Innovation and value creation Alan Hippe, CFO Roche Group J.P. - - PowerPoint PPT Presentation
Innovation and value creation Alan Hippe, CFO Roche Group J.P. - - PowerPoint PPT Presentation
Innovation and value creation Alan Hippe, CFO Roche Group J.P. Morgan Healthcare Conference San Francisco, January 12th, 2016 This presentation contains certain forward-looking statements. These forward-looking statements may be identified by
This presentation contains certain forward-looking statements. These forward-looking statements may be identified by words such as ‘believes’, ‘expects’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’, ‘seeks’, ‘estimates’, ‘future’ or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Various factors may cause actual results to differ materially in the future from those reflected in forward-looking statements contained in this presentation, among others:
1 pricing and product initiatives of competitors; 2 legislative and regulatory developments and economic conditions; 3 delay or inability in obtaining regulatory approvals or bringing products to market; 4 fluctuations in currency exchange rates and general financial market conditions; 5 uncertainties in the discovery, development or marketing of new products or new uses of existing products, including without limitation negative results of clinical trials or research projects, unexpected side-effects of pipeline or marketed products; 6 increased government pricing pressures; 7 interruptions in production; 8 loss of or inability to obtain adequate protection for intellectual property rights; 9 litigation; 10 loss of key executives or other employees; and 11 adverse publicity and news coverage. Any statements regarding earnings per share growth is not a profit forecast and should not be interpreted to mean that Roche’s earnings or earnings per share for this year or any subsequent period will necessarily match or exceed the historical published earnings or earnings per share of Roche. For marketed products discussed in this presentation, please see full prescribing information on our website – www.roche.com All mentioned trademarks are legally protected
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Performance update Innovation and efficiency Improving the standard of care Outlook
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Q3 2015: Sales growth for fifth consecutive year
4
All growth rates at constant exchange rates (CER)
0% 0% 1% 4% 2% 6% 4% 6% 6% 4% 8% 7% 5% 4% 5% 6% 5% 7% 6%
0% 2% 4% 6% 8% 10% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15
HY 2015: Strong underlying Group core operating profit & margin
5 % of sales
CHFbn
CER=Constant Exchange Rates * Excluding sale of filgrastim rights in 2014 at CER
8'3 8'6 9'5 9'4 9'2 38'1% 38'5% 40'7% 41'0% 39'2%
HY 2011 HY 2012 HY 2013 HY 2014 HY 2015 +2% at CER (+7%*)
(+0.4%p
- excl. filgrastim*)
2014: Dividend and payout ratio further increased
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1 compound annual growth rate
8.00 31'9 34'5 38'8 44'8 48'6 51'6 55'3 54'5 54'7 56.0 0'00 1'00 2'00 3'00 4'00 5'00 6'00 7'00 8'00 9'00 10'00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Dividend payout ratio (%) CHF
2014 payout ratio: 56.0%
Payout ratio calculated as dividend per share divided by core earnings per share (diluted); Note: For 1995, a special dividend was paid
- ut to mark F. Hoffmann-La Roche’s 100th anniversary in 1996
Performance update Innovation and efficiency Improving the standard of care Outlook
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Roche strategy: Focused on medically differentiated therapies
8
Generics
Differentiation
MedTech OTC
Premium for innovation
Dia Pharma
Focus
Regulators:
Optimised benefit / risk ratio
Payors:
Optimised benefit / cost ratio
Roche’s strategy remains unchanged
Success hinges on excellence in innovation & execution
- Focus investment on differentiated molecules
- Continuously improve processes
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Roche/Genentech: Sustained record of cutting edge scientific discoveries
(* through Oct. 2015)
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5 10 15 20 25 4 3 4 9 4 9 4 8 10 16 12 14 9 20
Research publications in Cell, Science, or Nature
10*
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Approach towards innovation
Exploring broad …
We invest more early stage …to increase options to choose from
46% 40% 54% 60% R & Early D Roche Late D Industry avg 18 11 19 2014 2012 2013 # of NME’s entering Pre-clinical Industry avg. % of budget
External sources: Investment split based on the CMR Pharmaceutical R&D Factbook (data from 10 companies, 2014); Number of entries into Pre-clinical for Industry based on data from KMR, data for 2011-2013.
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Approach towards innovation …but prioritizing rigorously
We select at late stage entry
Clinical differentiation
Threshold
high low low high
Greater differentiation Sales Time Medical need
Continued Disqualified
Illustrative
…to increase sales potential
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2 4 6 8 10 12
2010-14 2009-13 2008-12 2007-11 2006-10
Roche Industry
Likelihood of launch from phase 0
Achievements: Innovation
Above-average R&D success rate
Note: Success rates calculated at the project/indication level for overlapping 5-year periods based on KMR data (13 peers and Roche)
13 5% 8%
Data management
Collaborations are key
Real outcome data on actual benefit and side effects
Clinical Trials Clinical Practice
Controlled, clinical trial data
- n expected benefit and
side effects
Analysis Decisions on treatment Insight for R&D 14
Roche’s strategy remains unchanged
Success hinges on excellence in innovation & execution
- Focus investment on differentiated molecules
- Continuously improve processes
15
Driving operational efficiencies
Select examples R&D
Lean Protocol Design Sourcing Strategy Partnerships
Rethinking protocol design to reduce complexity Outsourcing transactional clinical operations roles Industry consortium (20 companies) to drive trial efficiency
Savings of ~100m CHF per year
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Driving operational efficiencies
Optimization production capacities
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2014 2015 2016 2017 2018 2019 2020 2021
Capacity Units
2013 2014 2015 2016 2017 2018 2019 2020
Large molecules Small molecules
highly potent small molecules with lower capacity requirements pipeline of large molecules and entry into new high volume segments
Savings of ~100m CHF per year
Performance update Innovation and efficiency Improving the standard of care Outlook
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taselisib
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NMEs line extensions 2015 2016 2017
venetoclax alectinib Cotellic lebrikizumab atezolizumab
- crelizumab
lampalizumab ACE910
Post 2017
etrolizumab crenezumab gantenerumab
- lesoxime
Herceptin + Perjeta Gazyva
atezolizumab + chemo
Gazyva
New growth opportunities outside oncology
Oncology/hematology Neuroscience Ophthalmology Immunology
The 7 steps of the Cancer-Immunity Cycle guide
- ur prioritization framework for Atezolizumab
Step 1: Release of Cancer Cell antigens:
- ex: Atezo + chemo, Gazyva, aCD40
Step 2 & 3: Cancer antigen presentation & priming and activation
- ex: Atezo + interferon, OX40
Steps 4 & 5: Trafficking & inflitration of T cells to tumours
- ex: Atezo + Avastin, aCSF1R,
Steps 6 & 7: Recognition of cancer cells by T cells & killing of cancer cells
- ex: Atezo + Meki, IDOi, aOX40
Chen and Mellman. Immunity 2013
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Atezolizumab: Pivotal programs by disease
21 KIDNEY
Going deep in diseases where we have strong scientific rationale
cis-inel.=cisplatin ineligible patients
Lung
FIR and BIRCH
Dx+ mono
Bladder
IMvigor 210
1L cis-inel. & 2L
Breast Kidney
POPLAR
2L+ mono
IMpower 110
1L non-sq. Dx+ mono
IMpower 130&150
1L non-sq. combo
IMpower 111
1L sq. Dx+ mono
IMpower 131
1L sq. combo
OAK
2L mono
IMpower 010
- Adj. Dx+ mono
IMvigor 211
2L mono
IMvigor 010
Adj.
IMmotion 150
1L combo
IMmotion 151
1L combo
IMpassion 131
1L combo
Rolling filing initiated Data in 2016 Data in 2017
taselisib
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NMEs line extensions 2015 2016 2017
venetoclax alectinib Cotellic lebrikizumab atezolizumab
- crelizumab
lampalizumab ACE910
Post 2017
etrolizumab crenezumab gantenerumab
- lesoxime
Herceptin + Perjeta Gazyva
atezolizumab + chemo
Gazyva
New growth opportunities outside oncology
Oncology/hematology Neuroscience Ophthalmology Immunology
Ocrelizumab: Active in both RMS & PPMS
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- Selective depletion of a B cell subset leaving
the ability to generate new B cells intact
- Administered IV twice yearly
RMS=relapsing forms of multiple sclerosis (MS) which includes patients with RRMS and SPMS with superimposed relapses; RRMS=relapsing-remitting MS; SPMS=secondary progressive MS; PPMS=primary progressive MS;
:
RMS PPMS
Multiple Sclerosis: Improvements over SoC driving market growth
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,0 5,000 10,000 15,000 20,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q2 2015
19,420 18,999 15,855 13,955 12,323 11,053 10,084 8,930 6,932 5,803 5,036 4,406
Global sales (lc) USDm
Source: Evaluate Pharma Multiple Sclerosis report, October 2015; * Includes Imusera sales; SoC=standard of care Betaseron Rebif Avonex Copaxone Lemtrada Tysabri Tecfidera Aubagio Gilenya*
ABCRs Orals New biologics
taselisib
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NMEs line extensions 2015 2016 2017
venetoclax alectinib Cotellic lebrikizumab atezolizumab
- crelizumab
lampalizumab ACE910
Post 2017
etrolizumab crenezumab gantenerumab
- lesoxime
Herceptin + Perjeta Gazyva
atezolizumab + chemo
Gazyva
New growth opportunities outside oncology
Oncology/hematology Neuroscience Ophthalmology Immunology
Severe asthma: High unmet need in growing market
26 Global asthma market 2014 vs 2020
11% 29% Small Molecules Biologics
2014
1 biologic
Shifting clinical practice
2020
6 biologics
Note: Market shares based on value (sales); Source: Evaluate; defined by daily use of ≥500ug ICS + LABA
- Approx. 300m patients worldwide and
growing strongly
- 5-10% asthma patients have severe
disease, and ~30% of severe disease is uncontrolled despite maximal therapy
- Over 4.5m severe asthmatics with
uncontrolled disease
Lebrikizumab in severe uncontrolled asthma
High efficacy and improved convenience
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Summary phase II results:
- Exacerbation reduction of 60%
- Early onset of lung function improvement (FEV1)
- Prefiled syringe and Q4W subcutaneous delivery
for improved convenience LUTE/VERSE MILLY
Q4W=monthly dosing; FEV=forced expiratory volume; LUTE/VERSE results presented at AAAAI 2014; Thomas NC. et al., Biologics 2012; Hanania NA. et al., Thorax 2015
Performance update Innovation and efficiency Improving the standard of care Outlook
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Multiple major pivotal trials reading out near term
Significant filing and launch activities ahead
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Year Molecule Indication Market
- pportunity
Incremental infrastructure
2015
Alectinib ALK+ NSCLC Low to medium Cotellic/Zelboraf Melanoma Low Venetoclax Hematology (CLL 17p del)* Low
2016
Ocrelizumab Multiple Scelerosis Medium Atezolizumab NSCLC, bladder (2/3L) Medium Lebrikizumab Asthma, AD, IPF, COPD Large APHINITY Adj HER2+ breast cancer Low GOYA NHL (aggressive) Low
2017
ACE 910 Hemophilia A Low to medium Lampalizumab Geographic atrophy Low to medium GALLIUM NHL (indolent) Low Atezolizumab+chemo NSCLC (1L) Low
2018
Taselisib (PI3Ki) HER2-/HR+ breast cancer Low to medium Idasanutlin (MDM2) Acute myeloid leukemia Low to medium Oncology Neuroscience Ophthalmology Immunology
Small: up to CHF 0.5 bn medium= CHF 0.5 to CHF 1bn large > CHF1bn
NSCLC=non-small cell lung cancer; CLL=chronic lymphocytic leukemia; AD=atopic dermatitis; IPF=idiopathic pulmonary fibrosis; COPD=chronic obstructive pulmonary disease; NHL=non-hodgkin’s lymphoma; * first indication
Positive outlook
Strong pipeline mitigates biosimilar impact
2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E Marketed products Sales Pipeline Biosimilars MabThera, Herceptin, Avastin NME launches Venetoclax, Alectinib, Cotellic, Ocrelizumab, Atezolizumab, Lebrikizumab, ACE910, Lampalizumab
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2015 outlook: Guidance upgraded
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Group sales growth1 Mid-single digit Core EPS growth1 Ahead of sales growth2 Dividend outlook Further increase dividend in Swiss francs
1 At constant exchange rates (CER) 2 Excluding sale of filgrastim rights in 2014
Appendix
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taselisib
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NMEs line extensions 2015 2016 2017
venetoclax alectinib Cotellic lebrikizumab atezolizumab
- crelizumab
lampalizumab ACE910
Post 2017
etrolizumab crenezumab gantenerumab
- lesoxime
Herceptin + Perjeta Gazyva
atezolizumab + chemo
Gazyva
New growth opportunities outside oncology
Oncology/hematology Neuroscience Ophthalmology Immunology
Hemophilia A: Current treatment strategies
34 Episodic (on demand) treatment
- Patients treated only when they bleed
- Can be up to 30-60 times per year
Prophylaxis
- Goal is to prevent bleeds
- IV infusion 2-3 times per week
- Can reduce bleed rate to 0-2 per year
for non-inhibitor patients
- Should be the standard, but is still not
used in ~35% of patients (treatment burden, adherence, IV access issues)
Hemophilia A: There are significant limitations of current treatment options
1.7 1.9 2.1 2.1 2.6 2009 2010 2011 2012 2018 FEIBA VH NovoSeven
3%
5.3 5.5 6.0 6.1 8.4 2009 2010 2011 2012 2018
Others Recombinate Hemofil M Helixate ReFacto AF/Xyntha Humate P 6%
*Company reported sales; 1EvaluatePharma consensus analyst estimates
1
FVIII market (USD 6.1bn in 2012)* By-passing agent market (USD 2.1bn)*
- Current FVIII treatments
− Limited half-life of only 8-12 hrs − Frequent IV injections − Induce neutralizing antibodies, which inhibit their function
- Current bypassing treatments
− Much shorter half-life of ~4-6 hrs − Multiple frequent IV infusions − Long infusion times (30+mins) for FEIBA − Unstable efficacy compared to FVIII
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1
USSbn USSbn
ACE910 can address the major medical needs for both inhibitor and non-inhibitor patients
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Potentially more effective prophylaxis No potential to induce FVIII inhibitor
ACE 910 Prophylaxis treatment 3 times/week, IV On-demand treatment 1-3 times/bleeding event, IV
Inhibiting Factor VIII antibodies in 20-30% of the patients
NON-INHIBITOR
Prophylaxis with by-passing agents Every other day, IV On-demand treatment with by-passing agents 2-3h intervals, IV
INHIBITOR
Immune Tolerance Induction
70-80 % success rate limitation due to very high cost and heavy burden for patients
Less frequent & SC injection
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Secondary Progressive (SPMS) (20-25%)
Initial RRMS followed by disability
- accumulation. Still experience
relapses which eventually stop
Primary Progressive (PPMS) (10-15%)
Slow but nearly continuous worsening of disease from outset (no relapses)
Relapse-Remitting (RRMS) (60-65%)
Clearly defined relapses (attacks) with remissions initially returning to baseline but gradually result in sustained disability
Three major types of Multiple Sclerosis
Disability Time
Relapse No Relapse
Mainly degenerative Mainly inflammatory
Adapted from Lublin 1996, Arnold 2004
Inflammatory / Degenerative
- High unmet need:
- high efficacy therapies have major
safety issues
- diagnosis and classification is
difficult, often retrospective and can take 2-5 years
- Treatment decisions concentrated
mainly in MS centers/hospitals
- Advocacy groups powerful in access
Achievements: Productivity
Doubled number of projects at same costs
2012 2013 2014 2010 2011 +90% Filing Ph0-2 Ph3 Pharma Development Spend
Late stage development costs & number of projects
Excludes Chugai, pRED and gRED, Medical Affairs and PTD Source: Roche internal development data
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