Novartis Launches Healthcare Industry’s First Sustainability-Linked Bond Offering
Multinational pharmaceutical company Novartis announced that it has priced a €1.85 billion sustainability-linked bond, with interest payments tied to the achievement of patient access targets. The patient access targets align with the company’s sustainability goals announced earlier this month.
Novartis stated that the new bond is the first of its kind in the healthcare industry and the first SLB incorporating social targets. The SLB is linked to 2025 Patient Access Targets, aiming to increase patients reached in low- and middle-income countries (LMICs) with strategic innovative therapies by 200% and the Novartis Flagship Programs by 50%. Bondholders will be entitled to receive a higher amount of interest if Novartis fails to meet its patient access targets.
Vas Narasimhan, CEO of Novartis, said:
“For decades, Novartis has worked to improve access to medicines and tackle global health challenges. We’re currently working to support global health efforts to address diseases like malaria and leprosy, to continue novel research into tropical diseases, and to ensure access to our new medicines in low- and middle-income countries. Today’s announcement is another important step on our journey to integrate ESG into the core of our business, measure our progress, hold ourselves accountable, and demonstrate our dedication to making good on our promise to broaden global access to our medicines.”
Novartis obtained two separate second-party opinions validating the robustness and relevance of the KPIs and targets, from Access to Medicine Foundation, and Sustainalytics. Access to Medicine Foundation, an independent non-profit organization focused on access to medicine in LMICs, assessed the social benefits of the 2025 Patient Access Targets. Sustainalytics, a consultancy organization with recognized ESG expertise, assessed the social benefits of the 2025 Patient Access Targets and the alignment of the SLB to the Sustainability-linked Bond Principles, published by the International Capital Markets Association (ICMA).