committed to innovation and growth - roche9a53ce2d-93f0-4751-948e-5028affe5f34/… · opens...

Committed to innovation

and growth

Roland Diggelmann, CEO Roche Diagnostics San Diego, 01 August 2017

HY 2017 Group results

Diagnostics

Business model & strategy

HY 2017 overview

Investing in innovation

Outlook

2

HY 2017: A strong start into the year

Guidance raised

3

Group sales growth CHF 0.5bn from recent launches* +5%

Core EPS growth Strong underlying business momentum,

divestments partially offsetting PSI +6%

Cash flow Strong operating free cash flow

generation +37%

IFRS net income Strong operating performance partially

offset by impairments +2%

* Tecentriq, Ocrevus, Alecensa

At constant exchange rates (CER); PSI=Past Service Income

HY 2017: Strong sales growth in both divisions

4 CER=Constant Exchange Rates

HY 2017 HY 2016

CHFbn CHFbn CHF CER

Pharmaceuticals Division 20.5 19.5 5 5

Diagnostics Division 5.8 5.6 5 5

Roche Group 26.3 25.0 5 5

Change in %

Q2 2017: Sales growth for the sixth consecutive

year

5

2%

6%

4%

6% 6%

4%

8%

7%

5%

4%

5%

6%

5%

7%

6%

4% 4%

6%

3% 3%

4%

6%

0%

2%

4%

6%

8%

10%

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q2

13

Q3

13

Q4

13

Q1

14

Q2

14

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15

Q4

15

Q1

16

Q2

16

Q3

16

Q4

16

Q1

17

Q2

17

All growth rates at Constant Exchange Rates (CER)

HY 2017: Strong sales growth in US and

International

6

0

2

4

6

8

10

12

Japan International Europe US

Diagnostics

Pharma

CHFbn

+8%

0% +5%

0%

+1% +12%

+2%

0%

+7%

+1%

0%

+7%

All growth rates at Constant Exchange Rates (CER)


HY 2017: Strong Core operating profit

9.2 9.9

10.1

HY 2015 HY 2016 HY 2017

CHFbn

% of sales 39.2% 39.4%

38.5%

+3% at CER

Roche significantly advancing patient care

Recognition for innovation 2013-present

8

Rank Company #

1 Roche 16

2 Novartis 12

3 BMS 10

4 Merck 9

5 AbbVie 7

5 Pfizer 7

16 Breakthrough Therapy Designations

Year Molecule

2017 Zelboraf (BRAF-mutated ECD)

Rituxan (Pemphigus vulgaris)

2016

Actemra (Giant cell arteritis)

Alecensa (1L ALK+ NSCLC)

Ocrevus (PPMS)

Venclexta (AML)

Venclexta + Rituxan (R/R CLL)

2015

Actemra (Systemic sclerosis)

Tecentriq (NSCLC)

Venclexta (R/R CLL 17p del)

Emicizumab/ACE 910 (Hemophilia A)

2014

Esbriet (IPF)

Lucentis (Diabetic retinopathy)

Tecentriq (Bladder)

2013 Alecensa (2L ALK+ NSCLC)

Gazyva (1L CLL)

Source: http://www.focr.org/breakthrough-therapies as of June 30, 2017; PPMS=Primary Progressive Multiple Sclerosis; CLL=Chronic

Lymphocytic Leukemia; NSCLC=Non-Small Cell Lung Cancer; IPF=Idiopathic Pulmonary Fibrosis; ECD=Erdheim-Chester disease

http://www.focr.org/breakthrough-therapies



Launch of new medicines at a record high

2011 2012 2013 2014 2015 2016 2017

Emicizumab

(filed)

9

2017 outlook raised

10

Group sales growth1 Mid-single digit

Core EPS growth1 Broadly in line with sales growth

Dividend outlook Further increase dividend in Swiss francs

1 At Constant Exchange Rates (CER)


Diagnostics


HY 2017 overview


Outlook

11

Centralized and Point of Care

Centralized and Point of Care

Molecular Diagnostics

Molecular Diagnostics

Tissue Diagnostics

Tissue Diagnostics

2016 2021

Blood Glucose Monitoring

-4% CAGR

+6% CAGR

+8% CAGR

Roche Clear Leader in Growing IVD Market

12

Share of IVD sales 2016 Expected IVD market growth

CHF 54bn

CHF 67bn

+5% CAGR

IVD Market:

+4% CAGR

Blood Glucose

Monitoring 19%

10% 10%

8%

4% 3% 3% 3% 3% 3%

0%

2%

4%

6%

8%

10%

Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17

Roche Diagnostics Division

WW IVD market

Roche continuously outgrowing the market

Increasing market leadership

Source: 3rd party IVD consultancy; Q1 2017 market growth is an estimate

Quarterly growth (% in CER)

• Strong commercial presence

• Broadest test menu

13

Total solution offering

Breadth of technologies Comprehensive menu IT and workflow connectivity

End-to-end workflow

14

Roche Diagnostics

Our competitive advantage

Implementing the fully integrated core laboratory

15

Connecting disciplines

(cobas 6800/8800, cobas

6500, cobas p 612)

Seamless workflow and

laboratory IT

(cobas connection modules)

Highest throughput analysers

(cobas e 801, cobas c 702)

Comprehensive menu

(Procalcitonin; Zika; MPX;

Syphilis; EGFR v2)

Digitalised data

management


Diagnostics


HY 2017 overview


Outlook

16

HY 2017: Diagnostics Division sales

Good growth driven by Centralised and Point of Care Solutions and Tissue Diagnostics


Underlying growth of Molecular Diagnostics excluding sequencing business: +2%

HY 2017 HY 2016

CHFm CHFm CHF CER

Diagnostics Division 5,823 5,562 5 5

Centralised and Point of Care Solutions 3,456 3,233 7 8

Diabetes Care 962 998 -4 -4

Molecular Diagnostics 920 903 2 1

Tissue Diagnostics 485 428 13 13

Change in %

North America

+1%

26% of divisional sales

Latin America

+8%


Japan

+2%

4% of divisional sales EMEA1

+3%


HY 2017: Diagnostics regional sales

Growth driven by all regions

Asia Pacific

+13%


18

+16% growth in E7 countries2

1 Europe, Middle East and Africa; 2 Brazil, China, India, Mexico, Russia, South Korea, Turkey All growth rates at Constant Exchange Rates

HY 2017: Diagnostics Division highlights

19

• Driven by immunodiagnostics (+13%);

clinical chemistry (+3%); PoC* (+3%)

• Continued US pricing and reimbursement

pressures

• Virology (-1%); Blood screening (+3%)

• Advanced staining portfolio (+9%); primary

staining (+15%) and companion diagnostics

(+40%)

,0.0 ,1.0 ,2.0 ,3.0 ,4.0

Tissue

Diagnostics

Molecular

Diagnostics

Diabetes

Care

Centralised

and Point of

Care

Solutions

EMEA

North America

RoW

+13%

-4%

+8%

+1%

CHFbn

**

* PoC =Point of Care; ** Underlying growth of Molecular Diagnostics excluding sequencing business: +2%

CER=Constant Exchange Rates; EMEA=Europe, Middle East and Africa

YoY CER growth

HY 2017: Diagnostics Division

Core operating profit growth partially offset by PSI

20

CHFm % sales

Sales 5,823 100.0

Royalties & other op. inc. 89 1.5

Cost of sales -2,649 -45.4

M & D -1,337 -23.0

R & D -642 -11.0

G & A -225 -3.9

Core operating profit 1,059 18.2

+5% in CHF

HY 2017 2017 vs. 2016

CER growth

5%

4%

5%

-1%

5%

70%

48%

70%Admin +2%

CER=Constant Exchange Rates; PSI=Past Service Income

Immunoassays contribute 1/3 of Diagnostics sales

Growing double digit > 19 years

CER=Constant Exchange Rates; “Other” include Needed Common Products, Allergy, Rheumatoid Arthritis, Immunosuppressants

HY 2017 Sales

12% 10%

Tumormarker

15%

Cardiac

10% 22%

Women’s

Health

Other Hormones

7%

Infectious

Diseases

Endo -

Thyroid

9%

Critical

Care

Anemia

36%

8%

Integrated workflow of cobas 8000 combined with

cobas 6800/8800

Broadest menu and superior integrated workflow

YoY CER growth

21

US launch of cobas e 801 and HIV assay*

Opens opportunities to gain market share

22

• 100% sensitivity to HIV-1 and recognition of all

known HIV groups and subtypes

• High specificity in samples from routine clinical,

pregnancy testing and dialysis patients

• Broadest infectious disease menu in the US

cobas e 801

*Currently the HIV combi PT is available on the cobas e 602

• Double throughput on same footprint

Market leader in women’s health

CE mark for HPV test on cobas 6800/8800

Immunoassays Molecular & sequencing Tissue

Fertility Cervical cancer* Cervical cancer*

Prenatal testing Virology Breast cancer

Osteoporosis Prenatal testing

Ovarian cancer

Breast cancer

Sexually

Transmitted

Diseases

* New 2017 launches

2013 2014 2015 2016

Sales Portfolio

23

24

• Detects HPV 16 and 18,

responsible for 70% of

cervical cancers, along

with 12 other high risk

HPV genotypes

• Identifies women at risk,

before disease develops

• Manage HPV-positive women

to determine those needing

more immediate intervention

• Dual-stain biomarker test

detects p16 & Ki-67 in cytology

samples; indicator of HPV-

mediated oncogenic

transformation

• Deliver confirmatory

diagnosis of disease in

cervical biopsy samples

• Detects p16 protein

expression in tissue

preparation; indicator of

HPV-mediated oncogenic

transformation

SCREEN MANAGE DIAGNOSE

HPV

Roche Cervical Cancer Portfolio Screening & diagnosis for better prevention of disease

* CINtec PLUS is not approved in the US

Market leader in Tissue Diagnostics

Superior multiplex IHC* clinical lab workflow driving double digit growth

Automated

multiplex IHC

staining

Automatic whole

slide image analysis

Result interpretation

“cold” vs. “hot tumor”

with TILs**

Whole slide scanning

(BF**, FL**)

Diagnostic

and/or treatment

decision

Spatial characterisation

of tumor

micro-environment

Patient specimen

arrives for analysis

25 * IHC = Immunohistochemistry; ** BF = brightfield; FL = fluorescent; TILs = tumor-infiltrating lymphocytes

VENTANA PD-L1 (SP142)*

VENTANA PD-L1 Assays approved as predictive

diagnostics for bladder and lung in US & CE markets

• CE marked as a companion

diagnostic to select patients

for KEYTRUDA (Merck) in

NSCLC

• FDA approved as a

complementary diagnostic to

predict patient response to

IMFINZI (AstraZeneca) in

bladder cancer

• CE marked as a

complementary diagnostic to

predict patient response to

OPDIVO (BMS) in NSCLC

• FDA approved as a

complementary

diagnostic to predict

patient response to

TECENTRIQ in bladder

cancer and NSCLC

PD-L1 IHC expression

VENTANA PD-L1 (SP263)*

*Available on BenchMark platform: large global installed base

26


Diagnostics


HY 2017 overview


Outlook

27

All-in-one:

Hematology analyser + slide maker/stainer

+ digital morphologic analyser

Unique slide-

making process

Low sample

volume (30 µL)

Digital multi-

spectral imaging

Clear, consistent

cell distribution

Convenient for

paediatric and

oncology patients

Unique cell

counting and

classification

28

Launch of cobas m 511 hematology analyser

Preparation, staining and analysis in one system

cobas® MRSA/SA* assay launched in CE markets

cobas® Liat® System menu expansion to meet European markets needs

* MRSA=methicillin resistant Staphylococcus Aureus; RSV=Respiratory Syncytial Virus ** In development; *** e.g. hospital emergency room, STAT lab, doctor’s office; pharmacy clinic

cobas® Liat®

assay tube

29

• Easy to use with minimal hands on time

• Lab quality performance in 30 minutes or less

• Suitable for testing in a variety of settings***

Menu of assays available and in development

cobas® Liat®

Analyzer

CE US CE US

cobas® Influenza A/B cobas® Cdiff

cobas® Strep A cobas® MRSA/SA

cobas® Influenza A/B & RSV*

cobas® Pertussis**

30

cobas® vivoDx

System

Light

Target bacteria

present and not

susceptible to

antibiotics in

assay

No Light

Target bacteria

not present or

susceptible to

antibiotics in

assay

• Smarticles Technology Identifies

multidrug-resistant organisms and

assesses antibiotic susceptibility

• No need for traditional sample

enrichment, culture or preparation

processes

• MRSA will be the first test launched;

CRE FRE, VRE in development*

Development of GeneWEAVE technology for

antibiotic susceptibility testing

Complementing our NAT microbiology portfolio

* CRE = carbapenem-resistant Enterobacteriaceae; FRE = Fluoroquinolone-resistant Enterococci; VRE: Vancomycin-resistant

Enterococci

Roche Sequencing Solutions

Innovating across the workflow

SAMPLE

PREPARATION

ANALYTICS

AND REPORTING SEQUENCING

MEDICAL &

RESEARCH CONTENT

AVENIO MilliSect System

(Tissue Dissection)

Kapa portfolio

SeqCap & HEAT-Seq Portfolio

Automated Extraction

for ctDNA

Library Prep / Target

Enrichment

Nanopore Instruments Software & Informatics NIPT: Harmony Prenatal Test

CLIA lab service

CE-IVD & RUO Harmony Kits

22q11.2 launch 1H 2017

AVENIO ctDNA Analysis Kits

31

Nanopore Technology (in development)*

Semiconductor-based platform with potential to lower cost and increase speed of sequencing

• Nanopore technology

• Long reads

• HTP NGS platform

• Used for a broad range of applications

• Human genetics

• Somatic oncology

• Hereditary oncology

• Virology and Microbiology

* Products in development and not available in the United States

32

Launch of three liquid biopsy oncology gene

panels

33 Validated on an on-market Illumina platform (Next Seq 500 and Next Seq 550). Next Seq 500/550 instruments and associated sequencing reagents are manufactured and sold by Illumina and are not supplied by Roche. * SNV – Single Nucleotide Variant; CNV – Copy number Variant; Indel – Insertion or Deletion.

• Includes all reagents & informatics for a "sample in, result out” solution

• Research Use Only

• All four mutation classes in one panel (SNV, CNV, fusions and indels)*

Three Kit Options

AVENIO ctDNA Targeted Kit

AVENIO ctDNA Expanded Kit

AVENIO ctDNA Surveillance Kit

Features

• Pan-cancer assay for tumor profiling

• 17 genes (81 kb)

• Pan-cancer assay for expanded tumor

profiling

• 77 genes (192 kb)

• Longitudinal tumor burden monitoring,

focus on lung and colorectal cancer

• 197 genes (198 kb)

34

AcfS Ariosa Cell Free DNA System: Kit testing in country; RUO (US); CE-IVD

NIPT: Harmony Prenatal Test

Available in more than 100 countries

Harmony Prenatal Test: LDT Service via CLIA/CAP central lab


Diagnostics


HY 2017 overview


Outlook

35

2017 Diagnostics: An important year for our

pipeline

Key platform launches

Q1 Q2 Q3 Q4

cobas e 801 Immunodiagnostics (US)

cobas m 511 Hematology (CE)

cobas t 511 / t 711 Coagulation (CE)

36

2017

Launch dates depend on development outcome; timelines may change

Area Product Market

Instruments/

Devices

Central

Laboratory

cobas 8000 <e 801> – High throughput immunochemistry analyser

CCM High Speed – cobas connection module (CCM) for up to 6000 samples/hour

US

WW

Coagulation

Testing cobas t 511 / t 711 – Medium and high volume coagulation systems EU

Point of Care CoaguChek Vantus – Hand-held coagulation monitoring system for Patient Self-

Testing US

Diabetes Care Accu-Chek Instant bG System – Effortless, accurate and affordable bG system

for price sensitive markets EU

Tests/

Assays

HPV cobas HPV – Next generation HPV DNA test leveraging 68/8800 Automation to detect

14 hrHPV with simultaneous detection of genotypes 16 and 18

CINtec Histology – Diagnostic component of the Roche Cervical Cancer portfolio

EU

US

Virology cobas HIV 1&2 Qual – For use on the cobas 6800/8800 Systems; for diagnosis of acute

HIV 1 or 2 infection and for confirmation of HIV 1 or 2 infection EU

Sequencing AVENIO ctDNA panels - Liquid biopsy for circulating tumor DNA, 3 panels: targeted

panel (17 genes for cancer therapy selection), expanded panel (77 genes for cancer therapy selection), surveillance panel (197 genes)

EU/US

cobas Liat

cobas Liat C.diff – Qualitative IVD test, that utilizes real-time PCR, for the direct

detection of the tcdB gene of toxigenic C. difficile in unformed stool specimens

cobas Liat MRSA/SA – Qualitative IVD test, that utilizes real-time PCR, for the direct

detection of MRSA and Staphylococcus aureus DNA from nasal swabs

EU

EU

Women’s Health AMH – Immunoassay for the in vitro quantitative determination of anti-Mullerian hormone

(AMH) in human serum and plasma for the assessment of the ovarian reserve in women presenting to fertility clinics

US

Companion

Diagnostics

PD-L1 (SP142) for Bladder Cancer* – complementary diagnostic for Tecentriq

PD-L1 (SP142) for NSCLC* – complementary diagnostic for Tecentriq

EU

EU

Key Launch List 2017

37 * = Achieve commercial readiness, dependent on Pharma label and approval

Doing now what patients need next

38

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