Roche Holding Ltd · SIX:RO
Roche — H1 2021 Earnings Presentation
68 slides from Roche's earnings presentation, Jul 22, 2021
Slide 1: Roche logo
Slide 2: Roche HY 2021 results
Roche HY 2021 results Basel, 22 July 2021
Slide 3: Forward-looking statements
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, str
Slide 4: Group
Group Severin Schwan Chief Executive Officer
Slide 5: HY 2021 performance, Outlook
HY 2021 performance Outlook 5
Slide 6: Strong start into the year
HY 2021: Strong start into the year • Group sales up +8% – Diagnostics with >50% sales growth, supported by strong recovery of base business – Pharma back to growth in Q2, strong performance of new products (capturing >50% of Pharma sales) • Core EPS up +6%, Operating Free Cash Flow +71% • Good deve
Slide 7: Responding quickly and broadly to the pandemic
Responding quickly and broadly to the pandemic Collaboration with Atea on Positive Ph II interim AT-527 development of AT-527 analysis in hospitalized Pharma Collaboration with Regeneron on FDA EUA granted in mild- EU CHMP scientific Positive Ph III (RECOVERY) casirivimab/imdevimab global supply mod
Slide 8: Strong Diagnostics Division driving Group sales growth
HY 2021: Strong Diagnostics Division driving Group sales growth HY 2021 HY 2020 Change in % CHFbn CHFbn CHF CER Pharmaceuticals Division 21.7 23.2 -7 -3 Diagnostics Division 9.0 6.1 49 51 Roche Group 30.7 29.3 5 8 CER=Constant Exchange Rates 8
Slide 9: Group sales growth recovery
HY 2021: Group sales growth recovery 16% 14%* 14% 13% 12% 10% 9% 9% 8% 8% 7% 7% 7% 7% 6% 6% 6% 6% 6% 6% 6% 6% 5% 5% 7% 8% 4% 6% 4% 5% 5% 4% 4% 4% 4% 3% 2% 3% 3% 1% 1% 0% -2% -4% -4% -6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 13 13 13 13
Slide 10: New products with continued momentum and strong growth in Diagnostics
HY 2021: New products with continued momentum and strong growth in Diagnostics CHFm % of Pharma Sales CHFm +8% at CER 12,000 51% 11,000 +2,580 +3,058 10,000 38% -402 9,000 -957 8,000 28% 7,000 6,000 -2,847 5,000 20% 4,000 30,713 29,281 3,000 2,000 1,000 0 HY 2018 HY 2019 HY 2020 HY 2021 HY 2020 Phar
Slide 11: Normalization of healthcare systems ongoing
HY 2021: Normalization of healthcare systems ongoing Pandemic continues to impact business dynamics % CER 1st wave 2nd wave 3rd wave +60% +50% +55% +48% Pharmaceuticals +50% • Some normalization of healthcare systems, not yet +40% +32% +28% +40% back to pre COVID-19 levels +30% +25% • Biosimilar imp
Slide 12: Good growth of Core EPS
HY 2021: Good growth of Core EPS Core operating profit Core EPS Operating free cash flow 24.6% 26.4% % of sales 40.6% 40.2% 17.2% 37.9% +6% at CER +71% at CER +4% at CER CHFbn CHF CHFbn 8.1 10.56 11.7 11.12 12.4 10.44 11.8 7.5 5.0 HY 2019 HY 2020 HY 2021 HY 2019 HY 2020 HY 2021 HY 2019 HY 2020 HY 20
Slide 13: HY 2021 performance, Outlook
HY 2021 performance Outlook 13
Slide 14: Continuing to invest in innovation in Pharma and Diagnostics
Continuing to invest in innovation in Pharma and Diagnostics Assets in Ph III & registration at all time high Diagnostics major systems launches 18 ePlex System cobas® 58001 cobas® pure 2 14 3 13 2 11 2 3 1 9 5 4 2 4 4 1 1 1 1 1 cobas® pro (high throughput) cobas® pulse1 1 8 1 5 5 5 NMEs 3 HY 2017 H
Slide 15: 2021 outlook confirmed
2021 outlook confirmed Further growing top and bottom line Group sales growth1 • Low- to mid-single digit Core EPS growth1 • Broadly in line with sales growth Dividend outlook • Further increase dividend in Swiss francs 1 At Constant Exchange Rates (CER); based on the current assessment of the COVID
Slide 16: Pharmaceuticals Division
Pharmaceuticals Division Bill Anderson CEO Roche Pharmaceuticals
Slide 17: Pharmaceuticals Division sales
HY 2021: Pharmaceuticals Division sales Sales still impacted by COVID-19 and biosimilars HY 2021 HY 2020 Change in % CHFm CHFm CHF CER Pharmaceuticals Division 21,671 23,202 -7 -3 United States 10,802 12,464 -13 -8 Europe 4,485 4,190 7 4 Japan 1,808 1,908 -5 0 International 4,576 4,640 -1 2 CER=Cons
Slide 18: Continued investments into R&D to drive future growth
HY 2021: Pharmaceuticals Division Continued investments into R&D to drive future growth HY 2021 2021 vs. 2020 CHFm % sales CER growth Sales 21,671 100 -3% Royalties & other op. inc. 1,372 6.3 34% Cost of sales -3,882 -17.9 -4% M&D -2,962 -13.7 -6% R&D -5,883 -27.1 19% G&A -754 -3.5 -2% Core operatin
Slide 19: Continued portfolio rejuvenation
HY 2021: Continued portfolio rejuvenation >50% of sales from new products* Ronapreve n/a Ocrevus 23% Hemlibra 45% Tecentriq 29% Evrysdi n/a Actemra / RoActemra 17% Kadcyla 19% Alecensa 20% Phesgo n/a Perjeta 5% Enspryng n/a Gazyva 8% Polivy 17% Xolair -1% Lucentis -3% US Esbriet -3% Xofluza n/a Euro
Slide 20: Oncology still impacted by biosimilars & COVID-19
HY 2021: Oncology still impacted by biosimilars & COVID-19 YoY CER growth HER2 franchise Phesgo • Kadcyla (+19%) with growth in all regions due to adjuvant BC HER2 franchise Herceptin Perjeta (+5%) -8% • Perjeta (+5%) growth cannibalized by Phesgo launch Kadcyla (+19%) Avastin Avastin -40% • Phesgo:
Slide 21: Tecentriq overview: Growth driven by first-in-class indications
Tecentriq overview: Growth driven by first-in-class indications Landmark results in adjuvant NSCLC presented and filed CHFm YoY CER growth Tecentriq Q2 update 900 +26% +31% Lung franchise (NSCLC, SCLC) 800 +49% +35% • EU: Growth driven by 1L SCLC 700 +99% +54% 600 +136% • EU: 1L PDL1+ NSCLC (IMpower
Slide 22: Hemophilia A franchise: Hemlibra growing strongly
Hemophilia A franchise: Hemlibra growing strongly 29% US/EU-5 patient share reached CHFm YoY CER growth 800 Hemophilia Q2 update +58% 700 +33% • US/EU: Gaining market share in non-inhibitors despite +45% +57% some COVID-19 impact 600 +146% 500 +313% +59% • #1 prescribed prophylaxis in the US for peo
Slide 23: Immunology franchise remains impacted by COVID-19
Immunology franchise remains impacted by COVID-19 CHFm YoY CER growth Immunology Q2 update 2,500 Actemra (+12%) +7% +2% +1% +7% • FDA grants EUA for COVID-19 treatment in hospitalized patients 2,000 • Remains leading RA monotherapy in EU-5; shift from IV to SC 1,500 Esbriet (+1%) 1,000 • COVID-19 im
Slide 24: MS franchise: Ocrevus total US market share increases to 28%
MS franchise: Ocrevus total US market share increases to 28% MS late stage development programs progressing well CHFm YoY CER growth 1,500 Q2 update +37% +16% +31% • US showing recovery as vaccination roll-out progresses, but 1,250 +55% +38% +10% COVID-19 impact still felt +12% 1,000 +59% +48% • Hig
Slide 25: SMA franchise: Strong US and EU launches
SMA franchise: Strong US and EU launches >1,800 US patients (approaching 20% total share) after <11 months Broad uptake across all patient types in the US Ph III (RAINBOWFISH) interim results: Patients treated with all SMA types CHOP-INTEND scores in presymptomatic babies with SMA (n=5) treated for
Slide 26: Ophthalmology franchise: PDS and faricimab US filings completed
Ophthalmology franchise: PDS and faricimab US filings completed PDS: New Ph III with 36-week dosing interval initiated Port delivery system Faricimab (PDS) (anti-VEGF/Ang-2 biMab) • Ph III (ARCHWAY) data in nAMD show more than 90% of patients • Ph III (YOSEMITE & RHINE) results in DME positive with
Slide 27: Pharma: Strong short- and mid-term news flow
Pharma: Strong short- and mid-term news flow Diversifying the late stage pipeline & setting new standards of care 12 new Ph III studies initiated in H1 Strong news flow ahead (data readout) New to Phase III in Q1 tiragolumab (SKY-4) in 2L cervical cancer Kadcyla + Tecentriq (KATE 3) in 2L+ HER2+ PDL
Slide 28: 2021: Key late-stage news flow
2021: Key late-stage news flow* Compound Indication Milestone Xofluza Healthy patients; High risk patients; Post exposure EU approval Evrysdi SMA type 1/2/3 EU approval faricimab DME/nAMD US/EU joint filing (DME+AMD) Regulatory Tecentriq 1L PDL1+ NSCLC EU approval Venclexta + azacitidine 1L unfit AM
Slide 29: Diagnostics Division
Diagnostics Division Thomas Schinecker CEO Roche Diagnostics
Slide 30: Diagnostics Division sales
HY 2021: Diagnostics Division sales Very strong growth driven by COVID-19 and routine testing HY 2021 HY 2020 Change in % CHFm CHFm CHF CER Diagnostics Division 9,042 6,079 49 51 Core Lab 3,726 2,821 32 34 Molecular Lab 2,216 1,558 42 45 Point of Care 1,616 360 349 349 Diabetes Care 894 832 7 10 Pat
Slide 31: Diagnostics Division sales growth by quarter
Diagnostics Division sales growth by quarter Accelerated growth of routine testing in H1 55% 48% Diagnostics Division sales growth 28% Routine sales growth 1 31% 18% 17% 5% 2% 1% -2% -5% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 -17% COVID-19 Q1: 0.1bn Q2: 0.6bn Q3: 0.6bn Q4: 1.1bn Q1: 1.2bn Q2: 1.3bn sal
Slide 32: Diagnostics Division regional sales
HY 2021: Diagnostics Division regional sales Very strong growth in all regions North America +25% EMEA1 ~23% of divisional sales +70% ~46% of divisional sales Asia Pacific Latin America +44% +77% ~25% of divisional sales ~6% of divisional sales All growth rates at Constant Exchange Rates (CER); 1 Eu
Slide 33: Diagnostics Division highlights
HY 2021: Diagnostics Division highlights Very strong growth across all businesses YoY CER growth Core Lab +34% • Immunodiagnostics (+40%) • Clinical Chemistry (+25%) Molecular • Virology (+60%) +45% • LightMix Systems (+44%) Lab1 • POC Molecular (+318%) Point of • POC Immunodiagnostics (>2,000%) +34
Slide 34: Diagnostics Division core operating profit more than doubled
HY 2021: Diagnostics Division Core operating profit more than doubled HY 2021 2021 vs. 2020 CHFm % sales CER growth Sales 9,042 100 51% Royalties & other op. inc. 48 0.5 79% Cost of sales -4,355 -48.2 51% M&D -1,330 -14.7 8% R&D -807 -8.9 16% G&A -274 -3.0 25% Core operating profit 2,324 25.7 137% +
Slide 35: SARS-CoV-2 Diagnostics portfolio
SARS-CoV-2 Diagnostics portfolio1 Comprehensive portfolio of tests and digital solutions Clinical Labs Near Patient • cobas® SARS-CoV-2 Launched • cobas® SARS-CoV-2 Variant set 1 Launched 7 • cobas® SARS-CoV-2 & Influenza A/B Launched Molecular • cobas® SARS-CoV-2 Launched • cobas® SARS-CoV-2 & Infl
Slide 36: Close of GenMark acquisition on April 24th
Close of GenMark acquisition on April 24th Focus on global expansion of high-medical value syndromic panels ePlex System (CE1 & 510k2) • Complementing our portfolio, offering the broadest coverage of infectious organisms and resistance genes • On market: − 2 ePlex Respiratory Pathogen Panels (20 vir
Slide 37: Claim extensions for cardiac NT-proBNP and Troponin T
Claim extensions for cardiac NT-proBNP and Troponin T Preventing diseases in 5 new clinical settings On-Market New Diagnosis Screening Clinical “Rule out” high CV Chest pain Perioperative risk Asymptomatic population at risk Troponin T- setting risk in ACS high sensitive Patient 100 million1 200 mil
Slide 38: Elecsys Anti-p53 immunoassay received CE mark
Elecsys® Anti-p53 immunoassay received CE mark Aids in earlier diagnosis of esophageal, colorectal & breast cancers Elecsys® Sandwich principle • Over 2 million deaths in 2020 related to these three cancers1 Phase 1 Ru • Between 20-50% of patients with mutated p53 will produce 9 min anti-p53 autoant
Slide 39: MMR RxDx Panel received FDA approval
MMR RxDx Panel received FDA approval VENTANA preferred partner for companion diagnostics Damaged DNA MSH2/MSH6: Loss of expression of • >380,000 new cases of endometrial cancer (EC) each year1 Mismatch recognition MSH2 MSH6 MSH2 or MSH6 indicates MMR deficiency • First MMR IHC-based companion diagno
Slide 40: Roche's first step into Automated Insulin Delivery
Roche’s first step into Automated Insulin Delivery (AID) Hybrid-closed loop mode for Accu-Chek Insight insulin pump users Accu-Chek Insight CGM Automated delivery of Continuous measurement insulin based on algorithm informing algorithm Self-learning AID Algorithm Determines the correct dose of insul
Slide 41: Key launches 2021
Key launches 2021 Area Product Description Market cobas® pure integrated solutions Low-to-medium volume SWA CE Core Lab cobas® pro integrated solutions New high throughput configurations of the cobas pro instrument US & CE Point of Care cobas® pulse Successor of Accu-Chek® Inform II CE Instruments c
Slide 42: Finance
Finance Alan Hippe Chief Financial Officer
Slide 43: HY 2021 results, Focus on Cash, Outlook
HY 2021 results Focus on Cash Outlook 43
Slide 44: HY 2021: Highlights
HY 2021: Highlights Business • Sales growth of +8% and Core operating profit up +4% • Core EPS growth +6% Cash flow • Operating Free Cash Flow of CHF 8.1bn, +71% higher due to lower payments related to trade and other accounts payable and lower investment in alliance arrangements and in-licensing •
Slide 45: Group performance
HY 2021: Group performance Sales growth of +8% and Core EPS growth of +6% HY 2021 HY 2020 Change in % CHFm CHFm CHF CER Sales 30,713 29,281 5 8 Core operating profit 11,652 11,766 -1 4 as % of sales 37.9 40.2 Core net income 9,527 9,443 1 6 as % of sales 31.0 32.2 Core EPS (CHF) 10.56 10.44 1 6 IFRS
Slide 46: Core EPS development
HY 2021: Core EPS development Growth driven by gains on product disposals & equity securities +5.7% HY 2020 HY 2021 All at CER (Constant Exchange Rates); * Core Operating profit excluding impacts from changes in gains on product disposals; ** Other (net) includes effects from changes in: financial i
Slide 47: Group operating performance
HY 2021: Group operating performance Core operating profit growth of +4% HY 2021 2021 vs. 2020 CHFm abs. CER CER growth Sales 30,713 +2,389 8% Royalties & other op. inc. 1,420 +374 35% Cost of sales -8,237 -1,294 19% M&D -4,292 +91 -2% R&D -6,690 -1,077 19% G&A -1,262 -58 5% Core operating profit 11
Slide 48: Royalties and other operating income
HY 2021: Royalties and other operating income Increase driven by higher income from disposal of products CHFm +354 +50 -58 -23 1,420 1,097 Royalties and other operating income increased by +35% at CER Royalty income Out-licensing Other operating Income from HY 2020 income income disp. of products HY
Slide 49: Core operating profit and margin
HY 2021: Core operating profit and margin 47.5% 47.2% 44.1% % of sales 40.6% 40.2% 37.9% -2.7%p¹ -1.7%p¹ 25.7% +4%¹ CHFm 17.0% 16.8% 12,363 +9.3%p¹ 11,766 11,652 11,500 -8%¹ 10,961 9,562 +137%¹ 2,324 1,064 1,022 2019 2020 2021 Roche Group Pharma Division Diagnostics Division 1 At CER=Constant Exchan
Slide 50: Core net financial result
HY 2021: Core net financial result Improvement driven by higher gains on equity securities & lower interest expenses CHFm • Net financial result improved by +57% at CER • Interest expenses1 decreased by +21% at CER -564 -186 +25 +57 -451 +31 -12 +164 HY Equity Net interest FX G/L Interest Other HY 2
Slide 51: Group Core tax rate
HY 2021: Group Core tax rate Lower effect from the resolution of tax disputes in 2021 (-1%p) compared to 2020 (-2%p) Figures in % +0.4%p 16.5 16.9 HY 2020 Increase in HY 2021 as reported Core tax rate as reported 51
Slide 52: Non-core and IFRS income
HY 2021: Non-core and IFRS income Non-core operating expenses above PY driven by Accutane provision release in 2020 and higher Global restructuring plans HY 2020 HY 2021 Change in % CHFm CHFm CHFm CHF CER Core operating profit 11,766 11,652 -114 -1 +4 Global restructuring plans -253 -511 -258 Amorti
Slide 53: HY 2021 results, Focus on Cash, Outlook
HY 2021 results Focus on Cash Outlook 53
Slide 54: Strong operating free cash flow and margin
HY 2021: Strong operating free cash flow and margin 33.9% 33.6% % of sales 24.6% 26.4% 23.5% 17.2% +10.6%p¹ +9.8%p¹ 13.0% +71%¹ -0.7% +41%¹ -6.1% +14.2%p¹ CHFm 8,117 8,191 7,508 7,282 5,454 5,036 n/a¹ 1,178 2019 2020 2021 -380 -44 Roche Group Pharma Division Diagnostics Division 1 At CER=Constant Ex
Slide 55: Group Operating Free Cash Flow
HY 2021: Group Operating Free Cash Flow Higher than PY (+71%) driven by NWC movement & lower investments in Intangible Assets CHFm +1,180 -369 -198 +2,056 +412 8,117 5,036 OFCF higher by +71%/+3,450m at CER HY 2020 OP, net of cash NWC Investments Investments Foreign HY 2021 adjustments movement in P
Slide 56: Group net debt up vs. YE 2020
HY 2021: Group net debt up vs. YE 2020 Driven by dividends paid Free Cash Flow CHF 6.0bn CHFbn vs. 3.3bn in 2020 -2.1 +8.1 Taxes -2.2 Treasury +0.1 -11.1 -1.9 Dividends paid -8.0 Trans. own eq. instr. -0.6 -7.0 M&A & All. trans. -1.9 Curr. Transl. & Other -0.6 Net debt Operating Non-Operating Divide
Slide 57: Balance sheet 30 June 2021
Balance sheet 30 June 2021 Equity ratio at 47% (31 Dec 2020: 46%; 30 June 2020: 43%) % change in CER % change in CER CHFbn vs 31 Dec 2020 vs 31 Dec 2020 86.1 87.9 0% 86.1 87.9 0% Cash and 8.0 -35% 12.3 marketable 14% 9% 25.2 25.4 -4% securities 23.3 Current 29% 29% 20.6 +11% liabilities Other 26% cu
Slide 58: HY 2021 results, Focus on Cash, Outlook
HY 2021 results Focus on Cash Outlook 58
Slide 59: Currency impact expected to reduce as 2021 progresses
Currency impact expected to reduce as 2021 progresses CHF / USD -7% -6% -5% -4% 0.97 0.97 0.95 0.94 Average YTD 2020 Assuming the 30 June 2021 exchange rates remain stable until end of 2021, 0.91 0.91 0.91 0.90 2021 impact 1 is expected to be (%p): Assumed average YTD 2021 0.89 0.90 0.93 0.92 0.90 0
Slide 60: 2021 outlook confirmed
2021 outlook confirmed Further growing top and bottom line Group sales growth1 • Low- to mid-single digit Core EPS growth1 • Broadly in line with sales growth Dividend outlook • Further increase dividend in Swiss francs 1 At Constant Exchange Rates (CER); based on the current assessment of the COVID
Slide 61: Changes to the development pipeline
Changes to the development pipeline Q2 2021 update New to phase I New to phase II New to phase III New to registration 2 NMEs: 3 NMEs: 1 NME: 1 NME: RG6189 FAP-CD40 – solid tumors RG6139 PD1xLAG3 – solid tumors RG6422 AT-527 – SARS-CoV-2 RG7716 faricimab – DME RG6338 NME – metabolic diseases RG7769
Slide 62: Roche Group development pipeline
Roche Group development pipeline Phase I (39 NMEs + 12 AIs) Phase II (25 NMEs + 13 AIs) RG6007 HLA-A2-WT1 x CD3 AML CHU FIXa x FX haemophilia tiragolumab + T NSCLC RG6026 glofitamab monotherapy and combos heme tumors CHU glypican-3 x CD3 solid tumors tiragolumab + T + chemo 1L non-squamous NSCLC RG6
Slide 63: Roche Group development pipeline
Roche Group development pipeline Phase III (15 NMEs + 39 AIs) Registration (3 NMEs + 4 AIs) Kadcyla + T 2L+ HER-2+ PD-L1+ mBC Venclexta r/r MM t(11:14) Gavreto (pralsetinib) 1 RET+ NSCLC RG3502 RG7601 RG6396 Kadcyla + T HER-2+ eBC high-risk Venclexta + azacitidine 1L MDS Gavreto (pralsetinib) 2 RET+
Slide 64: NME submissions and their additional indications
NME submissions and their additional indications Projects in phase II and III glofitamab + chemo autogene cevumeran semorinemab RG6026 RG6180 RG6100 2L DLBCL 1L melanoma Alzheimer’s rhPTX-2 brain shuttle glofitamab tiragolumab + T RG6026 RG6058 RG6354 (PRM-151) RG6102 gantenerumab 3L+ DLBCL 1L PD-L1
Slide 65: AI submissions for existing products
AI submissions for existing products Projects in phase II and III New Molecular Entity (NME) Immunology Neuroscience Xofluza Additional Indication (AI) Infectious Diseases Ophthalmology RG6152 direct transmission Oncology / Hematology Metabolism Other Xofluza RG6152 influenza, pediatric (0-1 year) X
Slide 66: Major pending approvals 2021
Major pending approvals 2021 US EU China Japan-Chugai PDS with ranibizumab Gavreto (pralsetinib) Tecentriq faricimab RG6321 wAMD RG6396 RET+ NSCLC RG7446 NSCLC adj RG7716 DME Filed April 2021 Filed May 2020 Filed June 2021 Filed June 2021 faricimab Tecentriq + nab-paclitaxel faricimab RG7716 DME RG7
Slide 67: Major granted approvals 2021
Major granted approvals 2021 US EU China Japan-Chugai Alecensa (BFAST) Xofluza Xofluza Polivy RG7853 1L NSCLC ALK+ RG6152 influenza, otherwise healthy RG6152 influenza, otherwise healthy RG7596 r/r DLBCL Jan 2021 Jan 2021 April 2021 March 2021 Actemra Xofluza Xofluza Evrysdi RG1569 SSc-ILD RG6152 in
Slide 68: Doing now what patients need next
Doing now what patients need next