Roche: Committed to innovation and profitable growth. Dr. Alan Hippe, CFO Roche. May 2012

Transcription

1 Roche: Committed to innovation and profitable growth Dr. Alan Hippe, CFO Roche May

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 A good start into the year Strong fundamentals Sustainable strategy 3

4 Q1 2012: Highlights Sales Group and Pharma: +2% 1 (+3% 1 excluding Tamiflu) Diagnostics: +4% 1 Negative currency impact (-3%p) 2 Approvals of New Molecular Entities Erivedge in advanced basal cell carcinoma approved in US Zelboraf in metastatic melanoma approved in EU 5 positive late-stage trials and regulatory filings Avastin in metastatic colorectal cancer: treatment through multiple lines (TML) T-DM1 in HER2+ metastatic breast cancer (EMILIA) Herceptin subcutaneous in HER2+ breast cancer (HANNAH)-filed in EU Actemra in polyarticular-course juvenile idiopathic arthritis (CHERISH) Actemra in rheumatoid arthritis (ADACTA) 1 at Constant Exchange Rates 4

5 Q1 2012: Group sales On track to meet full-year guidance change in % CHF m CHF m CHF CER Pharmaceuticals Division 8,624 8, Diagnostics Division 2,403 2, Roche Group 11,027 11, CER=Constant Exchange Rates 5

6 Q1 2012: Pharma sales drivers Oncology and Pegasys main growth drivers Pegasys MabThera/Rituxan Herceptin +7% +7% +32% Actemra/RoActemra Xeloda +46% +15% Zelboraf NA CellCept -19% Tamiflu Boniva/Bonviva NeoRecormon/Epogin -24% -31% -28% International US Japan Western Europe Absolute amounts in CHF m at Constant Exchange Rates (CER) average 2011; all growth rates at CER

7 Pharma quarterly growth (excluding Tamiflu),400 +3% +3%,300 +1% CHF m,200,100,0 -,100 +1% 0% US International WE Japan -,200 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Absolute amounts in CHF m at Constant Exchange Rates (CER) average 2011; all YOY growth rates at CER 7

8 Q1 2012: US back to strong growth Driven by Oncology and Pegasys US: +6% 2 US growth contribution 1 Growth 2 Pegasys % Rituxan 52 +8% Herceptin % Xeloda % Zelboraf 26 NA Actemra % Tarceva % 1 CHF m at average 2011 exchange rates; 2 CER=Constant Exchange Rates 8

9 Q1 2012: Western Europe Significant impact of genericized products 2, Bonviva CellCept Neorecormon Mircera Other tail products Pricing pressure MabThera RoActemra Herceptin Zelboraf Pegasys -4% 1 FX Q FX Q Sales 1 CER=Constant Exchange Rates 9

10 E7 countries: solid growth despite strong base One-off effects in Q1 in China and Russia 1000,000, +5% 1 800,000, 600,000, India Russia Korea Turkey Mexico 400,000, +15% China 200,000,,0, +19% Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Brazil 1 CER=Constant Exchange Rates; absolute values in CHF m at average 2011 exchange rates 10

11 China: Roche outgrowing the market 35% 30% 32% 29%* 25% 20% 19% 20% 24% 17% 15% 14% 16% 16% 10% 5% 0% Roche Chinese market Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Source: IMS Hospital Audits, January 2012; * Roche estimate for Q1 in-market sales in China 11

12 Securing growth for HER2 franchise HannaH and EMILIA advancing the standard of care 2nd line mbc Xeloda + lapatinib T-DM1 (EMILIA) 1st line mbc Herceptin + chemo Herceptin & pertuzumab + chemo (CLEOPATRA) T-DM1 & pertuzumab Adjuvant BC Herceptin + chemo Herceptin subcutaneous + chemo (HannaH) Herceptin & pertuzumab + chemo Established standard of care Potential new standard of care Future standard of care Timelines refer to the expected dates of first filing 12

13 Q2 2012: Clinical data to be presented at upcoming meetings EASL Barcelona, April danoprevir+mericitabine INFORM-SVR (phii, interferon-free combination) treatment-naive and interferon intolerant chronic HepC G1 danoprevir DAUPHINE (phii) treatment-naive chronic HepC mericitabine PROPEL, JUMP-C (phii) treatment-naive and failure chronic HepC G1/4 T-DM1 ASCO Chicago, June 1-5 EMILIA (submitted) pretreated HER2+ mbc PhII safety study in HER2+ ebc Avastin TML treatment through multiple lines in mcrc AURELIA platinum resistant ovarian cancer Actemra EULAR Berlin, June 6-9 ADACTA (submitted) Head-to-Head vs. Humira Virology Oncology Inflammation 13

14 A good start into the year Strong fundamentals Sustainable strategy 14

15 2011: Group performance Core EPS growth +11% 1 CHF m % Change CHF CER Sales 47,473 42, 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 15

16 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 16

17 Continuous growth in operating profit and margin Group core operating profit (CHF bn) and margin 33.0% 33.2% 34.9% 35.6% +6% in CER CER = constant exchange rates

18 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 18

19 Debt maturity profile Q Evolution CHF bn Repayment of CHF 2.2bn at maturity Tender of EUR 782m Repayments in Q1/2012 Refinancing in Q1/ USD EUR CHF GBP Of the CHF 48.2bn bonds and notes issued to finance the Genentech transaction, cumulative 23.6bn (49%) have been repaid as of 31 Mar 2012 * Nominal actual FX rates; *Original net proceeds in CHF 19

20 A good start into the year Strong fundamentals Sustainable strategy 20

21 Roche: Focused on medically differentiated therapies Focus Pharma Dia Premium for innovation Generics OTC MedTech Differentiation 21

22 P&L structure reflecting innovation based strategy Peer group core operating profit margin 2011 Eli Lilly Roche Merck Novartis Astra Sanofi GSK Pfizer JNJ R&D % sales 21% 19% 17% 16% 15% 14% 14% 13% 12% Pfizer Astra Roche Sanofi Merck Core operating profit margin % sales 36% 34% 34% 39% 43% Eli Lilly Novartis JNJ Pfizer Merck GSK Astra Sanofi Roche M&D+G&A % sales 33% 32% 30% 29% 29% 29% 28% 24% 23% GSK JNJ Novartis Eli Lilly 27% 27% 27% 31% 22

23 R&D productivity Excellence in science key lever to reduce attrition Industry success rate Research Phase 0 Phase 1 Phase 2 Phase 3 RegistrationLaunch 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 23

24 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 24

25 Roche Diagnostics commitment to PHC Preferred Partner for Companion Diagnostics (CDx) Internal collaborations > External collaborations 1 Personalized Healthcare collaborations with more than 30 pharma and biotech companies Tissue Diagnostics signs 4 new partnerships - Pfizer (Crizotinib ALK IHC) - Syndax (Entinostat- E-cadherin) - Aeterna Zentaris (AEZS 108 LHRH) - Bayer (antibody-drug conjugate) 1 Including R&D collaborations and CDx projects 25

26 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 26

27 Filings and launches in 2012 New Molecular Entities Zelboraf met. melanoma Erivedge (US) adv. basal cell carcinoma pertuzumab HER2+ mbc 1st line T-DM1 HER2+ advanced mbc Launches Filed/awaiting launch Planned filings Additional indications Oncology Immunology CardioMetabolism Avastin relapsed ovarian cancer (EU) Rituxan NHL faster infusion (US) Herceptin sc formulation HER2+ Actemra DMARD IR (US) Activase extend. time window AIS (US) Lucentis diabetic macular edema (US) Lucentis AMD 0.5 mg PRN (US)* Avastin mbc 2 nd line (EU) Avastin mcrc TML MabThera sc formulation (EU) Tarceva (US) NSCLC EGFR mutation 1 st line Actemra sc formulation Actemra RA DMARD IR H2H (EU) Actemra polyarticular JIA * New dosing regimen for already approved indication 27

28 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 ocrelizumab MetMAb danoprevir mericitabine aleglitazar lebrikizumab Potential Filing Year Non risk-adjusted 28

29 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 29

30 We Innovate Healthcare 30

31 Group core operating profit and margin Strong margin increase over years 33.2% 34.9% 35.6% 38.0% +1.8 %p 1 (+0.7 %p) 39.9% 40.9% +2.1 %p 1 (+1.0 %p) % of sales CHF m 16,27216, % 1 (-9 %) 15,149 14,83614, % 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 31

32 Roche: Staying focused on Prescription and Diagnostics Novartis 60% Merck & Co 90% Rx 1 OTC Vaccines Animal Health Generics Biosimilars Dx Others Ophthalmolog y Diversified Focused Pfizer 87% GSK 82% Sanofi Aventis 79% Bayer 31% Abbott 57% J&J 36% Generics/ EMs Generics/ EMs Eli Lilly 94% Branded Gx Intention AstraZeneca 100% Branded Gx Intention Roche 78% Amgen 100% BMS 100% Crop/Material Science Medical devices Medical devices 1 As of 2010 sales Source: FCMG; Company Annual Reports = Active Business Unit = Recent Transaction (post 2006) = Recent Transaction New Business Area (post 2006) 32

33 Roche: Focus on selected business/disease areas Aim to play in the lead Roche * 1 11 Novartis * Abbott Sanofi 4 6 Pfizer Merck JNJ AstraZeneca 5 Amgen 4 2 Sources: IMS MIDAS in PADDS; For Diagnostic: Industry Analyst Report; *Lucentis sold by Roche in US, by Novartis in RoW 33