Roche Annual Results 2007

Roche Full Year Results 2007 

January 30, 2008 

Roche 

Annual Results 2007 

r 

Basel, London, New York, January/February 2008 

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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 – 

www.roche.com 

All mentioned trademarks are legally protected 

Additional information in relation to the offer for 

Ventana shares and where to find it 

These materials are for informational purposes only and do not constitute an offer to purchase or a solicitation of an offer 

to sell Ventana’s common stock. The tender offer is being made pursuant to a tender offer statement on schedule TO 

(including the offer to purchase, letter of transmittal and other related tender offer materials) filed by Roche with the 

Securities and Exchange Commission (SEC) on June 27, 2007. These materials, as they may be amended from time to 

time, contain important information, including the terms and conditions of the offer, that should be read carefully before 

any decision is made with respect to the tender offer. Investors and stockholders can obtain a free copy of these 

materials and other documents filed by Roche with the SEC at the website maintained by the SEC at www.sec.gov. The 

tender offer materials may also be obtained for free by contacting the information agent for the tender offer, Mackenzie 

Partners, at (212) 929-5500 or (800) 322-2885 (toll-free). Additional information can also be found on www.roche.com. 

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Group 

Dr. Franz B. Humer 

Chief Executive Officer 

Roche in 2007: Delivered on targets as committed 

Market FY 

growth 2007 

Targets for 2007 

• Above-market sales growth Pharma 6 % 11 % 

in local currencies Diagnostics 5 % 6 % 

• Double-digit local sales growth Pharma 11 % 

Group 10 % 

• Target for Core EPS 

growth to be above Core EPS growth 20 % 

sales growth (CHF) Sales growth 10 % 

5 

6 

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2007: Industry-leading sales growth continued 

Sales in CHF billion % change in USD 

2006 2007 CHF local growth 

Pharmaceuticals 33.3 36.8 10 11 15 

Diagnostics 8.7 9.3 7 6 12 

Roche Group 42.0 46.1 10 10 15 

2007: Double-digit growth with and without Tamiflu 1 

incl. Tamiflu1 excl. Tamiflu1 H1/07 H2/07 2007 H1/07 H2/07 2007 

Pharmaceuticals Division 18 6 11 15 11 13 

Roche Pharma 16 4 9 12 12 12 

Genentech 28 12 19 28 12 19 

Chugai 7 -1 3 -1 4 1 

Diagnostics Division 5 6 6 5 6 6 

Roche Group 15 6 10 13 10 11 

1 Tamiflu corporate and government pandemic sales; all figures in % 

7 

8 

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2007: Additional CHF 4 billion organic sales; 

Net income up 25%; Core EPS growth twice sales growth 

CHF billion Change 

2006 2007 CHF billion % loc % 

Sales 42.0 46.1 4.1 +10 +10 

Operating profit 11.7 14.5 2.7 +23 +22 

as % of sales 27.9 31.4 

Net income 9.2 11.4 2.3 +25 

as % of sales 21.8 24.8 

Core EPS 9.86 11.85 +20 

2007: Major steps in building the base for 

future growth and stability 

Corporate Governance 

Split of the role of Chairman and CEO 

Management changes – succession planning 

Severin Schwan to become new CEO 

Organisational changes - building an appropriate environment to innovate 

New R&D in Pharma organised along 5 disease areas 

TALENT MANAGEMENT PIPELINE DEVELOPMENT STAKEHOLDER ENGAGEMENT 

Alnylam 

Ventana 

NimbleGen 454 

9 

10 

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Actively shaping the future 

Pharma 

Sales 1997 

CHF 18.8 billion 

65% 

Diagnostics 

5% 

Vitamins & 

Fine Chem. 

20% 

10% 

Fragrances & 

Flavours 

Pharma 

Sales 2007 

CHF 46.1 billion 

80% 

Continuing to focus on our core businesses 

Focus on differentiated products paying off 

Outstanding long-term value creation 

Group sales 1 (CHF billion) 

50 

45 

40 

35 

30 

25 

20 

15 

10 

5 

0 

1997 

1999 

CAGR 15 % 

2001 

2003 

1 Prescription and Diagnostics 

2 Continuing businesses, before exceptional items 

2005 

2007 

14 

12 

10 

8 

6 

4 

2 

0 

2001 

20.2% 

16.3% 

2002 

2003 

21.3% 

2004 

20% 

25.9% 27.9% 

22.9% 

2005 

Diagnostics 

Group operating profit 

16 

2 (CHF billion) 

31.4% 

CAGR 25 % 

Continuing to focus on our core assets 

2006 


11 

12 

6



Differentiated and rejuvenated product portfolio 

From 1 to 9 products with sales at or above CHF 1 billion 

24 

20 

16 

12 

8 

4 

Pharmaceuticals key products (CHF billion) 

By year of market introduction 

0 

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 

Outlook on 2008 sales: Growth 1.5 to 2 times the 

world market on an underlying basis 

Growth 


+ 10% 

Tamiflu 

Pandemic 

sales 

High 

single 

digit 

Underlying 

growth 

Boniva 

Tarceva 

Avastin 

Pegasys 

Herceptin 

Xeloda 

NeoRecormon/ 

Epogin 

MabThera/ 

Rituxan 

CellCept 

Rocephin 

Roaccutane 

Pharmaceuticals 16 14 12 11 

Roche Pharma 13 11 10 14 

Genentech 30 26 18 6 

Chugai -7 4 4 4 

Diagnostics 6 5 4 8 

Roche Group 14 12 10 10 

Local sales growth rates 2007 vs 2006 

13 

Excluding government & 

corporate pandemic Tamiflu 

Q1 ‘07 Q2 ‘07 Q3 ‘07 Q4 ‘07 

14 

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Outlook 2008 Profit: A commitment to our future 

Redistribution of ‘costs’ into R&D 

Core EPS 


Tamiflu 

pandemic 

sales impact 

Underlying 

growth 

and 

Product 

Mix 

and 

Efficiency 

gains 

R&D 

Commitment 

for the 

future 

Upside - not in outlook: 

- Additional Tamiflu pandemic sales 

- Avastin adjuvant 

- Delayed start or ‘failure’ of R&D 

assets (in particular risk-factored 

success of many phase II assets) 

2008: Investing now for the future 

While further redistributing efficiency gains into R&D 

Avastin adj.: Building standard of care 

Pertuzumab: Improving standard of care 

Ocrelizumab: Autoimmune: new and 

potentially large markets 

CETPi: Building a potentially 

vast new market 

GLP-1: Potential to enter as 

best-in-class product 

HCV pipeline: Shaping the future market 

15 

Schematic P&L (% of sales) 

• Cost of Sales 

• M&D 

• G&A 

• R&D 

16 

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Our objectives for 2008 

Sales 

• High single digit local currency sales increase for Roche Group (excl. Tamiflu pandemic1 ) 

• Above-market sales growth1 in both divisions 

Core EPS 

• Core earnings per share target2 at least at record 2007 level despite significant increase in 

R&D investment and considerably lower Tamiflu pandemic sales 

Shareholder return 

• Continuous increase in dividend pay-out ratio over the next 3 years 

1 Excluding government and corporate stockpiling orders of Tamiflu for pandemic use 

2 At constant exchange rates Barring unforeseen events 

Pharmaceuticals Division 

William M. Burns 

CEO Roche Pharmaceuticals 

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2007: Highlights in Pharma 

Double-digit growth in sales and profits 

• Pharma sales (+11 % in LC), Roche Pharma Q4: +14 % (excl. Tamiflu) 

• Operating profit margin improved by 3.8 % pts to 35.5 % 

Major progress for key marketed assets 

• Avastin launched in advanced breast and lung cancer (EU), approved in renal cell carcinoma (EU) 

• Approval of Avastin in 1st and later lines mCRC (EU) – not restricted by chemo choice 

• Mircera launched in EU 

Major pipeline progress 

• Actemra filed in EU / US 

• Ocrelizumab moved into phase III in lupus (SLE and LN), and into phase II in MS 

• Pertuzumab phase III in metastatic breast cancer starting soon 

• CETP inhibitor: decision to move into phase III 

• GLP-1: phase II data encouraging 

A review of 2007 – Pharmaceuticals 

Guidance met – significant pipeline progress 

Filings Major clinical data 

Compound Phase Indication Data Status YE'07 

R1503 (p38 kinase inh.) II Rheumatoid arthritis Final Terminated 

R1658 (CETP inh.) II Dyslipidemia Final � 

R1440 (GKA) II Type 2 Diabetes Final Backup prioritized 

R1626 (polymerase inh.) II HCV Final � 

pertuzumab II Solid tumors Final � (mBC) 

MabThera II RRMS Full data � 

Actemra III Rheumatoid arthritis Final � (4 ph. 3 trials) 

CellCept III Lupus nephritis Final Preliminary data 

Avastin III NSCLC (Avastin in Lung) Final � 

Avastin 

III RCC (AVOREN) 

Full data � 

Xeloda III Adjuvant CC (NO16968) Final ‘07/ ‘08 Data in 2008 

Xeloda III mCRC 2nd line (NO16967) Full data � 

Compound Indication Status YE‘07 

Avastin mCRC 1st line combo extension (EU) � 

Avastin RCC (EU) � 

Xeloda mCRC 1st/2nd line combo (US / EU) � 

Actemra Rheumatoid arthritis (US / EU) � 

CellCept Lupus nephritis (US / EU) Will not be filed 

Divisional sales 

growth 

Double-digit growth 

in local currencies 

19 

20 

10



Pharma continues to significantly outgrow the market 

CHF 3.5 billion additional organic sales 

Sales CHF million 

% change in USD 


Roche Pharma 20,666 22,970 11 9 16 

Genentech 9,125 10,414 14 19 19 

Chugai 3,503 3,399 -3 3 1 

Pharmaceuticals 33,294 36,783 10 11 15 

incl. Tamiflu1 excl. Tamiflu1 Growth in % 

H1/07 H2/07 2007 H1/07 H2/07 2007 

Pharmaceuticals Division 18 6 11 15 11 13 

Roche Pharma 16 4 9 12 12 12 

Genentech 28 12 19 28 12 19 

Chugai 7 -1 3 -1 4 1 

1 Government and corporate pandemic 

2007: Pharma operating margin: Up ~4 %-points 

The highest-ever margin increase 

CHF million % of sales 

31.7% 35.5% 

13,042 

10,545 

1 At constant exchange rates 

+22% 1 

(+24%) 

2006 2007 

29.7% 31.5% 

6,139 

+10% 

(+18%) 

7,225 

50.9% 

43.9% 

4,002 

+38% 

(+32%) 

5,298 

16.2% 17.9% 

Pharma Division Roche Pharma Genentech Chugai 

569 

+21% 

(+7%) 

610 

21 

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2007: Pharma operating performance 

Operating profit growth twice sales 


CHF million % sales 

Sales 36,783 100.0 +3,489 

Royalties & other op inc 2,057 5.6 +848 

Cost of sales -9,502 -25.8 -470 

M & D -7,018 -19.1 -159 

R & D -7,598 -20.6 -1,008 

G & A -1,680 -4.6 -203 

Operating profit 13,042 35.5 +2,497 

1 Manufacturing Costs of goods sold & period costs 

Review of core assets by therapeutic area 

Pipeline, Outlook and future catalysts 

8% 

3% 

11% 

2007 vs. 2006 

local growth 

COGS & PC 1 : +5 % 

18% 

17% 

Administration: +8 % 

22% 

76% 

Excl. impairment: +17 % 

23 

24 

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Roche Oncology: Strongest growing franchise 

Avastin: Best growing oncology brand ever 

CHF billion 

20 

15 

10 

5 

0 

2004 2005 2006 2007 


local growth 

+20 % 

6 % 

+11 % 

44 % 

50 % 

+14 % 

+28 % 

Europe/RoW US Japan 

Sales 

Avastin launch compared to other cancer 

therapies (US plus top-5 EU markets 1 ) 

0 2 4 6 8 10 12 14 

Quarters since launch 

1 Source: IMS. Products included are Avastin, Alimta, Arimidex, Camptosar, Eloxatine, Erbitux, Femara, Gemzar, Herceptin, MabThera, Nexavar, Sutent, Tarceva, 

Taxol, Taxotere, Xeloda 

Oncology 

Existing and new indications fuelling growth 

Major brands (CHF billion) 

MabThera 

Rituxan 

Herceptin 

Avastin 

Xeloda 

Tarceva 

+19 % 

+31 % 

+41 % 

+23 % 

local growth 

+15 % 


2006 

0 2 4 6 

Avastin 

Growth mainly from use following 1st l. in iNHL 

and RA (global RA sales: approx. CHF 500 m) 

Penetration in adj BC now 70% in top 5 EU and 

~75 % in US – still considerably lower in RoW 

US: Good uptake in NSCLC; EU: Strong growth 

in mCRC – promising launches in NSCLC, mBC 

Increased use in adj CC and mCRC (both EU and 

US) continues to drive growth 

Strong growth in Europe (NSCLC), EU approval 

for pancreatic cancer received early ’07 

25 

26 

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Major growth opportunities outside the US 

Herceptin leading the way 

% of Total 2007 Sales 

100 

80 

60 

40 

20 

0 

Herceptin 

68 % 

Xeloda 

62 % 

Tarceva MabThera/ 

Rituxan 

Avastin 

53 % 

EU / ROW (incl. Japan) 

Avastin still early in its journey 

Realising full potential across tumour types 

Tumour 

Colon/ 

rectal 

Lung 

(NSCLC) 

Breast 

(HER2-) 

Breast 

(HER2+) 

Kidney (RCC) 

Early/adjuvant 

(Potential for cure) 

Phase III 

(AVANT, NSABP C-08, 

E5202, E5204) 

Phase III 

(E1505) 

Phase III 

(BEATRICE, E5103) 

Phase III 

(BETH w/Herceptin) 

– 

� 

� 

� 

US 

Launched 

[EU majority of chemos, 

U.S. carboplatin/paclitaxel] 

Phase III 

(AVEREL w/Herceptin) 

48 % 

Launched [EU paclitaxel] 

Phase III (AVADO, RIBBON-1) 

� 

Launched 

[EU w/interferon] 

33 % 

Advanced/metastatic 

(Extending life) 

1st line of treatment 2nd line of treatment 

Launched 

[EU, U.S., JP; broad label in 1st and subsequent lines] 

Phase III 

(BETA Lung w/Tarceva) 

Avastin also trialed in gastric, ovarian, prostate, aNHL, and brain (GBM) 

(Trial names) [Approval status]. More trials are ongoing than listed above. 

– 

27 

Phase III 

(Ribbon-2, incl. w/Xeloda) 

28 

14



Expanding the market for Avastin and Xeloda in mCRC 

Avastin to be combined with any chemo in any line of treatment 

Avastin Xeloda 

Current EU 

label: 

5-FU or 5-FU 

+ Irinotecan 

New EU label: 

Any fluoropyrimidine 

combination 

Source: Synovate Healthcare 2005 

Xeloda 

14% 

5-FU 

8% 

Oxaliplatin 

53% 

Full label 

any 

combo 

100% 

Irinotecan 

25% 

Xeloda 

14% 

5-FU 

8% 

Oxaliplatin 

53% 

Full label 

any 

combo 

100% 

Avastin launching with best-possible label in 

1st line NSCLC market in Europe 1 

Monotherapy 

/ Others 

33% 

Platinum + 

Vinorelbine 

15% 

Platinum + 

Gemcitabine 

36% 

Platinum + 

Taxane 

16% 

Monotherapy 

/ Others 

33% 

Irinotecan 

25% 

Avastin 

label: 

Platinumbased 

chemo 

67% 

Avastin in combo with all current standards (platinum) 

Source: Synovate Healthcare, MAT Q3 2007; 1 in non–squamous NSCLC 

Future EU label: 

Any combo, 

including with 

Avastin 

29 

30 

15



Expanding the market for Avastin in breast cancer 

Large opportunity – strong commitment 

Current EU label: 

with paclitaxel 

Future broad 

target label 

Xeloda 

17% 

Source: Genactis MBC study Q4 2005 

other 

19% 

Taxane 

23% 

other 19% 

(e.g. 

monotherapy 

Vinorelbine) 

Anthracycline 

25% 

Anthracyc./ 

Taxane 

16% 

target 

label 

81% 

Oncology in 2008 

Preparing for new market opportunities 

US submission for 1st line mBC 

– ODAC split vote Dec 5, 2007 

– FDA action date Feb 23, 2008 

Further phase III studies to report in ‘08 

– AVADO (docetaxel +/- Avastin): 

expect data in H1 2008 

– RIBBON-1 (var. chemos +/- Avastin): 

expect data in H2 2008 

Phase III adjuvant trials started 

– E5103 (HER2-), initiated Q4 2007 

– BEATRICE (HER2-, ER-, PR-): 

initiated Q4 2007 

– BETH (HER2+) combo with Herceptin 

to start H1 2008 

Breast cancer (BC) 

• Phase III data (AVADO, RIBBON-1) to broaden Avastin label for combination with 

all major chemos 

• HER2+ mBC 

– phase III for pertuzumab to start in Q1 

– opted-in to trastuzumab-DM1 

• Avastin adjuvant trials started: Large potential new market opportunity 

Metastatic colorectal cancer (mCRC) 

• Launch of Avastin and Xeloda in 1st and later lines – not restricted by chemo 

choice (incl. oxaliplatin) (EU) 

Chronic lymphocytic leukemia (CLL) 

• Positive data in 1st line - MabThera to enter a new market in Europe 

31 

32 

16

3.0 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 



Inflammation/Autoimmune/Transplantation 

MabThera RA launch successful 

CHF billion 2007 vs. 2006 

3.5 

local growth 

5 % 

40 % 

55 % 

2004 2005 2006 2007 

+12 % 

+8 % 

+12 % 



Overall franchise growing +11 % 

MabThera RA sales ~CHF ½ billion 

Rheumatoid Arthritis 

• MabThera: Launched (TNF failures) 

• Actemra: Filed in EU and US (RA) 

• Ocrelizumab: Phase III initiated 

Lupus 

• Ocrelizumab: Phase III initiated 

Multiple Sclerosis 

• MabThera: Positive phase II (RRMS) 

• Ocrelizumab: Phase II decision taken 

Next generation anti-CD20s (MabThera follow-ons) 

Opportunities for improvement 

2nd gen. anti-CD20 (ocrelizumab) 

Fully humanized 

Potential clinical benefits 

• Less immunogenicity 

• Better tolerability 

• Shorter infusion time 

In phase III in RA, and SLE 

LN to start soon 

Phase II in RRMS to start 2008 

3rd gen. anti-CD20 (R7159) 

Fc engineered (glycosylations) 

• Increased CD20 binding and apoptosis 

• Increased ADCC (antibody dependent cellmediated 

toxicity) 

• Reduced CDC (complement dependent cell 

toxicity) 

Potential clinical benefits 

• Improved efficacy 

• Less infusion reactions 

In phase I for oncology / hematology 

33 

34 

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Inflammation/Autoimmune in 2008 

Major market opportunities in focus 


• MabThera for DMARD-IRs (1st line biologic): expect data and filing 

• Actemra: regulatory approval expected (first in US) 


• Phase II/III data for MabThera in PPMS in H1 2008 

Lupus 

• Phase II / III data for MabThera in SLE in H1 2008 

Virology 

Building on our HCV franchise 

Major brands (CHF billion) 

Tamiflu 

Pegasys 

Valcyte/Cymevene 

Fuzeon 

Copegus 

Invirase/Fortovase 

+12 % 

+3 % 

+6 % 

+9 % 

+11 % 

local growth 

-19 % 


2006 

Pandemic sales of CHF 1.9 bn (90 % of total sales); 

CHF 100-150 million pandemic sales expected in ’08 

Growth ex-US more than offsets US market decline; 

Japanese Copegus combo launch successful 

Growth driven by increased use in transplant and 

HIV/AIDS indications 

Steady growth in EU, decline in US 

Slight increase due to Japan, flat in EU/ RoW 

Growth driven by Invirase 500mg 

0 1 2 3 

Building new assets in HCV – early but promising data with 

polymerase and protease inhibitors 

35 

36 

18



Tamiflu sales 2006 – 2007 

Significant slowdown in H2 

CHF million 

1000 

900 

800 

700 

600 

500 

400 

300 

200 

100 

0 

265 

54 

336 306 

77 

592 

98 

899 

119 

746 

460 

65 

192 

54 

458 

Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 

1 Governmental & Corporate 

Hepatitis C portfolio in 2008 

Assets to potentially move standard of care 

xx % 

x % Seasonal 

Pandemic¹ 

I II 

III 

Polymerase inhibitor R1626 

Polymerase inhibitor 

Protease inhibitor 

Phase 

R7227 

R7128 

Key 2008 newsflow: 

R7128: Phase Ib combo data with Pegasys 

R7227: Phase I data 

2006 

494 

2,133 


229 

1,856 

37 

38 

19



Metabolism/Bone 

Boniva continuously gaining market share 

Major brands (CHF million) 

Bonviva/Boniva 

Xenical 

Nutropin 

-1 % 

-10 % 

local growth 

+85 % 


2006 

0 200 400 600 800 1000 

More than 15 % market share in US; 

strong EU launches 

Successful alli OTC launch in US 

in early 2007 

HDL: Next frontier in cardiovascular risk reduction 

Cholesteryl Ester Transfer Protein (CETP) Inhibitor 

• Epidemiologic data: strong inverse relationship between HDL and CV risk 

• LDL-C and HDL-C are independently related to CV risk 

1% decrease in LDL-C 

reduces CHD risk by 1% 1% increase in HDL-C 

reduces CHD risk by 1% 

• CETP inhibition: potential to decrease cardiovascular morbidity and mortality risk 

by increasing HDL-C 

Source: Amer J of Medicine (2005) 118, 1067-1077; J Amer Coll of Card (2005) 46(7) 1225-1228 

39 

40 

20



CETP Inhibitor (R1658) 

A major commitment – decision to enter phase III 

R1658 phase II summary 

• Generally well tolerated in clinical studies 

– Similar profile to placebo in terms of effects on blood pressure and electrolytes 

• R1658 increases HDL-C level in monotherapy and in combination with statins 

R1658 is different from torcetrapib 

• Different chemical structure and physicochemical properties 

• Different binding sites on CETP - different mechanisms leading to decreased CETP activity 

• HDL generated by R1658 and torcetrapib may be of different composition and function 

Health authorities feedback 

• R1658 can move forward in development 

• Morbidity & Mortality study required for initial registration for CETPi 

CETPi – development plan designed to mitigate risk 

Step-wise investment – several decision points 

investment 

CAP 

Decision 

point, 

data driven 

CAP 

Decision 

point, 

data driven 

CAP 

Decision 

point, 

data driven 

time 

41 

42 

21



GLP-1 Phase IIb data available 

Encouraging profile of sustained release formulation 

• R1583: An analogue of GLP-1 with increased stability 

• Phase 2b data (sustained release formulation) show encouraging and competitive 

effects on HbA1c and weight 

• Focus on differentiation beyond HbA1c and weight loss to include 

– dosing frequency (once a week) 

– auto injector (convenience, needle size) 

• Aiming for a best in class profile 

Metabolism/Diabetes in 2008 

Committed to become a major player 

CETP Inhibitor to move into phase III 

• Safety data to be presented at major medical meetings 

GLP-1 phase II data available 

• Decision for phase III to be taken in H1 2008 

• Publication planned for 2008 

Phase II data for DPP-IV (3) and PPARαγ expected 

• Looking for a differentiated profile (e.g. weight reduction for DPP-IV) 

• Go/no-go decisions for phase III trials to be taken this year 

43 

44 

22



Review of core assets by therapeutic area 

Pipeline, Outlook and future catalysts 

Major Roche managed projected submissions 

over the next years 

Phase 3 

Phase 2 

MabThera 

CLL (EU) 

Avastin 

mBC + Taxotere (EU 

Avastin 

pancreatic cancer (EU) 

Tarceva+Avastin 

NSCLC 2nd line (EU) 

MabThera 

RA DMARD IR (EU) 

MabThera 

iNHL maint 1 st line (EU) 

Avastin 

adj. CC (EU) 

Avastin 

gastric Ca metastatic(EU) 

Avastin 

ovarian Ca (EU) 

Xeloda+Avastin 

adj. CC (EU) 

ocrelizumab (R1594 ) 

RA & SLE (EU) 

HPV 16 (R3484) 

cervical neoplasia 

GLP-1 (R1583) 

type II diabetes 

Avastin 

prostate Ca (EU) 

Avastin+Herceptin 

mBC 1st line (EU) 

HCV pol.inhib. (R1626) 

HCV 

Avastin 

adj. NSCLC (EU) 

MabThera+Avastin 

aggressive NHL (EU) 

Tarceva 

adj. NSCLC (EU) 

2008 2009 2010 2011 post 2011 

DBA Oncology 

DBA Inflammation 

DBA Virology 

DBA Metabolic 

DBA CNS 

Others 

Status as of December 31, 2007. 

Xeloda 

adj. CC combo oxaliplatin 

Avastin 

mBC + standard chem (EU) 

Herceptin 

gastric Ca (EU) 

Tarceva 

NSCLC 1 st line maint (EU) 

Tarceva + Avastin 

NSCLC 1 st line maint (EU 

Xeloda 

adj. BC 

pertuzumab (R1273) 

HER 2+ BC (EU) 

aleglitazar (R1439) 


Unless stated otherwise, submissions will occur in US and EU. 

Avastin 

HER2- adj. BC (EU) 

Avastin 

NSCLC squamous (EU) 

Tarceva+Avastin 

NSCLC 1 st line (EU) 

IGF-1R inh huMAb R1507 

Ewing’s sarcoma (EU) 

pertuzumab (R1273) 

early BC (EU) 

CERA (R744 ) 

cancer anaemia 

45 

PNP inhibitor (R3421) 

AI/transplant 

RAR gamma (R667) 

emphysema 

DPP-IV (3) (R1579) 


CETP inhibitor (R1658) 

dyslipidemia 

46 

23



Major phase III commitments – large investments 

Additional large phase III trials started or starting soon 

Avastin mBC 

Avastin adjuvant CC 

Avastin adjuvant lung 

Avastin gastric, NHL 

Avastin adjuvant BC 

Pertuzumab mBC 

Actemra RA 

Ocrelizumab RA, lupus 

Ocrelizumab MS 

CETPi 

GLP-1 

Other T2D compounds 

HCV pipeline 

2007 2008 2009 

Key drivers in place for sustainable growth 

Current and projected sources of value creation (phase IIb and III) 

ILLUSTRATIVE 

Avastin 

mCRC, 

NSCLC 

MabThera 

NHL 

Herceptin 

adjuvant BC 

Avastin 

mBC 

extensions 

Actemra 

RA 

MabThera 

RA 

Avastin 

adjuvant 

Tarceva 

Colon cancer 

1st line maint. 

Xeloda 

adj. BC 

MabThera 

CLL 

Tarceva+ 

Avastin 

combo 2nd line 

GLP-1 

T2 diabetes 

HPV16 

therapeutic 

vaccine 

Avastin 

adjuvant 

Avastin Breast cancer 

adjuvant 

Lung 

cancer 

Pertuzumab 

mBC 

CETP 

inhibitor 

HCV 

Polymerase 

Inhibitor 

Ocrelizumab 

Ocrelizumab 

MS 

RA, lupus 

2007 2011 2015 

47 

48 

24



Pharmaceuticals objectives for 2008 

A rich clinical news flow ahead 

Major clinical data 

Filings 

Avastin+Tarceva 

III 2nd line NSCLC (BETA lung) interim Event-driven 

Tarceva 

III 1st line NSCLC (SATURN) 

H2 2008 

MabThera 

III SLE (EXPLORER) 

H1 2008 

CLL 1 Q1 2008 

GLP-1 

IIb Type 2 diabetes full data 

2008 

DPP-IV 

II Type 2 diabetes 

H2 2008 

st Compound Phase Indication / data Timing 

Avastin III mBC (AVADO) H1 2008 

Avastin III mBC (RIBBON-1) H2 2008 

MabThera III RA, DMARD-IR Q1 2008 

MabThera III PPMS (OLYPMUS) H1 2008 

MabThera 

III 

line ph. III data interim 

MabThera 

III CLL relapsed ph. III data interim Event-driven 

Xeloda III Adjuvant CC (NO16968) interim Event-driven 

Actemra III RA (AMBITION, RADIATE) full data 2008 

Compound Indication 

Avastin mBC (AVADO) 

Avastin+Tarceva NSCLC 2nd line (BETA lung) 

MabThera RA, DMARD IR, and CLL 

Diagnostics Division 

Severin Schwan 

CEO Roche Diagnostics 

Divisional sales growth 

Above-market excluding 

pandemic Tamiflu 

barring unforeseen events 

49 

50 

25



2007: Diagnostics continues solid growth 

Driven by new products and strategic acquisitions 

Strong operating performance 

− Sales growth above market, accelerating during the year 

Continued market penetration of new products 

− Strong cobas 6000 placements drove market share gains 

− New Accu-Chek products restoring Diabetes growth 

− Doubled market share in rapidly expanding DNA sequencing market 

Strategic transactions enabling entry into new markets 

− 454 Life Sciences: Ultra-fast gene sequencing 

− NimbleGen Systems: High density microarrays 

− BioVeris: ECL IP and expansion into clinical trial testing market 

− OCD / Novartis* agreement: Entry into HCV immunochemistry testing 

− Ventana: Merger agreement signed 

* Ortho-Clinical Diagnostics Inc. and Novartis Vaccines & Diagnostics 

2007: Diagnostics sales by business area 

Growth driven by Professional Diagnostics 


Professional Diagnostics* 3,929 4,294 9 8 14 % 

Diabetes Care 3,020 3,216 6 5 11 % 

Molecular Diagnostics 1,175 1,148 -2 -2 2 % 

Applied Science 623 692 11 11 16 % 

Roche Diagnostics 8,747 9,350 7 6 12 % 

* Amalgamation of Centralized Diagnostics and Near Patient Testing 

% change in USD 


51 

52 

26



Diagnostics half-yearly sales growth 

Growth acceleration continued 

4 % 

4 % 

4 % 

5 % 

5 % 

6 % 

H1 '05 H2 '05 H1 '06 H2 '06 H1 '07 H2 '07 

Growth on local currencies, versus same period prior year 

Roche is the #1 In Vitro Diagnostics company 

19 % 

13 % 

12 % 

Estimated market share 20071, 2 

10 % 

6 % 

Roche Siemens* Abbott J&J Beckman 

Coulter 

4 % 

Becton 

Dickinson 

1 Source: company reports, Boston Biomedical Consultants and Roche analysis based on peer sales YTD Sept 2007 

2 in vitro diagnostics market; excludes Life Science research market * Siemens includes Dade (2007 deal) 

3 % 

3 % 

bioMérieux Bayer 

53 

54 

27



2007: Diagnostics operating performance 



Sales 9,350 100.0 +603 

Royalties & other op inc 186 2.0 +4 

Cost of sales -4,241 -45.4 +12 

M & D -2,309 -24.7 -214 

R & D -787 -8.4 -12 

G & A -551 -5.9 -167 

Operating profit 1,648 17.6 +226 

1 Manufacturing costs of goods sold & period costs 

Business Area review 

Investing in our future 

-2% 

6% 

4% 

COGS & PC1 : +7 % 

1% 


local growth 

10% 

Excl. impairment: +10 % 

Administration: +5% 

14% 

43% 

55 

56 

28



Professional Diagnostics 

Double-digit immunochemistry growth for 7 th consecutive 

year 

CHF billion 

5 

4 

3 

2 

1 

0 

+8 % 1 

2005 2006 2007 

Immunochemistry Clinical Chemistry 

POC products other 

+7 % 

+3 % 

+13 % 

1 local growth * Ortho-Clinical Diagnostics, Inc. and Novartis Vaccines & Diagnostics 

Diabetes Care 

New product portfolio restoring growth 

10% 

Accu-Chek 

Advantage 

Decline 

Mature flagship 

product 

Accu-Chek 

Aviva 

3% 

Accu-Chek 

Compact Plus 

Growth 

Leverage portfolio 

3% 

Accu-Chek 

Performa 

Accu-Chek 

Spirit 

Stabilisation 

Rejuvenated portfolio 

5% 

2004 2005 2006 2007 

• Gained market share through strong 

instrument placements 

– Elecsys 2010, cobas 6000, cobas e 411 systems 

• Immunochemistry sales benefiting from new 

markers 

– NT-proBNP, Trop T, TSH, Vitamin D, MPA 

• Clinical Chemistry testing volume increased, 

dampened by pricing pressure 

• Key transactions to access new markets 

– BioVeris acquisition (clinical trials) 

– OCD/ Novartis* agreement (HCV) 

• Accu-Chek Aviva driving growth in key 

markets 

• Accu-Chek Compact Plus and Accu-Chek 

Active strong contributors 

• Accu-Chek Spirit (insulin pump) 

continues gaining momentum 

• Launched: 

– Accu-Chek Performa 

– Accu-Chek Compact Plus (new) 

– Accu-Chek 360o 57 

58 

29



Molecular Diagnostics 

Automated platforms supporting virology market share 

CHF million 

1200 

800 

400 

0 

1 local growth 

-2 % 1 

-1 % 

+4 % 

2005 2006 2007 

Virology Blood Screening 

Other Industrial Business 

Business Area review 

Investing in our future 

-49 % 

• Growth +3 % excluding industrial business, 

which declined as guided 

• Blood screening: 

– Continued up-take cobas s 201 system 

& cobas TaqScreen MPX Test in EU 

– WNV test for cobas s 201 system FDA 

approved 

– Contract with Japanese Red Cross 

renewed 5 yrs 

• Virology benefiting from successful launch of 

CAP/CTM HIV Test in the US 

59 

60 

30



Investing in our future: Closing the gaps 

Full range of tissue- and serum/plasma-based Diagnostics 

Sequencing 

Microarray 

Analysis 

Real-time PCR 

IHC/ISH* 

ECL IA** 

Research IVD Development IVD Commercial 

LightCycler 

Applied 

Science 

AmpliChip 

TaqMan 

Elecsys 

* ImmunoHistoChemistry/In Situ Hybridisation ** ElectroChemiluminescent Label ImmunoAssay 

Investing in our future: Ventana* 

Closes the gap in tissue-based cancer diagnosis 

• Leader in tissue-based diagnostics 

– Large installed base in pathology labs 

– Strong US presence 

• Estimated financials 2007** 

– Revenue `07: USD 296-300 million 

– Operating Margin ’07: ~17.5 % 

• Located in Tucson, Arizona 

– ~1000 employees 

* Merger agreement signed 

** Source: Ventana Q3 News release, Ventana Q2 Earnings and Future Guidance Presentations 

*** 

*** Merger agreement signed 

61 

62 

31



Investing in our future: Ventana acquisition* 

Deploying capital for the right strategic purposes 

Financials: 

− Tender offer of USD 89.50 per share (total transaction: USD 3.4 billion) 

− Price reflects strategic fit and value of friendly and accelerated integration 

− Tender offer set to expire on February 7, 2008, closing of merger expected H1 ‘08 

− Strategic flexibility of Roche group not affected 

Smooth integration expected: 

− Chris Gleeson will continue as CEO and will become a member of Diagnostics 

Executive Committee 

− Ventana to operate as dedicated business under Roche Diagnostics umbrella 

− Headquarters to remain in Tucson, Arizona 


Investing in our future: Complementary technologies 

Complete tissue-based diagnostic capabilities for customers 

Testing on Tissue 

IHC 

protein markers 

FISH/CISH/SISH 

NA markers 

Ventana technology capabilities 

Pathologist 

Testing after Protein / Nucleic acid Extraction 

DNA mutation RNA 

expression 

via microarray 

AmpliChip 

RNA expression via 

multiple RT-PCR or 

mutation detection 

LC480 

RNA expression via 

multiple RT-PCR or 

mutation detection 

TaqMan 

Roche Diagnostics technology capabilities 

Protein expression 

via IC system 

Elecsys 

63 

64 

32



Investing in our future: Companion Diagnostics 

Strong oncology drug portfolio, combined with diagnostics 

capabilities uniquely positions Roche to lead in PHC 

Late 

Development/ 

Market 

Early Development 


Roche Capabilities Ventana Capabilities 

Oncology Pipeline PCR Elecsys/ Others 

IHC/ ISH 

’ 

Herceptin 

Tarceva 

MabThera/ Rituxan 

Pertuzumab 

R7204 

R7112 

R1507 

R7160 

R7159 

Investing in our future: Personalised healthcare 

Strengthening all businesses 

Life 

Sciences 

Strengthen leading 

position in Genomics 

• Microarrays 

• Sequencing 


In Vitro 

Diagnostics 

Solidify leading 

position in diagnostics 

•HCV 

agreement 

•ECL IP 

Pharma 

Become Pharma’s 

“Partner of Choice” 

• Interfaces 

• Breadth of offering 

* 

65 

Increasing 

medical 

value 

to patients 

& physicians 

66 

33



Key growth drivers in 2008 

Commercialise current assets; prepare market for new drivers 

Professional 

Diagnostics 

Diabetes Care 

Molecular 

Diagnostics 

Applied 

Science 

• cobas 4000 analyzer series 

– cobas e 411 analyzer 

• cobas IT 3000 & 1000 

• cobas h 232 

• cobas h 152 (Accutrend Plus) 

• Genome Sequencer FLX 

Divisional sales growth 

outlook 

Key 2007 Launches* 

• Accu-Chek Performa 

• Accu-Chek Compact Plus (new) 

• Accu-Chek 360 0 

• cobas s 201 system & WNV Test (US) 

• Cobas AmpliPrep/Cobas TaqMan HIV 

Test (US) 

* Subject to appropriate regulatory approvals; US launch may be later 

Group financial results 

Dr. Erich Hunziker 

Chief Financial Officer 

Key 2008 Launches* 

• cobas 4000 analyzer series 

– cobas c 311 analyzer 

• Accu-Chek Inform II 

• menu: HCV, RA, sepsis, CMV 

• Accu-Chek Aviva Nano 

• Accu-Chek Active (new) 

• CAP/CTM HCV Test (US) 

• cobas TaqScreen MPX (US, J) 

• cobas TaqMan 48 HBV Test (US) 

• cobas TaqMan 48 CT Test (EU) 

• Real-Time Cell Analyser (RTCA) 

• XLR-HD for DNA sequencing 

• High-density Microarray product line 

Above market growth in local currencies 

barring unforeseen events 

67 

68 

34



2007: Strong operating and financial performance 

Strong operating results 

• Record operating profit of CHF 14.5 billion (+22 % 1 ) 

Translating operational excellence into bottom line and financial condition 

• Core EPS growth twice sales growth 

• Financial assets remain conservatively invested 

• Tax rate improved 

• Increase in net cash and equity ratio 

Improved financial disclosure 

• New presentation of operating results 

• Continued proactive disclosure beyond financial reporting standards 

1 in local currencies 

Group results 2007 

Highest-ever increase in operating margin 

directly translated into net income 

CHF million 


% change 

CHF local 

Sales 42,041 46,133 +10 +10 

EBITDA 14,436 17,068 +18 +17 

% of sales 34.3 37.0 +2.7 p 

Operating profit 11,730 14,468 +23 +22 

% of sales 27.9 31.4 +3.5 p 

Net financial result 855 834 -2 

Taxes -3,436 -3,867 +13 

Tax rate in % 27.3 25.3 -2.0 p 

Net income 9,171 11,437 +25 

% of sales 21.8 24.8 +3.0 p 

Core EPS (CHF) 9.86 11.85 +20 

EPS (CHF) 9.05 11.16 +23 

69 

70 

35



Group operating profit 2007 

Both divisions contributing 


27.9% 

11,730 

2006 

1 at constant exchange rates 

31.4% 

+22% 1 

(+23%) 

14,468 


31.7% 

10,545 

35.5% 

+22% 1 

(+24%) 

13,042 

16.3% 

1,422 

17.6% 

+14% 

1,648 

1 

(+16%) 

Roche Group Pharmaceuticals Diagnostics 

Group operating performance 2007 

Higher out-licensing income partially off-sets increase in 

R&D and G&A 



Sales 46,133 100.0 +4,092 

Royalties & other op inc 2,243 4.9 +852 

Cost of sales -13,743 -29.8 -458 

M & D -9,327 -20.2 -373 

R & D -8,385 -18.2 -1,020 

G & A -2,453 -5.3 -355 

Operating profit 14,468 31.4 +2,738 

5% 

5% 

10% 


local growth 

16% 

19% 

22% 

66% 

71 

Administration: +7% 

72 

36



Group general and administration 2007 

Administration growth below sales growth 

Sales 46,133 +4,092 

General and administration -2,453 -355 

• Administration -2,267 -123 

• Legal and environmental settlements -71 -85 

• Restructuring expenses -146 -111 

• Gains (losses) on disposal of PPE1 16 +2 

• Other general items 15 -38 

1 PPE: Property, plant and equipment 


CHF million vs. 06 

Net financial income 

Stable contribution at very low risk 

Financial income (CHF billion) 

1.5 

1.0 

0.5 

0.0 

2003 2004 2005 2006 2007 

Financing costs (CHF billion) 

0.0 

-0.5 

-1.0 

-1.5 

2003 2004 2005 2006 2007 

-66% 

Net cash (CHF billion) 

30 

20 

10 

0 

-10 

-20 

Liquid funds 

Debt 


local growth 

10% 

7% 

n.a. 

19% 

6% 

2003 2004 2005 2006 2007 

Financial income and financing costs excl. net pension management and also excl. exceptional financial income 2004 

324% 

Net cash 

73 

74 

37



2007 Group tax rate 

Considerable decline mainly driven by Roche 

27.3 % 

0.5 % -0.5 % 

Mix Profit 

before tax 

Roche/ 

Genentech/ 

Chugai 

Tax rate 

Genentech 

41.6 % 

→ 

40.0 % 

0.0 % 

Tax rate 

Chugai 

38.9 % 

→ 

38.2 % 

-2.0 % 

Tax rate 


18.9 % 

→ 

15.6 % 

25.3 % 


Core EPS continued to rise rapidly 

CHF 

14.0 

12.0 

10.0 

8.0 

6.0 

4.0 

2.0 

0.0 

4.34 

1 Compound Annual Growth Rate 

Core EPS CAGR 1 ('02 – '07): 22% 

4.71 

5.87 

7.84 

9.86 

11.85 

2002 2003 2004 2005 2006 2007 

75 

76 

38

CHF million 



Equity 

Increase due to net income 

46,814 

-3,027 

Dividends 

1 net of transactions in own equity instruments 

11,437 

Net 

income 

-887 761 -1,791 

Equity 

compensation 

plans, net of 

share 

repurchases 

Convertible 

debt 

instruments 1 

Net income 

directly 

recognised 

in equity 2 

53,307 

equity 

+14% 

31 Dec 06 31 Dec 07 

2 mainly currency translation adjustments 

77 

Balance sheet 

82% long-term financing 

CHF billion 

Cash and 

marketable 

securities 

Other 

current 

assets 

Non-current 

assets 

24.3 

16.6 

33.5 

74.4 

33 % 

22 % 

45 % 

24.2 

18.6 

35.3 

78.2 

31 % 

24 % 

45 % 

Current 

liabilities 

Non-current 

liabilities 

Equity 

(Net assets) 

12.7 

14.9 

46.8 

74.4 

17 % 

20 % 

63 % 

14.5 

10.4 

53.3 

78.2 

2006 2007 2006 2007 

Assets 

Equity & liabilities 

18 % 

14 % 

68 % 

78 

39



Net cash 

Increase by CHF 1.2 billion 

CHF million 31 December 31 December 


Cash 3,210 3,755 

Marketable securities 21,121 20,447 

Liquid funds 24,331 24,202 

Long-term debt -6,199 -3,834 

Short-term debt -2,044 -3,032 

Interest-bearing liabilities -8,243 -6,866 

Net Cash 16,088 17,336 

Committed to continuously increase pay-out ratio 

over the next 3 years 

CHF Dividend CAGR 1 (’91-’07): 19% 

5.00 

4.50 

4.00 

3.50 

3.00 

2.50 

2.00 

1.50 

1.00 

0.50 

0.00 

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 

1 compound annual growth rate 

1 Compound Annual Growth Rate. 

1995 includes centenary bonus. 2007 Dividend: Proposed by the Board of Directors. 

79 

80 

40



Our objectives for 2008 

Sales 

• High single digit local currency sales increase for Roche Group (excl. Tamiflu pandemic1 ) 

• Above-market sales growth1 in both divisions 

Core EPS 

• Core earnings per share target2 at least at record 2007 level despite significant increase in 

R&D investment and considerably lower Tamiflu pandemic sales 

Shareholder return 

• Continuous increase in dividend pay-out ratio over the next 3 years 

1 Excluding government and corporate stockpiling orders of Tamiflu for pandemic use 

2 At constant exchange rates Barring unforeseen events 

r 

81 

41



2007: Quarterly local sales growth in % 

2006 vs. 2005 2007 vs. 2006 

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 

Pharmaceuticals Division 19 19 25 22 20 16 6 5 

Roche Pharma 19 15 25 20 18 13 1 7 

Genentech 40 39 33 37 30 26 18 6 

Chugai -8 1 2 2 11 2 8 -8 

Diagnostics Division 3 5 6 5 6 5 4 8 

Roche Group 15 16 20 18 17 13 6 6 

2007: Pharma sales (vs. 2006) 

Top 20 products 

Global US Japan Europe/RoW 

% % % % 

CHF m loc CHF m loc CHF m loc CHF m loc 

MabThera/Rituxan 5,516 15 2,851 10 190 3 2,475 23 

Herceptin 4,852 23 1,545 4 164 11 3,143 36 

Avastin 4,106 41 2,757 32 36 - 1,313 64 

NeoRecorm/Epogin 2,094 -7 - - 558 -14 1,536 -4 

Tamiflu 2,085 -19 962 10 394 2 729 -46 

CellCept 2,012 10 989 10 35 17 988 10 

Pegasys 1,637 11 397 -7 65 10 1,175 19 

Xeloda 1,151 19 435 19 28 9 688 19 

Tarceva 1,062 31 500 4 2 - 560 76 

Lucentis 991 117 991 117 - - - - 

Bonviva/Boniva 887 85 595 50 - - 292 278 

Xenical 632 -10 80 -27 - - 552 -7 

Xolair 567 10 567 10 - - - - 

Valcyte/Cymevene 542 12 268 8 - - 274 16 

Pulmozyme 483 12 267 12 - - 216 11 

Nutropin 470 -1 455 -1 - - 15 -3 

Kytril 425 -12 138 -26 138 5 149 -11 

Neutrogin 405 13 - - 405 13 - - 

Rocephin 399 -4 19 -21 58 5 322 -4 

Activase/TNKase 382 9 338 12 - - 44 -7 

83 

84 

42



Pharma local sales growth 1 in % 

Global top 20 products 

Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 

MabThera/Rituxan 17 17 16 17 12 

Herceptin 58 36 25 18 14 

Avastin 49 41 39 45 41 

NeoRecormon/Epogin -1 -3 -5 -5 -15 

Tamiflu 43 47 25 -60 -46 

CellCept 7 7 14 4 16 

Pegasys 6 15 7 7 14 

Xeloda 16 14 18 20 22 

Tarceva 71 44 31 28 24 

Lucentis - - 1964 31 -9 

Boniva 251 132 123 62 63 

Xenical 6 -10 -6 -9 -17 

Xolair 23 16 13 11 2 

Valcyte/Cymevene 30 15 19 9 7 

Pulmozyme 11 4 15 14 13 

Nutropin 8 5 -2 3 -8 

Kytril -10 -16 -18 -11 -3 

Neutrogin 7 11 12 15 14 

Rocephin -32 -7 -2 -2 -4 

Activase/TNKase 

1 versus previous year 

14 15 20 6 -2 

Pharma local sales growth 1 in % 

Top 20 products by region 

US Japan Europe/RoW 

Q1 1 Q2 1 Q3 1 Q4 1 Q1 1 Q2 1 Q3 1 Q4 1 Q1 1 Q2 1 Q3 1 Q4 1 

Mabthera/Rituxan 13 12 14 4 1 6 4 2 23 21 23 25 

Herceptin 7 3 6 1 23 25 3 0 61 43 26 23 

Avastin 34 33 37 23 - - - - 63 52 59 80 

NeoRecorm/Epogin - - - - -17 -3 -12 -22 3 -6 -2 -11 

Tamiflu -8 196 -71 52 55 -93 48 -58 76 -48 -70 -92 

Cellcept 3 18 -1 17 21 14 14 18 10 10 9 14 

Pegasys 6 -5 -27 -3 -38 -5 34 53 23 13 22 20 

Xeloda 2 23 30 19 3 6 11 14 22 16 15 25 

Tarceva 9 -1 1 5 - - - - 125 94 68 47 

Lucentis - 1964 31 -9 - - - - - - - - 

Boniva 83 77 27 40 - - - - 658 400 278 160 

Xenical -24 -8 -30 -46 - - - - -7 -6 -5 -11 

Xolair 16 13 11 2 - - - - - - - - 

Valcyte/Cymevene 8 20 4 3 - - - - 21 17 15 11 

Pulmozyme 6 17 14 10 - - - - 1 13 14 17 

Nutropin 5 -2 3 -8 - - - - 0 4 -7 -10 

Kytril -28 -36 -28 -10 7 5 8 1 -15 -19 -4 0 

Neutrogin - - - - 11 12 15 14 - - - - 

Rocephin -34 -7 -13 -32 4 5 11 -1 -5 -2 -4 -3 

Activase/TNKase 18 24 6 0 - - - - -6 -4 1 -16 

1 2007 vs. 2006 

86 

85 

43



2007: Pharma sales (vs. 2006) 

Other launches since January 2003 1 

1 other than launches already covered in Top 20 

Global US Japan Europe/RoW 

CHF % CHF % CHF % CHF % 

million loc million loc million loc million loc 

Fuzeon 320 3 140 -7 - - 180 13 

Copegus 221 6 -4 - 20 - 205 -1 

Evista 163 19 - - 163 19 - - 

Raptiva 144 15 144 15 - - - - 

Renagel 63 6 - - 63 6 - - 

Femara 11 216 - - 11 216 - - 

Actemra 5 21 - - 5 21 - - 

Quarterly local sales growth: 2H 07 affected by lower 

Tamiflu sales- strong underlying growth 

2006 vs. 2005 2007 vs. 2006 

Sales growth in % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 

Pharmaceuticals Division 19 19 25 22 20 16 6 5 

excl. pandemic Tamiflu 16 16 19 16 16 14 12 11 

Roche Pharma 19 15 25 20 18 13 1 7 

excl. pandemic Tamiflu 15 11 18 14 13 11 10 14 

Chugai -8 1 2 2 11 2 8 -8 

excl. pandemic Tamiflu -14 0 -5 -11 -7 4 4 4 

87 

88 

44



2007: Outgrowing the market in all geographies 

Local sales growth 

Division 

Europe 

North 

America 

Latin 

America 

Japan 

Other 

6% 

5% 

3% 

4% 

10% 

7% 

6% 

11% 

12% 

15% 

17% 


IMS YTD Oct '07 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

2007: Pharmaceuticals Division 

Sales distribution and growth 

Geographies 

Japan +3% 

Latin 

America +6% 

North 

America +15% 

6% 

11% 14% 

42% 

% Key products of total pharmaceutical sales 

0% 

2003 2004 2005 2006 2007 

Others* +19% 

27% 

all growth figures are in local currencies * including Eastern Europe 

1% 

5% 

6% 

4% 

3% 

3% 

6% 

Western Europe +8% 

Boniva 

Tarceva 

Xeloda 

Pegasys 

CellCept 

NeoRecormon/ 

Epogin 

Avastin 

Herceptin 

MabThera/ 

Rituxan 

Western Europe 

Switzerland 

France 

Germany 

Italy 

Spain 

UK 

other 

Western Europe 

89 

90 

45



MabThera / Rituxan 

Strong double-digit growth continues 

CHF billion 

6.0 

5.0 

4.0 

3.0 

2.0 

1.0 

0.0 

Global sales 

+ 15% 1 

2001 2002 2003 2004 2005 2006 2007 

local growth 

Europe/ RoW +23% 

Japan +3% 

US +10% 

• Sales of CHF 5.516 billion 

• Oncology: 

– US: growth from increased use following 1st line therapy in iNHL - adoption in other areas stable 

– Top 5 EU: adoption in relapsed iNHL maintenance use strongly increased (from 16% to 61%) – 

adoption rates in other areas flat to slightly increased from already high levels 

• RA: increasing adoption in US and EU 

– Global RA sales of approx. CHF 500 mn (of which USD 240-260 mn in US) 

91 


Herceptin 

Adjuvant usage keeps increasing in EU/RoW 

CHF billion 

5.0 

4.0 

3.0 

2.0 

1.0 

0.0 


• US market penetration (Q4 ’07) 

– adjuvant: approximately 75% 

– 1st line metastatic: approx. 70%, stable 

• Top 5 EU market penetration (Q4 ’07) 

– adjuvant: approx. 70%, up from 40% at YE 2006 

– 1st line metastatic: approx. 80%, stable 


Global sales 

+ 23% 1 

2001 2002 2003 2004 2005 2006 2007 

local growth 


Japan +11% 

US +4% 

92 

46



Attacking the HER2 pathway from multiple angles 

Pertuzumab moving forward, Trastuzumab-DM1 in-licensed 

Mechanism Specifically targeting First in class HER Binds to HER2 and 

HER2 

dimerization inhibitor delivers intracellularly 

a potent cytotoxic 

Inhibits HER2-mediated Inhibits multiple HER- agent in a targeted 

signalling 

mediated pathways manner 

Phase of 

development 

Efficacy data 

Newsflow 

Herceptin 

Approved for adjuvant 

and mBC (HER2+) 

Survival benefit 

In adjuvant and 

metastatic 

HER2+ BC 

Unprecedented benefit – 

standard of care 

Pertuzumab 

Phase III CLEOPATRA 

FPI Q1 2008 

18% response rate 

39% clinical benefit 

rate 

Phase II final results 

in 2008 

Avastin 

Four new indications approved in EU 

CHF billion 

5.0 

4.0 

3.0 

2.0 

1.0 

0.0 

Global sales 

+ 41% 1 

2004 2005 2006 2007 

Trastuzumab-DM1 

Phase II FPI Q3 2007 

Promising phase I 

data at ASCO 2007 

Partnered with 

Genentech 


• Penetration rate, 1st line mCRC (major EU markets): approx. 60% of on label market (as of YE2007) 

• EU mCRC label so far: only approx. 30% of total EU market covered; large growth potential due to 

broadening of Avastin EU label to include combo with any chemo in any line of treatment – approved end 

of January 2008 

• Launch in 1st line mBC and mNSCLC in EU progressing well 

• EU approval in mRCC at the end of 2007: launch in Q1 2008 

• Key clinical news flow in 2008: AVADO and RIBBON-1 (1st line mBC) 

94 


93 

local growth 


Japan 

US +32% 

47



Avastin in adjuvant colon cancer 

Key phase III trials fully recruited 

Treatment regimen 

Number of patients 

Recruitment duration 

Efficacy analysis 

Filing 

FOLFOX-6 ± Avastin 

2,700 

Q3 2004 until Q4 2006 

First interim look: Q2 2007 

Subsequently every 6 months 

Next interim look: Q2 2008 

2010 (or earlier) 

Xeloda 

Continuously gaining share 

CHF billion 

1.5 

1.0 

0.5 

0.0 

NSABP C-08 

FOLFOX-4 ± Avastin 

XELOX + Avastin 

3,450 

Q4 2004 until Q2 2007 

Event-driven analysis 

2010 (or earlier) 

AVANT 


• Rollout in EU for gastric cancer (approved in EU in March 2007) 

• Positive 5-year follow-up overall survival data in adjuvant colon cancer (X-ACT study) presented at ECCO 

• Xeloda mCRC label extension approval in EU expected early February 2008 


Global sales 

+ 19% 1 

2001 2002 2003 2004 2005 2006 2007 

95 

local growth 


Japan +9% 

US +19% 

96 

48



Tarceva 

Annual sales of more than CHF 1bn for the first time 

CHF billion 

1.0 

0.5 

0.0 


Global sales 

+ 31% 1 

2004 2005 2006 2007 


• Market penetration in NSCLC, top 5 EU: 2nd line: 25-30%, 3rd line: approx. 45% 

• Successful launch in metastatic pancreatic cancer (EU approval in January 2007) 

Avastin 

Maximizing a key asset 

Main Indication 

Study name Status 

mCRC 2nd line, after progression on 

1st line Avastin 

SWOG S0600 Initiated Q2‘07 

local growth 

Europe/ RoW + 76% 

Japan 

US +4% 

Adjuvant CC Stage II high risk / stage III AVANT Recruitment completed Q2‘07 

Stage II high risk / stage III NSABP C-08 Recruitment completed Q4‘06 

Stage II 

E5202 Initiated Q3‘05 

Adj. rectal Cancer Stage II / stage III 

E5204 Initiated Q1‘06 

Met. Gastric cancer AVAGAST Initiated Q3 2007 

RCC 1st line 

AVOREN Approved EU; US filing Q3’08 

1st line 

CALGB 90206 Topline PFS data to be 

submitted in US filing 

Pancreatic Cancer 1st line (with Tarceva) AVITA Did not meet primary endpoint 

Ovarian Cancer GOG 218 Initiated Q3‘05 

1st line 

1st line 

Relapsed 

ICON-7 Initiated Q4‘06 

GOG 213 Initiated Q4’07 

Prostate Cancer 1st line, hormone refractory CALGB 90401 Initiated Q2’05, enrollment 

completed Q4 2007 

97 

98 

49



Avastin 

Maximizing a key asset 



NHL aggressive 1st line, R-CHOP+/-Avastin MAIN 

Initiated in Q3‘07 

NSCLC 1st line non-sq. (with Tarceva) ATLAS Init. Q4’05, expect to compl. H1’08 

2nd line (with Tarceva) BETA Lung Init. Q2’05, expect to compl. H2’08 

1st line squamous BRIDGE (pilot study) Init. Q2’06, expect to compl. H1’08 

1st or 2nd line non-squamous 

previously treated CNS mets 

PASSPORT Init. Q1’06, expect to compl. Q2’08 

Adjuvant NSCLC Stage IB-IIIA, sq. + non-sq. ECOG 1505 

Initiated Q3‘07 

mBC 1st line HER2-negative AVADO Recruitment completed Q2‘07 

1st line HER2-negative RIBBON-1 Recruitment completed Q3‘07 

2nd line HER2-negative RIBBON-2 Initiated Q1‘06 

1st line HER2-pos. (with 

Herceptin) 

AVEREL Initiated Q3‘06 

Adjuvant BC HER2-negative E2104 Safety data pres. at SABCS ‘07 

HER2-negative E5103 


HER2-negative, ER-/PR-neg. BEATRICE Initiated Q4‘07 

HER2-positive (with Herceptin) BETH In preparation 

Glioblastoma 2nd/3rd line BRAIN Data presented Q4‘07 

Herceptin and pertuzumab 

Further strengthening our position in HER2-positive BC 


HERCEPTIN 


Gastric cancer ToGA Initiated Q3’05, final analysis 

2009, event-driven 

Adjuvant BC 1 year vs. 2 years treatment HERA event-driven - Interim analysis 

2008/’09 with potential for results 

on optimal treatment duration 

PERTUZUMAB 

mBC HER2+, 1st line Combo with Herceptin+ 

docetaxel 

ph. III (CLEOPATRA) To start Q1’08 

mBC HER2+, 2nd line Combo with Herceptin Roche phase II Ongoing – positive stage 1 

data at ASCO ’07, final data ‘08 

Ovarian cancer 

platinum-sensitive 

Ovarian cancer 

platinum-resistant 

Combo with chemotherapy phase II (BO17931) results in Q1’08 

Combo with gemcitabine 

phase II (TOC3258g) 

Genentech study 

99 

Data presented at ASCO and 

ECCO 2007 

100 

50



Xeloda / Tarceva / MabThera 

Expanding to new indications and combinations 


XELODA 


Adjuvant CC Combo with Avastin 

AVANT Recruitment completed Q2‘07 

XELOX vs. 5FU/LV 

NO16968 Recruitment completed, final 

analysis event driven (’08/’09) 

Adjuvant BC 

TARCEVA 

AC -> T vs. AC -> TX NO17629 Recruitment completed in 

Jan ‘06, final analysis event driven 

NSCLC 1st l. maint. Combo with chemotherapy SATURN 

Init. Q4’05, expect to compl. H1’08 

Combo with Avastin 

ATLAS 


NSCLC 2nd line Combo with Avastin 

BETA Lung 


Adjuvant NSCLC RADIANT 


MABTHERA 

NHL1st line maint. After MabThera induction PRIMA Recruitment completed Q1’07, 

final data expected in H1’10 

CLL 1st line ML17102 

Met primary endpoint 

CLL relapsed REACH 

Recruitment completed Q3’07, 

final data expected in H2’09 

101 

Actemra 

Broadly investigated in all RA segments 

Main Indication Study name Status 

Rheumatoid Arthritis MTX–IR 

OPTION Presented at EULAR 2007 

DMARD–IR TOWARD 

Presented at ACR 2007 

IR = inadequate responders 

MTX-naive (monotherapy) 

AMBITION 

Topline data positive 

Anti-TNF IR RADIATE 

Topline data positive 

MTX–IR 

Prevention of structural 

damage 

LITHE Recruitment completed, 

2 yrs study 

102 

51



Actemra 

Potential to become a significant new RA treatment 

Large international phase III program 

• First-in-class agent 

• 5 registration trials (>4,000 patients) 

• Mono and combo therapy 

• Patient populations studied: 

– MTX inadequate responders 

– DMARD inadequate responders 

– Anti-TNFα inadequate responders 

– MTX-naïve patients 

Filed in US and EU in Q4 2007 

• First 4 trials all met primary endpoint 

– Strong efficacy seen in MTX and 

DMARD IR (OPTION and TOWARD) 

– Superior to MTX as monotherapy 

(AMBITION) 

– Met primary endpoint in a-TNF-IR 

(RADIATE) 

• Generally well tolerated 

MabThera / ocrelizumab anti-CD-20 pipeline 

Major indications in phase III development 




MABTHERA MTX–IR 

Phase III SERENE Met primary endpoint 

MTX–IR dose escalation 

retreatment 

Phase III MIRROR Recruitment completed 

Anti-TNF–IR 

Phase III SUNRISE Met endpoint Q4’07 

MTX-naive, radiographic study Phase III IMAGE Recruitment completed Q4’07 

Combo with Enbrel Phase II TAME 


OCRELIZUMAB MTX–IR 

Phase III STAGE Initiated Q4‘06 

Anti-TNF IR 

Phase III SCRIPT Initiated Q2‘07 

MTX–naive; X-ray study Phase III FILM 


Anca ass. vasculitis 

MABTHERA RAVE Initiated Q4‘04 

Lupus nephritis 

MABTHERA Phase III LUNAR Enrollment completed Q1‘08 

OCRELIZUMAB Phase III BELONG To initiate Q1‘08 

IR = inadequate responders 

104 

103 

52



MabThera / ocrelizumab anti-CD-20 pipeline 

Major indications in phase III development 


Syst. Lupus erythem. 


MABTHERA Phase II / III EXPLORER Results expected H1’08 

OCRELIZUMAB Phase III BEGIN Initiated Q4’07 


MABTHERA PPMS 

OLYMPUS Recruitment completed Q4’05, 

results expected H1’08 

RRMS 

HERMES Met primary endpoint, 

data presented at AAN 2007 

OCRELIZUMAB RRMS 

Phase II Expected to initiate in H1’08 

Metabolic and vascular diseases 

Major decision points in 2007 and 2008 

Main Indication Status 

Type 2 Diabetes 

R1583 (GLP-1) Phase II 

Presented at ADA 2006 

Phase II sustained release formulation 

First data in - encouraging 

R1439 (PPAR αγ) Phase II 

Data in 2008 

R1579 (DPP IV-3) Phase II 

Data in 2008 

R1511 (GK 3) Phase I 

Ongoing 

Dyslipidemia 

R1658 (JTT-705) Phase II 

Encouraging data, 

plans to enter phase III 

105 

106 

53



Roche key therapeutic areas 

Current and future pillars of growth 

Oncology 

Xeloda 

MabThera 

Herceptin 

Avastin 

Tarceva 

Pertuzumab 

R1507 (IGF-1R mAb) 

Apomab 

Apo2L/TRAIL 

14 phase I compounds 

On Hand 

RA/Autoimmune 

MabThera 

Actemra 

R1594 ocrelizumab 

PNP inhibitor 


Metabolic 

R1583 GLP-1 

R1658 CETP Inh. 

R1439 dual PPAR 

R1579 DPP-IV 


Promising Late 

Stage 

Roche R&D pipeline today 

phase I - (34 NMEs + 1 AI) 

phase II - (19 NMEs + 12 AIs) 

Virology 

Tamiflu 

Pegasys 

R3484 HPV16 

R1626 HCV pol. Inh. 

R7128 HCV pol. Inh. 

R7227 HCV prot. inh. 

Emerging 

Mid-Term 

phase III - (2 NMEs + 40 AIs) 

CNS 


Early 

Stage 

107 

Registration - (2 NMEs + 5 AIs) 

R435 

Avastin - NSCLC squamous 

R435 

Avastin - NSCLC mCNS treat. 

R1273 

R1415+R435 Tarceva + Avastin –NSCLC1 

R1507 

R3502 

GEN 

GEN 

GEN 

GEN 

GEN 

GEN 

GEN 

GEN 

ARQ 

R667 

NME 

R3421 

Additional Indication 

ISO 

R1626 

R3484 

R1439 

R1579 

R1658 

R1594 

DBA Oncology 

DBA Inflammation 

DBA Virology 

DBA Metabolic 

DBA CNS 

Others 

MEM 

R744 

CHU 

R-No. Roche managed 

GEN Genentech managed 

CHU Chugai managed 

ARQ ArQule opt-in 

BTI BioTie opt-in 

MEM Memory opt-in 

ISO Isotechnika opt-in 

108 

st R547 

solid tumors 

MabThera –CLL1 

R1530 

solid tumors 

R4733 

solid tumors 

R7112 

oncology R1273 pertuzumab – EBC HER2+ 

R7159 

NHL 

pertuzumab – ovarian cancer 

R7204 

malignant melanoma 

line 

GEN 

anti-cMET – cancer therapy 

Ewing‘s sarcoma 

GEN 

hedgehog ant. – solid tumors 

T-DM1 - mBC 

GEN 

anti-CD20 3rd gen. – hem. malig. 

CD40 Ab – diff. large B Cell lymph. 

GEN 

GEN 

GEN 

IAP ant. – cancer therapy 

MEK inh. – cancer therapy 

ABT-263–solid tumors & hem. malig. 

Apomab -sarcoma 

Apomab -cancer 

Apo2L/TRAIL - cancer 

GEN CD40 Ab – NHL/MM/rel.large B-CL 

ABT-869–solid tumors 

CHU 

CRC 

Avastin – glioblastoma recurr. 

R1646 

pain 

Avastin – extensive SCLC 

R1671 

asthma 

Avastin - relapsed MM 

R3477 

R7103 

autoimmune diseases 

COPD 

solid tumors 

RAR gamma - emphysema 

R7277 

RA 

PNP inh. – AI / transplant 

GEN 

IFN-alpha Ab - SLE 

BTI 

VAP-1 – inflammatory diseases 

renal transplant 

R7128 

R7227 

CHU 

R1511 

R1512 

R4929 

HCV 

HCV 

HCV 

type 2 diabetes 

PVD 


R1583 

HCV pol - HCV 

HPV16 – cervical neoplasia 

aleglitazar – type 2 diabetes 

DPP-IV (3) – type 2 diabetes 

GLP1 - type 2 diabetes 

CETP inh. - dyslipidemia 

ocrelizumab – RRMS 

R7201 


Alzheimer‘s / schizophrenia 

R7232 

dyslipidemia 

CERA – chemo induced anaemia 

R7234 


gastroparesis / IBS 

R1450 

Alzheimer‘s 

R1678 

schizophrenia 

R4996 

Alzheimer‘s 

Status as of December 31, 2007 

st line 

MabThera –CLLrelapsed 

MabThera –iNHLmaint. 1st line 

MabThera + Avastin – NHL aggr. 

Xeloda - adj. CC combo oxaliplatin 

Xeloda –adj. CC comboAvastin 

Xeloda –adj. BC 

Avastin -adj. CC 

Avastin – pancreatic cancer 

Avastin – ovarian cancer 1st line 

Avastin - mBC lineadj. combo Taxot. rectal cancer 1st line 

Avastin–mBC combo std. chem. 1st l. 

Avastin – mBC combo Hercept. 1st R105 

R105 

R105 

R105 

R340 

R340 

R340 

R435 

R435 

Avastin –prostatecancer 

R435 

R435 

R435 

R435 

R435 

. l. 

R435 

Avastin –adj. NSCLC 

R435 

Avastin –m. gastriccancer 

R435 

R597 

Avastin – adj. BC HER2- 

Herceptin –m. gastric cancer HER2+ 

Tarceva -NSCLCmaint. 1st line 

Tarceva –adj. NSCLC 

Tarceva+Avastin–NSCLC maint.1st l. 

Tarceva + Avastin – NSCLC2nd line 

Avastin – ovarian cancer 2nd line 

Avastin –GISTrecurr. 

Avastin – adj. rectal cancer 

Avastin –mBC2nd Avastin–mCRC 1 

R1415 

R1415 

R1415+R435 

R1415+R435 

GEN 

GEN 

GEN 

GEN 

line 

R99 

CellCept – pemphigus vulgaris 

R105 

MabThera – RA DMARD IR 

R1569 

Actemra –sJIA 

R1594 

ocrelizumab -RA 

R1594 

ocrelizumab -SLE 

CHU 

ED-71 – osteoporosis 

GEN 

MabThera – lupus nephritis 

GEN 

MabThera – ANCA ass. vascul. 

GEN 

MabThera –SLE 

GEN 

Xolair – pediatric asthma 

R127 

Valcyte –CMV extension 

GEN 

MabThera – PPMS 

GEN 

TNKase – catheter clearance 

GEN 

GEN 

CHU 

Lucentis – diabetic macul. edema 

Lucentis – renital vein occlusion 

Epogin – chemo induced anaemia 

st Xeloda –mCRCcombo1 

R435** 

combo oxalipl. 

R435*** 

Avastin -RCC 

R1569 

Actemra -RA 

CHU 

Antevas – subarach. haemorr. 

st line 

Xeloda–mCRC combo 2nd line 

Avastin –mBCcomboTaxol1st R340* 

R340* 

R1273 pertuzumab – mBC HER2+ 

R435 

l. 

* CPMP positive opinion granted Dec. 2007 

** approved in EU end of January 2008 

*** approved in EU, US to file in 2008 

GEN Raptiva - renal transplant 

R1663 anticoagulant 

R1295 MS 

54



Roche managed R&D pipeline - overview 

Projects by Disease Biology Area (DBA) 

Inflammatory 

CNS 

25 

19 

Research Development 

Virology 

7 

92 Projects 

23 

Oncology 

Metabolic 

18 

Inflammatory 

13 

CNS 

6 

Others 

1 

44 

7 

Virology 

14 

Oncology 

85 Projects 

including 9 in Phase 0 

Virology 

Assets in development to secure long-term growth 


local growth 

6 

5 

4 

3 

2 

1 

0 

2004 2005 2006 2007 


-8% 

10% 

37% 

54% 

+7% 

+3% 

-16% 

Metabolic 

109 

110 

55



Metabolism/Bone 

Boniva drives growth 


local growth 

3.0 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

+16% 

2004 2005 2006 2007 


Anemia 

NeoRecormon holds ground against competition 

20% 

43% 

37% 

+7% 

+20% 

+19% 


local growth 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

2004 2005 2006 2007 

Europe/ RoW Japan 

-7% 

36% 

64% 

-14% 

-4% 

111 

112 

56



2007: Pharmaceuticals 

EBITDA and operating profit 



40.0% 

36.5% 35.5% 

12,168 

+20% 1 

(+21%) 

14,706 


31.7% 

10,545 

+22% 

13,042 

1 

(+24%) 

EBITDA Operating Profit 

2007: Diagnostics margins 

EBITDA remains well above industry average 



28.6% 

2,500 

27.6% 

+2% 1 

(+3%) 

2,580 


16.3% 

1,422 

17.6% 

+14% 1 

(+16%) 

1,648 

EBITDA Operating Profit 

113 

114 

57



2007: Diagnostics local sales 

By Region and Business Area (vs. 2006) 


Global Nth Am. EMEA RoW 

% loc 

growth 

% loc 

growth 

% loc 

growth 

% loc 

growth 

Professional Diag. 4,294 8 899 5 2,494 6 901 16 

Diabetes Care 3,216 5 930 5 1,849 3 437 13 

Molecular Diagnostics 1,148 -2 374 -1 480 6 294 -12 

Applied Science 692 11 278 15 293 7 121 12 

Roche Diagnostics 9,350 6 2,481 5 5,116 5 1,753 9 

Diagnostics quarterly sales and local growth 1 


Q4 ‘06 Q1 ‘07 Q2 ‘07 Q3 ‘07 Q4 ‘07 

% loc 

% loc 

Professional 1,024 5% 1,017 5% 1,093 8% 1,047 7% 1,137 10% 

Diagnostics 

Diabetes 844 6% 755 11% 789 3% 768 0% 904 7% 

Care* 

Molecular 293 -1% 278 -2% 296 -3% 282 -3% 292 1% 

Diagnostics* 

Applied 171 10% 166 7% 165 12% 167 11% 194 15% 

Science* 

DIA Division 2,332 5% 2,216 6% 2,343 5% 2,264 4% 2,527 8% 

1 2006 vs. 2005 for Q4 ‘06, 2007 vs. 2006 for Q1 to Q4 ’07 

* service support removed from Business Areas DC, MD & AS and reallocated into Professional Diagnostics 

115 

% loc % loc % loc 

116 

58



2007: Diagnostics sales by region 

Strong growth in emerging markets 

CHF 9,350 million 

2,481 

5,116 

509 

1 Europe, Middle East and Africa 

784 

411 

49 

North America 27 % 

Latin America 5 % 

Asia Pacific 8 % 

Japan 4 % 

Others 1 % 

EMEA 1 55 % 

Roche Dx 

North 

America 

EMEA* 

Latin 

America 

Asia Pacific 

Japan 

2008: Key planned product launches* (1) 

local sales growth 

Product BA 1 Indication Region 

cobas 4000 analyzer 

series 

- cobas c 311 analyzer 

Immunochemistry 

menu 

PD Next generation system consolidating clinical chemistry and 

immunochemistry testing for small to medium workload laboratories; 

software links stand-alone cobas c 311 (clinical chemistry) & 

cobas e 411 (immunochemistry) modules with cobas p242 data 

manager 

PD New assays for a number of important diagnostic uses: 

•Elecsys Anti-HCV: Assay for the detection of hepatitis C infection 

•Elecsys anti-CCP (anti-cyclic citrullinated peptide antibody),: Assay 

for the diagnosis of rheumatoid arthritis 

•IL-6 (interleukin-6): Immunoassay to aid in management of critically 

ill patients as early indicator for acute inflammation and to monitor 

course of disease 

•Procalcitonin: immunoassay to aid in early detection and monitoring 

of sepsis 

•Elecsys Anti-CMV IgG and Anti-CMV IgM: For the detection of 

cytomegalovirus infection 

2% 

6% 

5% 

5% 

Global 

Accu-Chek Inform II PD First wireless enabled hospital blood glucose meter Global 

1 Business Areas: Professional Diagnostics (PD) 

* Subject to appropriate regulatory approvals; US launches may be later than indicated 

19% 

18% 

117 

Global/ EU 

118 

59



2008: Key planned product launches* (2) 

Product BA1 Indication Region 

Cobas TaqMan 48 HBV 

Test 

MD Automated, real-time PCR test for monitoring hepatitis B viral load US 

Cobas AmpliPrep/ Cobas 

TaqMan HCV Test 

cobas TaqScreen MPX 

Test 

Cobas TaqMan 48 CT Test 

MD Real-time PCR quantification of HCV viral levels on fully automated Cobas 

AmpliPrep/Cobas TaqMan systems 

MD Screens donated blood for major viruses (HIV-1, HIV-2, hepatitis B, and 

hepatitis C) in a single assay . Will run on automated cobas s 201 system 

in US and on automated, fully integrated cobas s 401 system in Japan 

MD 

New version of an automated, real-time PCR test for Chlamydia 

trachomatis; also detects the new Swedish CT strain 

US 

US, Japan 

Accu-Chek Aviva Nano DC Enhanced portability by reduced size, combined with an attractive design 

and improved features 

Global 

Accu-Chek Active (new) DC Proven performance with additional features in a handy modern design Global 

Real-Time Cell Analyser 

(RTCA) 

XLR-HD 

AS Enables for precise online measurement of cell activities without labelling 

DNA sequencing kit enabling increased read lengths and higher 

throughputs per plate 

1 Business Areas: Applied Science (AS), Molecular Diagnostics (MD), Diabetes Care (DC) 

* Subject to appropriate regulatory approvals; US launches may be later than indicated 

Group performance 2007 

Strong sales growth drives bottom line growth 

EU 

Global 

Change 

CHF million 2006 2007 CHF million % loc % 

Sales 42,041 46,133 +4,092 +10 +10 

Operating profit 11,730 14,468 +2,738 +23 +22 

as % of sales 27.9 31.4 

Associated companies 2 2 - - 

Financial income 1,829 1,805 -24 -1 

Financing costs -974 -971 +3 0 

Profit before taxes 12,587 15,304 2,717 +22 

Income taxes -3,436 -3,867 -431 +13 

Tax rate in % 27.3 25.3 

Profit from continuing businesses 9,151 11,437 +2,286 +25 

as % of sales 21.8 24.8 

Profit from discontinued businesses 20 - -20 -100 

Net income 9,171 11,437 +2,266 +25 

as % of sales 21.8 24.8 

Attributable to Roche shareholders 7,880 9,761 +1,881 +24 

Minority interests 1,291 1,676 +385 +30 

119 

120 

60

1.31 

1.27 

1.23 

1.19 

1.15 

1.11 



2007 and 2006 

CHF / USD 

1.35 

1.31 

1.27 

1.23 

1.19 

1.15 

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 



-5% 

2006 

Monthly averages 

Year-To-Date averages 

2006 

-3% -3% -4% 



Average monthly CHF / USD 

1.31 

1.29 

1.27 

1.25 

1.23 

1.21 

1.19 

1.17 

1.15 

1.13 

average 2006 

average 2007 

monthly avg 2006 

monthly avg 2007 

1.11 


122 

-4% 

121 

61

1.68 

1.66 

1.64 

1.62 

1.60 

1.58 

1.56 

1.54 

1.68 

1.66 

1.64 

1.62 

1.60 

1.58 

1.56 

1.54 




CHF / EUR 




+4% 

2006 

2006 

Monthly averages 

Year-To-Date averages 

+5% +5% 



Average monthly CHF / EUR 

1.68 

1.67 

1.66 

1.65 

1.64 

average 2007 

1.63 monthly avg 2007 

1.62 

1.61 

1.60 

1.59 

+4% 

1.58 

1.57 

1.56 

average 2006 

1.55 

1.54 

monthly avg 2006 


124 

+4% 

123 

62




Average exchange rates 

YTD YTD YTD 12 07 vs. YTD 12 06 

12 07 12 06 

EUR 1.64 1.57 

USD 1.20 1.25 

JPY 1.02 1.08 

17.4 % 

15.6 % 15.4 % 15.0 % 

-6% -4% -2% 0% 2% 4% 6% 

125 

Exchange rate impact on sales 

Stronger EUR almost compensates weaker USD and JPY 

Development of 

average exchange rates versus prior year period 

CHF / EUR +3.7 % +4.5 % +4.5 % +4.4 % 

CHF / USD -4.8 % -3.4 % -3.2 % -4.2 % 

CHF / JPY -6.8 % -6.9 % -6.1 % -5.4 % 

Difference 

in CHF / local -1.8 %pt -0.4 %pt -0.1 %pt -0.5 %pt 

growth 

Sales 

growth 


vs. 2006 

local 

growth 

CHF 

growth 

12.0 % 11.9 % 

10.2 % 

Q1 H1 YTD 9 FY 

9.7 % 

126 

63



Exchange rate impact on sales 

Stronger EUR compensates weaker USD & JPY in Q2 & Q3 

Development of 

average exchange rates versus prior year period 

CHF / EUR +3.7 % +5.4 % +4.5 % +4.2 % 

CHF / USD -4.8 % -1.8 % -3.0 % -7.2 % 

CHF / JPY -6.8 % -6.9 % -4.4 % -3.4 % 

Difference 

in CHF / local -1.8 %pt +1.1 %pt +0.5 %pt -1.7 %pt 

growth 

Sales 

growth 


vs. 2006 

17.4 % 

15.6 % 

local 

growth 

CHF 

growth 

14.5 % 

13.4 % 

5.6 % 6.1 % 5.7 % 

Q1 Q2 Q3 Q4 

Exchange rate impact on sales growth 

Stronger EUR compensates for weaker USD and JPY 

Local 

sales 

growth 


vs. 

2006 

10.2% 

1.3 % 

0.4 % 

0.1 % 

0.0 % 

-1.8 % 

-0.5 % 

0.0 % 

EUR Other AS-PAC LAT-AM USD JPY CAD 

9.7% 

4.0 % 

127 

CHF 

sales 

growth 


vs. 

2006 

128 

64

15.4 % 



2007: Currency impact 

Difference in CHF / local growth 

-0.4 %pt -0.5 %pt 

local 

growth 

15.0 % 

CHF 

growth 

10.2 % 

9.7 % 

H1 FY 

Sales growth 2007 vs. 2006 

CHF 0.01 change against USD / EURO 

/ JPY effect on 

Sales 

CHF 144 m 

CHF 77 m 

CHF 37 m 

Currency 

USD 

EUR 

JPY 

• USD 1 = CHF 1.20 ± CHF 0.01 

• EUR 1 = CHF 1.64 ± CHF 0.01 

• JPY 100 = CHF 1.02 ± CHF 0.01 

Currency sensitivities (order of magnitude) are based on business / product mix composition of 2007 

Group royalties and other operating income 2007 



Royalties & other op income 2,243 +852 

• Royalty income 1,202 +218 

• Income from 

out-licensing arrangements 777 +402 

• Income from disposal of 

products and other 264 +232 

26% 


local growth 

66% 

115% 

Operating 

profit 

CHF 29 m 

CHF 37 m 

CHF 15 m 

727% 

129 

130 

65



Group cost of sales 2007 

Increase in collaboration expenses almost compensated 

by absence of impairments 

Sales 46,133 +4,092 

Cost of sales -13,743 -458 

• Manufacturing COGS1 /period costs -8,737 -420 

• Royalty expenses -2,304 -12 

• Collaboration and profit sharing agreements -1,755 -209 

• Amortisation of product intangibles -942 -1 

• Impairment of property, plant & equipment -5 +66 

• Impairment of product intangibles 0 +118 

Gross profit margin 81.1 % +0.9 %p 

1 Cost of goods sold 

Net cash 31 December 2007 

Increase by CHF 1.2 bn 



-93% 

-100% 


local growth 

CHF million 31 December 2006 31 December 2007 

Roche GNE Chu Total Roche GNE Chu Total 

Cash 1,003 1,527 680 3,210 1,869 1,157 729 3,755 

Marketable securities 16,891 3,312 918 21,121 14,496 5,209 742 20,447 

Liquid funds 17,894 4,839 1,598 24,331 16,365 6,366 1,471 24,202 

Long-term debt -3,549 -2,648 -2 -6,199 -1,270 -2,564 - -3,834 

Short-term debt -2,044 - - -2,044 -2,357 -675 - -3,032 

Interest-bearing liabilities -5,593 -2,648 -2 -8,243 -3,627 -3,239 - -6,866 

Net cash 12,301 2,191 1,596 16,088 12,738 3,127 1,471 17,336 

Net cash increase Roche CHF +437 m 

Genentech CHF +936 m Group CHF +1,248 m 

Chugai CHF -125 m 

5% 

10% 

6% 

3% 

2% 

18% 

131 

132 

66



Net financial income 2007 

Higher interest income almost compensates net 

exchange losses and lower equity security income 

CHF m 

+ 

2,000 

1,600 

1,200 

800 

400 

0 

-400 

-800 

Expected Return on 

Pension Plan Assets 

Interest Income & 

Debt Securities Income 

Equity Income 

Interest Expense 

Amortisation of Debt Discounts 

Time Cost of Provisions 

Interest Cost of 

Pension Plans 

Expected Return on 

Pension Plan Assets 

Interest Income & 

Debt Securities Income 

Equity Income 

Interest Expense 

Time Cost of Provisions 

Fx loss 

Interest Cost of 

Pension Plans 

-1,200 

- 

Net financial income 

2006 

855 


834 

Net treasury management 790 776 

Net pension management 65 58 

Net financial income 2007 

Higher interest income almost compensates net 

exchange losses and lower equity security income 

Change 

CHF million 2006 2007 CHF million % 

Net financial income 855 834 -21 -2 

Financial income 1,829 1,805 -24 -1 

Equity security income 390 313 -77 -20 

Interest & debt security income 780 1,001 +221 +28 

Expected return on pension plan assets 636 670 +34 +5 

Net foreign exchange gains (losses) -24 -153 -129 +538 

Net other 47 -26 -73 - 

Financing costs -974 -971 +3 0 

Interest expense -315 -281 +34 -11 

Amortisation of discount debt instruments -40 -8 +32 -80 

Net gains (losses) interest rate derivatives -25 -2 +23 -92 

Net gains (losses) fin liabs at fair value P&L 51 1 -50 -98 

Time cost of provisions -74 -69 +5 -7 

Interest cost of pension plans -571 -612 -41 +7 

133 

134 

67



2007: Profit expansion driven by operating and tax lines 

CHF growth in % 

25 

20 

15 

10 

5 

0 

9.7 

13.6 

23.3 

1.7 

25.0 

-3.1 

-1.2 

20.7 

-0.5 

20.2 

Sales Operating Operating Net Profit Amorti- Minorities Core net Dilution/ Core 

cost profit financial continuing sation/ income number of EPS 

before income businesses Impair- shares 

exceptional and before ment 

items taxes exceptional 

135 

items 

2007: Disclosure further improved 

New presentation of operating results (alliances and collaborations etc.) 

- More accurate assessment of sustainable earnings capacity 

- Improved comparability with other healthcare companies 

Expanded disclosures 

- Breakdown of Cost of Sales, R&D and G&A for Pharma and Diagnostics (proactive) 

- Impairments, commitments (proactive) 

- Financial risk management (IFRS 7) 

- Executive remuneration and shareholdings (new Swiss legal requirement) 

Internal Control over Financial Reporting 

- Risk-focused internal control approach (similar to new US regulations, AS5) 

- Management report and external audit opinion on effectiveness 

136 

68

Roche Annual Results 2007

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