Roche: Committed to innovation and profitable growth. Nina Goworek, Investor Relations Officer 10 November 2011

Transcription

1 Roche: Committed to innovation and profitable growth Nina Goworek, Investor Relations Officer 10 November 2011

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 More than 115 years of Roche Historical timeline Sales in 2010: million CHF Personalised Healthcare Strategic Transition - focus on Pharmaceuticals & Diagnostics 50,000 Ventana Chugai One Company 40,000 30,000 20,000 10,000 Founding Limited Company International expansion Genentech Diagnostics Fragrances & Flavours Disetronic Boehringer Mannheim Diversification Spin off Fragrances & Flavours Sale OTC Sale Vitamins & Fine Chemicals #1 in in-vitro diagnostics #1 in biotech Today

4 Roche Group Structure Pharma Diagnostics Roche Pharma Genentech Chugai Roche Applied Science Roche Molecular Diagnostics Roche Professional Diagnostics Roche Tissue Diagnostics Roche Diabetes Care

5 Pharmaceuticals Diagnostics Personalized Healthcare Financials 5

6 Pharma: Strong position in a large market 8% 7% 6% 5% 5% 5% % Pharma Rx market share (2010) Source: EvaluatePharma Source: EvaluatePharma Rx + OTC estimate Other represents Australia and Canada 6

7 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 7

8 Roche: Limited exposure to patent expiries in the short and medium term 40% % 30% 25% 20% 15% 10% Business impact from biosimilars 2014/15 and beyond? 5% 0% % Sales Lost calculated by subtracting given year sales ( 10, 11, 12, 13) from full year sales from year prior to LOE. Data excludes sales lost impact of products with LOE prior to Source: Evaluate Pharma 8

9 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 9

10 A leading pipeline 12 NMEs in late-stage development Number of NMEs Virology Expected filing timelines CNS 12 Metabolic Inflammation Oncology 10 Glycine reuptake inh aleglitazar HCV pol inh 1 ocrelizumab MS Glycine reuptake inh aleglitazar taspoglutide dalcetrapib 2013 dalcetrapib lebrikizumab ocrelizumab Hedgehog inh MetMAb vismodegib 2014 Filed in US 2 ocrelizumab Actemra taspoglutide dalcetrapib ocrelizumab pertuzumab BRAF inhibitor T-DM1 GA101 (CLL) pertuzumab Zelboraf 2 T-DM1 GA101 (CLL, NHL) pertuzumab Approved in US, filed in EU Q LIP decision made, phase III start pending; 2 approved in US, filed in EU

11 HER2 franchise Building on the strength of Herceptin Pertuzumab Disrupts HER2:HER3 receptor dimers and downstream signaling In combination with Herceptin: potential to create new standard of care for women with HER2-positive metastatic BC T-DM1 Retains Herceptin s biologic activity Targeted intracellular delivery of a potent cell-killing agent, DM1 11

12 Example T-DM1 vs. Herceptin + docetaxel in breast cancer Ph II: significant improvement in PFS Proportion progression-free Trastuzumab +docetaxel T-DM1 PFS, 1 st line HER2+ breast cancer (n=70) (n=67) T+D T-DM1 Median PFS, mos Hazard ratio Log-rank P value Time (months) Median duration of treatment, months T-DM1 Trastuzumab Docetaxel Trastuzumab + docetaxel (n=66) Hurvitz SA, et al. Abstract ESMO 2011; Hazard ratio and log-rank P value were from stratified analysis T-DM1 (n=69)

13 Example Vemurafenib phase I overall survival Updated KM estimates (Aug. 2011) Overall survival (%) year 2 years Time since first dose (months) V600E dose escalation (n=16) Extension, 960 mg twice daily (n=32) WT or sub-therapeutic exposure (n=33) Median OS (month) Dose escalation 25.2 Extension 13.8 WT or sub-therapeutic Extension cohort in phase I estimated survival: 1 year = 50%, 2 years = 38% McArthur, ECCO/ESMO 2011; Flaherty et al, NEJM

14 Example MEK inhibitor (GDC-0973) in combination with Zelboraf Before initiation of Zelboraf 15 weeks on Zelboraf after relapse MEK inh. (GDC-0973) in combination with BRAF inh. Nature 468, ; 16 December

15 Example Vismodegib in metastatic and locally advanced Basal Cell Carcinoma Phase II data at EADO and ESMO Baseline Week 8 Week 20 Week 16: no BCC on biopsy Filed in Q in US In collaboration with Curis A. Sekulic et al., EADO

16 Example Ocrelizumab in RMS Looking for the next step in MS therapy 90 Relative reduction in Annualized Relapse Rate vs. placebo in a range of phase 2/3 trials % ocrelizumab natalizumab rituximab fingolimod BG-12 interferon ß-1a sc interferon ß-1b glatiramer acetate NOTES: Pattern: Solid bars represent Phase III studies; pattern = Phase II Trial durations vary from 6 mos. to 3 yrs; studies included different patient populations, different in/exclusion criteria, different ARR definitions and data were collected over a time span of more than 20 years 16

17 Portfolio outlook An update on key compounds Market potential Larger Smaller Launch Year Vemurafenib Vismodegib Pertuzumab T-DM1 GA Glyt-1 Dalcetrapib Ocrelizumab MetMAb Mericitabine Lebrikizumab Aleglitazar gred pred 17

18 Roche development pipeline Phase I Phase II Phase III RG7112 RG7167 RG7212 RG7256 RG7304 RG7321 RG7334 RG7356 RG7420 RG7421 RG7422 RG7440 RG7444 RG7446 RG7450 RG7458 RG7459 RG7593 RG7594 RG7596 RG7597 RG7598 RG7599 RG7601 RG7602 RG7603 RG7604 RG7686 CHU CHU CHU MDM2 ant (2) solid & hem tumors CIF/MEK inh solid tumors Tweak MAb oncology BRaf inh(2) BRAF mut. melanoma Raf & MEK dual inh solid tumors PI3 kinase inh solid tumors anti-plgf MAb solid tumors anti-cd44-mab solid tumors MEK inh solid tumors MEK inh solid tumors PI3 K/mTOR inh solid & hem tumors AKT inhibitor solid tumors anti-fgfr3 MAb oncology tumor immunotherapy oncology - ADC prostate ca. - ADC ovarian ca. IAP ant (2) solid tum & lymphoma anti-d22 ADC hem. malignancies anti-angiogenic solid tumors - ADC hematologic tumors anti-her3/egfr m. epithelial tumors - ADC multiple myeloma - ADC oncology Bcl-2 inh CLL Chk-1 inh tumors or lymphoma - solid tumors or NHL PI3K inh oncology anti-glypican-3 MAb liver cancer ALK inhibitor NSCLC - solid tumors WT-1 vaccine oncology RG4934 RG7185 CHU RG7432 RG7236 RG7273 RG7652 RG7685 RG1578 RG1662 RG7314 RG7129 RG7166 anti-il-17 MAb CRTH2 antag Anti-IL 6 MAb nucleoside pol inh Cat S antag ABCA1 inducer mglur2 antag (2) GABRA5 BACE inh NME Additional Indication Oncology Inflammation/Immunology Virology Metabolic/Cardiovascular CNS Ophthalmology Others RA asthma HCV CV risk in CKD dyslipidemia - metabolic GIP/GLP-1 dual ago type 2 diabetes V1 receptor antag (2) triple reuptake inh RA depression cogn. disorders autism Alzheimer s depression RG1273 RG1273 RG3502 RG3616 RG3638 RG3638 RG3638 RG7160 RG7204 RG7433 RG7414 RG3637 RG7413 RG7415 RG7416 RG7449 RG7128 RG7227 RG4929 RG1512 RG7418 RG1450 RG1577 RG7090 RG7412 RG7417 pertuzumab HER2+ EBC pertuzumab HER2+ mbc 2 nd line T-DM1 HER2+ EBC vismodegib operable BCC MetMAb mnsclc MetMAb mbc MetMAb mcrc 1L EGFR Mab solid tumors Zelboraf papillary thyroid cancer navitoclax (ABT-263) sol & hem tum anti-egfl7 MAb solid tumors lebrikizumab severe asthma rhu Mab Beta7 ulcerative colitis rontalizumab SLE anti-lt alpha MAb RA anti-m1 prime MAb asthma mericitabine HCV danoprevir HCV 11 beta HSD inh metabolic diseases P selectin MAb ACS/CVD anti-oxldl MAb sec prev CV events gantenerumab Alzheimer s MAO-B inh AD mglur5 antag (2) TRD anti-abeta MAb Alzheimer s anti-factor D Fab geogr. atrophy RG105 RG105 RG435 RG435 RG435 RG435 RG435 RG435 RG435 RG435 RG435 RG597 RG597 RG1273 RG1415 RG1415 RG3502 RG3502 RG3502 RG7159 RG7159 RG7159 RG7159 RG105 RG1569 RG1569 RG1569 RG3648 RG1439 RG1658 CHU RG1594 RG1594 Rituxan NHL fast infusion MabThera NHL s.c. formulation Avastin HER2+ BC adj Avastin BC combo Herceptin 1 st line Avastin NSCLC adj Avastin HER2-neg. BC adj Avastin triple-neg. BC adj Avastin high risk carcinoid Avastin glioblastoma 1 st line Avastin mcrc TML Avastin mbc 2 nd line Herceptin HER2+ BC s.c. form. Herceptin HER2+ adj BC (2yrs) pertuzumab HER2+ mbc 1 st line Tarceva NSCLC adj Tarceva NSCLC EGFR mut 1 st line T-DM1 HER2+ adv. mbc T-DM1 HER2+ mbc 3rd l. T-DM1 HER2+ mbc 1 st l. GA101 CLL GA101 inhl relapsed GA101 DLBCL GA101 inhl front-line MabThera ANCA assoc vascul Actemra sc formulation RA Actemra early RA Actemra RA DMARD IR H2H Xolair chronic idiopathic urticaria aleglitazar CV risk reduction in T2D dalcetrapib atherosc. CV risk red. tofogliflozin (SGLT2) type 2 diabetes ocrelizumab RMS ocrelizumab PPMS RG-No Roche Genentech managed CHU Chugai managed RG1678 RG1678 RG3645 GRI schizophrenia negative sympt. GRI schizophrenia subopt control Lucentis AMD high dose 18 Status as of September 30, 2011

19 Pharmaceuticals Diagnostics Personalized Healthcare Financials 19

20 Market Overview: In vitro Diagnostics Large & growing market, increasing in importance World-wide IVD Sales by Segment Market trends USD bn Total Tissue Molecular CAGR 5% 11% 9% Labs remain willing to invest to address costs and improve efficiency Payers support solutions that deliver health economic and medical value Professional 5% New drug approvals increasingly linked to Companion Diagnostics 9 10 Diabetes Monitoring 3% Emerging markets adopting western standards of care E Source: Independent IVD consulting firm, Roche Analysis, Company reports Excludes Life Sciences & insulin pumps 20

21 Market Overview: Market share Roche is the clear IVD market leader 20% Roche's strengths Total solution offering Breadth of technologies 12% 11% 9% 7% IT and workflow connectivity Completeness of menu Strong commercial presence 3% Operates in >130 countries Roche Abbott Siemens J&J Beckman biomérieux Source: Independent IVD consulting firm, Roche Analysis, Company reports Excludes Life Sciences & insulin pumps 21

22 Performance: Diagnostics Division HY 2011 Leading in sales growth and margin Sales % change CHF m CHF m CHF CER Operating profit 2011 % change CHF m % Sales (at CER) Professional Diagnostics 2,449 2, Diabetes Care 1,489 1, Molecular Diagnostics Applied Science Tissue Diagnostics Diagnostics Division 5,250 4, Sales 4, Royalties & other op inc Cost of sales -2, M & D -1, R & D G & A Core operating profit 1, CER=Constant Exchange Rates, (average full year 2010) 22

23 Pharmaceuticals Diagnostics Personalized Healthcare Financials 23

24 Competitive advantage of having Pharma and Diagnostics in the Group Pharma Diagnostics in R&D in Commercial Develop superior Personalized Healthcare solutions, faster and cheaper Drive faster implementation in the market 24

25 Personalised Healthcare a key enabler Fitting the treatment to the patients Effectiveness of treatment can be improved % of patients do not receive effective treatment 1 >100,000 deaths/yr from adverse drug reactions in US 2... by tailoring treatments to selected patient groups defined by biomarkers 1 Spears et al., Trends Mol Med, Lazarou et al., JAMA, 1998

26 Roche Pharma: a leading pipeline 12 NMEs in late-stage development New molecular entities (NMEs) Virology HCV pol inh 1 ocrelizumab MS PHC approach CNS Glycine reuptake inh Glycine reuptake inh Metabolic aleglitazar aleglitazar Inflammation taspoglutide dalcetrapib dalcetrapib lebrikizumab 1 Oncology ocrelizumab MetMAb 4 Hedgehog inh vismodegib 2 taspoglutide dalcetrapib BRAF inhibitor T-DM1 Zelboraf 2 T-DM1 ocrelizumab Actemra ocrelizumab pertuzumab GA101 (CLL) pertuzumab GA101 (CLL, NHL) pertuzumab LIP decision made, phase III start pending; 2 approved in US, filed in EU

27 A big step forward for our PHC strategy Zelboraf is just the start T-DM1 Metastatic breast cancer (HER-2 expression level) MetMAb Non-small cell lung cancer (MET status) Pertuzumab Metastatic breast cancer (HER-2/3 expression level) Lebrikizumab 1 Asthma (periostin level) Mericitabine Hepatitis C (HCV viral load, genotype) Zelboraf Metastatic melanoma (BRAF V600E mutation) 1 LIP decision made, phase III start pending

28 PHC: Roche internal collaborations Significant increase due to focused PHC strategy 169 = Companion Dx Projects = R&D Collaborations Genentech Privatization Ventana Acquisition

29 Personalised Healthcare- benefit for all stake holders, including the industry Today Benefit from patient stratification Future Time to market Reduced Patient pool Faster penetration Lower development costs Price increase / stability Increased market share 29

30 Pharmaceuticals Diagnostics Personalized Healthcare Financials 30

31 HY 2011: Group performance Core EPS growth +10% 1 CHF m %Change CHF CER Sales 24,636 21, Core operating profit 9,159 8, as % of sales Core net income 6,062 5, as % of sales Attributable to Roche shareholders 5,965 5,697-4 Core EPS (CHF) IFRS net income 5,565 5, as % of sales at Constant Exchange Rates, CER (average full year 2010) 31

32 YTD Sept 2011: Group sales Supporting full-year guidance, strong currency impact % change Excluding CHF bn CHF CER Tamiflu 1 Pharmaceuticals Division Diagnostics Division Roche Group at Constant Exchange Rates, CER (average full year 2010) 32

33 HY 2011: Group operating performance Positive effects of Operational Excellence Sales Royalties & other op. inc Cost of sales M & D R & D G & A G&A excl. excise tax 2011 vs local growth COGS/PC 1 : +1% Higher milestone income and product disposal income Lower royalty (e.g. Tamiflu) and manufacturing costs Primary care sales force reduction & cost management Project prioritisation and OpEx savings (Pharma -2%) Increase due to excise tax in the US Efficiency improvements Major drivers Underlying sales growth of Herceptin, Lucentis, MabThera/ Rituxan and Actemra Core operating profit -10% in CHF 1 Cost of goods sold & period cost 33

34 HY 2011: Group core operating profit and margin Strong margin increase over years CHF m +1.8 % p 1 (+0.9 % p) +2.7 %p 1 (+1.7 %p) % of sales +5 % 1 (-10 %) +5 % 1 (-10 %) -0.2 %p 1 (-0.4 %p) % 1 (-9 %) 1 at Constant Exchange Rates 34

35 P&L structure reflecting innovation based strategy Peer group core operating profit margin 2010 R&D % sales Core operating profit margin % sales M&D+G&A % sales FY 2010 figures; restated to a core basis based on publicly available information 1. Pfizer: Non-core items in CoS 2. Eli Lilly: 8%p. lower CoS ratio vs. Roche. Not feasible to judge if definition of Lilly s CoS same as Roche s 3. JNJ: No adjustments feasible as no details are disclosed. 35

36 Committed to growing operating free cash generation Operating free cash flow 2010 (% of sales) Group operating free cash flow (CHF bn) and margin Gilead 52% Biogen 52% Amgen 36% Sanofi 36% AZ 35% Lilly 34% Abbott 32% Roche 30% Takeda 30% J&J 29% BMS 29% Novartis 28% Merck 23% Becton D. 21% Astellas 19% Pfizer 16% GSK Bayer Ø 28% (27% excl. Biogen and Gilead) 36

37 Attractive dividend payout ratio CHF Average yearly dividend growth ( ): 22% % 51.6% Payout ratio 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1 compound annual growth rate Pay-out ratio calculated as dividend per share divided by core earnings per share (diluted) Pay-out ratio calculated as dividend per share divided by earnings (before exceptional items) per share (diluted) 37

38 2010: 24th consecutive annual increase in the dividend 27% increase in the ADR dividend! Dividend per share Dividend per American Depositary Receipt 1 +10% 1 Currency rate as determined by the depositary bank during the dividend payment and tax reclaim process 38

39 Increasing shareholder value P&L: increasing profitability Operating profit margin increase (37.2% to 38.1% HY 2011) Delivering on productivity improvements Headcount: 3,000 released from work, further 800 notified since start of Operational Excellence Sites: closing/divesting of Boulder, Burgdorf, Kulmbach, Graz and Palo Alto done or ongoing Increasing cash generation HY 2011: Operating free cash flow +27% 1 (+7% CHF) Committed to an attractive dividend policy Grow in-line with Core EPS; maintain at least last year s dividend in CHF 1 at Constant Exchange Rates 39

40 Increased outlook for 2011 Good first half due to strong business performance Sales growth (at CER) Genentech synergies Operational Excellence savings Core EPS growth target (at CER) Dividend outlook Group & Pharma (excl. Tamiflu): low single-digit Diagnostics: significantly above market : CHF 1.0 bn* 2011 : CHF 1.8 bn : CHF 2.4 bn Increased to around 10% Grow in-line with Core EPS; maintain at least last year s dividend in CHF Barring unforeseen events; CER=constant exchange rates; * vs. 2010: CHF 0.8 bn 40

41 Roche in brief Innovation & productivity Focused innovation strategy Personalized Healthcare through Pharmaceuticals & Diagnostics Medically-differentiated products & services Leading businesses Biotech-based leadership in Oncology, Virology; emerging Immunology, Cardio-metabolic and Neuroscience franchises. Limited patent risk World s #1 in-vitro Diagnostics company Strong financials Increasing profitability through growth & productivity with constant focus on cash flow Attractive dividend

42 We Innovate Healthcare