Roche Committed to innovation and profitable growth. Dr. Nina Mojas Dr. Luis Correia Investor Relations Officers. Zurich, March 2012

Transcription

1 Roche Committed to innovation and profitable growth Dr. Nina Mojas Dr. Luis Correia Investor Relations Officers Zurich, March

2 This presentation contains certain forward-looking statements. These forward-looking statements may be identified by words such as believes, expects, anticipates, projects, intends, should, seeks, estimates, future or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Various factors may cause actual results to differ materially in the future from those reflected in forward-looking statements contained in this presentation, among others: 1 pricing and product initiatives of competitors; 2 legislative and regulatory developments and economic conditions; 3 delay or inability in obtaining regulatory approvals or bringing products to market; 4 fluctuations in currency exchange rates and general financial market conditions; 5 uncertainties in the discovery, development or marketing of new products or new uses of existing products, including without limitation negative results of clinical trials or research projects, unexpected side-effects of pipeline or marketed products; 6 increased government pricing pressures; 7 interruptions in production; 8 loss of or inability to obtain adequate protection for intellectual property rights; 9 litigation; 10 loss of key executives or other employees; and 11 adverse publicity and news coverage. Any statements regarding earnings per share growth is not a profit forecast and should not be interpreted to mean that Roche s earnings or earnings per share for this year or any subsequent period will necessarily match or exceed the historical published earnings or earnings per share of Roche. For marketed products discussed in this presentation, please see full prescribing information on our website All mentioned trademarks are legally protected 2

3 Fundamentals Challenges Sustainable business Focus 3

4 Roche in 2011: Targets fully achieved Targets for 2011 FY 2011 Pharma Low single-digit 1,2 +1% Diagnostics Above market 1 +6% Group Low single-digit 1,2 +2% Operational excellence CHF 1.8 bn ~CHF 1.8 bn Core EPS Around 10% 1 +11% Dividend min CHF 6.60 CHF % 1 Growth rates, at constant exchange rates; 2 Excluding Tamiflu 2011 dividend as proposed by the Board of Directors 4

5 2011: Group performance Core EPS growth +11% 1 % Change CHF CER Sales 47,473 42, CHF m Core operating profit 16,591 15, as % of sales Core net financial income -2,272-1, Core tax rate in % p Core net income 11,181 10, as % of sales Attributable to Roche shareholders 10,955 10, Core EPS (CHF) Operating free cash flow 14,149 13, % of sales p Free cash flow 4,699 3, % of sales p 1 CER = Constant Exchange Rates 5

6 2011: Core operating profit development Profit growth driven by productivity improvements CHF m 16,591 US healthcare reform incl. excise tax EU austerity measures Japan price cuts % -609 Tamiflu Avastin US/WE CellCept US/WE Boniva US/WE sales +1,764* +1,037 Profit growth underlying business 1 17,643 Core Operating Profit ,140 Cost savings Operational Excellence Core Operating Profit FY10 Fx FY10 Fx rates * corresponds to CHF 1,836 m at exchange rates at the time of Operational Excellence announcement; 1 including Genentech integration synergies 6

7 Group core operating profit and margin Strong margin increase over years 33.2% 34.9% 35.6% +1.8 %p 1 (+0.7 %p) 38.0% 39.9% 40.9% +2.1 %p 1 (+1.0 %p) % of sales CHF m 16,272 16, % 1 (-9 %) 15,149 14,836 14, % 1 (-9 %) 13, % 21.1% 22.4% +1.6 %p 1 (+1.3 %p) ,742 2, % 1 (-1 %) 2,178 1 CER = Constant Exchange Rates Roche Group Pharma Division Diagnostics Division 7

8 P&L structure reflecting innovation based strategy Peer group core operating profit margin 2010 Eli Lilly Roche Merck Novartis Sanofi Pfizer GSK Astra JNJ R&D % sales 22% 19% 18% 16% 14% 14% 14% 13% 11% Astra Sanofi Pfizer Roche Merck Core operating profit margin % sales 31% 35% 38% 38% 44% GSK JNJ Eli Lilly Novartis Astra Pfizer Merck Sanofi Roche M&D+G&A % sales 33% 32% 32% 31% 29% 29% 29% 25% 23% GSK Eli Lilly Novartis JNJ 28% 27% 31% 30% 8

9 Continuous increase in dividends and pay-out ratio Average yearly dividend growth ( ): 19% Payout Ratio of 55.3% 3.40 CHF Pay-out compound ratio calculated annual growth as dividend rate per share divided by core earnings per share (diluted); 2011 as proposed by the Board of Directors 9

10 2011: Three New Molecular Entities filed Expanding into selected therapeutic franchises Larger (> 1 bn) Smaller (up to ~1 bn) Oncology Neuroscience Metabolism Virology Immunology Zelboraf Erivedge pertuzumab T-DM1 GA101 GlyT-1 dalcetrapib ocrelizumab MetMAb danoprevir mericitabine aleglitazar lebrikizumab Potential Filing Year Non risk-adjusted 10

11 Fundamentals Challenges Sustainable business Focus 11

12 Pharma growth rates have declined in last decade From double digit to single digit Pharma market growth rate (prescription drugs) Bolus of patent expiries Price pressures Utilization controls Source: EvaluatePharma 12

13 R&D productivity of Pharma industry Output relatively flat, while R&D costs have increased Industry R&D spend (US$ bn) # NMEs approved # New Molecular Entities (NMEs) (lagging 5 year average) R&D spend Notes: R&D spend figures may not include overhead components as reported in company annual reports Source:. NME data for from Peltzman, S. (1973) J. of Political Economy 81, no. 5: NME data for as reported in Hutt, P.B. (1982) Health Affairs 1(2) NME Data for from Parexel s Pharma R&D Statistical Sourcebook 2009/2010, FDA, and PhRMA. Industry R&D spend data from PhRMA Annual Membership Survey, 2008 and Parexel 2009/

14 R&D productivity Excellence in science key lever to reduce attrition Industry success rate Research Phase 0 Phase 1 Phase 2 Phase 3 Registration Launch Understanding of disease biology Probability of success - 64% 48% 25% 67% 83% 4% Leveraging Personalized Healthcare - stratify patient population early on Industry: 4% Roche: 9% Rigorous decision making transition only most promising projects Major decision points Source: Industry success rates - Linda Martin, KMR, Bernstein R&D conference 2011 Roche publically available data, BCG analysis 14

15 2012: Major clinical and regulatory news flow Timeline Compound Indication Milestone Avastin mcrc Ph III TML pertuzumab 1 st line HER2+ mbc US, EU approval Erivedge advanced BCC US approval EU approval (2012/13) Zelboraf metastatic melanoma EU approval Lucentis DME US approval T-DM1 2 nd line HER2+ mbc Ph III EMILIA 2012 Herceptin subcutaneous early HER2+ BC Ph III HANNAH (data presentation) Herceptin adjuvant HER2+ BC Ph III HERA 2 years vs. 1 year MabThera subcutaneous front-line follicular NHL Ph III Actemra RA DMARD IR Ph III ADACTA H2H vs. Humira Actemra subcutaneous RA, moderate to severe Ph III SUMMACTA/BREVACTA Avastin newly diagnosed glioblastoma Ph III AVAglio 2013 dalcetrapib Atherosclerosis CV risk red. Ph III dal-outcomes final analysis; 2 nd interim analysis in H GA101 Front line CLL Ph III vs. chemotherapy Glycin reuptake inh (GlyT-1) Schizophrenia Ph III (several studies) Oncology and CV outcome studies are event driven, timelines may change 15

16 Fundamentals Challenges Sustainable business Focus 16

17 Roche strategy for post-patent biologics marketplace Actively pursuing multiple strategies Innovate Re-define the standard of care Mode of administration, combination therapies and new drugs Protect Protect high standards Enforce efficacy and safety standards, defend intellectual property Expand Act to expand patient access in emerging markets Change from global pricing to tiered pricing, including 2nd brand 17

18 Timelines refer to the expected dates of first filing Innovate and re-shape biologics market HER2-positive breast cancer Herceptin IV Biosimilars (Europe) 2nd line mbc Xeloda + lapatinib T-DM1 1st line mbc Herceptin + chemo Herceptin & pertuzumab + chemo T-DM1 & pertuzumab Adjuvant BC Herceptin + chemo Herceptin Subcutaneous Herceptin & pertuzumab + chemo Established standard of care Potential new standard of care Future standard of care 18

19 Fundamentals Challenges Sustainable business Focus 19

20 Roche: Focused on medically differentiated therapies Focus Pharma Dia Premium for innovation Generics OTC MedTech Differentiation 20

21 Personalised Healthcare is a reality today Significant progress in 2011 APPROVED FILED TO FILE IN 2012 Zelboraf Metastatic Melanoma BRAF V600E Mutation Pertuzumab Metastatic Breast Cancer HER2 expression level T-DM1 Metastatic Breast Cancer HER2 expression level Ph III Ph III Ph III decision in 2012 MetMAb NSCLC Met Status Lebrikizumab Severe uncontrolled asthma Periostin level Mericitabine and danoprevir Hepatitis C HCV viral load, genotype 21

22 A leading pipeline 12 NMEs in late-stage development Expected filing timelines NMEs in late stage development Virology CNS Metabolism Inflammation Oncology danoprevir mericitabine 1 ocrelizumab Glycine reuptake inh aleglitazar dalcetrapib lebrikizumab MetMAb Erivedge T-DM1 GA101 pertuzumab Approved in US, filed in EU Filed in US and EU Q LIP decision made, phase III start pending 22

23 Efficiency improvements and long-term growth Track-record Group operating free cash flow (CHF bn) and margin 32.1% 32.3% 29.8% 27.1% +14% CHF bn 12.4 % of sales 2012 Outlook Profitability Core EPS: high single digit* Operational Excellence savings: CHF 2.4 bn* Growth Sales (CER) Group & Pharma: low to mid-single digit Diagnostics: above market * CER = Constant Exchange Rates Potential NMEs filings/approvals in 2012 Zelboraf (metastatic melanoma) pertuzumab (1L HER2+ mbc) vismodegib (advanced BCC) T-DM1 (2L HER2+ mbc) 23

24 Outlook for 2012 Sales growth (CER) Operational Excellence savings Core EPS growth target (CER) Dividend outlook Group & Pharma: low to mid-single digit Diagnostics: above market : CHF 2.4 bn* High single-digit Continue attractive dividend policy Barring unforeseen events; CER=Constant Exchange Rates; * vs. 2011: CHF 1.8 bn 24

25 We Innovate Healthcare 25