Overview: The future of medicine is personalised. Severin Schwan, CEO

Transcription

1 Overview: The future of medicine is personalised Severin Schwan, CEO

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 1

3 Agenda Morning session 09:00 Severin Schwan: Overview David Loew: Pharmaceuticals Hal Barron: Late stage pipeline 10:15 Q&A 10:45 Break 11:00 Daniel O Day: Diagnostics Alan Hippe: Financial view 11:40 Q&A 12:00 Lunch Afternoon session 13:10 Breakout sessions: 3 in parallel (pred, gred, Emerging markets) 14:10 Breakout sessions: 3 in parallel (pred, gred, Emerging markets) 15:10 Closing Q&A 16:00 Drinks

4 Our strategy R&D productivity - general considerations R&D allocation and governance at Roche Pipeline progress

5 An increasingly challenging environment Where do we go from here? Regulators Medical benefit-risk ratio Efficacy (clinical endpoints) Safety ( zero tolerance) Payers Economic benefit-cost ratio Constrained funding capacity Demanding real outcome evidence Investors Economic risk-return ratio Declining Returns Declining Growth 4

6 Premium for innovation Roche strategy: Focused on medically differentiated therapies Pharma Dia Regulators: Optimised benefit / risk ratio Focus Payors: Optimised benefit / cost ratio MedTech Generics OTC Differentiation 5

7 Roche strategy: Leveraging Pharma & Diagnostics Through-out discovery to market Pharmaceuticals Research Development Commercialisation Unrestricted know-how and IP exchange More efficient development Faster adoption of PHC solutions (medicine and test) Research assay Diagnostics Technically validated IVD assay Clinically validated IVD assay 6

8 Roche strategy: Tailor made access options for high value products Established Markets Emerging Markets Value based pricing Tiered pricing Universal access and coverage -> Negotiate prices for new medicines Limited patient access -> Enable access to public funding 7

9 Our strategy R&D productivity - general considerations R&D productivity at Roche Pipeline progress

10 R&D productivity of Pharma industry: average returns 1 falling to critical levels Return on R&D investment 25% 20% Bernstein KPMG Deloitte McKinsey 15% 10% Cost of Capital: 8%-10% 5% 0% Different methodologies (e.g. IRR, economic returns) Sources: Bernstein Research 2011, McKinsey 2011, KPMG 2011, Deloitte 2011, Roche analysis 9

11 R&D productivity differs substantially among players Average annual NME peak sales ( ) 1 US$ bn $ 710 m Peak Sales (per $1 bn R&D) 4 x Roche $ 165 m Peak Sales (per $1 bn R&D) Average annual R&D investment ( ) 1 US$ bn 1 Peak sales and R&D calculated pro forma to account for major M&A Source: EvaluatePharma; BCG analysis; Roche analysis 10

12 low Medical differentiation high Implications of R&D productivity challenge Segregation will continue as only true innovation will be rewarded High differentiation Generics Me-too players?? True innovators No / limited differentiation low Willingness to pay for added value high 11

13 Our strategy R&D productivity - general considerations R&D allocation and governance at Roche Pipeline progress

14 Roche R&D productivity Key success factors In-house cutting edge science Efficient resource allocation External innovation 13

15 In house cutting edge science Providing an environment for top scientists Patent applications of leading healthcare companies Roche Culture of empowerment & decentralised decision making At the forefront of leading academic research Exchange with academia: hiring top academic scientists/clinicians Post-doc program : >240 postdocs p.a. High quality of publications (Science, Cell, Nature: 17 in 2010, 12 in 2011) Companies rated in the above analysis include: Abbott, Amgen, AstraZeneca, BMS, GSK, J&J, Merck (US), Novartis, Pfizer, and Sanofi Focus on translating science into patient benefit 1 Source: WIPO-databank, counted are all Patent Cooperation Treaty (PCT)-applications per international classification C (covers all Pharmaceuticals, Biotech and Chemicals, excluding Diagnostics) 14

16 R&D resource allocation Decision criteria for portfolio trade off Research Development Medical need Plausibility of scientific hypothesis Expertise in the field Strength of preclinical / early clinical data Market potential / competition Technical feasibility Scientific judgment Analysis 15

17 Roche R&D: Allocation of funds Decides overall risk appetite Invest proportionally more into R&D as compared to peers Cap / keep R&D stable in view of the overall market risks Corporate Executive Committee (CEC) Sets total* budget by unit (Total CHF 8bn) Diagnostics (CHF 0.9bn) REDs (CHF 2.5bn) Late stage (CHF 3.9bn) Chugai (CHF 0.8bn) (arms length) Reviews allocation Oncology Neuroscience Immunology Virology Metabolism Approves LIP decisions e.g. MetMAb 16 * Refers to actual 2011 figures

18 R&D allocation of funds: Next level & governance Rigorous project evaluations Major independent decision points RRC ESPC LSPC / CEC Research Registration Launch Ph 0 Ph 1 Ph 2 Ph 3 Research Review Committee (RRC) Early Stage Portfolio Committee (ESPC) Late Stage Portfolio Committee (LSPC) Corporate Executive Committee (CEC) 17

19 Example: Optimise research at pred Nutley Reduce complexity Close R&D centres (Nutley) Co-locate management TCRC Optimise resource allocation Increase investment in late stage Leverage support functions New Molecular Entities HY 2012 before R&D Phase I Phase II Phase III + Registration prioritisation HY 2012 after R&D prioritisation Refine infrastructure Reduce infrastructure costs (support functions / site infrastructure) Unify sites for non clinical safety and chemistry Welwyn Penzberg Basel Schlieren Shanghai Strategic sites Support Centers 18

20 Continued focus on external innovation Roche Partnering 150 existing partnerships 33% of total R&D pipeline compounds (phase 1-3) are from external CHF 32% of total Pharma sales (2011) are from partnership compounds 19

21 Our strategy R&D productivity - general considerations R&D allocation and governance at Roche Pipeline progress

22 Roche portfolio: Increasing value through focus New Molecular Entities HY 2012 before R&D prioritisation Phase I Phase II Phase III + Registration HY 2012 after R&D prioritisation 21

23 Perjeta T-DM1 GA101 bitopertin ocrelizumab onartuzumab aleglitazar danoprevir mericitabine lebrikizumab rontalizumab etrolizumab anti-pcsk9 Bcl-2-sel inh MEK 0973 Expanding into selected therapeutic franchises Larger (> 1 bn) LIP candidates 2012 target: 3 out of 5 Smaller (up to ~1 bn) Potential Filing Year / onwards Oncology Neuroscience Metabolism Virology Immunology 22 Non risk-adjusted

24 Late stage pipeline Potential phase II / LIP read outs Oncology Neuroscience Metabolism Virology Immunology Ophthalmology 5 Number of NMEs 10 setrobuvir mglur2 antagonist mglur5 antagonist crenezumab gantenerumab anti-pcsk9 rontalizumab etrolizumab MEK 0973 Bcl-2-sel inhibitor 2012 anti factor D anti-egfl7 EGFR ADCC Mab (GA201) PI3 kinase inhibitor Dual PI3k/ mtor inh LIP=Lifecycle Investment Point 23

25 Summary 1 Strategic focus on innovation and driving Personalised Healthcare 2 Strong growth in Emerging Markets facilitated by innovative access models 3 Leading product pipeline providing value for the future 24

26 We Innovate Healthcare