Rejuvenating the portfolio

Transcription

1 Rejuvenating the portfolio Alan Hippe, CFO J.P. Morgan, 37 th Annual Healthcare Conference, San Francisco 2019

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 Performance update Rejuvenating the portfolio Productivity Outlook 3

4 Q3 2018: Sales growth for the seventh consecutive year 10% 8% 6% 6% 6% 6% 8% 7% 5% 6% 7% 6% 6% 6% 6% 7% 7% 6% 4% 4% 4% 4% 5% 5% 4% 4% 4% 5% 2% 2% 3% 3% 0% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 All growth rates at Constant Exchange Rates (CER) 4

5 HY 2018: Strong Core results, significant operating free cash flow Operating profit EPS Operating free cash flow % of sales 39.4% 38.5% 39.7% 21.9% 28.8% 28.6% CHFbn % at CER 11.2 CHF % 1 at CER CHFbn % at CER HY 2016 HY 2017 HY 2018 HY 2016 HY 2017 HY 2018 HY 2016 HY 2017 HY 2018 CER=Constant Exchange Rates 1 +8% at CER excl. US tax reform 5

6 CHF New product growth expected to show strong momentum Considerable optionality Sensitivity analysis: Assuming conservative planning assumptions of 60-70% erosion from biosimilars consensus sales growth* (CHF) Avastin 6.7 bn Mabthera 7.4 bn to fill: ~10 bn 1 4 bn Ocrevus Tecentriq Hemlibra Gazyva Alecensa In-market & mature 2 Pipeline value bn 2.3 bn 2.1 bn 1.0 bn 1.1 bn (0.6 bn) 0.4 bn Herceptin 7.0 bn 2017 Sales Perjeta Kadcyla Herceptin H+P SC 2022 Sales Total ~11 bn Up-side potential to consensus above are: Venclexta, SMA (risdiplam), Huntington (HTT- ASO), Autism (balovaptan), Alzheimer (gantenerumab & crenezumab), Ophthalmology (Port Delivery System), Infectious disease (baloxavir marboxil), Oncology (polatuzumab, idasanutlin, ipatasertib, mosunetuzumab) * Source: Roche post-hy2018 consensus; 1 Gap value including the total HER2 franchise change from 2017 to 2022, assuming Lucentis will be replaced by faricimab; 2 Esbriet, Tarceva, Xolair, Pulmozyme, Rocephin, CellCept, Mircera, NeoRecormon/Epogin, Activase/TNKase, Xeloda, Valcyte/Cymevene, Actemra, Tamiflu, Madopar, Pegasys; 3 etrolizumab 6

7 Performance update Rejuvenating the portfolio Productivity Outlook 7

8 Breakthrough innovation remains key Highest number in industry reflects quality of our research Phase duration (years) No = 7.5 Fast track = 5.8 Accelerated review = 3.8 Breakthrough therapy = 3.6 BTD=Breakthrough Therapy Designation; Data source: Evaluate Pharma, Decision Resources, Prismaccess 8

9 Near term pipeline carries significant revenue potential Submission Molecule Indication Market opportunity Submission Molecule Indication Market opportunity Hemlibra Hemophilia A, non-inhibitors 2018 Xofluza Influenza A & B polatuzumab vedotin Venclexta R/R DLBCL 1L AML 2019 satralizumab risdiplam Neuromyelitis optica SMA 2018 Tecentriq 1L NSq NSCLC 2020 anti-myostatin DMD Tecentriq 1L ES SCLC crenezumab Alzheimer s disease Tecentriq 1L TNBC HTT-ASO Huntington s disease Tecentriq + Avastin entrectinib RCC NSCLC ROS1+, NTRK balovaptan PDS Autism wamd idasanutlin AML faricimab DME 2019 Tecentriq+Cotellic+/-Zelboraf Tecentriq BRAFm Mel, BRAFwt Mel neoadj TNBC etrolizumab UC/CD Venclexta + Gazyva 1L CLL Tecentriq + Avastin ipatasertib 1L HCC 1L CRPC, 1L TNBC, HER2-/HR+ BC Oncology / Hematology Ophthalmology Small: up to CHF 0.5 bn 2020 Tecentriq Tecentriq Tecentriq + Avastin 1L muc CRPC 1L OC Neuroscience Immunology Infectious disease medium= CHF 0.5 to CHF 1bn large > CHF1bn 2021 polatuzumab vedotin 1L DLBCL 9

10 Replace and extend the business Through continuously improving standard of care Replace existing businesses Entering new franchises Why did we get more optimistic over the past years? MabThera/Rituxan Herceptin Avastin Lucentis Tamiflu Gazyva, Venclexta, polatuzumab vedotin, Subcutaneous Perjeta, Kadcyla, Subcutaneous Tecentriq, entrectinib, ipatasertib Faricimab, Port Delivery System Xofluza MS: Ocrevus Hemophilia A: Hemlibra CNS: SMA, Autism, Huntington s, Alzheimer s (+) New molecular entities (NMEs) with fast approval and up-take for Ocrevus, Alecensa, Perjeta, Venclexta, Hemlibra (+) Pipeline development with highest number of NMEs, in particular in CNS, Ophthalmology, Infectious Diseases VA2=aVEGF/ANG2 biab; MS=multiple sclerosis; SMA=spinal muscular atrophy; RMS=relapsing MS; PPMS=primary progressive MS; inhl=indolent Non-Hodgkin`s lymphoma; NSCLC=non-small cell lung cancer; ES-SCLC=extensive stage small cell lung cancer; RCC=renal cell carcinoma; TNBC=triple negative breast cancer; ebc=early breast cancer; R/R CLL=relapsed/refractory chronic lymphocytic leukemia; DME=diabetic macular edema; wamd=wet age-related macular degeneration 10

11 Roche positioned to maintain market leadership in hematology Broad portfolio Differentiated Combinations Innovation and Acceleration + Largest hematology portfolio across indications and asset classes Bispecific Antibodies ADCs Small molecules, etc. Portfolio breadth enables opportunity for intra-portfolio combinations, including: Gazyva + Venclexta (1L CLL) Venclexta + Idasanutlin (R/R AML) Polatuzumab + Mosun (FL/DLBCL) Develop early endpoints (e.g. MRD) Innovative trial design: Hemlibra intrapatient comparison Fast to market strategies: Venclexta accelerated approval in AML on PhIb/II ADC=antibody drug conjugate; MRD=minimal residual disease; FL = follicular lymphoma; DLBCL = Diffuse large b-cell lymphoma; CLL=chronic lymphoid leukemia; AML=acute myeloid leukemia; Venclexta in collaboration with AbbVie 11

12 Defining and redefining the standard of care in B-cell malignancies Hematology market Advancing B-cell biology for over 20 years, with novel MOAs Incidence rates (est.) To be confirmed DLBCL treatment evolution chemotherapy (CHOP/benda) +chemo Polatuzumab +R-chemo mosunetuzumab CD20/CD3 TCB +chemo/polatuzumab 14% CLL treatment evolution chemotherapy (chlorambucil) +Clb +Clb 2019 (est.) +Gazyva Total CLL, NHL (DLBCL/iNHL) market growing to USD 9bn & 15bn, respectively by CLL=chronic lymphocytic leukemia; anhl=agressive non-hodgkin s lymphoma; inhl=indolent non-hodgkin s lymphoma; R/R=relapsed refractory; DLBCL=diffuse large B-cell lymphoma; R=Rituxan; G=Gazyva; clb=chlorambucil; benda=bendamustine; 1 Datamonitor: incidence rates includes the 7 major markets (US, Japan, France, Germany, Italy, Spain, UK); 2 Evaluate Pharma; Venclexta in collaboration with AbbVie 12

13 Defining and redefining the standard of care in B-cell malignancies Hematology market Advancing B-cell biology for over 20 years, with novel MOAs Incidence rates 1 Polatuzumab vedotin Overall Survival Mosunetuzumab R/R DLBCL/trFL Anti-CD20/CD3 TCB anhl/dlbcl 10mg cohort* DLBCL treatment evolution 14% CLL treatment evolution Total CLL, NHL (DLBCL/iNHL) market growing to USD 9bn & 15bn, respectively by CLL=chronic lymphocytic leukemia; anhl=agressive non-hodgkin s lymphoma; inhl=indolent non-hodgkin s lymphoma; R/R=relapsed refractory; DLBCL=diffuse large B-cell lymphoma; R=Rituxan; G=Gazyva; clb=chlorambucil; benda=bendamustine; 1 Datamonitor: incidence rates includes the 7 major markets (US, Japan, France, Germany, Italy, Spain, UK); 2 Evaluate Pharma; Venclexta in collaboration with AbbVie 13

14 Expanding to hematologic cancers with high unmet need Venclexta with CR rates double of historical SOC in 1L unfit AML Hematology market Results from M PhIb/II trial in 1L Unfit AML Incidence rates 1 14% Cross trial comparison with Azacitadine (standard of care) Ven (400mg) + azacitadine Ven (400mg) + decitabine azacitadine (historical data) 2 CR 44% 55% ~20% CR+CRi 71% 74% ~28% MRD-negative 48% 39% N/A mos 16.9m 16.2m 10.4m ~50% of 1L AML patients are unfit for intense chemotherapy US: Approval for Venclexta+HMA/LDAC in 1L unfit AML; two confirmatory Ph 3 trials ongoing Promising early activity in R/R AML in combination with idasanutlin also presented Pollyea, et al., ASH 2018; HMA=hypomethylating agent; LDAC=low dose aracytarabine; dex=dexamethasone; MRD=minimal residual disease: AML=acute myeloid leukemia; CR=complete response; 1 Datamonitor: incidence rates includes the 7 major markets (US, Japan, France, Germany, Italy, Spain, UK); 2 Dombert H., et al., International phase 3 study of azacitidine vs conventional care regimens in older patients with newly diagnosed AML with >30% blasts. Blood. 2016;126 (3): ; MRD<10-3 Venclexta in collaboration with AbbVie 14

15 Breast cancer: Expanding into areas with high unmet need Continue defining the SoC in HER2+ BC Incidence pivotal trials Kadcyla in ebc KATHERINE disease free survival New opportunity 15% TNBC ipatasertib IPATunity130 (Ph III 1L Dx+) IMpassion130 (Ph III 1L), filed Roche marketed 20% Her2+ IMpassion131 (Ph III 1L) IMpassion132 (Ph III 1L) IMpassion031 (Ph III NeoAdj) IMpassion030 (Ph III Adj) KATHERINE (Ph III non-pcr Adj) New opportunity 65% Her2- HR+ IMpassion050 (Ph III NeoAdj) ipatasertib IPATunity130 (Ph III 1st chemo Dx+) Incidence rates (490,000 pts 1 ) 1 Source: Datamonitor and internal estimates, US & EU5; SoC=standard of care; BC=breast cancer; TNBC=triple negative breast cancer 15

16 Lung cancer Broad coverage with differentiated growth opportunities Lung cancer market Incidence rates 1 Driver mutations NSCLC Alecensa rapidly established as market leader in 1L ALK+ Entrectinib setting a new SOC in ROS1+/NTRK+ SCLC Tecentriq with OS benefit with chemo in 1L SCLC 1L NSq NSCLC Tecentriq: 3 positive Ph III trials, including multiple chemos Uniquely differentiated with abraxane and Avastin combinations Strong efficacy in patients with liver metastases (~20% pts) Early NSCLC Pivotal studies in neoadjuvant and adjuvant ongoing Total lung cancer market growing from USD ~14bn in 2017 to ~33bn in CIT=Cancer Immunotherapy; SCLC=small cell lung cancer; NSCLC=non-small cell lung cancer, Sq=squamous, NSq=non-squamous, SOC=standard of care; 1 Datamonitor: incidence rates includes the 7 major markets (US, Japan, France, Germany, Italy, Spain, UK); 2 Evaluate Pharma 16

17 Replace and extend the business Through continuously improving standard of care Replace existing businesses Entering new franchises Why did we get more optimistic over the past years? MabThera/Rituxan Herceptin Avastin Gazyva, Venclexta, polatuzumab vedotin, Subcutaneous Perjeta, Kadcyla, Subcutaneous Tecentriq, entrectinib, ipatasertib MS: Ocrevus Hemophilia A: Hemlibra (+) New molecular entities (NMEs) with fast approval and up-take for Ocrevus, Alecensa, Perjeta, Venclexta, Hemlibra (+) Pipeline development with highest number of NMEs, in particular in CNS, Ophthalmology, Infectious Diseases Lucentis Tamiflu Faricimab Port Delivery System Xofluza CNS: SMA, Autism, Huntington s, Alzheimer s VA2=aVEGF/ANG2 biab; MS=multiple sclerosis; SMA=spinal muscular atrophy; RMS=relapsing MS; PPMS=primary progressive MS; inhl=indolent Non-Hodgkin`s lymphoma; NSCLC=non-small cell lung cancer; ES-SCLC=extensive stage small cell lung cancer; RCC=renal cell carcinoma; TNBC=triple negative breast cancer; ebc=early breast cancer; R/R CLL=relapsed/refractory chronic lymphocytic leukemia; DME=diabetic macular edema; wamd=wet age-related macular degeneration 17

18 Multiple Sclerosis Goal to be market leader in MS Ocrevus uniquely differentiated in RMS and PPMS Efficacy RMS Superior to SOC DMT PPMS First therapy to show efficacy in setting MS Projected Revenue Uptake Curves 1 US New/Switch Patient Share 2 Ocrevus 35% Ocrevus Safety Convenience 70,000+ patients; 4-year safety data presented; no PML cases related to drug IV twice yearly Tecfidera Gilenya Aubagio Tysabri Copaxone (incl. generic) ABREPS Tysabri Tecfidera Access Priced below or similar to high efficacy therapies, broad payer coverage in US, reimbursement ongoing in EU Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Aubagio Gilenya Other US: Total Patient 12% Market Share As of Q #1 New MS prescription in US As of Mar Sales split: RMS/PPMS 30 Q Total MS market USD ~23bn in SOC=Standard of Care; RMS=Relapsing Multiple Sclerosis; PPMS=Primary Progressive Multiple Sclerosis; DMT=disease modifying therapy; 1 Source: Evaluate Pharma 2. US IMS and Symphony claims data Q

19 Bringing transformative therapies to non-malignant hematology Hemophilia patient overview 1 Hemlibra transforming care for patients with and without inhibitors 20-25% 10% 5% 45% Hemophilia (inhibitor) treatment evolution bypassing agents 2017 Inhibitors 15% Non-inhibitors with bleeds Paediatric Non-inhibitors without bleeds Mild Hemophilia (non-inhibitor) R/R AML treatment evolution Factor VIII/ Modified FVIII 2018 Total hemophila A market growing to USD 13bn by Data from internal estimates 2. Evaluate Pharma 19

20 Emerging opportunities in CNS Adressing high medical need Risdiplam in SMA Phase II/III (FIREFISH) Type 1 SMA Median change from baseline in CHOP-INTEND HTT-ASO in Huntington Pivotal trial initiated Balovaptan in autism (ASD) Pivotal trial initiated in adults* 20/21 babies (95%) were alive at 10.5m With 8 m treatment: 3 unassisted sitting babies Broad clinical program including Type 1 to 3 Highest doses: mean reductions of mhtt protein of 40% to 60% Safe and well tolerated Dose dependent treatment effect on VinelandTM-II score Ph II study in children ongoing * Primary endpoint (SRS-2) in Phase 1 not met 20

21 Transforming Healthcare through new era of data and analytics Deeper scientific insights (bench to bedside) Enhanced matching of patients with therapies Better, earlier go/no-go decisions Faster, more efficient trials Smarter, more efficient R&D Improved access & personalized care Improving access and value-based healthcare Accelerating optimization of care 21

22 Performance update Rejuvenating the portfolio Productivity Outlook 22

23 Transforming our operating model Building an effective organization for the future R&D Manufacturing Commercial +11% US Example: Filing of IMpassion 130 in 14 weeks (down from 26w) Volume HY 2018 vs. HY % Core COGS and Period Costs Europe LATAM APAC EEMEA US International Fit-for-purpose teams enabling fast, but rigorous decision making Faster filing initiatives (e.g. regulatory acceleration, dossier optimizing) PHC and data strategy driving insights and R&D efficiencies Lean management production program Favorable product mix Management of inventory Simplified structures, processes & culture to drive effectiveness Productivity initiatives Resource shift to support key launches EM=Emerging Market; PHC=Personalized Healthcare; COGS=cost of goods sold 23

24 Performance update Rejuvenating the portfolio Productivity Outlook 24

25 line extensions NMEs Q3 2018: Record number of NMEs at pivotal stage entrectinib polatuzumab vedotin polatuzumab vedotin ipatasertib ipatasertib Hemlibra Hemlibra idasanutlin Hemlibra idasanutlin Perjeta+Herceptin FDC SC idasanutlin Hemlibra taselisib faricimab taselisib Venclexta Alecensa Tecentriq lampalizumab satralizumab gantenerumab idasanutlin taselisib Alecensa Tecentriq lampalizumab crenezumab satralizumab faricimab risdiplam balovaptan anti-myostatin adnectin crenezumab satralizumab gantenerumab PDS with ranibizumab HTT-ASO risdiplam balovaptan anti-myostatin adnectin crenezumab satralizumab Oncology Ophthalmology Neuroscience Immunology Infectious Disease Ocrevus gantenerumab Ocrevus gantenerumab lebrikizumab Ocrevus baloxavir marboxil baloxavir marboxil etrolizumab etrolizumab etrolizumab etrolizumab FY 2015 FY 2016 FY 2017 Q NME=new molecular entities; baloxavir marboxil (Cap Endonuclease inhibitor); risdiplam (SMN2 splicer); FDC=Fixed dose combination; SC=Subcutaneous; PDS=Port delivery system For details on the indications and line extensions please consult the pipeline appendix 25

26 2018 outlook Group sales growth 1 Mid single digit Core EPS growth 1 Broadly in line with sales, excl. US tax reform benefit Mid teens incl. US tax reform Dividend outlook Further increase dividend in Swiss francs 1 At Constant Exchange Rates (CER) 26

27 Doing now what patients need next