Roche Annual Results 2007
Roche Annual Results 2007
Roche Annual Results 2007
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<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>Roche</strong><br />
<strong>Annual</strong> <strong>Results</strong> <strong>2007</strong><br />
r<br />
Basel, London, New York, January/February 2008<br />
2<br />
1
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
This presentation contains certain forward-looking statements. These forward-looking statements<br />
may be identified by words such as ‘believes’, ‘expects’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’,<br />
‘seeks’, ‘estimates’, ‘future’ or similar expressions or by discussion of, among other things, strategy,<br />
goals, plans or intentions. Various factors may cause actual results to differ materially in the future<br />
from those reflected in forward-looking statements contained in this presentation, among others:<br />
1 pricing and product initiatives of competitors;<br />
2 legislative and regulatory developments and economic conditions;<br />
3 delay or inability in obtaining regulatory approvals or bringing products to market;<br />
4 fluctuations in currency exchange rates and general financial market conditions;<br />
5 uncertainties in the discovery, development or marketing of new products or new uses of existing products,<br />
including without limitation negative results of clinical trials or research projects, unexpected side-effects of<br />
pipeline or marketed products;<br />
6 increased government pricing pressures;<br />
7 interruptions in production<br />
8 loss of or inability to obtain adequate protection for intellectual property rights;<br />
9 litigation;<br />
10 loss of key executives or other employees; and<br />
11 adverse publicity and news coverage.<br />
Any statements regarding earnings per share growth is not a profit forecast and should not be interpreted to mean<br />
that <strong>Roche</strong>’s earnings or earnings per share for this year or any subsequent period will necessarily match or<br />
exceed the historical published earnings or earnings per share of <strong>Roche</strong>.<br />
For marketed products discussed in this presentation, please see full prescribing information on our website –<br />
www.roche.com<br />
All mentioned trademarks are legally protected<br />
Additional information in relation to the offer for<br />
Ventana shares and where to find it<br />
These materials are for informational purposes only and do not constitute an offer to purchase or a solicitation of an offer<br />
to sell Ventana’s common stock. The tender offer is being made pursuant to a tender offer statement on schedule TO<br />
(including the offer to purchase, letter of transmittal and other related tender offer materials) filed by <strong>Roche</strong> with the<br />
Securities and Exchange Commission (SEC) on June 27, <strong>2007</strong>. These materials, as they may be amended from time to<br />
time, contain important information, including the terms and conditions of the offer, that should be read carefully before<br />
any decision is made with respect to the tender offer. Investors and stockholders can obtain a free copy of these<br />
materials and other documents filed by <strong>Roche</strong> with the SEC at the website maintained by the SEC at www.sec.gov. The<br />
tender offer materials may also be obtained for free by contacting the information agent for the tender offer, Mackenzie<br />
Partners, at (212) 929-5500 or (800) 322-2885 (toll-free). Additional information can also be found on www.roche.com.<br />
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<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Group<br />
Dr. Franz B. Humer<br />
Chief Executive Officer<br />
<strong>Roche</strong> in <strong>2007</strong>: Delivered on targets as committed<br />
Market FY<br />
growth <strong>2007</strong><br />
Targets for <strong>2007</strong><br />
• Above-market sales growth Pharma 6 % 11 %<br />
in local currencies Diagnostics 5 % 6 %<br />
• Double-digit local sales growth Pharma 11 %<br />
Group 10 %<br />
• Target for Core EPS<br />
growth to be above Core EPS growth 20 %<br />
sales growth (CHF) Sales growth 10 %<br />
5<br />
6<br />
3
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Industry-leading sales growth continued<br />
Sales in CHF billion % change in USD<br />
2006 <strong>2007</strong> CHF local growth<br />
Pharmaceuticals 33.3 36.8 10 11 15<br />
Diagnostics 8.7 9.3 7 6 12<br />
<strong>Roche</strong> Group 42.0 46.1 10 10 15<br />
<strong>2007</strong>: Double-digit growth with and without Tamiflu 1<br />
incl. Tamiflu1 excl. Tamiflu1 H1/07 H2/07 <strong>2007</strong> H1/07 H2/07 <strong>2007</strong><br />
Pharmaceuticals Division 18 6 11 15 11 13<br />
<strong>Roche</strong> Pharma 16 4 9 12 12 12<br />
Genentech 28 12 19 28 12 19<br />
Chugai 7 -1 3 -1 4 1<br />
Diagnostics Division 5 6 6 5 6 6<br />
<strong>Roche</strong> Group 15 6 10 13 10 11<br />
1 Tamiflu corporate and government pandemic sales; all figures in %<br />
7<br />
8<br />
4
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Additional CHF 4 billion organic sales;<br />
Net income up 25%; Core EPS growth twice sales growth<br />
CHF billion Change<br />
2006 <strong>2007</strong> CHF billion % loc %<br />
Sales 42.0 46.1 4.1 +10 +10<br />
Operating profit 11.7 14.5 2.7 +23 +22<br />
as % of sales 27.9 31.4<br />
Net income 9.2 11.4 2.3 +25<br />
as % of sales 21.8 24.8<br />
Core EPS 9.86 11.85 +20<br />
<strong>2007</strong>: Major steps in building the base for<br />
future growth and stability<br />
Corporate Governance<br />
Split of the role of Chairman and CEO<br />
Management changes – succession planning<br />
Severin Schwan to become new CEO<br />
Organisational changes - building an appropriate environment to innovate<br />
New R&D in Pharma organised along 5 disease areas<br />
TALENT MANAGEMENT PIPELINE DEVELOPMENT STAKEHOLDER ENGAGEMENT<br />
Alnylam<br />
Ventana<br />
NimbleGen 454<br />
9<br />
10<br />
5
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Actively shaping the future<br />
Pharma<br />
Sales 1997<br />
CHF 18.8 billion<br />
65%<br />
Diagnostics<br />
5%<br />
Vitamins &<br />
Fine Chem.<br />
20%<br />
10%<br />
Fragrances &<br />
Flavours<br />
Pharma<br />
Sales <strong>2007</strong><br />
CHF 46.1 billion<br />
80%<br />
Continuing to focus on our core businesses<br />
Focus on differentiated products paying off<br />
Outstanding long-term value creation<br />
Group sales 1 (CHF billion)<br />
50<br />
45<br />
40<br />
35<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
1997<br />
1999<br />
CAGR 15 %<br />
2001<br />
2003<br />
1 Prescription and Diagnostics<br />
2 Continuing businesses, before exceptional items<br />
2005<br />
<strong>2007</strong><br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001<br />
20.2%<br />
16.3%<br />
2002<br />
2003<br />
21.3%<br />
2004<br />
20%<br />
25.9% 27.9%<br />
22.9%<br />
2005<br />
Diagnostics<br />
Group operating profit<br />
16<br />
2 (CHF billion)<br />
31.4%<br />
CAGR 25 %<br />
Continuing to focus on our core assets<br />
2006<br />
<strong>2007</strong><br />
11<br />
12<br />
6
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Differentiated and rejuvenated product portfolio<br />
From 1 to 9 products with sales at or above CHF 1 billion<br />
24<br />
20<br />
16<br />
12<br />
8<br />
4<br />
Pharmaceuticals key products (CHF billion)<br />
By year of market introduction<br />
0<br />
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07<br />
Outlook on 2008 sales: Growth 1.5 to 2 times the<br />
world market on an underlying basis<br />
Growth<br />
<strong>2007</strong><br />
+ 10%<br />
Tamiflu<br />
Pandemic<br />
sales<br />
High<br />
single<br />
digit<br />
Underlying<br />
growth<br />
Boniva<br />
Tarceva<br />
Avastin<br />
Pegasys<br />
Herceptin<br />
Xeloda<br />
NeoRecormon/<br />
Epogin<br />
MabThera/<br />
Rituxan<br />
CellCept<br />
Rocephin<br />
Roaccutane<br />
Pharmaceuticals 16 14 12 11<br />
<strong>Roche</strong> Pharma 13 11 10 14<br />
Genentech 30 26 18 6<br />
Chugai -7 4 4 4<br />
Diagnostics 6 5 4 8<br />
<strong>Roche</strong> Group 14 12 10 10<br />
Local sales growth rates <strong>2007</strong> vs 2006<br />
13<br />
Excluding government &<br />
corporate pandemic Tamiflu<br />
Q1 ‘07 Q2 ‘07 Q3 ‘07 Q4 ‘07<br />
14<br />
7
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Outlook 2008 Profit: A commitment to our future<br />
Redistribution of ‘costs’ into R&D<br />
Core EPS<br />
<strong>2007</strong><br />
Tamiflu<br />
pandemic<br />
sales impact<br />
Underlying<br />
growth<br />
and<br />
Product<br />
Mix<br />
and<br />
Efficiency<br />
gains<br />
R&D<br />
Commitment<br />
for the<br />
future<br />
Upside - not in outlook:<br />
- Additional Tamiflu pandemic sales<br />
- Avastin adjuvant<br />
- Delayed start or ‘failure’ of R&D<br />
assets (in particular risk-factored<br />
success of many phase II assets)<br />
2008: Investing now for the future<br />
While further redistributing efficiency gains into R&D<br />
Avastin adj.: Building standard of care<br />
Pertuzumab: Improving standard of care<br />
Ocrelizumab: Autoimmune: new and<br />
potentially large markets<br />
CETPi: Building a potentially<br />
vast new market<br />
GLP-1: Potential to enter as<br />
best-in-class product<br />
HCV pipeline: Shaping the future market<br />
15<br />
Schematic P&L (% of sales)<br />
• Cost of Sales<br />
• M&D<br />
• G&A<br />
• R&D<br />
16<br />
8
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Our objectives for 2008<br />
Sales<br />
• High single digit local currency sales increase for <strong>Roche</strong> Group (excl. Tamiflu pandemic1 )<br />
• Above-market sales growth1 in both divisions<br />
Core EPS<br />
• Core earnings per share target2 at least at record <strong>2007</strong> level despite significant increase in<br />
R&D investment and considerably lower Tamiflu pandemic sales<br />
Shareholder return<br />
• Continuous increase in dividend pay-out ratio over the next 3 years<br />
1 Excluding government and corporate stockpiling orders of Tamiflu for pandemic use<br />
2 At constant exchange rates Barring unforeseen events<br />
Pharmaceuticals Division<br />
William M. Burns<br />
CEO <strong>Roche</strong> Pharmaceuticals<br />
17<br />
18<br />
9
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Highlights in Pharma<br />
Double-digit growth in sales and profits<br />
• Pharma sales (+11 % in LC), <strong>Roche</strong> Pharma Q4: +14 % (excl. Tamiflu)<br />
• Operating profit margin improved by 3.8 % pts to 35.5 %<br />
Major progress for key marketed assets<br />
• Avastin launched in advanced breast and lung cancer (EU), approved in renal cell carcinoma (EU)<br />
• Approval of Avastin in 1st and later lines mCRC (EU) – not restricted by chemo choice<br />
• Mircera launched in EU<br />
Major pipeline progress<br />
• Actemra filed in EU / US<br />
• Ocrelizumab moved into phase III in lupus (SLE and LN), and into phase II in MS<br />
• Pertuzumab phase III in metastatic breast cancer starting soon<br />
• CETP inhibitor: decision to move into phase III<br />
• GLP-1: phase II data encouraging<br />
A review of <strong>2007</strong> – Pharmaceuticals<br />
Guidance met – significant pipeline progress<br />
Filings Major clinical data<br />
Compound Phase Indication Data Status YE'07<br />
R1503 (p38 kinase inh.) II Rheumatoid arthritis Final Terminated<br />
R1658 (CETP inh.) II Dyslipidemia Final �<br />
R1440 (GKA) II Type 2 Diabetes Final Backup prioritized<br />
R1626 (polymerase inh.) II HCV Final �<br />
pertuzumab II Solid tumors Final � (mBC)<br />
MabThera II RRMS Full data �<br />
Actemra III Rheumatoid arthritis Final � (4 ph. 3 trials)<br />
CellCept III Lupus nephritis Final Preliminary data<br />
Avastin III NSCLC (Avastin in Lung) Final �<br />
Avastin<br />
III RCC (AVOREN)<br />
Full data �<br />
Xeloda III Adjuvant CC (NO16968) Final ‘07/ ‘08 Data in 2008<br />
Xeloda III mCRC 2nd line (NO16967) Full data �<br />
Compound Indication Status YE‘07<br />
Avastin mCRC 1st line combo extension (EU) �<br />
Avastin RCC (EU) �<br />
Xeloda mCRC 1st/2nd line combo (US / EU) �<br />
Actemra Rheumatoid arthritis (US / EU) �<br />
CellCept Lupus nephritis (US / EU) Will not be filed<br />
Divisional sales<br />
growth<br />
Double-digit growth<br />
in local currencies<br />
19<br />
20<br />
10
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Pharma continues to significantly outgrow the market<br />
CHF 3.5 billion additional organic sales<br />
Sales CHF million<br />
% change in USD<br />
2006 <strong>2007</strong> CHF local growth<br />
<strong>Roche</strong> Pharma 20,666 22,970 11 9 16<br />
Genentech 9,125 10,414 14 19 19<br />
Chugai 3,503 3,399 -3 3 1<br />
Pharmaceuticals 33,294 36,783 10 11 15<br />
incl. Tamiflu1 excl. Tamiflu1 Growth in %<br />
H1/07 H2/07 <strong>2007</strong> H1/07 H2/07 <strong>2007</strong><br />
Pharmaceuticals Division 18 6 11 15 11 13<br />
<strong>Roche</strong> Pharma 16 4 9 12 12 12<br />
Genentech 28 12 19 28 12 19<br />
Chugai 7 -1 3 -1 4 1<br />
1 Government and corporate pandemic<br />
<strong>2007</strong>: Pharma operating margin: Up ~4 %-points<br />
The highest-ever margin increase<br />
CHF million % of sales<br />
31.7% 35.5%<br />
13,042<br />
10,545<br />
1 At constant exchange rates<br />
+22% 1<br />
(+24%)<br />
2006 <strong>2007</strong><br />
29.7% 31.5%<br />
6,139<br />
+10%<br />
(+18%)<br />
7,225<br />
50.9%<br />
43.9%<br />
4,002<br />
+38%<br />
(+32%)<br />
5,298<br />
16.2% 17.9%<br />
Pharma Division <strong>Roche</strong> Pharma Genentech Chugai<br />
569<br />
+21%<br />
(+7%)<br />
610<br />
21<br />
22<br />
11
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Pharma operating performance<br />
Operating profit growth twice sales<br />
<strong>2007</strong><br />
CHF million % sales<br />
Sales 36,783 100.0 +3,489<br />
Royalties & other op inc 2,057 5.6 +848<br />
Cost of sales -9,502 -25.8 -470<br />
M & D -7,018 -19.1 -159<br />
R & D -7,598 -20.6 -1,008<br />
G & A -1,680 -4.6 -203<br />
Operating profit 13,042 35.5 +2,497<br />
1 Manufacturing Costs of goods sold & period costs<br />
Review of core assets by therapeutic area<br />
Pipeline, Outlook and future catalysts<br />
8%<br />
3%<br />
11%<br />
<strong>2007</strong> vs. 2006<br />
local growth<br />
COGS & PC 1 : +5 %<br />
18%<br />
17%<br />
Administration: +8 %<br />
22%<br />
76%<br />
Excl. impairment: +17 %<br />
23<br />
24<br />
12
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>Roche</strong> Oncology: Strongest growing franchise<br />
Avastin: Best growing oncology brand ever<br />
CHF billion<br />
20<br />
15<br />
10<br />
5<br />
0<br />
2004 2005 2006 <strong>2007</strong><br />
<strong>2007</strong> vs. 2006<br />
local growth<br />
+20 %<br />
6 %<br />
+11 %<br />
44 %<br />
50 %<br />
+14 %<br />
+28 %<br />
Europe/RoW US Japan<br />
Sales<br />
Avastin launch compared to other cancer<br />
therapies (US plus top-5 EU markets 1 )<br />
0 2 4 6 8 10 12 14<br />
Quarters since launch<br />
1 Source: IMS. Products included are Avastin, Alimta, Arimidex, Camptosar, Eloxatine, Erbitux, Femara, Gemzar, Herceptin, MabThera, Nexavar, Sutent, Tarceva,<br />
Taxol, Taxotere, Xeloda<br />
Oncology<br />
Existing and new indications fuelling growth<br />
Major brands (CHF billion)<br />
MabThera<br />
Rituxan<br />
Herceptin<br />
Avastin<br />
Xeloda<br />
Tarceva<br />
+19 %<br />
+31 %<br />
+41 %<br />
+23 %<br />
local growth<br />
+15 %<br />
<strong>2007</strong><br />
2006<br />
0 2 4 6<br />
Avastin<br />
Growth mainly from use following 1st l. in iNHL<br />
and RA (global RA sales: approx. CHF 500 m)<br />
Penetration in adj BC now 70% in top 5 EU and<br />
~75 % in US – still considerably lower in RoW<br />
US: Good uptake in NSCLC; EU: Strong growth<br />
in mCRC – promising launches in NSCLC, mBC<br />
Increased use in adj CC and mCRC (both EU and<br />
US) continues to drive growth<br />
Strong growth in Europe (NSCLC), EU approval<br />
for pancreatic cancer received early ’07<br />
25<br />
26<br />
13
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Major growth opportunities outside the US<br />
Herceptin leading the way<br />
% of Total <strong>2007</strong> Sales<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
Herceptin<br />
68 %<br />
Xeloda<br />
62 %<br />
Tarceva MabThera/<br />
Rituxan<br />
Avastin<br />
53 %<br />
EU / ROW (incl. Japan)<br />
Avastin still early in its journey<br />
Realising full potential across tumour types<br />
Tumour<br />
Colon/<br />
rectal<br />
Lung<br />
(NSCLC)<br />
Breast<br />
(HER2-)<br />
Breast<br />
(HER2+)<br />
Kidney (RCC)<br />
Early/adjuvant<br />
(Potential for cure)<br />
Phase III<br />
(AVANT, NSABP C-08,<br />
E5202, E5204)<br />
Phase III<br />
(E1505)<br />
Phase III<br />
(BEATRICE, E5103)<br />
Phase III<br />
(BETH w/Herceptin)<br />
–<br />
�<br />
�<br />
�<br />
US<br />
Launched<br />
[EU majority of chemos,<br />
U.S. carboplatin/paclitaxel]<br />
Phase III<br />
(AVEREL w/Herceptin)<br />
48 %<br />
Launched [EU paclitaxel]<br />
Phase III (AVADO, RIBBON-1)<br />
�<br />
Launched<br />
[EU w/interferon]<br />
33 %<br />
Advanced/metastatic<br />
(Extending life)<br />
1st line of treatment 2nd line of treatment<br />
Launched<br />
[EU, U.S., JP; broad label in 1st and subsequent lines]<br />
Phase III<br />
(BETA Lung w/Tarceva)<br />
Avastin also trialed in gastric, ovarian, prostate, aNHL, and brain (GBM)<br />
(Trial names) [Approval status]. More trials are ongoing than listed above.<br />
–<br />
27<br />
Phase III<br />
(Ribbon-2, incl. w/Xeloda)<br />
28<br />
14
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Expanding the market for Avastin and Xeloda in mCRC<br />
Avastin to be combined with any chemo in any line of treatment<br />
Avastin Xeloda<br />
Current EU<br />
label:<br />
5-FU or 5-FU<br />
+ Irinotecan<br />
New EU label:<br />
Any fluoropyrimidine<br />
combination<br />
Source: Synovate Healthcare 2005<br />
Xeloda<br />
14%<br />
5-FU<br />
8%<br />
Oxaliplatin<br />
53%<br />
Full label<br />
any<br />
combo<br />
100%<br />
Irinotecan<br />
25%<br />
Xeloda<br />
14%<br />
5-FU<br />
8%<br />
Oxaliplatin<br />
53%<br />
Full label<br />
any<br />
combo<br />
100%<br />
Avastin launching with best-possible label in<br />
1st line NSCLC market in Europe 1<br />
Monotherapy<br />
/ Others<br />
33%<br />
Platinum +<br />
Vinorelbine<br />
15%<br />
Platinum +<br />
Gemcitabine<br />
36%<br />
Platinum +<br />
Taxane<br />
16%<br />
Monotherapy<br />
/ Others<br />
33%<br />
Irinotecan<br />
25%<br />
Avastin<br />
label:<br />
Platinumbased<br />
chemo<br />
67%<br />
Avastin in combo with all current standards (platinum)<br />
Source: Synovate Healthcare, MAT Q3 <strong>2007</strong>; 1 in non–squamous NSCLC<br />
Future EU label:<br />
Any combo,<br />
including with<br />
Avastin<br />
29<br />
30<br />
15
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Expanding the market for Avastin in breast cancer<br />
Large opportunity – strong commitment<br />
Current EU label:<br />
with paclitaxel<br />
Future broad<br />
target label<br />
Xeloda<br />
17%<br />
Source: Genactis MBC study Q4 2005<br />
other<br />
19%<br />
Taxane<br />
23%<br />
other 19%<br />
(e.g.<br />
monotherapy<br />
Vinorelbine)<br />
Anthracycline<br />
25%<br />
Anthracyc./<br />
Taxane<br />
16%<br />
target<br />
label<br />
81%<br />
Oncology in 2008<br />
Preparing for new market opportunities<br />
US submission for 1st line mBC<br />
– ODAC split vote Dec 5, <strong>2007</strong><br />
– FDA action date Feb 23, 2008<br />
Further phase III studies to report in ‘08<br />
– AVADO (docetaxel +/- Avastin):<br />
expect data in H1 2008<br />
– RIBBON-1 (var. chemos +/- Avastin):<br />
expect data in H2 2008<br />
Phase III adjuvant trials started<br />
– E5103 (HER2-), initiated Q4 <strong>2007</strong><br />
– BEATRICE (HER2-, ER-, PR-):<br />
initiated Q4 <strong>2007</strong><br />
– BETH (HER2+) combo with Herceptin<br />
to start H1 2008<br />
Breast cancer (BC)<br />
• Phase III data (AVADO, RIBBON-1) to broaden Avastin label for combination with<br />
all major chemos<br />
• HER2+ mBC<br />
– phase III for pertuzumab to start in Q1<br />
– opted-in to trastuzumab-DM1<br />
• Avastin adjuvant trials started: Large potential new market opportunity<br />
Metastatic colorectal cancer (mCRC)<br />
• Launch of Avastin and Xeloda in 1st and later lines – not restricted by chemo<br />
choice (incl. oxaliplatin) (EU)<br />
Chronic lymphocytic leukemia (CLL)<br />
• Positive data in 1st line - MabThera to enter a new market in Europe<br />
31<br />
32<br />
16
3.0<br />
2.5<br />
2.0<br />
1.5<br />
1.0<br />
0.5<br />
0.0<br />
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Inflammation/Autoimmune/Transplantation<br />
MabThera RA launch successful<br />
CHF billion <strong>2007</strong> vs. 2006<br />
3.5<br />
local growth<br />
5 %<br />
40 %<br />
55 %<br />
2004 2005 2006 <strong>2007</strong><br />
+12 %<br />
+8 %<br />
+12 %<br />
Europe/RoW US Japan<br />
<strong>2007</strong><br />
Overall franchise growing +11 %<br />
MabThera RA sales ~CHF ½ billion<br />
Rheumatoid Arthritis<br />
• MabThera: Launched (TNF failures)<br />
• Actemra: Filed in EU and US (RA)<br />
• Ocrelizumab: Phase III initiated<br />
Lupus<br />
• Ocrelizumab: Phase III initiated<br />
Multiple Sclerosis<br />
• MabThera: Positive phase II (RRMS)<br />
• Ocrelizumab: Phase II decision taken<br />
Next generation anti-CD20s (MabThera follow-ons)<br />
Opportunities for improvement<br />
2nd gen. anti-CD20 (ocrelizumab)<br />
Fully humanized<br />
Potential clinical benefits<br />
• Less immunogenicity<br />
• Better tolerability<br />
• Shorter infusion time<br />
In phase III in RA, and SLE<br />
LN to start soon<br />
Phase II in RRMS to start 2008<br />
3rd gen. anti-CD20 (R7159)<br />
Fc engineered (glycosylations)<br />
• Increased CD20 binding and apoptosis<br />
• Increased ADCC (antibody dependent cellmediated<br />
toxicity)<br />
• Reduced CDC (complement dependent cell<br />
toxicity)<br />
Potential clinical benefits<br />
• Improved efficacy<br />
• Less infusion reactions<br />
In phase I for oncology / hematology<br />
33<br />
34<br />
17
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Inflammation/Autoimmune in 2008<br />
Major market opportunities in focus<br />
Rheumatoid Arthritis<br />
• MabThera for DMARD-IRs (1st line biologic): expect data and filing<br />
• Actemra: regulatory approval expected (first in US)<br />
Multiple Sclerosis<br />
• Phase II/III data for MabThera in PPMS in H1 2008<br />
Lupus<br />
• Phase II / III data for MabThera in SLE in H1 2008<br />
Virology<br />
Building on our HCV franchise<br />
Major brands (CHF billion)<br />
Tamiflu<br />
Pegasys<br />
Valcyte/Cymevene<br />
Fuzeon<br />
Copegus<br />
Invirase/Fortovase<br />
+12 %<br />
+3 %<br />
+6 %<br />
+9 %<br />
+11 %<br />
local growth<br />
-19 %<br />
<strong>2007</strong><br />
2006<br />
Pandemic sales of CHF 1.9 bn (90 % of total sales);<br />
CHF 100-150 million pandemic sales expected in ’08<br />
Growth ex-US more than offsets US market decline;<br />
Japanese Copegus combo launch successful<br />
Growth driven by increased use in transplant and<br />
HIV/AIDS indications<br />
Steady growth in EU, decline in US<br />
Slight increase due to Japan, flat in EU/ RoW<br />
Growth driven by Invirase 500mg<br />
0 1 2 3<br />
Building new assets in HCV – early but promising data with<br />
polymerase and protease inhibitors<br />
35<br />
36<br />
18
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Tamiflu sales 2006 – <strong>2007</strong><br />
Significant slowdown in H2<br />
CHF million<br />
1000<br />
900<br />
800<br />
700<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
0<br />
265<br />
54<br />
336 306<br />
77<br />
592<br />
98<br />
899<br />
119<br />
746<br />
460<br />
65<br />
192<br />
54<br />
458<br />
Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07<br />
1 Governmental & Corporate<br />
Hepatitis C portfolio in 2008<br />
Assets to potentially move standard of care<br />
xx %<br />
x % Seasonal<br />
Pandemic¹<br />
I II<br />
III<br />
Polymerase inhibitor R1626<br />
Polymerase inhibitor<br />
Protease inhibitor<br />
Phase<br />
R7227<br />
R7128<br />
Key 2008 newsflow:<br />
R7128: Phase Ib combo data with Pegasys<br />
R7227: Phase I data<br />
2006<br />
494<br />
2,133<br />
<strong>2007</strong><br />
229<br />
1,856<br />
37<br />
38<br />
19
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Metabolism/Bone<br />
Boniva continuously gaining market share<br />
Major brands (CHF million)<br />
Bonviva/Boniva<br />
Xenical<br />
Nutropin<br />
-1 %<br />
-10 %<br />
local growth<br />
+85 %<br />
<strong>2007</strong><br />
2006<br />
0 200 400 600 800 1000<br />
More than 15 % market share in US;<br />
strong EU launches<br />
Successful alli OTC launch in US<br />
in early <strong>2007</strong><br />
HDL: Next frontier in cardiovascular risk reduction<br />
Cholesteryl Ester Transfer Protein (CETP) Inhibitor<br />
• Epidemiologic data: strong inverse relationship between HDL and CV risk<br />
• LDL-C and HDL-C are independently related to CV risk<br />
1% decrease in LDL-C<br />
reduces CHD risk by 1% 1% increase in HDL-C<br />
reduces CHD risk by 1%<br />
• CETP inhibition: potential to decrease cardiovascular morbidity and mortality risk<br />
by increasing HDL-C<br />
Source: Amer J of Medicine (2005) 118, 1067-1077; J Amer Coll of Card (2005) 46(7) 1225-1228<br />
39<br />
40<br />
20
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
CETP Inhibitor (R1658)<br />
A major commitment – decision to enter phase III<br />
R1658 phase II summary<br />
• Generally well tolerated in clinical studies<br />
– Similar profile to placebo in terms of effects on blood pressure and electrolytes<br />
• R1658 increases HDL-C level in monotherapy and in combination with statins<br />
R1658 is different from torcetrapib<br />
• Different chemical structure and physicochemical properties<br />
• Different binding sites on CETP - different mechanisms leading to decreased CETP activity<br />
• HDL generated by R1658 and torcetrapib may be of different composition and function<br />
Health authorities feedback<br />
• R1658 can move forward in development<br />
• Morbidity & Mortality study required for initial registration for CETPi<br />
CETPi – development plan designed to mitigate risk<br />
Step-wise investment – several decision points<br />
investment<br />
CAP<br />
Decision<br />
point,<br />
data driven<br />
CAP<br />
Decision<br />
point,<br />
data driven<br />
CAP<br />
Decision<br />
point,<br />
data driven<br />
time<br />
41<br />
42<br />
21
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
GLP-1 Phase IIb data available<br />
Encouraging profile of sustained release formulation<br />
• R1583: An analogue of GLP-1 with increased stability<br />
• Phase 2b data (sustained release formulation) show encouraging and competitive<br />
effects on HbA1c and weight<br />
• Focus on differentiation beyond HbA1c and weight loss to include<br />
– dosing frequency (once a week)<br />
– auto injector (convenience, needle size)<br />
• Aiming for a best in class profile<br />
Metabolism/Diabetes in 2008<br />
Committed to become a major player<br />
CETP Inhibitor to move into phase III<br />
• Safety data to be presented at major medical meetings<br />
GLP-1 phase II data available<br />
• Decision for phase III to be taken in H1 2008<br />
• Publication planned for 2008<br />
Phase II data for DPP-IV (3) and PPARαγ expected<br />
• Looking for a differentiated profile (e.g. weight reduction for DPP-IV)<br />
• Go/no-go decisions for phase III trials to be taken this year<br />
43<br />
44<br />
22
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Review of core assets by therapeutic area<br />
Pipeline, Outlook and future catalysts<br />
Major <strong>Roche</strong> managed projected submissions<br />
over the next years<br />
Phase 3<br />
Phase 2<br />
MabThera<br />
CLL (EU)<br />
Avastin<br />
mBC + Taxotere (EU<br />
Avastin<br />
pancreatic cancer (EU)<br />
Tarceva+Avastin<br />
NSCLC 2nd line (EU)<br />
MabThera<br />
RA DMARD IR (EU)<br />
MabThera<br />
iNHL maint 1 st line (EU)<br />
Avastin<br />
adj. CC (EU)<br />
Avastin<br />
gastric Ca metastatic(EU)<br />
Avastin<br />
ovarian Ca (EU)<br />
Xeloda+Avastin<br />
adj. CC (EU)<br />
ocrelizumab (R1594 )<br />
RA & SLE (EU)<br />
HPV 16 (R3484)<br />
cervical neoplasia<br />
GLP-1 (R1583)<br />
type II diabetes<br />
Avastin<br />
prostate Ca (EU)<br />
Avastin+Herceptin<br />
mBC 1st line (EU)<br />
HCV pol.inhib. (R1626)<br />
HCV<br />
Avastin<br />
adj. NSCLC (EU)<br />
MabThera+Avastin<br />
aggressive NHL (EU)<br />
Tarceva<br />
adj. NSCLC (EU)<br />
2008 2009 2010 2011 post 2011<br />
DBA Oncology<br />
DBA Inflammation<br />
DBA Virology<br />
DBA Metabolic<br />
DBA CNS<br />
Others<br />
Status as of December 31, <strong>2007</strong>.<br />
Xeloda<br />
adj. CC combo oxaliplatin<br />
Avastin<br />
mBC + standard chem (EU)<br />
Herceptin<br />
gastric Ca (EU)<br />
Tarceva<br />
NSCLC 1 st line maint (EU)<br />
Tarceva + Avastin<br />
NSCLC 1 st line maint (EU<br />
Xeloda<br />
adj. BC<br />
pertuzumab (R1273)<br />
HER 2+ BC (EU)<br />
aleglitazar (R1439)<br />
type II diabetes<br />
Unless stated otherwise, submissions will occur in US and EU.<br />
Avastin<br />
HER2- adj. BC (EU)<br />
Avastin<br />
NSCLC squamous (EU)<br />
Tarceva+Avastin<br />
NSCLC 1 st line (EU)<br />
IGF-1R inh huMAb R1507<br />
Ewing’s sarcoma (EU)<br />
pertuzumab (R1273)<br />
early BC (EU)<br />
CERA (R744 )<br />
cancer anaemia<br />
45<br />
PNP inhibitor (R3421)<br />
AI/transplant<br />
RAR gamma (R667)<br />
emphysema<br />
DPP-IV (3) (R1579)<br />
type II diabetes<br />
CETP inhibitor (R1658)<br />
dyslipidemia<br />
46<br />
23
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Major phase III commitments – large investments<br />
Additional large phase III trials started or starting soon<br />
Avastin mBC<br />
Avastin adjuvant CC<br />
Avastin adjuvant lung<br />
Avastin gastric, NHL<br />
Avastin adjuvant BC<br />
Pertuzumab mBC<br />
Actemra RA<br />
Ocrelizumab RA, lupus<br />
Ocrelizumab MS<br />
CETPi<br />
GLP-1<br />
Other T2D compounds<br />
HCV pipeline<br />
<strong>2007</strong> 2008 2009<br />
Key drivers in place for sustainable growth<br />
Current and projected sources of value creation (phase IIb and III)<br />
ILLUSTRATIVE<br />
Avastin<br />
mCRC,<br />
NSCLC<br />
MabThera<br />
NHL<br />
Herceptin<br />
adjuvant BC<br />
Avastin<br />
mBC<br />
extensions<br />
Actemra<br />
RA<br />
MabThera<br />
RA<br />
Avastin<br />
adjuvant<br />
Tarceva<br />
Colon cancer<br />
1st line maint.<br />
Xeloda<br />
adj. BC<br />
MabThera<br />
CLL<br />
Tarceva+<br />
Avastin<br />
combo 2nd line<br />
GLP-1<br />
T2 diabetes<br />
HPV16<br />
therapeutic<br />
vaccine<br />
Avastin<br />
adjuvant<br />
Avastin Breast cancer<br />
adjuvant<br />
Lung<br />
cancer<br />
Pertuzumab<br />
mBC<br />
CETP<br />
inhibitor<br />
HCV<br />
Polymerase<br />
Inhibitor<br />
Ocrelizumab<br />
Ocrelizumab<br />
MS<br />
RA, lupus<br />
<strong>2007</strong> 2011 2015<br />
47<br />
48<br />
24
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Pharmaceuticals objectives for 2008<br />
A rich clinical news flow ahead<br />
Major clinical data<br />
Filings<br />
Avastin+Tarceva<br />
III 2nd line NSCLC (BETA lung) interim Event-driven<br />
Tarceva<br />
III 1st line NSCLC (SATURN)<br />
H2 2008<br />
MabThera<br />
III SLE (EXPLORER)<br />
H1 2008<br />
CLL 1 Q1 2008<br />
GLP-1<br />
IIb Type 2 diabetes full data<br />
2008<br />
DPP-IV<br />
II Type 2 diabetes<br />
H2 2008<br />
st Compound Phase Indication / data Timing<br />
Avastin III mBC (AVADO) H1 2008<br />
Avastin III mBC (RIBBON-1) H2 2008<br />
MabThera III RA, DMARD-IR Q1 2008<br />
MabThera III PPMS (OLYPMUS) H1 2008<br />
MabThera<br />
III<br />
line ph. III data interim<br />
MabThera<br />
III CLL relapsed ph. III data interim Event-driven<br />
Xeloda III Adjuvant CC (NO16968) interim Event-driven<br />
Actemra III RA (AMBITION, RADIATE) full data 2008<br />
Compound Indication<br />
Avastin mBC (AVADO)<br />
Avastin+Tarceva NSCLC 2nd line (BETA lung)<br />
MabThera RA, DMARD IR, and CLL<br />
Diagnostics Division<br />
Severin Schwan<br />
CEO <strong>Roche</strong> Diagnostics<br />
Divisional sales growth<br />
Above-market excluding<br />
pandemic Tamiflu<br />
barring unforeseen events<br />
49<br />
50<br />
25
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Diagnostics continues solid growth<br />
Driven by new products and strategic acquisitions<br />
Strong operating performance<br />
− Sales growth above market, accelerating during the year<br />
Continued market penetration of new products<br />
− Strong cobas 6000 placements drove market share gains<br />
− New Accu-Chek products restoring Diabetes growth<br />
− Doubled market share in rapidly expanding DNA sequencing market<br />
Strategic transactions enabling entry into new markets<br />
− 454 Life Sciences: Ultra-fast gene sequencing<br />
− NimbleGen Systems: High density microarrays<br />
− BioVeris: ECL IP and expansion into clinical trial testing market<br />
− OCD / Novartis* agreement: Entry into HCV immunochemistry testing<br />
− Ventana: Merger agreement signed<br />
* Ortho-Clinical Diagnostics Inc. and Novartis Vaccines & Diagnostics<br />
<strong>2007</strong>: Diagnostics sales by business area<br />
Growth driven by Professional Diagnostics<br />
Sales CHF million<br />
Professional Diagnostics* 3,929 4,294 9 8 14 %<br />
Diabetes Care 3,020 3,216 6 5 11 %<br />
Molecular Diagnostics 1,175 1,148 -2 -2 2 %<br />
Applied Science 623 692 11 11 16 %<br />
<strong>Roche</strong> Diagnostics 8,747 9,350 7 6 12 %<br />
* Amalgamation of Centralized Diagnostics and Near Patient Testing<br />
% change in USD<br />
2006 <strong>2007</strong> CHF local growth<br />
51<br />
52<br />
26
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Diagnostics half-yearly sales growth<br />
Growth acceleration continued<br />
4 %<br />
4 %<br />
4 %<br />
5 %<br />
5 %<br />
6 %<br />
H1 '05 H2 '05 H1 '06 H2 '06 H1 '07 H2 '07<br />
Growth on local currencies, versus same period prior year<br />
<strong>Roche</strong> is the #1 In Vitro Diagnostics company<br />
19 %<br />
13 %<br />
12 %<br />
Estimated market share <strong>2007</strong>1, 2<br />
10 %<br />
6 %<br />
<strong>Roche</strong> Siemens* Abbott J&J Beckman<br />
Coulter<br />
4 %<br />
Becton<br />
Dickinson<br />
1 Source: company reports, Boston Biomedical Consultants and <strong>Roche</strong> analysis based on peer sales YTD Sept <strong>2007</strong><br />
2 in vitro diagnostics market; excludes Life Science research market * Siemens includes Dade (<strong>2007</strong> deal)<br />
3 %<br />
3 %<br />
bioMérieux Bayer<br />
53<br />
54<br />
27
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Diagnostics operating performance<br />
<strong>2007</strong><br />
CHF million % sales<br />
Sales 9,350 100.0 +603<br />
Royalties & other op inc 186 2.0 +4<br />
Cost of sales -4,241 -45.4 +12<br />
M & D -2,309 -24.7 -214<br />
R & D -787 -8.4 -12<br />
G & A -551 -5.9 -167<br />
Operating profit 1,648 17.6 +226<br />
1 Manufacturing costs of goods sold & period costs<br />
Business Area review<br />
Investing in our future<br />
-2%<br />
6%<br />
4%<br />
COGS & PC1 : +7 %<br />
1%<br />
<strong>2007</strong> vs. 2006<br />
local growth<br />
10%<br />
Excl. impairment: +10 %<br />
Administration: +5%<br />
14%<br />
43%<br />
55<br />
56<br />
28
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Professional Diagnostics<br />
Double-digit immunochemistry growth for 7 th consecutive<br />
year<br />
CHF billion<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
+8 % 1<br />
2005 2006 <strong>2007</strong><br />
Immunochemistry Clinical Chemistry<br />
POC products other<br />
+7 %<br />
+3 %<br />
+13 %<br />
1 local growth * Ortho-Clinical Diagnostics, Inc. and Novartis Vaccines & Diagnostics<br />
Diabetes Care<br />
New product portfolio restoring growth<br />
10%<br />
Accu-Chek<br />
Advantage<br />
Decline<br />
Mature flagship<br />
product<br />
Accu-Chek<br />
Aviva<br />
3%<br />
Accu-Chek<br />
Compact Plus<br />
Growth<br />
Leverage portfolio<br />
3%<br />
Accu-Chek<br />
Performa<br />
Accu-Chek<br />
Spirit<br />
Stabilisation<br />
Rejuvenated portfolio<br />
5%<br />
2004 2005 2006 <strong>2007</strong><br />
• Gained market share through strong<br />
instrument placements<br />
– Elecsys 2010, cobas 6000, cobas e 411 systems<br />
• Immunochemistry sales benefiting from new<br />
markers<br />
– NT-proBNP, Trop T, TSH, Vitamin D, MPA<br />
• Clinical Chemistry testing volume increased,<br />
dampened by pricing pressure<br />
• Key transactions to access new markets<br />
– BioVeris acquisition (clinical trials)<br />
– OCD/ Novartis* agreement (HCV)<br />
• Accu-Chek Aviva driving growth in key<br />
markets<br />
• Accu-Chek Compact Plus and Accu-Chek<br />
Active strong contributors<br />
• Accu-Chek Spirit (insulin pump)<br />
continues gaining momentum<br />
• Launched:<br />
– Accu-Chek Performa<br />
– Accu-Chek Compact Plus (new)<br />
– Accu-Chek 360o 57<br />
58<br />
29
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Molecular Diagnostics<br />
Automated platforms supporting virology market share<br />
CHF million<br />
1200<br />
800<br />
400<br />
0<br />
1 local growth<br />
-2 % 1<br />
-1 %<br />
+4 %<br />
2005 2006 <strong>2007</strong><br />
Virology Blood Screening<br />
Other Industrial Business<br />
Business Area review<br />
Investing in our future<br />
-49 %<br />
• Growth +3 % excluding industrial business,<br />
which declined as guided<br />
• Blood screening:<br />
– Continued up-take cobas s 201 system<br />
& cobas TaqScreen MPX Test in EU<br />
– WNV test for cobas s 201 system FDA<br />
approved<br />
– Contract with Japanese Red Cross<br />
renewed 5 yrs<br />
• Virology benefiting from successful launch of<br />
CAP/CTM HIV Test in the US<br />
59<br />
60<br />
30
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Investing in our future: Closing the gaps<br />
Full range of tissue- and serum/plasma-based Diagnostics<br />
Sequencing<br />
Microarray<br />
Analysis<br />
Real-time PCR<br />
IHC/ISH*<br />
ECL IA**<br />
Research IVD Development IVD Commercial<br />
LightCycler<br />
Applied<br />
Science<br />
AmpliChip<br />
TaqMan<br />
Elecsys<br />
* ImmunoHistoChemistry/In Situ Hybridisation ** ElectroChemiluminescent Label ImmunoAssay<br />
Investing in our future: Ventana*<br />
Closes the gap in tissue-based cancer diagnosis<br />
• Leader in tissue-based diagnostics<br />
– Large installed base in pathology labs<br />
– Strong US presence<br />
• Estimated financials <strong>2007</strong>**<br />
– Revenue `07: USD 296-300 million<br />
– Operating Margin ’07: ~17.5 %<br />
• Located in Tucson, Arizona<br />
– ~1000 employees<br />
* Merger agreement signed<br />
** Source: Ventana Q3 News release, Ventana Q2 Earnings and Future Guidance Presentations<br />
***<br />
*** Merger agreement signed<br />
61<br />
62<br />
31
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Investing in our future: Ventana acquisition*<br />
Deploying capital for the right strategic purposes<br />
Financials:<br />
− Tender offer of USD 89.50 per share (total transaction: USD 3.4 billion)<br />
− Price reflects strategic fit and value of friendly and accelerated integration<br />
− Tender offer set to expire on February 7, 2008, closing of merger expected H1 ‘08<br />
− Strategic flexibility of <strong>Roche</strong> group not affected<br />
Smooth integration expected:<br />
− Chris Gleeson will continue as CEO and will become a member of Diagnostics<br />
Executive Committee<br />
− Ventana to operate as dedicated business under <strong>Roche</strong> Diagnostics umbrella<br />
− Headquarters to remain in Tucson, Arizona<br />
* Merger agreement signed<br />
Investing in our future: Complementary technologies<br />
Complete tissue-based diagnostic capabilities for customers<br />
Testing on Tissue<br />
IHC<br />
protein markers<br />
FISH/CISH/SISH<br />
NA markers<br />
Ventana technology capabilities<br />
Pathologist<br />
Testing after Protein / Nucleic acid Extraction<br />
DNA mutation RNA<br />
expression<br />
via microarray<br />
AmpliChip<br />
RNA expression via<br />
multiple RT-PCR or<br />
mutation detection<br />
LC480<br />
RNA expression via<br />
multiple RT-PCR or<br />
mutation detection<br />
TaqMan<br />
<strong>Roche</strong> Diagnostics technology capabilities<br />
Protein expression<br />
via IC system<br />
Elecsys<br />
63<br />
64<br />
32
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Investing in our future: Companion Diagnostics<br />
Strong oncology drug portfolio, combined with diagnostics<br />
capabilities uniquely positions <strong>Roche</strong> to lead in PHC<br />
Late<br />
Development/<br />
Market<br />
Early Development<br />
<strong>Roche</strong><br />
<strong>Roche</strong> Capabilities Ventana Capabilities<br />
Oncology Pipeline PCR Elecsys/ Others<br />
IHC/ ISH<br />
’<br />
Herceptin<br />
Tarceva<br />
MabThera/ Rituxan<br />
Pertuzumab<br />
R7204<br />
R7112<br />
R1507<br />
R7160<br />
R7159<br />
Investing in our future: Personalised healthcare<br />
Strengthening all businesses<br />
Life<br />
Sciences<br />
Strengthen leading<br />
position in Genomics<br />
• Microarrays<br />
• Sequencing<br />
* Merger agreement signed<br />
In Vitro<br />
Diagnostics<br />
Solidify leading<br />
position in diagnostics<br />
•HCV<br />
agreement<br />
•ECL IP<br />
Pharma<br />
Become Pharma’s<br />
“Partner of Choice”<br />
• Interfaces<br />
• Breadth of offering<br />
*<br />
65<br />
Increasing<br />
medical<br />
value<br />
to patients<br />
& physicians<br />
66<br />
33
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Key growth drivers in 2008<br />
Commercialise current assets; prepare market for new drivers<br />
Professional<br />
Diagnostics<br />
Diabetes Care<br />
Molecular<br />
Diagnostics<br />
Applied<br />
Science<br />
• cobas 4000 analyzer series<br />
– cobas e 411 analyzer<br />
• cobas IT 3000 & 1000<br />
• cobas h 232<br />
• cobas h 152 (Accutrend Plus)<br />
• Genome Sequencer FLX<br />
Divisional sales growth<br />
outlook<br />
Key <strong>2007</strong> Launches*<br />
• Accu-Chek Performa<br />
• Accu-Chek Compact Plus (new)<br />
• Accu-Chek 360 0<br />
• cobas s 201 system & WNV Test (US)<br />
• Cobas AmpliPrep/Cobas TaqMan HIV<br />
Test (US)<br />
* Subject to appropriate regulatory approvals; US launch may be later<br />
Group financial results<br />
Dr. Erich Hunziker<br />
Chief Financial Officer<br />
Key 2008 Launches*<br />
• cobas 4000 analyzer series<br />
– cobas c 311 analyzer<br />
• Accu-Chek Inform II<br />
• menu: HCV, RA, sepsis, CMV<br />
• Accu-Chek Aviva Nano<br />
• Accu-Chek Active (new)<br />
• CAP/CTM HCV Test (US)<br />
• cobas TaqScreen MPX (US, J)<br />
• cobas TaqMan 48 HBV Test (US)<br />
• cobas TaqMan 48 CT Test (EU)<br />
• Real-Time Cell Analyser (RTCA)<br />
• XLR-HD for DNA sequencing<br />
• High-density Microarray product line<br />
Above market growth in local currencies<br />
barring unforeseen events<br />
67<br />
68<br />
34
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Strong operating and financial performance<br />
Strong operating results<br />
• Record operating profit of CHF 14.5 billion (+22 % 1 )<br />
Translating operational excellence into bottom line and financial condition<br />
• Core EPS growth twice sales growth<br />
• Financial assets remain conservatively invested<br />
• Tax rate improved<br />
• Increase in net cash and equity ratio<br />
Improved financial disclosure<br />
• New presentation of operating results<br />
• Continued proactive disclosure beyond financial reporting standards<br />
1 in local currencies<br />
Group results <strong>2007</strong><br />
Highest-ever increase in operating margin<br />
directly translated into net income<br />
CHF million<br />
2006 <strong>2007</strong><br />
% change<br />
CHF local<br />
Sales 42,041 46,133 +10 +10<br />
EBITDA 14,436 17,068 +18 +17<br />
% of sales 34.3 37.0 +2.7 p<br />
Operating profit 11,730 14,468 +23 +22<br />
% of sales 27.9 31.4 +3.5 p<br />
Net financial result 855 834 -2<br />
Taxes -3,436 -3,867 +13<br />
Tax rate in % 27.3 25.3 -2.0 p<br />
Net income 9,171 11,437 +25<br />
% of sales 21.8 24.8 +3.0 p<br />
Core EPS (CHF) 9.86 11.85 +20<br />
EPS (CHF) 9.05 11.16 +23<br />
69<br />
70<br />
35
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Group operating profit <strong>2007</strong><br />
Both divisions contributing<br />
CHF million % of sales<br />
27.9%<br />
11,730<br />
2006<br />
1 at constant exchange rates<br />
31.4%<br />
+22% 1<br />
(+23%)<br />
14,468<br />
<strong>2007</strong><br />
31.7%<br />
10,545<br />
35.5%<br />
+22% 1<br />
(+24%)<br />
13,042<br />
16.3%<br />
1,422<br />
17.6%<br />
+14%<br />
1,648<br />
1<br />
(+16%)<br />
<strong>Roche</strong> Group Pharmaceuticals Diagnostics<br />
Group operating performance <strong>2007</strong><br />
Higher out-licensing income partially off-sets increase in<br />
R&D and G&A<br />
<strong>2007</strong><br />
CHF million % sales<br />
Sales 46,133 100.0 +4,092<br />
Royalties & other op inc 2,243 4.9 +852<br />
Cost of sales -13,743 -29.8 -458<br />
M & D -9,327 -20.2 -373<br />
R & D -8,385 -18.2 -1,020<br />
G & A -2,453 -5.3 -355<br />
Operating profit 14,468 31.4 +2,738<br />
5%<br />
5%<br />
10%<br />
<strong>2007</strong> vs. 2006<br />
local growth<br />
16%<br />
19%<br />
22%<br />
66%<br />
71<br />
Administration: +7%<br />
72<br />
36
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Group general and administration <strong>2007</strong><br />
Administration growth below sales growth<br />
Sales 46,133 +4,092<br />
General and administration -2,453 -355<br />
• Administration -2,267 -123<br />
• Legal and environmental settlements -71 -85<br />
• Restructuring expenses -146 -111<br />
• Gains (losses) on disposal of PPE1 16 +2<br />
• Other general items 15 -38<br />
1 PPE: Property, plant and equipment<br />
<strong>2007</strong><br />
CHF million vs. 06<br />
Net financial income<br />
Stable contribution at very low risk<br />
Financial income (CHF billion)<br />
1.5<br />
1.0<br />
0.5<br />
0.0<br />
2003 2004 2005 2006 <strong>2007</strong><br />
Financing costs (CHF billion)<br />
0.0<br />
-0.5<br />
-1.0<br />
-1.5<br />
2003 2004 2005 2006 <strong>2007</strong><br />
-66%<br />
Net cash (CHF billion)<br />
30<br />
20<br />
10<br />
0<br />
-10<br />
-20<br />
Liquid funds<br />
Debt<br />
<strong>2007</strong> vs. 2006<br />
local growth<br />
10%<br />
7%<br />
n.a.<br />
19%<br />
6%<br />
2003 2004 2005 2006 <strong>2007</strong><br />
Financial income and financing costs excl. net pension management and also excl. exceptional financial income 2004<br />
324%<br />
Net cash<br />
73<br />
74<br />
37
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong> Group tax rate<br />
Considerable decline mainly driven by <strong>Roche</strong><br />
27.3 %<br />
0.5 % -0.5 %<br />
Mix Profit<br />
before tax<br />
<strong>Roche</strong>/<br />
Genentech/<br />
Chugai<br />
Tax rate<br />
Genentech<br />
41.6 %<br />
→<br />
40.0 %<br />
0.0 %<br />
Tax rate<br />
Chugai<br />
38.9 %<br />
→<br />
38.2 %<br />
-2.0 %<br />
Tax rate<br />
<strong>Roche</strong><br />
18.9 %<br />
→<br />
15.6 %<br />
25.3 %<br />
2006 <strong>2007</strong><br />
Core EPS continued to rise rapidly<br />
CHF<br />
14.0<br />
12.0<br />
10.0<br />
8.0<br />
6.0<br />
4.0<br />
2.0<br />
0.0<br />
4.34<br />
1 Compound <strong>Annual</strong> Growth Rate<br />
Core EPS CAGR 1 ('02 – '07): 22%<br />
4.71<br />
5.87<br />
7.84<br />
9.86<br />
11.85<br />
2002 2003 2004 2005 2006 <strong>2007</strong><br />
75<br />
76<br />
38
CHF million<br />
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Equity<br />
Increase due to net income<br />
46,814<br />
-3,027<br />
Dividends<br />
1 net of transactions in own equity instruments<br />
11,437<br />
Net<br />
income<br />
-887 761 -1,791<br />
Equity<br />
compensation<br />
plans, net of<br />
share<br />
repurchases<br />
Convertible<br />
debt<br />
instruments 1<br />
Net income<br />
directly<br />
recognised<br />
in equity 2<br />
53,307<br />
equity<br />
+14%<br />
31 Dec 06 31 Dec 07<br />
2 mainly currency translation adjustments<br />
77<br />
Balance sheet<br />
82% long-term financing<br />
CHF billion<br />
Cash and<br />
marketable<br />
securities<br />
Other<br />
current<br />
assets<br />
Non-current<br />
assets<br />
24.3<br />
16.6<br />
33.5<br />
74.4<br />
33 %<br />
22 %<br />
45 %<br />
24.2<br />
18.6<br />
35.3<br />
78.2<br />
31 %<br />
24 %<br />
45 %<br />
Current<br />
liabilities<br />
Non-current<br />
liabilities<br />
Equity<br />
(Net assets)<br />
12.7<br />
14.9<br />
46.8<br />
74.4<br />
17 %<br />
20 %<br />
63 %<br />
14.5<br />
10.4<br />
53.3<br />
78.2<br />
2006 <strong>2007</strong> 2006 <strong>2007</strong><br />
Assets<br />
Equity & liabilities<br />
18 %<br />
14 %<br />
68 %<br />
78<br />
39
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Net cash<br />
Increase by CHF 1.2 billion<br />
CHF million 31 December 31 December<br />
2006 <strong>2007</strong><br />
Cash 3,210 3,755<br />
Marketable securities 21,121 20,447<br />
Liquid funds 24,331 24,202<br />
Long-term debt -6,199 -3,834<br />
Short-term debt -2,044 -3,032<br />
Interest-bearing liabilities -8,243 -6,866<br />
Net Cash 16,088 17,336<br />
Committed to continuously increase pay-out ratio<br />
over the next 3 years<br />
CHF Dividend CAGR 1 (’91-’07): 19%<br />
5.00<br />
4.50<br />
4.00<br />
3.50<br />
3.00<br />
2.50<br />
2.00<br />
1.50<br />
1.00<br />
0.50<br />
0.00<br />
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07<br />
1 compound annual growth rate<br />
1 Compound <strong>Annual</strong> Growth Rate.<br />
1995 includes centenary bonus. <strong>2007</strong> Dividend: Proposed by the Board of Directors.<br />
79<br />
80<br />
40
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Our objectives for 2008<br />
Sales<br />
• High single digit local currency sales increase for <strong>Roche</strong> Group (excl. Tamiflu pandemic1 )<br />
• Above-market sales growth1 in both divisions<br />
Core EPS<br />
• Core earnings per share target2 at least at record <strong>2007</strong> level despite significant increase in<br />
R&D investment and considerably lower Tamiflu pandemic sales<br />
Shareholder return<br />
• Continuous increase in dividend pay-out ratio over the next 3 years<br />
1 Excluding government and corporate stockpiling orders of Tamiflu for pandemic use<br />
2 At constant exchange rates Barring unforeseen events<br />
r<br />
81<br />
41
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Quarterly local sales growth in %<br />
2006 vs. 2005 <strong>2007</strong> vs. 2006<br />
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4<br />
Pharmaceuticals Division 19 19 25 22 20 16 6 5<br />
<strong>Roche</strong> Pharma 19 15 25 20 18 13 1 7<br />
Genentech 40 39 33 37 30 26 18 6<br />
Chugai -8 1 2 2 11 2 8 -8<br />
Diagnostics Division 3 5 6 5 6 5 4 8<br />
<strong>Roche</strong> Group 15 16 20 18 17 13 6 6<br />
<strong>2007</strong>: Pharma sales (vs. 2006)<br />
Top 20 products<br />
Global US Japan Europe/RoW<br />
% % % %<br />
CHF m loc CHF m loc CHF m loc CHF m loc<br />
MabThera/Rituxan 5,516 15 2,851 10 190 3 2,475 23<br />
Herceptin 4,852 23 1,545 4 164 11 3,143 36<br />
Avastin 4,106 41 2,757 32 36 - 1,313 64<br />
NeoRecorm/Epogin 2,094 -7 - - 558 -14 1,536 -4<br />
Tamiflu 2,085 -19 962 10 394 2 729 -46<br />
CellCept 2,012 10 989 10 35 17 988 10<br />
Pegasys 1,637 11 397 -7 65 10 1,175 19<br />
Xeloda 1,151 19 435 19 28 9 688 19<br />
Tarceva 1,062 31 500 4 2 - 560 76<br />
Lucentis 991 117 991 117 - - - -<br />
Bonviva/Boniva 887 85 595 50 - - 292 278<br />
Xenical 632 -10 80 -27 - - 552 -7<br />
Xolair 567 10 567 10 - - - -<br />
Valcyte/Cymevene 542 12 268 8 - - 274 16<br />
Pulmozyme 483 12 267 12 - - 216 11<br />
Nutropin 470 -1 455 -1 - - 15 -3<br />
Kytril 425 -12 138 -26 138 5 149 -11<br />
Neutrogin 405 13 - - 405 13 - -<br />
Rocephin 399 -4 19 -21 58 5 322 -4<br />
Activase/TNKase 382 9 338 12 - - 44 -7<br />
83<br />
84<br />
42
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Pharma local sales growth 1 in %<br />
Global top 20 products<br />
Q4/06 Q1/07 Q2/07 Q3/07 Q4/07<br />
MabThera/Rituxan 17 17 16 17 12<br />
Herceptin 58 36 25 18 14<br />
Avastin 49 41 39 45 41<br />
NeoRecormon/Epogin -1 -3 -5 -5 -15<br />
Tamiflu 43 47 25 -60 -46<br />
CellCept 7 7 14 4 16<br />
Pegasys 6 15 7 7 14<br />
Xeloda 16 14 18 20 22<br />
Tarceva 71 44 31 28 24<br />
Lucentis - - 1964 31 -9<br />
Boniva 251 132 123 62 63<br />
Xenical 6 -10 -6 -9 -17<br />
Xolair 23 16 13 11 2<br />
Valcyte/Cymevene 30 15 19 9 7<br />
Pulmozyme 11 4 15 14 13<br />
Nutropin 8 5 -2 3 -8<br />
Kytril -10 -16 -18 -11 -3<br />
Neutrogin 7 11 12 15 14<br />
Rocephin -32 -7 -2 -2 -4<br />
Activase/TNKase<br />
1 versus previous year<br />
14 15 20 6 -2<br />
Pharma local sales growth 1 in %<br />
Top 20 products by region<br />
US Japan Europe/RoW<br />
Q1 1 Q2 1 Q3 1 Q4 1 Q1 1 Q2 1 Q3 1 Q4 1 Q1 1 Q2 1 Q3 1 Q4 1<br />
Mabthera/Rituxan 13 12 14 4 1 6 4 2 23 21 23 25<br />
Herceptin 7 3 6 1 23 25 3 0 61 43 26 23<br />
Avastin 34 33 37 23 - - - - 63 52 59 80<br />
NeoRecorm/Epogin - - - - -17 -3 -12 -22 3 -6 -2 -11<br />
Tamiflu -8 196 -71 52 55 -93 48 -58 76 -48 -70 -92<br />
Cellcept 3 18 -1 17 21 14 14 18 10 10 9 14<br />
Pegasys 6 -5 -27 -3 -38 -5 34 53 23 13 22 20<br />
Xeloda 2 23 30 19 3 6 11 14 22 16 15 25<br />
Tarceva 9 -1 1 5 - - - - 125 94 68 47<br />
Lucentis - 1964 31 -9 - - - - - - - -<br />
Boniva 83 77 27 40 - - - - 658 400 278 160<br />
Xenical -24 -8 -30 -46 - - - - -7 -6 -5 -11<br />
Xolair 16 13 11 2 - - - - - - - -<br />
Valcyte/Cymevene 8 20 4 3 - - - - 21 17 15 11<br />
Pulmozyme 6 17 14 10 - - - - 1 13 14 17<br />
Nutropin 5 -2 3 -8 - - - - 0 4 -7 -10<br />
Kytril -28 -36 -28 -10 7 5 8 1 -15 -19 -4 0<br />
Neutrogin - - - - 11 12 15 14 - - - -<br />
Rocephin -34 -7 -13 -32 4 5 11 -1 -5 -2 -4 -3<br />
Activase/TNKase 18 24 6 0 - - - - -6 -4 1 -16<br />
1 <strong>2007</strong> vs. 2006<br />
86<br />
85<br />
43
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Pharma sales (vs. 2006)<br />
Other launches since January 2003 1<br />
1 other than launches already covered in Top 20<br />
Global US Japan Europe/RoW<br />
CHF % CHF % CHF % CHF %<br />
million loc million loc million loc million loc<br />
Fuzeon 320 3 140 -7 - - 180 13<br />
Copegus 221 6 -4 - 20 - 205 -1<br />
Evista 163 19 - - 163 19 - -<br />
Raptiva 144 15 144 15 - - - -<br />
Renagel 63 6 - - 63 6 - -<br />
Femara 11 216 - - 11 216 - -<br />
Actemra 5 21 - - 5 21 - -<br />
Quarterly local sales growth: 2H 07 affected by lower<br />
Tamiflu sales- strong underlying growth<br />
2006 vs. 2005 <strong>2007</strong> vs. 2006<br />
Sales growth in % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4<br />
Pharmaceuticals Division 19 19 25 22 20 16 6 5<br />
excl. pandemic Tamiflu 16 16 19 16 16 14 12 11<br />
<strong>Roche</strong> Pharma 19 15 25 20 18 13 1 7<br />
excl. pandemic Tamiflu 15 11 18 14 13 11 10 14<br />
Chugai -8 1 2 2 11 2 8 -8<br />
excl. pandemic Tamiflu -14 0 -5 -11 -7 4 4 4<br />
87<br />
88<br />
44
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Outgrowing the market in all geographies<br />
Local sales growth<br />
Division<br />
Europe<br />
North<br />
America<br />
Latin<br />
America<br />
Japan<br />
Other<br />
6%<br />
5%<br />
3%<br />
4%<br />
10%<br />
7%<br />
6%<br />
11%<br />
12%<br />
15%<br />
17%<br />
<strong>Roche</strong><br />
IMS YTD Oct '07<br />
70%<br />
60%<br />
50%<br />
40%<br />
30%<br />
20%<br />
10%<br />
<strong>2007</strong>: Pharmaceuticals Division<br />
Sales distribution and growth<br />
Geographies<br />
Japan +3%<br />
Latin<br />
America +6%<br />
North<br />
America +15%<br />
6%<br />
11% 14%<br />
42%<br />
% Key products of total pharmaceutical sales<br />
0%<br />
2003 2004 2005 2006 <strong>2007</strong><br />
Others* +19%<br />
27%<br />
all growth figures are in local currencies * including Eastern Europe<br />
1%<br />
5%<br />
6%<br />
4%<br />
3%<br />
3%<br />
6%<br />
Western Europe +8%<br />
Boniva<br />
Tarceva<br />
Xeloda<br />
Pegasys<br />
CellCept<br />
NeoRecormon/<br />
Epogin<br />
Avastin<br />
Herceptin<br />
MabThera/<br />
Rituxan<br />
Western Europe<br />
Switzerland<br />
France<br />
Germany<br />
Italy<br />
Spain<br />
UK<br />
other<br />
Western Europe<br />
89<br />
90<br />
45
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
MabThera / Rituxan<br />
Strong double-digit growth continues<br />
CHF billion<br />
6.0<br />
5.0<br />
4.0<br />
3.0<br />
2.0<br />
1.0<br />
0.0<br />
Global sales<br />
+ 15% 1<br />
2001 2002 2003 2004 2005 2006 <strong>2007</strong><br />
local growth<br />
Europe/ RoW +23%<br />
Japan +3%<br />
US +10%<br />
• Sales of CHF 5.516 billion<br />
• Oncology:<br />
– US: growth from increased use following 1st line therapy in iNHL - adoption in other areas stable<br />
– Top 5 EU: adoption in relapsed iNHL maintenance use strongly increased (from 16% to 61%) –<br />
adoption rates in other areas flat to slightly increased from already high levels<br />
• RA: increasing adoption in US and EU<br />
– Global RA sales of approx. CHF 500 mn (of which USD 240-260 mn in US)<br />
91<br />
1 local growth<br />
Herceptin<br />
Adjuvant usage keeps increasing in EU/RoW<br />
CHF billion<br />
5.0<br />
4.0<br />
3.0<br />
2.0<br />
1.0<br />
0.0<br />
• Sales of CHF 4.852 billion<br />
• US market penetration (Q4 ’07)<br />
– adjuvant: approximately 75%<br />
– 1st line metastatic: approx. 70%, stable<br />
• Top 5 EU market penetration (Q4 ’07)<br />
– adjuvant: approx. 70%, up from 40% at YE 2006<br />
– 1st line metastatic: approx. 80%, stable<br />
1 local growth<br />
Global sales<br />
+ 23% 1<br />
2001 2002 2003 2004 2005 2006 <strong>2007</strong><br />
local growth<br />
Europe/ RoW +36%<br />
Japan +11%<br />
US +4%<br />
92<br />
46
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Attacking the HER2 pathway from multiple angles<br />
Pertuzumab moving forward, Trastuzumab-DM1 in-licensed<br />
Mechanism Specifically targeting First in class HER Binds to HER2 and<br />
HER2<br />
dimerization inhibitor delivers intracellularly<br />
a potent cytotoxic<br />
Inhibits HER2-mediated Inhibits multiple HER- agent in a targeted<br />
signalling<br />
mediated pathways manner<br />
Phase of<br />
development<br />
Efficacy data<br />
Newsflow<br />
Herceptin<br />
Approved for adjuvant<br />
and mBC (HER2+)<br />
Survival benefit<br />
In adjuvant and<br />
metastatic<br />
HER2+ BC<br />
Unprecedented benefit –<br />
standard of care<br />
Pertuzumab<br />
Phase III CLEOPATRA<br />
FPI Q1 2008<br />
18% response rate<br />
39% clinical benefit<br />
rate<br />
Phase II final results<br />
in 2008<br />
Avastin<br />
Four new indications approved in EU<br />
CHF billion<br />
5.0<br />
4.0<br />
3.0<br />
2.0<br />
1.0<br />
0.0<br />
Global sales<br />
+ 41% 1<br />
2004 2005 2006 <strong>2007</strong><br />
Trastuzumab-DM1<br />
Phase II FPI Q3 <strong>2007</strong><br />
Promising phase I<br />
data at ASCO <strong>2007</strong><br />
Partnered with<br />
Genentech<br />
• Sales of CHF 4.106 billion<br />
• Penetration rate, 1st line mCRC (major EU markets): approx. 60% of on label market (as of YE<strong>2007</strong>)<br />
• EU mCRC label so far: only approx. 30% of total EU market covered; large growth potential due to<br />
broadening of Avastin EU label to include combo with any chemo in any line of treatment – approved end<br />
of January 2008<br />
• Launch in 1st line mBC and mNSCLC in EU progressing well<br />
• EU approval in mRCC at the end of <strong>2007</strong>: launch in Q1 2008<br />
• Key clinical news flow in 2008: AVADO and RIBBON-1 (1st line mBC)<br />
94<br />
1 local growth<br />
93<br />
local growth<br />
Europe/ RoW +64%<br />
Japan<br />
US +32%<br />
47
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Avastin in adjuvant colon cancer<br />
Key phase III trials fully recruited<br />
Treatment regimen<br />
Number of patients<br />
Recruitment duration<br />
Efficacy analysis<br />
Filing<br />
FOLFOX-6 ± Avastin<br />
2,700<br />
Q3 2004 until Q4 2006<br />
First interim look: Q2 <strong>2007</strong><br />
Subsequently every 6 months<br />
Next interim look: Q2 2008<br />
2010 (or earlier)<br />
Xeloda<br />
Continuously gaining share<br />
CHF billion<br />
1.5<br />
1.0<br />
0.5<br />
0.0<br />
NSABP C-08<br />
FOLFOX-4 ± Avastin<br />
XELOX + Avastin<br />
3,450<br />
Q4 2004 until Q2 <strong>2007</strong><br />
Event-driven analysis<br />
2010 (or earlier)<br />
AVANT<br />
• Sales of CHF 1.151 billion<br />
• Rollout in EU for gastric cancer (approved in EU in March <strong>2007</strong>)<br />
• Positive 5-year follow-up overall survival data in adjuvant colon cancer (X-ACT study) presented at ECCO<br />
• Xeloda mCRC label extension approval in EU expected early February 2008<br />
1 local growth<br />
Global sales<br />
+ 19% 1<br />
2001 2002 2003 2004 2005 2006 <strong>2007</strong><br />
95<br />
local growth<br />
Europe/ RoW +19%<br />
Japan +9%<br />
US +19%<br />
96<br />
48
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Tarceva<br />
<strong>Annual</strong> sales of more than CHF 1bn for the first time<br />
CHF billion<br />
1.0<br />
0.5<br />
0.0<br />
1 local growth<br />
Global sales<br />
+ 31% 1<br />
2004 2005 2006 <strong>2007</strong><br />
• Sales of CHF 1.062 billion<br />
• Market penetration in NSCLC, top 5 EU: 2nd line: 25-30%, 3rd line: approx. 45%<br />
• Successful launch in metastatic pancreatic cancer (EU approval in January <strong>2007</strong>)<br />
Avastin<br />
Maximizing a key asset<br />
Main Indication<br />
Study name Status<br />
mCRC 2nd line, after progression on<br />
1st line Avastin<br />
SWOG S0600 Initiated Q2‘07<br />
local growth<br />
Europe/ RoW + 76%<br />
Japan<br />
US +4%<br />
Adjuvant CC Stage II high risk / stage III AVANT Recruitment completed Q2‘07<br />
Stage II high risk / stage III NSABP C-08 Recruitment completed Q4‘06<br />
Stage II<br />
E5202 Initiated Q3‘05<br />
Adj. rectal Cancer Stage II / stage III<br />
E5204 Initiated Q1‘06<br />
Met. Gastric cancer AVAGAST Initiated Q3 <strong>2007</strong><br />
RCC 1st line<br />
AVOREN Approved EU; US filing Q3’08<br />
1st line<br />
CALGB 90206 Topline PFS data to be<br />
submitted in US filing<br />
Pancreatic Cancer 1st line (with Tarceva) AVITA Did not meet primary endpoint<br />
Ovarian Cancer GOG 218 Initiated Q3‘05<br />
1st line<br />
1st line<br />
Relapsed<br />
ICON-7 Initiated Q4‘06<br />
GOG 213 Initiated Q4’07<br />
Prostate Cancer 1st line, hormone refractory CALGB 90401 Initiated Q2’05, enrollment<br />
completed Q4 <strong>2007</strong><br />
97<br />
98<br />
49
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Avastin<br />
Maximizing a key asset<br />
Main Indication<br />
Study name Status<br />
NHL aggressive 1st line, R-CHOP+/-Avastin MAIN<br />
Initiated in Q3‘07<br />
NSCLC 1st line non-sq. (with Tarceva) ATLAS Init. Q4’05, expect to compl. H1’08<br />
2nd line (with Tarceva) BETA Lung Init. Q2’05, expect to compl. H2’08<br />
1st line squamous BRIDGE (pilot study) Init. Q2’06, expect to compl. H1’08<br />
1st or 2nd line non-squamous<br />
previously treated CNS mets<br />
PASSPORT Init. Q1’06, expect to compl. Q2’08<br />
Adjuvant NSCLC Stage IB-IIIA, sq. + non-sq. ECOG 1505<br />
Initiated Q3‘07<br />
mBC 1st line HER2-negative AVADO Recruitment completed Q2‘07<br />
1st line HER2-negative RIBBON-1 Recruitment completed Q3‘07<br />
2nd line HER2-negative RIBBON-2 Initiated Q1‘06<br />
1st line HER2-pos. (with<br />
Herceptin)<br />
AVEREL Initiated Q3‘06<br />
Adjuvant BC HER2-negative E2104 Safety data pres. at SABCS ‘07<br />
HER2-negative E5103<br />
Initiated Q4‘07<br />
HER2-negative, ER-/PR-neg. BEATRICE Initiated Q4‘07<br />
HER2-positive (with Herceptin) BETH In preparation<br />
Glioblastoma 2nd/3rd line BRAIN Data presented Q4‘07<br />
Herceptin and pertuzumab<br />
Further strengthening our position in HER2-positive BC<br />
Main Indication<br />
HERCEPTIN<br />
Study name Status<br />
Gastric cancer ToGA Initiated Q3’05, final analysis<br />
2009, event-driven<br />
Adjuvant BC 1 year vs. 2 years treatment HERA event-driven - Interim analysis<br />
2008/’09 with potential for results<br />
on optimal treatment duration<br />
PERTUZUMAB<br />
mBC HER2+, 1st line Combo with Herceptin+<br />
docetaxel<br />
ph. III (CLEOPATRA) To start Q1’08<br />
mBC HER2+, 2nd line Combo with Herceptin <strong>Roche</strong> phase II Ongoing – positive stage 1<br />
data at ASCO ’07, final data ‘08<br />
Ovarian cancer<br />
platinum-sensitive<br />
Ovarian cancer<br />
platinum-resistant<br />
Combo with chemotherapy phase II (BO17931) results in Q1’08<br />
Combo with gemcitabine<br />
phase II (TOC3258g)<br />
Genentech study<br />
99<br />
Data presented at ASCO and<br />
ECCO <strong>2007</strong><br />
100<br />
50
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Xeloda / Tarceva / MabThera<br />
Expanding to new indications and combinations<br />
Main Indication<br />
XELODA<br />
Study name Status<br />
Adjuvant CC Combo with Avastin<br />
AVANT Recruitment completed Q2‘07<br />
XELOX vs. 5FU/LV<br />
NO16968 Recruitment completed, final<br />
analysis event driven (’08/’09)<br />
Adjuvant BC<br />
TARCEVA<br />
AC -> T vs. AC -> TX NO17629 Recruitment completed in<br />
Jan ‘06, final analysis event driven<br />
NSCLC 1st l. maint. Combo with chemotherapy SATURN<br />
Init. Q4’05, expect to compl. H1’08<br />
Combo with Avastin<br />
ATLAS<br />
Init. Q4’05, expect to compl. H1’08<br />
NSCLC 2nd line Combo with Avastin<br />
BETA Lung<br />
Init. Q2’05, expect to compl. H2’08<br />
Adjuvant NSCLC RADIANT<br />
Initiated Q3‘06<br />
MABTHERA<br />
NHL1st line maint. After MabThera induction PRIMA Recruitment completed Q1’07,<br />
final data expected in H1’10<br />
CLL 1st line ML17102<br />
Met primary endpoint<br />
CLL relapsed REACH<br />
Recruitment completed Q3’07,<br />
final data expected in H2’09<br />
101<br />
Actemra<br />
Broadly investigated in all RA segments<br />
Main Indication Study name Status<br />
Rheumatoid Arthritis MTX–IR<br />
OPTION Presented at EULAR <strong>2007</strong><br />
DMARD–IR TOWARD<br />
Presented at ACR <strong>2007</strong><br />
IR = inadequate responders<br />
MTX-naive (monotherapy)<br />
AMBITION<br />
Topline data positive<br />
Anti-TNF IR RADIATE<br />
Topline data positive<br />
MTX–IR<br />
Prevention of structural<br />
damage<br />
LITHE Recruitment completed,<br />
2 yrs study<br />
102<br />
51
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Actemra<br />
Potential to become a significant new RA treatment<br />
Large international phase III program<br />
• First-in-class agent<br />
• 5 registration trials (>4,000 patients)<br />
• Mono and combo therapy<br />
• Patient populations studied:<br />
– MTX inadequate responders<br />
– DMARD inadequate responders<br />
– Anti-TNFα inadequate responders<br />
– MTX-naïve patients<br />
Filed in US and EU in Q4 <strong>2007</strong><br />
• First 4 trials all met primary endpoint<br />
– Strong efficacy seen in MTX and<br />
DMARD IR (OPTION and TOWARD)<br />
– Superior to MTX as monotherapy<br />
(AMBITION)<br />
– Met primary endpoint in a-TNF-IR<br />
(RADIATE)<br />
• Generally well tolerated<br />
MabThera / ocrelizumab anti-CD-20 pipeline<br />
Major indications in phase III development<br />
Main Indication<br />
Rheumatoid Arthritis<br />
Study name Status<br />
MABTHERA MTX–IR<br />
Phase III SERENE Met primary endpoint<br />
MTX–IR dose escalation<br />
retreatment<br />
Phase III MIRROR Recruitment completed<br />
Anti-TNF–IR<br />
Phase III SUNRISE Met endpoint Q4’07<br />
MTX-naive, radiographic study Phase III IMAGE Recruitment completed Q4’07<br />
Combo with Enbrel Phase II TAME<br />
Initiated Q2‘06<br />
OCRELIZUMAB MTX–IR<br />
Phase III STAGE Initiated Q4‘06<br />
Anti-TNF IR<br />
Phase III SCRIPT Initiated Q2‘07<br />
MTX–naive; X-ray study Phase III FILM<br />
Initiated Q2‘07<br />
Anca ass. vasculitis<br />
MABTHERA RAVE Initiated Q4‘04<br />
Lupus nephritis<br />
MABTHERA Phase III LUNAR Enrollment completed Q1‘08<br />
OCRELIZUMAB Phase III BELONG To initiate Q1‘08<br />
IR = inadequate responders<br />
104<br />
103<br />
52
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
MabThera / ocrelizumab anti-CD-20 pipeline<br />
Major indications in phase III development<br />
Main Indication<br />
Syst. Lupus erythem.<br />
Study name Status<br />
MABTHERA Phase II / III EXPLORER <strong>Results</strong> expected H1’08<br />
OCRELIZUMAB Phase III BEGIN Initiated Q4’07<br />
Multiple Sclerosis<br />
MABTHERA PPMS<br />
OLYMPUS Recruitment completed Q4’05,<br />
results expected H1’08<br />
RRMS<br />
HERMES Met primary endpoint,<br />
data presented at AAN <strong>2007</strong><br />
OCRELIZUMAB RRMS<br />
Phase II Expected to initiate in H1’08<br />
Metabolic and vascular diseases<br />
Major decision points in <strong>2007</strong> and 2008<br />
Main Indication Status<br />
Type 2 Diabetes<br />
R1583 (GLP-1) Phase II<br />
Presented at ADA 2006<br />
Phase II sustained release formulation<br />
First data in - encouraging<br />
R1439 (PPAR αγ) Phase II<br />
Data in 2008<br />
R1579 (DPP IV-3) Phase II<br />
Data in 2008<br />
R1511 (GK 3) Phase I<br />
Ongoing<br />
Dyslipidemia<br />
R1658 (JTT-705) Phase II<br />
Encouraging data,<br />
plans to enter phase III<br />
105<br />
106<br />
53
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>Roche</strong> key therapeutic areas<br />
Current and future pillars of growth<br />
Oncology<br />
Xeloda<br />
MabThera<br />
Herceptin<br />
Avastin<br />
Tarceva<br />
Pertuzumab<br />
R1507 (IGF-1R mAb)<br />
Apomab<br />
Apo2L/TRAIL<br />
14 phase I compounds<br />
On Hand<br />
RA/Autoimmune<br />
MabThera<br />
Actemra<br />
R1594 ocrelizumab<br />
PNP inhibitor<br />
7 phase I compounds<br />
Metabolic<br />
R1583 GLP-1<br />
R1658 CETP Inh.<br />
R1439 dual PPAR<br />
R1579 DPP-IV<br />
6 phase I compounds<br />
Promising Late<br />
Stage<br />
<strong>Roche</strong> R&D pipeline today<br />
phase I - (34 NMEs + 1 AI)<br />
phase II - (19 NMEs + 12 AIs)<br />
Virology<br />
Tamiflu<br />
Pegasys<br />
R3484 HPV16<br />
R1626 HCV pol. Inh.<br />
R7128 HCV pol. Inh.<br />
R7227 HCV prot. inh.<br />
Emerging<br />
Mid-Term<br />
phase III - (2 NMEs + 40 AIs)<br />
CNS<br />
4 phase I compounds<br />
Early<br />
Stage<br />
107<br />
Registration - (2 NMEs + 5 AIs)<br />
R435<br />
Avastin - NSCLC squamous<br />
R435<br />
Avastin - NSCLC mCNS treat.<br />
R1273<br />
R1415+R435 Tarceva + Avastin –NSCLC1<br />
R1507<br />
R3502<br />
GEN<br />
GEN<br />
GEN<br />
GEN<br />
GEN<br />
GEN<br />
GEN<br />
GEN<br />
ARQ<br />
R667<br />
NME<br />
R3421<br />
Additional Indication<br />
ISO<br />
R1626<br />
R3484<br />
R1439<br />
R1579<br />
R1658<br />
R1594<br />
DBA Oncology<br />
DBA Inflammation<br />
DBA Virology<br />
DBA Metabolic<br />
DBA CNS<br />
Others<br />
MEM<br />
R744<br />
CHU<br />
R-No. <strong>Roche</strong> managed<br />
GEN Genentech managed<br />
CHU Chugai managed<br />
ARQ ArQule opt-in<br />
BTI BioTie opt-in<br />
MEM Memory opt-in<br />
ISO Isotechnika opt-in<br />
108<br />
st R547<br />
solid tumors<br />
MabThera –CLL1<br />
R1530<br />
solid tumors<br />
R4733<br />
solid tumors<br />
R7112<br />
oncology R1273 pertuzumab – EBC HER2+<br />
R7159<br />
NHL<br />
pertuzumab – ovarian cancer<br />
R7204<br />
malignant melanoma<br />
line<br />
GEN<br />
anti-cMET – cancer therapy<br />
Ewing‘s sarcoma<br />
GEN<br />
hedgehog ant. – solid tumors<br />
T-DM1 - mBC<br />
GEN<br />
anti-CD20 3rd gen. – hem. malig.<br />
CD40 Ab – diff. large B Cell lymph.<br />
GEN<br />
GEN<br />
GEN<br />
IAP ant. – cancer therapy<br />
MEK inh. – cancer therapy<br />
ABT-263–solid tumors & hem. malig.<br />
Apomab -sarcoma<br />
Apomab -cancer<br />
Apo2L/TRAIL - cancer<br />
GEN CD40 Ab – NHL/MM/rel.large B-CL<br />
ABT-869–solid tumors<br />
CHU<br />
CRC<br />
Avastin – glioblastoma recurr.<br />
R1646<br />
pain<br />
Avastin – extensive SCLC<br />
R1671<br />
asthma<br />
Avastin - relapsed MM<br />
R3477<br />
R7103<br />
autoimmune diseases<br />
COPD<br />
solid tumors<br />
RAR gamma - emphysema<br />
R7277<br />
RA<br />
PNP inh. – AI / transplant<br />
GEN<br />
IFN-alpha Ab - SLE<br />
BTI<br />
VAP-1 – inflammatory diseases<br />
renal transplant<br />
R7128<br />
R7227<br />
CHU<br />
R1511<br />
R1512<br />
R4929<br />
HCV<br />
HCV<br />
HCV<br />
type 2 diabetes<br />
PVD<br />
type 2 diabetes<br />
R1583<br />
HCV pol - HCV<br />
HPV16 – cervical neoplasia<br />
aleglitazar – type 2 diabetes<br />
DPP-IV (3) – type 2 diabetes<br />
GLP1 - type 2 diabetes<br />
CETP inh. - dyslipidemia<br />
ocrelizumab – RRMS<br />
R7201<br />
type 2 diabetes<br />
Alzheimer‘s / schizophrenia<br />
R7232<br />
dyslipidemia<br />
CERA – chemo induced anaemia<br />
R7234<br />
type 2 diabetes<br />
gastroparesis / IBS<br />
R1450<br />
Alzheimer‘s<br />
R1678<br />
schizophrenia<br />
R4996<br />
Alzheimer‘s<br />
Status as of December 31, <strong>2007</strong><br />
st line<br />
MabThera –CLLrelapsed<br />
MabThera –iNHLmaint. 1st line<br />
MabThera + Avastin – NHL aggr.<br />
Xeloda - adj. CC combo oxaliplatin<br />
Xeloda –adj. CC comboAvastin<br />
Xeloda –adj. BC<br />
Avastin -adj. CC<br />
Avastin – pancreatic cancer<br />
Avastin – ovarian cancer 1st line<br />
Avastin - mBC lineadj. combo Taxot. rectal cancer 1st line<br />
Avastin–mBC combo std. chem. 1st l.<br />
Avastin – mBC combo Hercept. 1st R105<br />
R105<br />
R105<br />
R105<br />
R340<br />
R340<br />
R340<br />
R435<br />
R435<br />
Avastin –prostatecancer<br />
R435<br />
R435<br />
R435<br />
R435<br />
R435<br />
. l.<br />
R435<br />
Avastin –adj. NSCLC<br />
R435<br />
Avastin –m. gastriccancer<br />
R435<br />
R597<br />
Avastin – adj. BC HER2-<br />
Herceptin –m. gastric cancer HER2+<br />
Tarceva -NSCLCmaint. 1st line<br />
Tarceva –adj. NSCLC<br />
Tarceva+Avastin–NSCLC maint.1st l.<br />
Tarceva + Avastin – NSCLC2nd line<br />
Avastin – ovarian cancer 2nd line<br />
Avastin –GISTrecurr.<br />
Avastin – adj. rectal cancer<br />
Avastin –mBC2nd Avastin–mCRC 1<br />
R1415<br />
R1415<br />
R1415+R435<br />
R1415+R435<br />
GEN<br />
GEN<br />
GEN<br />
GEN<br />
line<br />
R99<br />
CellCept – pemphigus vulgaris<br />
R105<br />
MabThera – RA DMARD IR<br />
R1569<br />
Actemra –sJIA<br />
R1594<br />
ocrelizumab -RA<br />
R1594<br />
ocrelizumab -SLE<br />
CHU<br />
ED-71 – osteoporosis<br />
GEN<br />
MabThera – lupus nephritis<br />
GEN<br />
MabThera – ANCA ass. vascul.<br />
GEN<br />
MabThera –SLE<br />
GEN<br />
Xolair – pediatric asthma<br />
R127<br />
Valcyte –CMV extension<br />
GEN<br />
MabThera – PPMS<br />
GEN<br />
TNKase – catheter clearance<br />
GEN<br />
GEN<br />
CHU<br />
Lucentis – diabetic macul. edema<br />
Lucentis – renital vein occlusion<br />
Epogin – chemo induced anaemia<br />
st Xeloda –mCRCcombo1<br />
R435**<br />
combo oxalipl.<br />
R435***<br />
Avastin -RCC<br />
R1569<br />
Actemra -RA<br />
CHU<br />
Antevas – subarach. haemorr.<br />
st line<br />
Xeloda–mCRC combo 2nd line<br />
Avastin –mBCcomboTaxol1st R340*<br />
R340*<br />
R1273 pertuzumab – mBC HER2+<br />
R435<br />
l.<br />
* CPMP positive opinion granted Dec. <strong>2007</strong><br />
** approved in EU end of January 2008<br />
*** approved in EU, US to file in 2008<br />
GEN Raptiva - renal transplant<br />
R1663 anticoagulant<br />
R1295 MS<br />
54
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>Roche</strong> managed R&D pipeline - overview<br />
Projects by Disease Biology Area (DBA)<br />
Inflammatory<br />
CNS<br />
25<br />
19<br />
Research Development<br />
Virology<br />
7<br />
92 Projects<br />
23<br />
Oncology<br />
Metabolic<br />
18<br />
Inflammatory<br />
13<br />
CNS<br />
6<br />
Others<br />
1<br />
44<br />
7<br />
Virology<br />
14<br />
Oncology<br />
85 Projects<br />
including 9 in Phase 0<br />
Virology<br />
Assets in development to secure long-term growth<br />
CHF billion <strong>2007</strong> vs. 2006<br />
local growth<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
2004 2005 2006 <strong>2007</strong><br />
Europe/RoW US Japan<br />
-8%<br />
10%<br />
37%<br />
54%<br />
+7%<br />
+3%<br />
-16%<br />
Metabolic<br />
109<br />
110<br />
55
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Metabolism/Bone<br />
Boniva drives growth<br />
CHF billion <strong>2007</strong> vs. 2006<br />
local growth<br />
3.0<br />
2.5<br />
2.0<br />
1.5<br />
1.0<br />
0.5<br />
0.0<br />
+16%<br />
2004 2005 2006 <strong>2007</strong><br />
Europe/RoW US Japan<br />
Anemia<br />
NeoRecormon holds ground against competition<br />
20%<br />
43%<br />
37%<br />
+7%<br />
+20%<br />
+19%<br />
CHF billion <strong>2007</strong> vs. 2006<br />
local growth<br />
2.5<br />
2.0<br />
1.5<br />
1.0<br />
0.5<br />
0.0<br />
2004 2005 2006 <strong>2007</strong><br />
Europe/ RoW Japan<br />
-7%<br />
36%<br />
64%<br />
-14%<br />
-4%<br />
111<br />
112<br />
56
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Pharmaceuticals<br />
EBITDA and operating profit<br />
CHF million % of sales<br />
1 at constant exchange rates<br />
40.0%<br />
36.5% 35.5%<br />
12,168<br />
+20% 1<br />
(+21%)<br />
14,706<br />
2006 <strong>2007</strong><br />
31.7%<br />
10,545<br />
+22%<br />
13,042<br />
1<br />
(+24%)<br />
EBITDA Operating Profit<br />
<strong>2007</strong>: Diagnostics margins<br />
EBITDA remains well above industry average<br />
CHF million % of sales<br />
1 at constant exchange rates<br />
28.6%<br />
2,500<br />
27.6%<br />
+2% 1<br />
(+3%)<br />
2,580<br />
2006 <strong>2007</strong><br />
16.3%<br />
1,422<br />
17.6%<br />
+14% 1<br />
(+16%)<br />
1,648<br />
EBITDA Operating Profit<br />
113<br />
114<br />
57
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Diagnostics local sales<br />
By Region and Business Area (vs. 2006)<br />
Sales CHF million<br />
Global Nth Am. EMEA RoW<br />
% loc<br />
growth<br />
% loc<br />
growth<br />
% loc<br />
growth<br />
% loc<br />
growth<br />
Professional Diag. 4,294 8 899 5 2,494 6 901 16<br />
Diabetes Care 3,216 5 930 5 1,849 3 437 13<br />
Molecular Diagnostics 1,148 -2 374 -1 480 6 294 -12<br />
Applied Science 692 11 278 15 293 7 121 12<br />
<strong>Roche</strong> Diagnostics 9,350 6 2,481 5 5,116 5 1,753 9<br />
Diagnostics quarterly sales and local growth 1<br />
Sales CHF million<br />
Q4 ‘06 Q1 ‘07 Q2 ‘07 Q3 ‘07 Q4 ‘07<br />
% loc<br />
% loc<br />
Professional 1,024 5% 1,017 5% 1,093 8% 1,047 7% 1,137 10%<br />
Diagnostics<br />
Diabetes 844 6% 755 11% 789 3% 768 0% 904 7%<br />
Care*<br />
Molecular 293 -1% 278 -2% 296 -3% 282 -3% 292 1%<br />
Diagnostics*<br />
Applied 171 10% 166 7% 165 12% 167 11% 194 15%<br />
Science*<br />
DIA Division 2,332 5% 2,216 6% 2,343 5% 2,264 4% 2,527 8%<br />
1 2006 vs. 2005 for Q4 ‘06, <strong>2007</strong> vs. 2006 for Q1 to Q4 ’07<br />
* service support removed from Business Areas DC, MD & AS and reallocated into Professional Diagnostics<br />
115<br />
% loc % loc % loc<br />
116<br />
58
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Diagnostics sales by region<br />
Strong growth in emerging markets<br />
CHF 9,350 million<br />
2,481<br />
5,116<br />
509<br />
1 Europe, Middle East and Africa<br />
784<br />
411<br />
49<br />
North America 27 %<br />
Latin America 5 %<br />
Asia Pacific 8 %<br />
Japan 4 %<br />
Others 1 %<br />
EMEA 1 55 %<br />
<strong>Roche</strong> Dx<br />
North<br />
America<br />
EMEA*<br />
Latin<br />
America<br />
Asia Pacific<br />
Japan<br />
2008: Key planned product launches* (1)<br />
local sales growth<br />
Product BA 1 Indication Region<br />
cobas 4000 analyzer<br />
series<br />
- cobas c 311 analyzer<br />
Immunochemistry<br />
menu<br />
PD Next generation system consolidating clinical chemistry and<br />
immunochemistry testing for small to medium workload laboratories;<br />
software links stand-alone cobas c 311 (clinical chemistry) &<br />
cobas e 411 (immunochemistry) modules with cobas p242 data<br />
manager<br />
PD New assays for a number of important diagnostic uses:<br />
•Elecsys Anti-HCV: Assay for the detection of hepatitis C infection<br />
•Elecsys anti-CCP (anti-cyclic citrullinated peptide antibody),: Assay<br />
for the diagnosis of rheumatoid arthritis<br />
•IL-6 (interleukin-6): Immunoassay to aid in management of critically<br />
ill patients as early indicator for acute inflammation and to monitor<br />
course of disease<br />
•Procalcitonin: immunoassay to aid in early detection and monitoring<br />
of sepsis<br />
•Elecsys Anti-CMV IgG and Anti-CMV IgM: For the detection of<br />
cytomegalovirus infection<br />
2%<br />
6%<br />
5%<br />
5%<br />
Global<br />
Accu-Chek Inform II PD First wireless enabled hospital blood glucose meter Global<br />
1 Business Areas: Professional Diagnostics (PD)<br />
* Subject to appropriate regulatory approvals; US launches may be later than indicated<br />
19%<br />
18%<br />
117<br />
Global/ EU<br />
118<br />
59
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
2008: Key planned product launches* (2)<br />
Product BA1 Indication Region<br />
Cobas TaqMan 48 HBV<br />
Test<br />
MD Automated, real-time PCR test for monitoring hepatitis B viral load US<br />
Cobas AmpliPrep/ Cobas<br />
TaqMan HCV Test<br />
cobas TaqScreen MPX<br />
Test<br />
Cobas TaqMan 48 CT Test<br />
MD Real-time PCR quantification of HCV viral levels on fully automated Cobas<br />
AmpliPrep/Cobas TaqMan systems<br />
MD Screens donated blood for major viruses (HIV-1, HIV-2, hepatitis B, and<br />
hepatitis C) in a single assay . Will run on automated cobas s 201 system<br />
in US and on automated, fully integrated cobas s 401 system in Japan<br />
MD<br />
New version of an automated, real-time PCR test for Chlamydia<br />
trachomatis; also detects the new Swedish CT strain<br />
US<br />
US, Japan<br />
Accu-Chek Aviva Nano DC Enhanced portability by reduced size, combined with an attractive design<br />
and improved features<br />
Global<br />
Accu-Chek Active (new) DC Proven performance with additional features in a handy modern design Global<br />
Real-Time Cell Analyser<br />
(RTCA)<br />
XLR-HD<br />
AS Enables for precise online measurement of cell activities without labelling<br />
DNA sequencing kit enabling increased read lengths and higher<br />
throughputs per plate<br />
1 Business Areas: Applied Science (AS), Molecular Diagnostics (MD), Diabetes Care (DC)<br />
* Subject to appropriate regulatory approvals; US launches may be later than indicated<br />
Group performance <strong>2007</strong><br />
Strong sales growth drives bottom line growth<br />
EU<br />
Global<br />
Change<br />
CHF million 2006 <strong>2007</strong> CHF million % loc %<br />
Sales 42,041 46,133 +4,092 +10 +10<br />
Operating profit 11,730 14,468 +2,738 +23 +22<br />
as % of sales 27.9 31.4<br />
Associated companies 2 2 - -<br />
Financial income 1,829 1,805 -24 -1<br />
Financing costs -974 -971 +3 0<br />
Profit before taxes 12,587 15,304 2,717 +22<br />
Income taxes -3,436 -3,867 -431 +13<br />
Tax rate in % 27.3 25.3<br />
Profit from continuing businesses 9,151 11,437 +2,286 +25<br />
as % of sales 21.8 24.8<br />
Profit from discontinued businesses 20 - -20 -100<br />
Net income 9,171 11,437 +2,266 +25<br />
as % of sales 21.8 24.8<br />
Attributable to <strong>Roche</strong> shareholders 7,880 9,761 +1,881 +24<br />
Minority interests 1,291 1,676 +385 +30<br />
119<br />
120<br />
60
1.31<br />
1.27<br />
1.23<br />
1.19<br />
1.15<br />
1.11<br />
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong> and 2006<br />
CHF / USD<br />
1.35<br />
1.31<br />
1.27<br />
1.23<br />
1.19<br />
1.15<br />
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
<strong>2007</strong><br />
<strong>2007</strong><br />
-5%<br />
2006<br />
Monthly averages<br />
Year-To-Date averages<br />
2006<br />
-3% -3% -4%<br />
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
<strong>2007</strong> and 2006<br />
Average monthly CHF / USD<br />
1.31<br />
1.29<br />
1.27<br />
1.25<br />
1.23<br />
1.21<br />
1.19<br />
1.17<br />
1.15<br />
1.13<br />
average 2006<br />
average <strong>2007</strong><br />
monthly avg 2006<br />
monthly avg <strong>2007</strong><br />
1.11<br />
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
122<br />
-4%<br />
121<br />
61
1.68<br />
1.66<br />
1.64<br />
1.62<br />
1.60<br />
1.58<br />
1.56<br />
1.54<br />
1.68<br />
1.66<br />
1.64<br />
1.62<br />
1.60<br />
1.58<br />
1.56<br />
1.54<br />
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong> and 2006<br />
CHF / EUR<br />
<strong>2007</strong><br />
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
<strong>2007</strong><br />
+4%<br />
2006<br />
2006<br />
Monthly averages<br />
Year-To-Date averages<br />
+5% +5%<br />
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
<strong>2007</strong> and 2006<br />
Average monthly CHF / EUR<br />
1.68<br />
1.67<br />
1.66<br />
1.65<br />
1.64<br />
average <strong>2007</strong><br />
1.63 monthly avg <strong>2007</strong><br />
1.62<br />
1.61<br />
1.60<br />
1.59<br />
+4%<br />
1.58<br />
1.57<br />
1.56<br />
average 2006<br />
1.55<br />
1.54<br />
monthly avg 2006<br />
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
124<br />
+4%<br />
123<br />
62
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong> and 2006<br />
Average exchange rates<br />
YTD YTD YTD 12 07 vs. YTD 12 06<br />
12 07 12 06<br />
EUR 1.64 1.57<br />
USD 1.20 1.25<br />
JPY 1.02 1.08<br />
17.4 %<br />
15.6 % 15.4 % 15.0 %<br />
-6% -4% -2% 0% 2% 4% 6%<br />
125<br />
Exchange rate impact on sales<br />
Stronger EUR almost compensates weaker USD and JPY<br />
Development of<br />
average exchange rates versus prior year period<br />
CHF / EUR +3.7 % +4.5 % +4.5 % +4.4 %<br />
CHF / USD -4.8 % -3.4 % -3.2 % -4.2 %<br />
CHF / JPY -6.8 % -6.9 % -6.1 % -5.4 %<br />
Difference<br />
in CHF / local -1.8 %pt -0.4 %pt -0.1 %pt -0.5 %pt<br />
growth<br />
Sales<br />
growth<br />
<strong>2007</strong><br />
vs. 2006<br />
local<br />
growth<br />
CHF<br />
growth<br />
12.0 % 11.9 %<br />
10.2 %<br />
Q1 H1 YTD 9 FY<br />
9.7 %<br />
126<br />
63
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Exchange rate impact on sales<br />
Stronger EUR compensates weaker USD & JPY in Q2 & Q3<br />
Development of<br />
average exchange rates versus prior year period<br />
CHF / EUR +3.7 % +5.4 % +4.5 % +4.2 %<br />
CHF / USD -4.8 % -1.8 % -3.0 % -7.2 %<br />
CHF / JPY -6.8 % -6.9 % -4.4 % -3.4 %<br />
Difference<br />
in CHF / local -1.8 %pt +1.1 %pt +0.5 %pt -1.7 %pt<br />
growth<br />
Sales<br />
growth<br />
<strong>2007</strong><br />
vs. 2006<br />
17.4 %<br />
15.6 %<br />
local<br />
growth<br />
CHF<br />
growth<br />
14.5 %<br />
13.4 %<br />
5.6 % 6.1 % 5.7 %<br />
Q1 Q2 Q3 Q4<br />
Exchange rate impact on sales growth<br />
Stronger EUR compensates for weaker USD and JPY<br />
Local<br />
sales<br />
growth<br />
<strong>2007</strong><br />
vs.<br />
2006<br />
10.2%<br />
1.3 %<br />
0.4 %<br />
0.1 %<br />
0.0 %<br />
-1.8 %<br />
-0.5 %<br />
0.0 %<br />
EUR Other AS-PAC LAT-AM USD JPY CAD<br />
9.7%<br />
4.0 %<br />
127<br />
CHF<br />
sales<br />
growth<br />
<strong>2007</strong><br />
vs.<br />
2006<br />
128<br />
64
15.4 %<br />
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Currency impact<br />
Difference in CHF / local growth<br />
-0.4 %pt -0.5 %pt<br />
local<br />
growth<br />
15.0 %<br />
CHF<br />
growth<br />
10.2 %<br />
9.7 %<br />
H1 FY<br />
Sales growth <strong>2007</strong> vs. 2006<br />
CHF 0.01 change against USD / EURO<br />
/ JPY effect on<br />
Sales<br />
CHF 144 m<br />
CHF 77 m<br />
CHF 37 m<br />
Currency<br />
USD<br />
EUR<br />
JPY<br />
• USD 1 = CHF 1.20 ± CHF 0.01<br />
• EUR 1 = CHF 1.64 ± CHF 0.01<br />
• JPY 100 = CHF 1.02 ± CHF 0.01<br />
Currency sensitivities (order of magnitude) are based on business / product mix composition of <strong>2007</strong><br />
Group royalties and other operating income <strong>2007</strong><br />
<strong>2007</strong><br />
CHF million vs. 06<br />
Royalties & other op income 2,243 +852<br />
• Royalty income 1,202 +218<br />
• Income from<br />
out-licensing arrangements 777 +402<br />
• Income from disposal of<br />
products and other 264 +232<br />
26%<br />
<strong>2007</strong> vs. 2006<br />
local growth<br />
66%<br />
115%<br />
Operating<br />
profit<br />
CHF 29 m<br />
CHF 37 m<br />
CHF 15 m<br />
727%<br />
129<br />
130<br />
65
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Group cost of sales <strong>2007</strong><br />
Increase in collaboration expenses almost compensated<br />
by absence of impairments<br />
Sales 46,133 +4,092<br />
Cost of sales -13,743 -458<br />
• Manufacturing COGS1 /period costs -8,737 -420<br />
• Royalty expenses -2,304 -12<br />
• Collaboration and profit sharing agreements -1,755 -209<br />
• Amortisation of product intangibles -942 -1<br />
• Impairment of property, plant & equipment -5 +66<br />
• Impairment of product intangibles 0 +118<br />
Gross profit margin 81.1 % +0.9 %p<br />
1 Cost of goods sold<br />
Net cash 31 December <strong>2007</strong><br />
Increase by CHF 1.2 bn<br />
<strong>2007</strong><br />
CHF million vs. 06<br />
-93%<br />
-100%<br />
<strong>2007</strong> vs. 2006<br />
local growth<br />
CHF million 31 December 2006 31 December <strong>2007</strong><br />
<strong>Roche</strong> GNE Chu Total <strong>Roche</strong> GNE Chu Total<br />
Cash 1,003 1,527 680 3,210 1,869 1,157 729 3,755<br />
Marketable securities 16,891 3,312 918 21,121 14,496 5,209 742 20,447<br />
Liquid funds 17,894 4,839 1,598 24,331 16,365 6,366 1,471 24,202<br />
Long-term debt -3,549 -2,648 -2 -6,199 -1,270 -2,564 - -3,834<br />
Short-term debt -2,044 - - -2,044 -2,357 -675 - -3,032<br />
Interest-bearing liabilities -5,593 -2,648 -2 -8,243 -3,627 -3,239 - -6,866<br />
Net cash 12,301 2,191 1,596 16,088 12,738 3,127 1,471 17,336<br />
Net cash increase <strong>Roche</strong> CHF +437 m<br />
Genentech CHF +936 m Group CHF +1,248 m<br />
Chugai CHF -125 m<br />
5%<br />
10%<br />
6%<br />
3%<br />
2%<br />
18%<br />
131<br />
132<br />
66
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
Net financial income <strong>2007</strong><br />
Higher interest income almost compensates net<br />
exchange losses and lower equity security income<br />
CHF m<br />
+<br />
2,000<br />
1,600<br />
1,200<br />
800<br />
400<br />
0<br />
-400<br />
-800<br />
Expected Return on<br />
Pension Plan Assets<br />
Interest Income &<br />
Debt Securities Income<br />
Equity Income<br />
Interest Expense<br />
Amortisation of Debt Discounts<br />
Time Cost of Provisions<br />
Interest Cost of<br />
Pension Plans<br />
Expected Return on<br />
Pension Plan Assets<br />
Interest Income &<br />
Debt Securities Income<br />
Equity Income<br />
Interest Expense<br />
Time Cost of Provisions<br />
Fx loss<br />
Interest Cost of<br />
Pension Plans<br />
-1,200<br />
-<br />
Net financial income<br />
2006<br />
855<br />
<strong>2007</strong><br />
834<br />
Net treasury management 790 776<br />
Net pension management 65 58<br />
Net financial income <strong>2007</strong><br />
Higher interest income almost compensates net<br />
exchange losses and lower equity security income<br />
Change<br />
CHF million 2006 <strong>2007</strong> CHF million %<br />
Net financial income 855 834 -21 -2<br />
Financial income 1,829 1,805 -24 -1<br />
Equity security income 390 313 -77 -20<br />
Interest & debt security income 780 1,001 +221 +28<br />
Expected return on pension plan assets 636 670 +34 +5<br />
Net foreign exchange gains (losses) -24 -153 -129 +538<br />
Net other 47 -26 -73 -<br />
Financing costs -974 -971 +3 0<br />
Interest expense -315 -281 +34 -11<br />
Amortisation of discount debt instruments -40 -8 +32 -80<br />
Net gains (losses) interest rate derivatives -25 -2 +23 -92<br />
Net gains (losses) fin liabs at fair value P&L 51 1 -50 -98<br />
Time cost of provisions -74 -69 +5 -7<br />
Interest cost of pension plans -571 -612 -41 +7<br />
133<br />
134<br />
67
<strong>Roche</strong> Full Year <strong>Results</strong> <strong>2007</strong><br />
January 30, 2008<br />
<strong>2007</strong>: Profit expansion driven by operating and tax lines<br />
CHF growth in %<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
9.7<br />
13.6<br />
23.3<br />
1.7<br />
25.0<br />
-3.1<br />
-1.2<br />
20.7<br />
-0.5<br />
20.2<br />
Sales Operating Operating Net Profit Amorti- Minorities Core net Dilution/ Core<br />
cost profit financial continuing sation/ income number of EPS<br />
before income businesses Impair- shares<br />
exceptional and before ment<br />
items taxes exceptional<br />
135<br />
items<br />
<strong>2007</strong>: Disclosure further improved<br />
New presentation of operating results (alliances and collaborations etc.)<br />
- More accurate assessment of sustainable earnings capacity<br />
- Improved comparability with other healthcare companies<br />
Expanded disclosures<br />
- Breakdown of Cost of Sales, R&D and G&A for Pharma and Diagnostics (proactive)<br />
- Impairments, commitments (proactive)<br />
- Financial risk management (IFRS 7)<br />
- Executive remuneration and shareholdings (new Swiss legal requirement)<br />
Internal Control over Financial Reporting<br />
- Risk-focused internal control approach (similar to new US regulations, AS5)<br />
- Management report and external audit opinion on effectiveness<br />
136<br />
68