Roche Holding Ltd · SIX:RO
Roche — HY 2023 Earnings Presentation
68 slides from Roche's earnings presentation, Jul 27, 2023
Slide 1: Roche
Slide 2: 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 3: Roche HY 2023 results
Roche HY 2023 results Basel, 27 July 2023
Slide 4: Group
Group Thomas Schinecker Chief Executive Officer
Slide 5: HY 2023 performance; Outlook
HY 2023 performance Outlook
Slide 6: HY 2023: Strong base business growth in both divisions
HY 2023: Strong base business growth in both divisions Group sales -2% at CER due to expected COVID-19 sales decline • Strong Pharma growth (+8% at CER) driven by Vabysmo, Ocrevus, Hemlibra, Evrysdi, Phesgo, Tecentriq and Polivy • Strong Diagnostics base business growth (+6% at CER) • COVID-19 sales
Slide 7: Strong base business impacted by COVID-19 sales decline
HY 2023: Strong base business impacted by COVID-19 sales decline Currency headwinds further increased in Q2 2023 2022 Change in % Excl. CHFbn CHFbn CHF CER C191 Pharmaceuticals Division 22.7 22.3 1 8 8 Diagnostics Division 7.1 9.9 -29 -23 6 Roche Group 29.8 32.3 -8 -2 8 CER=Constant Exchange Rates;
Slide 8: Quarterly sales: COVID-19 and AHR impact as expected
Quarterly sales: COVID-19 and AHR impact as expected Q4 2023 to be impacted by Ronapreve base effect of roughly CHF 1.1bn 15% 14%* 13% 12% 11% 10% 9% 9% 7% 7% 6% 6% 6% 6% 8% 8% 5% 4% 7% 6% 4% 5% 4% 1% 3% 3% 3% 1% 0% 0% 0% -5% -4% -3% -6% -10% AHR1 impact -15% COVID-19 impact Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 9: Base business largely compensates for COVID-19 impact
HY 2023: Base business largely compensates for COVID-19 impact Portfolio diversification progresses as ophthalmology franchise gains momentum CHFm -2% at CER Diversification of Roche portfolio + 421 +9 HY 2018 HY 2023 -635 CHF 28.1bn CHF 29.8bn -2,695 +2,360 -1,976 32,295 29,779 Diagnostics Neurosci
Slide 10: Base businesses in both divisions grow high single digit
HY 2023: Base businesses in both divisions grow high single digit COVID-19 impact to reduce significantly by end of Q1 2024 Pharma Diagnostics Quarterly sales evolution 2022-2023 Quarterly sales evolution 2022-2023 % CER % CER +30% +30% +24% +20% +20% +9% +9% +7% +8% +8% +10% +7% +10% +6% +4% +3% +4
Slide 11: Results impacted by Ultomiris settlement and COVID-19
HY 2023: Results impacted by Ultomiris settlement and COVID-19 Group sales Core operating profit Core EPS 37.9% 39.2% 36.6% % of sales 0% at CER excl. -2% at CER Ultomiris excl. Ultomiris -2% at CER -6% at CER -5% at CER CHFbn CHFbn CHF 29.8 12.7 10.9 32.3 11.7 11.76 10.10 30.7 10.56 2021 2022 2023
Slide 12: Young portfolio: New launches exceed 50% of sales
Young portfolio: New launches exceed 50% of sales Keeping historic launch momentum with two NMEs approved in 2023 CHFm % of Pharma Sales** 12,000 50% 10,000 41% 8,000 33% 6,000 22% * 4,000 2,000 0 HY 2020 HY 2021 HY 2022 HY 2023 Cotellic Alecensa Tecentriq Ocrevus Hemlibra Luxturna Xofluza Polivy Ro
Slide 13: New partnerships signed to strengthen Pharma pipeline
New partnerships signed to strengthen Pharma pipeline Entering hypertension and adding to the early portfolio in DNA damage response (DDR) Zilebesiran (angiotensinogen siRNA) KSQ-4279 (USP1 inhibitor) No AGT synthesis Translesion synthesis Inter-strand crosslink repair • siRNA targeting angiotensino
Slide 14: Invitation to Roche Pharma Day 2023
Invitation to Roche Pharma Day 2023 Additional IR events: ECTRIMS 2023, Digitalization Day and ASH 2023 Presenters include: • Thomas Schinecker, CEO Roche Group • Teresa Graham, CEO Roche Pharmaceuticals • Levi Garraway, Chief Medical Officer and Head of Global Product Development • Charlie Fuchs, S
Slide 15: 2023 performance; Outlook
2023 performance Outlook
Slide 16: 2023: Upcoming newsflow
2023: Upcoming newsflow Pharma Diagnostics Tiragolumab + Tecentriq in 1L Q4 2023/ Columvi + GemOx in 2L+ DLBCL 2024 Modular transportation system, integrated CCM Vertical PDL1+ NSCLC Q1 2024 into existing cobas connection modules Lunsumio + Polivy in 2L+ DLBCL 2024 Tiragolumab + Tecentriq + chemo in
Slide 17: 2023 sales outlook confirmed
2023 sales outlook confirmed Sales drivers1 Pharma: Key products with strong growth and momentum from ongoing launches Diagnostics: Base business with solid growth Group sales growth1 Low single digit decline COVID-19 sales for Diagnostics and Pharma expected to decline by roughly CHF 5bn AHR2 sales
Slide 18: 2023 outlook confirmed
2023 outlook confirmed Group sales growth1 Low single digit decline Core EPS growth1 Broadly in line with sales decline Dividend outlook Further increase dividend in Swiss francs 1 At Constant Exchange Rates (CER) 18
Slide 19: Pharmaceuticals Division
Pharmaceuticals Division Teresa Graham CEO Roche Pharmaceuticals
Slide 20: Pharmaceuticals Division sales
HY 2023: Pharmaceuticals Division sales All regions delivering strong growth, intensifying currency headwinds in Q2 2023 2022 Change in % CHFm CHFm CHF CER Pharmaceuticals Division 22,681 22,347 1 8 United States 11,743 11,363 3 7 Europe 4,105 4,104 0 5 Japan 2,210 2,202 0 14 International 4,623 4,6
Slide 21: Pharmaceuticals Division
HY 2023: Pharmaceuticals Division Core operating profit impacted by Ultomiris patent settlement 2023 2023 vs. 2022 CHFm % sales CER growth Sales 22,681 100.0 8% Other revenue 806 3.6 -45% Cost of sales -4,107 -18.0 3% COGS + PC: +1% R&D -5,617 -24.8 9% SG&A -3,444 -15.3 7% OOI&E 699 3.1 79% Core ope
Slide 22: Strong momentum for key growth drivers
HY 2023: Strong momentum for key growth drivers Vabysmo nearing CHF 1bn in H1; Polivy with strong launch in 1L DLBCL Vabysmo >500% Ocrevus 15% Hemlibra 20% Evrysdi 48% Phesgo 69% Tecentriq 12% Polivy 114% Perjeta 9% Tamiflu 298% TNKase / Activase 15% Gazyva 22% Alecensa 10% Enspryng 56% Xolair 4% Lu
Slide 23: Oncology portfolio growing +4%
HY 2023: Oncology portfolio growing +4% YoY CER growth Phesgo (+69%) HER2 franchise • Kadcyla (0%) growth in International compensating for US/EU HER2 franchise Herceptin Perjeta (+9%) +4% • Perjeta (+9%) driven by US and International Kadcyla (0%) • Phesgo (+69%): 35% conversion in early launch cou
Slide 24: Tiragolumab: Positive early results in 1L HCC
Tiragolumab: Positive early results in 1L HCC Ph III in 1L HCC initiated Ph I/II (MORPHEUS) results in 1L HCC Development program ORR PFS* 100 Indication Ph I Ph II Ph III 43% HR 0.42 (95% CI: 27.0, 59.1) 1L NSCLC: PD-L1 high SKYSCRAPER-01 Results in Q4 / Q1 95% CI: 0.22, 0.82 75 Stage III unres. NS
Slide 25: Columvi: Approval in 3L+ DLBCL in US and EU achieved
Columvi: Approval in 3L+ DLBCL in US and EU achieved First and only bispecific offering fixed-duration treatment in 3L+ DLBCL Ph II results for Columvi in 3L+ DLBCL CD20 x CD3 development program CRR and ORR Duration of ORR Regimen Indication Ph I Ph II Ph III 52% Columvi 3L+ DLBCL US/EU approved (9
Slide 26: Tecentriq: First PD-(L)1 with pivotal SC results filed
Tecentriq: First PD-(L)1 with pivotal SC results filed in US and EU US PDUFA set for September 15th CHFm YoY CER growth Q2 update 1,100 1,000 +13% +8% Lung franchise (NSCLC, SCLC) 900 +31% • US/EU: Adjuvant NSCLC launch ongoing 800 GI franchise (HCC) 700 +54% • US/ROW: Further growth in 1L HCC, near
Slide 27: Hemophilia A: Hemlibra, the global SoC, keeps expanding
Hemophilia A: Hemlibra, the global SoC, keeps expanding US/EU-5 patient share reached 39% CHFm YoY CER growth Q2 update 1,400 • ~21,000 patients treated globally • Hemlibra continues to penetrate across all approved 1,200 +17% patient segments +31% 1,000 • SPK-8011 pivotal Ph III gene therapy initia
Slide 28: Immunology: Sales impacted by Esbriet erosion
Immunology: Sales impacted by Esbriet erosion Ph III (OUtMATCH) Xolair in food allergy readout expected in H2 2023 Q2 update CHFm YoY CER growth • Ph III (ARNASA) astegolimab in COPD initiated 2,500 • Ph III (IMAGINATION) ASO factor B in IgA nephropathy initiated +2% +1% -12% Actemra (+2%) 2,000 • N
Slide 29: Astegolimab: First in class anti-ST2 mAb in COPD enters Ph III
Astegolimab: First in class anti-ST2 mAb in COPD enters Ph III Early results show benefit in key endpoints throughout broad patient population Astegolimab (anti-ST2 mAb) Ph IIa (COPD-ST2OP) results Ph III (ARNASA) trial design Exacerbation rate at 48 weeks1 Astegolimab SC Q2W Screening Follow- R Ast
Slide 30: Multiple Sclerosis: Positive Ph III results for Ocrevus 6m SC
Multiple Sclerosis: Positive Ph III results for Ocrevus 6m SC Twice a year, 10 min injection to further improve treatment experience and expand usage CHFm YoY CER growth Q2 update 1,750 +15% +17% • Ocrevus with 22% patient share globally (>300k pts treated ) 1,500 • Market leader in US and EU-5 +31%
Slide 31: Fenebrutinib: Strong Ph II data highlight potential in MS
Fenebrutinib: Strong Ph II data highlight potential in MS Highly selective and the only reversible, non-covalent BTKi in Ph III Ph II (FENopta) results in RMS Ph III program Total new T1 Gd+ lesions by week and combined* Combined Week 4 Week 8 Week 12 (Weeks 4, 8 and 12) 92% P=0.0022 (65% to 98%) In
Slide 32: Spinal muscular atrophy: Evrysdi on track to become global #1
Spinal muscular atrophy: Evrysdi on track to become global #1 4 year follow-up data confirm strong efficacy and safety profile in infants CHFm YoY CER growth Q2 update 450 • >8,500 patients treated worldwide; retention rate in first 12 400 months of ~90% globally +36% 350 • US: Market leader with gr
Slide 33: Elevidys: US approval for first DMD gene therapy by partner Sarepta
Elevidys: US approval for first DMD gene therapy by partner Sarepta Ph III (EMBARK) results in Q4, needed for EU filing & US label extension Pooled analysis of studies 101/102/103* Development program Change from baseline in NSAA total score over 1 year** Study DMD subgroup Ph I Ph II Ph III Comment
Slide 34: Ophthalmology: Vabysmo nearing CHF 1bn sales in H1
Ophthalmology: Vabysmo nearing CHF 1 bn sales in H1 US market share reaches 15% in nAMD and 9% in DME* Q2 update CHFm YoY CER growth • US: ~30% naive patients, ~70% switches (mostly from aflibercept) 600 • JP/UK/CH/AUS: Double-digit market share in early launch countries >500% 500 • Filed for third
Slide 35: Vabysmo: Benefits of dual pathway supported by anatomic results
Vabysmo: Benefits of dual pathway supported by anatomic results Latest results on ERM endpoint to be presented at ASRS 2023 Elevated VEGF-A Elevated Ang-2 leading to Vascular Instability Dual Primary Effects Primary Effects pathway inhibition Neovascularization Vascular Leakage Inflammation Fibrosis
Slide 36: Zilebesiran: Roche enters partnership with Alnylam in hypertension
Zilebesiran: Roche enters partnership with Alnylam in hypertension New MoA with tight upstream blockade of AGT pathway and best in disease potential Zilebesiran (angiotensinogen siRNA) Ph I results in hypertension1 Mean change in 24-h ambulatory Change in serum angiotensinogen No AGT systolic blood
Slide 37: 2023: Key late-stage newsflow
2023: Key late-stage newsflow* Compound Indication Milestone Hemlibra Moderate hemophilia A EU approval Polivy + R-CHP 1L DLBCL US approval Vabysmo RVO US approval/EU filing Regulatory Tecentriq Subcutaneous administration US approval/EU filing EU filing Columvi (glofitamab) 3L+ DLBCL US/EU approval
Slide 38: Diagnostics Division
Diagnostics Division Matt Sause CEO Roche Diagnostics
Slide 39: Diagnostics Division sales
HY 2023: Diagnostics Division sales Good base business growth, partially offsetting COVID-19 sales decrease 2023 2022 2023 2022ChangeChange in % in % CHFm CHFm CHF Excl. CER CHFm CHFm CHF CER 1 C19 Diagnostics Division 7,098 9,948 -29 -23 Diagnostics Division 7,098 9,948 -29 -23 6 Core Lab 3,935 3,8
Slide 40: Diagnostics Division sales growth by quarter
Diagnostics Division sales growth by quarter Good base business growth 24% 10% 8% 7% 8% 3% 4% 0% -9% -4% -17% Diagnostics Division sales growth Base business sales growth1 -28% Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 1.9bn 1.2bn 0.6bn 0.5bn 0.3bn 0.1bn COVID-19 sales Growth rates and absolute values at
Slide 41: Diagnostics Division highlights
HY 2023: Diagnostics Division highlights Good base business growth, partially offsetting COVID-19 sales decrease CHFbn YoY CER growth • Immunodiagnostics (+11%) Core Lab +10% • Clinical Chemistry (+10%) • Custom biotech (-8%) • Cervical Cancer (+24%) • Blood Screening (+13%) Molecular Lab -40% • Vir
Slide 42: Diagnostics Division regional sales
HY 2023: Diagnostics Division regional sales Good base business growth across all regions impacted by lower COVID-19 sales North America -30% EMEA ~27% of divisional sales -22% ~35% of divisional sales Asia Pacific Latin America -23% 0% ~31% of divisional sales ~7% of divisional sales Growth rates a
Slide 43: Diagnostics Division
HY 2023: Diagnostics Division Core operating profit decline due to drop in COVID-19 sales 2023 2023 vs. 2022 CHFm % sales CER growth Sales 7,098 100.0 -23% Other revenue 31 0.4 29% Cost of sales -3,349 -47.2 -26% R&D -832 -11.7 2% SG&A -1,342 -18.9 -2% OOI&E 13 0.2 -35% Core operating profit 1,619 2
Slide 44: cobas i601 analytical mass spectrometry unit and assay menu
cobas® i601 analytical mass spectrometry unit and assay menu Fully integrated and automated solution with more than 40 IVD assays at launch Seamless integration into cobas® pro integrated solutions IVD assay menu of more than 60 assays in 2 launch waves1 Steroids Vitamin D Therapeutic Drug Monitorin
Slide 45: Driving access to essential diagnostics
Driving access to essential diagnostics WHO prequalification for HPV molecular test expands access in LMICs WHO 2030 cervical cancer Implications for LMICs and Roche elimination goals2 91% of adult • 90% of girls fully vaccinated against • WHO PQ enables LMICs requiring PQ to use cobas® women in HPV
Slide 46: IDH1 R132H & ATRX (Glioma) assays
IDH1 R132H & ATRX (Glioma) assays1 Enable better treatment decisions for patients with brain cancer Classification pathway of adult-type diffuse gliomas2 Oligodendroglioma Astrocytoma • Globally more than 340k patients estimated in 2025 with Histology brain cancer, of which ~75% are malignant glioma
Slide 47: Diagnostics key launches 2023
Diagnostics key launches 2023 Area Product Description Markets Status Modular transportation system, integrated into the existing cobas connection modules, allowing for overhead CCM Vertical Global sample transportation over different work areas or different floors enabling effective use of lab spac
Slide 48: Finance
Finance Alan Hippe Chief Financial Officer
Slide 49: HY 2023: Highlights
HY 2023: Highlights Business • Group sales -2% due to COVID-19 sales erosion in Diagnostics • Pharma with strong momentum for key growth drivers; Strong Diagnostics base business growth (+6%) • Core operating profit down by -6% and Core EPS -5% due to base effect from Ultomiris patent settlement in
Slide 50: New Income Statement Presentation effective Jan 2023
New Income Statement Presentation effective Jan 2023 Improving comparability, reducing complexity, reinforcing alignment Changes in Income Statement presentation • Improve external comparability and simplify messaging by using “Selling, General & Administration” costs, from merging “Marketing & Dist
Slide 51: HY 2023: Group performance
HY 2023: Group performance Sales decline of -2% and Core EPS decline of -5% 2023 2022 Change in % CHFm CHFm CHF CER Sales 29,779 32,295 -8 -2 Core operating profit 10,911 12,668 -14 -6 as % of sales 36.6 39.2 Core net income 8,587 10,160 -15 -7 as % of sales 28.8 31.5 Core EPS (CHF) 10.10 11.76 -14
Slide 52: Base business largely compensates for COVID-19 impact
HY 2023: Base business largely compensates for COVID-19 impact Portfolio diversification progresses as ophthalmology franchise gains momentum CHFm -2% at CER Diversification of Roche portfolio + 421 +9 HY 2018 HY 2023 -635 CHF 28.1bn CHF 29.8bn -2,695 +2,360 -1,976 32,295 29,779 Diagnostics Neurosci
Slide 53: HY 2023: Group operating performance
HY 2023: Group operating performance Core operating profit lower by -6% driven by the Ultomiris patent settlement 2023 2023 vs. 2022 CHFm abs. CER CER growth Sales 29,779 -540 -2% Other revenue 837 -685 -44% Cost of sales -7,456 +1,093 -12% R&D -6,449 -486 8% SG&A -6,505 -392 6% OOI&E 705 +305 73% C
Slide 54: Other revenue
HY 2023: Other revenue Lower revenue driven by base effect of the Ultomiris patent settlement in 2022 CHFm +5 -76 -691 1,605 -6 837 837 Other revenue decreased by -44% at CER HY 2022 Royalty income Profit-share Other income from Other HY 2023 income collaboration and out-licensing agreements CER=Con
Slide 55: Core operating profit and margin
HY 2023: Core operating profit and margin 50.5% 48.6% -1.5%p¹ +1.6%p² 39.2% % of sales 36.6% -1.6%p¹ excl. Ultomiris +0.5%p² 29.7% excl. Ultomiris 22.8% 12,668 -6%¹ 0%² +5%¹ +11%² -5.1%p¹ CHFm 10,911 11,289 11,018 -36%¹ 2,953 1,619 2022 2023 Roche Group Pharma Division Diagnostics Division 1 At CER=
Slide 56: Core net financial result
HY 2023: Core net financial result Worsening driven by higher interest expenses and Fx losses CHFm • Net financial result worsened by -75m at CER • Interest expenses1 increased by -166m at CER -558 -582 -220 +76 -85 +151 -147 -19 HY 2022 Equity Net interest Fx G/L Interest Other HY 2023 securities i
Slide 57: Group Core tax rate
HY 2023: Group Core tax rate Increase in core tax rate mainly due to the impact from the resolution of tax disputes in HY 2022 partially offset by lower profits in high tax jurisdictions in 2023 -1.6%p 18.5% 2.4% 16.9% Tax rate before resolution of tax 16.1% +0.8%p 16.9% disputes Effective tax rate
Slide 58: Core EPS development
HY 2023: Core EPS development Decrease of -4.6% driven by base effect of the Ultomiris patent settlement in 2022 -4.6% CHF -0.6%p +1.4%p -3.0%p -2.0%p -0.4%p 11.77 11.23 HY 2022 Operations1 Base effect 2022: Gains/losses on Effective tax Other4 HY 2023 Ultomiris patent equity securities rate change3
Slide 59: Non-core and IFRS income
HY 2023: Non-core and IFRS income Non-core operating expenses broadly in line with prior year 2022 2023 Change in % CHFm CHFm CHFm CHF CER Core operating profit 12,668 10,911 -1,756 -14 -6 Global restructuring plans -266 -678 -412 Amortisation of intangible assets -468 -358 110 1 Impairment of intan
Slide 60: 2023 results; Focus on cash and balance sheet; Outlook
2023 results Focus on cash and balance sheet Outlook 60
Slide 61: Operating free cash flow and margin
HY 2023: Operating free cash flow and margin 43.1% 42.2% % of sales 30.3% -0.1%p¹ 27.0% 19.1% -2.0%p¹ 5.7% +8%¹ -11.5%p¹ 9,782 -8%¹ 9,638 9,562 CHFm 8,031 1,902 -70%¹ 402 2022 2023 Roche Group Pharma Division Diagnostics Division 1 At CER=Constant Exchange Rates 61
Slide 62: Group Operating Free Cash Flow
HY 2023: Group Operating Free Cash Flow OFCF down -8% driven by lower Core operating profit due to base effect from Ultomiris patent settlement in 2022, partly offset by positive NWC movement CHFm -946 +235 +99 -161 -978 9’782 OFCF lower by -8%/-773m at CER 8’031 HY 2022 OP, net of cash NWC Investme
Slide 63: Group net debt development
HY 2023: Group net debt development Net debt higher by CHF -2.3bn vs. year end 2022 Free Cash Flow CHF 6.1bn CHFbn vs. 7.1bn in 2022 Taxes -1.6 Dividends paid -7.8 Treasury -0.3 Trans. own eq. instr. 0.0 M&A & All. trans. 0.0 Curr. Transl. & Other -0.6 -15.6 -1.9 -17.9 +8.0 -8.4 Net debt Operating N
Slide 64: Balance sheet 30 June 2023
Balance sheet 30 June 2023 Equity ratio at 36% (31 Dec 22: 36%); net debt to assets at 21% (31 Dec 22: 18%) % change in CER vs % change in CER vs CHFbn 31 Dec 2022 31 Dec 2022 88.2 88.2 Cash and 84.4 -1% 84.4 -1% 9.8 marketable 11% 7.5 -16% 9% Current 27.2 securities liabilities 26.2 -1% 24.1 23.5 +
Slide 65: 2023 results; Focus on cash and balance sheet; Outlook
2023 results Focus on cash and balance sheet Outlook 65
Slide 66: Expected 2023 currency impact
Expected 2023 currency impact CHF / USD Assumed avg. YTD 2023 0% -3% -5% -5% 0.94 0.95 0.95 Assuming the 30 June 2023 exchange rates remain 0.92 stable until end of 2023, 2023 impact1 is expected to be (%p): 0.93 0.91 0.91 0.91 Q1 HY Sep FY 0.92 0.92 0.93 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90
Slide 67: 2023 outlook confirmed
2023 outlook confirmed Group sales growth1 Low single digit decline Core EPS growth1 Broadly in line with sales decline Dividend outlook Further increase dividend in Swiss francs 1 At Constant Exchange Rates (CER) 67
Slide 68: Doing now what patients need next
Doing now what patients need next