Roche Committed to Innovation. Sal. Oppenheim European Healthcare Investors Conference Frankfurt, September 2, 2008

Transcription

1 Roche Committed to Innovation Sal. Oppenheim European Healthcare Investors Conference Frankfurt, September 2, 2008

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 document, including 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) developments in financial market conditions, including the market for acquisition financing and other capital markets and fluctuations in currency exchange rates; (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 and unexpected side-effects of pipeline or marketed products; (6) increased government pricing pressures or changes in third party reimbursement rates; (7) interruptions in production; (8) loss of or inability to obtain adequate protection for intellectual property rights; (9) Litigation; (10) the inherent uncertainties involved in negotiations with the special committee of Genentech and that there can be no assurances that a negotiated transaction will ultimately be agreed to or consummated; (11) potential difficulties in integrating the businesses of Genentech and Roche, and that some or all of the anticipated benefits of the proposed transaction may not be realized on the schedule contemplated or at all; (12) that future dividends are subject to the discretion of the board of directors of Roche and a number of other factors, some of which are beyond the control of Roche; (13) the ability of Roche to generate cash flow to, among other things, repay acquisition-related debt as currently contemplated; (14) loss of key executives or other employees; and (15) adverse publicity and news coverage. The directors of Genentech who are also employees of Roche will not take part in the consideration of the proposed transaction by the Genentech board and accordingly are not permitted to comment or respond to questions regarding the transaction as representatives of Genentech. For marketed products discussed in this presentation, please see full prescribing information on our website All mentioned trademarks are legally protected. 2

3 Roche strategy Committed to innovation The Roche Business Model: Roche Strategy: High Medical Differentiation Roche Focus Generics Pharma Dia MedTech OTC Focus on innovation in medically differentiated therapeutics and diagnostics Hub and spokes approach No mega mergers focused on cost rationalization Drive for efficiency Low Premium for Innovation High 3

4 Differentiated product portfolio From 1 to 9 products with sales at or above CHF 1 billion Pharmaceuticals key products (CHF billion) By year of market introduction 0 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 Boniva Tarceva Avastin Pegasys Herceptin Xeloda NeoRecormon/ Epogin MabThera/ Rituxan CellCept Rocephin Roaccutane 4

5 H1 2008: Industry-leading sales performance in our markets CHF bn % change in USD H1 07 H1 08 CHF local growth Pharmaceuticals excl. Tamiflu pandemic Diagnostics Roche Group excl. Tamiflu pandemic

6 H1 2008: Profit maintained despite CHF 3 billion Tamiflu and currency headwind CHF billion Change H1 07 H1 08 CHF billion % loc % Sales Operating profit before ex. items as % of sales Operating profit as % of sales Net income as % of sales Core EPS

7 Pharma: Sales growth more than twice global market Sales CHF m % change in USD H1 07 H1 08 CHF local growth Roche Pharma 11,367 10, excl. Tamiflu pandemic 10,354 10, Genentech 5,227 4, Chugai 1,674 1, excl. Tamiflu pandemic 1,481 1, Pharmaceuticals 18,268 17, excl. Tamiflu pandemic 17,062 17,

8 H1 2008: Strong Pharma operating performance Efficiency gains in manufacturing and marketing H1 08 H1 08 vs. H1 07 H1 08 vs. H1 07 CHF million % sales in CHF m Sales 17, ,011 Local growth 3% Royalties & other op inc 1, Cost of sales -4, M & D -3, R & D -3, G & A % -1% -1% 10% 11% Operating profit 6, before except. items 8% Improving efficiency, investing in R&D 8

9 Roche Pharma pipeline overview Focused on five Disease Biology Areas Oncology Xeloda MabThera Herceptin Avastin Tarceva Pertuzumab T-DM1 R1507 (IGF-1R mab) Apomab Apo2L/TRAIL Anti-CD40 mab Hedgehog antagonist 18 phase I compounds On Hand RA/Inflammation MabThera Actemra R1594 ocrelizumab R667 RARg 9 phase I compounds Metabolic R1658 CETP Inh. R1583 GLP-1 R1439 dual PPAR 9 phase I compounds Promising Late Stage Virology Pegasys Tamiflu R3484 HPV16 R1626 HCV pol. Inh. R7128 HCV pol. Inh. R7227 HCV prot. inh. Emerging Mid-Term CNS ocrelizumab RRMS R1678 Schizophrenia R3487 Alzheimer s 3 phase I compounds Early Stage 9

10 Oncology: H pipeline update Major newsflow expected in H MabThera in relapsed CLL: REACH Randomized ph. III, 552 patients Fludarabine+cyclophosphamide +/-MabThera Avastin in 1st line mbc: RIBBON-1 Phase III study, 1200 patients, 2 analyses: Anthracycline-/taxane-based +/- Avastin, and Xeloda +/- Avastin Expect data H2 08 Expect topline data H2 08 Tarceva+Avastin in 2nd line NSCLC: BETA lung Tarceva+/-Avastin Enrollment completed Q2 08 Potentially label-enabling for Avastin Expect topline data H2 08 Tarceva 1st line maintenance NSCLC: SATURN 4 chemo cycles followed by T vs. placebo Enrollment completed Q2 08 Potentially label-enabling for Tarceva Expect topline data H

11 Autoimmune: H pipeline update Actemra launch planned for this year Actemra: FDA Advisory Committee recommends approval Five Phase III clinical trials LITHE 1 yr X-ray data to be presented at ACR FDA action expected in September MabThera RA: DMARD IR signs and symptoms (SERENE) Primary endpoint met; to be filed in 2009 together with X-ray data (IMAGE) Filing 2009 Lupus nephritis: studies with MabThera and ocrelizumab ongoing LUNAR (MabThera): phase III ongoing BELONG (ocrelizumab): enrolment started in Q LUNAR: results in early 2009 Ocrelizumab: RRMS Excellent proof-of-concept data for MabThera in RRMS - ocrelizumab to be developed in RRMS Phase II dose-finding study initiated Phase II initiated 11

12 Metabolism: H pipeline update CETPi and GLP-1 on track; DPP-IV to be out-licensed CETPi (R1658): M&M study to prove the concept Safety and tolerability data well received at ACC 08 GLP-1 (R1583): potential for best-in-class product Phase II data encouraging presented at ADA 08 Phase III recruiting Phase III recruiting DPP-IV (R1579) Phase II data available Efficacious but no evidence of weight loss Good safety profile PPAR αγ (R1439) Initial phase II data available Renal study ongoing - data by year end Looking for a safe and differentiated profile Out-licensing planned Go/no-go decision by early 09 12

13 Diagnostics in H1 2008: Sales by business area Strong growth in Professional Diagnostics & Applied Science Sales CHF m % change in USD H1 07 H1 08 CHF local growth % Professional Diagnostics 2,110 2, Diabetes Care 1,544 1, Molecular Diagnostics Applied Science Tissue Diagnostics Diagnostics Division 4,559 4, Sales from beginning of February

14 Diagnostics in H Strategic investments impacting P&L H1 08 H1 08 vs. H1 07 H1 08 vs. H1 07 CHF million % sales in CHF m Sales 4, Local growth 11% Royalties & other op inc Cost of sales -2, M & D -1, R & D G & A % 25% 19% 29% 22% Operating profit % 14

15 H1 2008: Group results Operational excellence translated into the bottom line CHF million Sales 22,827 22, Operating free cash flow 5,365 4, % of sales Operating profit before exceptional items 7,477 7, % of sales Net financial result Taxes -2,115-1, Tax rate in % Net income 5,862 5,732-2 % of sales % change CHF local Core EPS (CHF)

16 Our objectives for 2008 Sales High single digit local currency sales increase for Roche Group (excl. Tamiflu pandemic 1 ) Above-market sales growth 1 in both divisions Core EPS Core earnings per share target 2 at least at record 2007 level despite significant increase in R&D investment and considerably lower Tamiflu pandemic sales Shareholder return Continuous increase in dividend pay-out ratio over the next 3 years 1 Excluding government and corporate stockpiling orders of Tamiflu for pandemic use 2 At constant exchange rates Barring unforeseen events 16

17 Genentech offer 17

18 Roche makes an offer to acquire all publicly held shares in Genentech Roche makes an all cash offer to acquire all outstanding publicly held shares of Genentech at US$ 89 per share, for a total investment of US$ 43.7 billion The offer has been presented to Genentech s independent directors, and we expect to enter negotiations shortly in order to secure a recommended deal Our offer is both fair and generous and provides an opportunity for all non- Roche shareholders in Genentech to receive an immediate premium for all of their shares: The offer represents a 1-day premium of 8.8% to Genentech s closing price of US$ on July 18 th and a 1-month premium of 19.0% to Genentech s closing price of US$ on June 20 th 2008 Roche has no interest in selling its controlling equity stake in Genentech 18

19 Genentech in 1990 A research focused emerging biotech company Total employees: % R&D % all other functions Robert A. Swanson & Herbert W. Boyer Co-founders of Genentech Source: Roche estimate 19

20 Genentech: the journey between Strong revenue growth driven by medical breakthroughs $ 11.7 bn Roche majority shareholding $ 0.4 bn Revenues ($bn)

21 Genentech today a fully integrated pharmaceutical company Total employees: Admin / Other R&D 27% Commercial Manufacturing Genentech campus in South San Francisco Source: Genentech filings, Roche estimates 21

22 Key objectives of combining Genentech and Roche building a leading organization Research and Early Development Late Development Manufacturing Commercial Admin & other Enhance innovation Allow diversity of approaches in research Encourage sharing of IP, technologies, networks etc. Post 2015 partnership Improve operational efficiency Reduce complexity Eliminate duplications Leverage combined scale in the US and globally 22

23 Summary of offer Combination creates a win-win situation Strengthen our business Enhance ability to innovate Improve operational efficiency Attractive to shareholders Offer is fair and generous and gives shareholders an opportunity to receive an immediate premium for their shares in Genentech Accretive in the first year after closing Strong cash generation Improved long term prospects for the combined entity 23

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