Innovation and value creation - Roche11426708-4542-4374-95d4-2fd547106… · Research publications...
Transcript of Innovation and value creation - Roche11426708-4542-4374-95d4-2fd547106… · Research publications...
Innovation and value creation
Karl Mahler, Head of Investor Relations UBS Global Healthcare Conference
New York, May 2016
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 2
Q1 2016: Sales growth for fifth consecutive year
4
2%
6%
4%
6% 6%
4%
8%
7%
5%
4%
5%
6%
5%
7%
6%
4%
4%
0%
2%
4%
6%
8%
10%
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
Q4
15
Q1
16
All growth rates at Constant Exchange Rates (CER)
Q1 2016: Solid sales growth in all regions
5
0
1
2
3
4
5
6
Japan International Europe US
Diagnostics
Pharma
CHFbn
+3%
+5% +4%
+4%
-1%
+16%
-3%
0%
+3%
+3%
+3%
+7%
All growth rates at Constant Exchange Rates (CER)
Roche significantly advancing patient care
Recognition for innovation 2013-present
6
Rank Company #
1 Roche 12
2 BMS 8
3 Novartis 7
3 Merck 6
3 Pfizer 6
4 GSK 5
12 Breakthrough Therapy Designations
Year Molecule
2016
Ocrelizumab (PPMS)
Venclexta (AML)
Venclexta + Rituxan (R/R CLL)
2015
Actemra (Systemic sclerosis)
Atezolizumab (NSCLC)
Venclexta (R/R CLL 17p del)
Emicizumab/ACE 910 (Hemophilia A)
2014
Esbriet (IPF)
Lucentis (DR)
Atezolizumab (Bladder)
2013 Alectinib (2L ALK+ NSCLC)
Gazyva (1L CLL)
Source: http://www.focr.org/breakthrough-therapies as at 22 March 2016; PPMS=Primary Progressive Multiple Sclerosis; CLL=Chronic
Lymphocytic Leukemia; NSCLC=Non-Small Cell Lung Cancer; IPF=Idiopathic Pulmonary Hypertension; DR=Diabetic Retinopathy
2015: Strong underlying Group Core operating
profit & margin
7 CER=Constant Exchange Rates; * Excluding sale of filgrastim rights in 2014
35.6%
37.7% 38.3%37.2%
36.4%
15.1
17.217.9 17.6
17.5
2011 2012 2013 2014 2015
+5% at CER (+7%*)
% of sales
CHFbn
(+0.7%*)
2015: Dividend and payout ratio further
increased
8 1 compound annual growth rate
8.10
31.9 34.5
38.8
44.8
48.6
51.6
55.3
54.5 54.7
56.0
60.0
0
1
2
3
4
5
6
7
8
9
10
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Dividend payout ratio (%) CHF
2015 payout ratio: 60.0%
Payout ratio calculated as dividend per share divided by Core earnings per share (diluted); 2015 dividend as proposed by the Board of Directors;
Note: For 1995, a special dividend was paid out to mark F. Hoffmann-La Roche’s 100th anniversary in 1996
Roche strategy: Focused on medically
differentiated therapies
10
Generics
Differentiation
MedTech
OTC
Pre
miu
m f
or
inn
ova
tio
n
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
11
Roche/Genentech: Sustained record of cutting
edge scientific discoveries
12 (* through Oct. 2015)
0
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 …
13
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.
Approach towards innovation
…but prioritizing rigorously
14
We select at late stage entry
Clinical differentiation
Threshold
high low
low
high
Greater
differentiation
Sa
les
Time
Me
dic
al
ne
ed
Continued
Disqualified
Illustrative
…to increase sales potential
0
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) 15
5%
8%
Real World Data
Strengthening Pharma through collaborations
Data analysis driving innovation and efficiencies
16
Access meaningful data Create insights Create insights Realise value
Advanced analytics
of integrated data
Diagnostic Data
Clinical Trial Data
Smarter, more efficient
R&D
Improved access &
personalised patient care
Roche’s strategy remains unchanged
Success hinges on excellence in innovation & execution
• Focus investment on differentiated molecules
• Continuously improve processes
17
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
18
Driving operational efficiencies
Optimization production capacities
19
2014 2015 2016 2017 2018 2019 2020 2021
Ca
pa
cit
y U
nit
s
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
taselisib
21
NM
Es
line
ext
ensi
ons
2015 2016 2017
venetoclax
alectinib
Cotellic
lebrikizumab
atezolizumab
ocrelizumab
lampalizumab
ACE910
Post 2017
etrolizumab
crenezumab
gantenerumab
olesoxime
Herceptin + Perjeta
Gazyva
atezolizumab + chemo
Gazyva
New growth opportunities
Oncology/hematology
Neuroscience
Ophthalmology
Immunology
taselisib
22
NM
Es
line
ext
ensi
ons
2015 2016 2017
venetoclax
alectinib
Cotellic
lebrikizumab
atezolizumab
ocrelizumab
lampalizumab
ACE910
Post 2017
etrolizumab
crenezumab
gantenerumab
olesoxime
Herceptin + Perjeta
Gazyva
atezolizumab + chemo
Gazyva
New growth opportunities
Oncology/hematology
Neuroscience
Ophthalmology
Immunology
10 novel own CIT assets in clinical development
Targeting cancer through different mechanisms
T cell trafficking
Cancer T cell recognition
• anti-CEA/CD3 TCB
• anti-CD20/CD3 TCB
T cell infiltration
• anti-Ang2/VEGF
(vanucizumab)
T cell killing
• anti-PDL1 (atezolizumab)
• anti-CSF-1R (emactuzumab)
• IDOi (NewLink)
Antigen presentation
• anti-CD40
Antigen release
Priming & activation
• anti-CEA-IL2v FP (cergutuzumab)
• anti-FAP-IL2v FP
• anti-OX40
Chen and Mellman. Immunity 2013 NME=new molecular entity; CIT=cancer immunotherapy; FP=fusion protein; TCB=T-cell bispecific
23
aCSF-1R
aCEA-IL2v FP
aOX40
aCD40
IDO
aCEA/CD3 TCB
24
Combination trials as of beginning 2015…
Launched/ late-stage portfolio
Immunotherapy portfolio
atezolizumab
polatuzumab
Targeted combinations approved Chemotherapy combinations approved
Roche combinations in trials
Chemotherapy combinations in trials
NMEs late stage
NMEs early stage
venetoclax
chemo
cobimetinib
alectinib
taselisib
26
NM
Es
line
ext
ensi
ons
2015 2016 2017
venetoclax
alectinib
Cotellic
lebrikizumab
atezolizumab
ocrelizumab
lampalizumab
ACE910
Post 2017
etrolizumab
crenezumab
gantenerumab
olesoxime
Herceptin + Perjeta
Gazyva
atezolizumab + chemo
Gazyva
New growth opportunities outside oncology
Oncology/hematology
Neuroscience
Ophthalmology
Immunology
Ocrelizumab: Active in both RRMS & PPMS
27
• 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;
: R
RM
S
Risk reduction: 40%
HR (95% CI): 0.60 (0.45, 0.81);
p=0.0006
Risk reduction: 40%
HR (95% CI): 0.60 (0.43, 0.84);
p=0.0025
Time to 12-week CDP Time to 24-week CDP
15.2
9.8
12.0
7.6
Secondary Endpoints: Significant reduction in
number of T1 Gd+ lesions compared with IFN β-1a
OPERA I
0.286
0.016
0.0
0.1
0.2
0.3
0.4
0.5
IFN β-1a 44 μg
(n=411)
Ocrelizumab 600 mg (n=410)
Me
an
Nu
mb
er
of T1
Gd
-
en
ha
nc
ing
Le
sio
ns
pe
r M
RI Sc
an
*
94% Reduction
vs IFN β-1a p<0.0001
ITT
*Adjusted by means calculated by negative binomial regression and adjusted for baseline T1 Gd lesion (present or not), baseline EDSS (<4.0 vs ≥4.0) and geographical region (US vs ROW).
EDSS, Expanded Disability Status Scale; Gd+, gadolinium enhancing; IFN, interferon; MRI, magnetic resonance imaging; ROW, rest of the world.
0.416
0.021
0.0
0.1
0.2
0.3
0.4
0.5
IFN β-1a 44 μg
(n=418)
Ocrelizumab 600 mg
(n=417)
Me
an
Nu
mb
er
of T1
Gd
-
en
ha
nc
ing
Le
sio
ns
pe
r M
RI Sc
an
*
95% Reduction
vs IFN β-1a p<0.0001
OPERA II
Safety summary Overall, in OPERA I and OPERA II, ocrelizumab had a similar safety profile compared with IFN β -1a over 96 weeks
28
Multiple Sclerosis: Improvements over SoC
driving market growth
29
,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
30
NM
Es
line
ext
ensi
ons
2015 2016 2017
venetoclax
alectinib
Cotellic
lebrikizumab
atezolizumab
ocrelizumab
lampalizumab
ACE910
Post 2017
etrolizumab
crenezumab
gantenerumab
olesoxime
Herceptin + Perjeta
Gazyva
atezolizumab + chemo
Gazyva
New growth opportunities outside oncology
Oncology/hematology
Neuroscience
Ophthalmology
Immunology
Hemophilia A: Current treatment strategies
31
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)
ACE910 can address the major medical needs for
both inhibitor and non-inhibitor patients
32
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
NO
N-I
NH
IBIT
OR
Prophylaxis with by-passing
agents
Every other day, IV
On-demand treatment with
by-passing agents
2-3h intervals, IV
INH
IBIT
OR
Immune Tolerance Induction 70-80 % success rate
limitation due to very high cost and heavy burden for patients
Less frequent & SC
injection
Significant launch activities ahead
34 Outcome studies are event-driven: timelines may change. Standard approval timelines of 1 year assumed.
Oncology/
hematology Neuroscience Ophthalmology Immunology
FDA Breakthrough
Therapy Designation
Cotellic + Zelboraf
BRAFmut melanoma
Venclexta
R/R CLL with 17p del
Ocrelizumab
RMS/ PPMS
Lebrikizumab
Severe Asthma
Emicizumab (ACE910)
Hemophilia A
Atezolizumab
2L+ lung and bladder cancer
Alecensa
2L ALK+ NSCLC
Perjeta + Herceptin
eBC HER2+ (APHINITY)
Atezolizumab+Avastin+chemo
1L NSCLC
Gazyva
1L aNHL (GOYA)
Gazyva
1L iNHL (GALLIUM)
Gazyva
Refractory iNHL (GADOLIN)
Lampalizumab
Geographic atrophy
Atezolizumab + Avastin
1L RCC
2016 2017 2018
Actemra
Giant cell arteritis
Alecensa
1L ALK+ NSCLC
Pharma
Diagnostics cobas e 801 launch in
immunodiagnostics
cobas t 511
cobas t 711 cobas 6000 (new)
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
35
2016 outlook
36
Group sales growth1 Low to mid-single digit
Core EPS growth1 Ahead of sales growth
Dividend outlook Further increase dividend in Swiss francs
1 At Constant Exchange Rates (CER)
Multiple major pivotal trials reading out near term
Significant filing and launch activities ahead
38
Year Molecule Indication Market
opportunity
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
39
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
Dis
ab
ilit
y
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
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 RecombinateHemofil M HelixateReFacto 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
41
1
US
Sb
n
US
Sb
n
Ocrelizumab: Active in both RRMS & PPMS
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;
:
Primary endpoint Key secondary
PP
MS
Analysis based on ITT population; p-value based on log-rank test stratified by geographic region and age.
Patients with initial disability progression who discontinued treatment early with no confirmatory EDSS assessment were
considered as having confirmed disability progression. CDP, confirmed disability progression; EDSS, Expanded Disability
Status Scale; HR, hazard ratio; ITT, intent to treat.
Safety summary Overall, in ORATORIO ocrelizumab had a favorable safety profile
42