Roche Holding AG

Ladies and gentlemen, welcome to Roche's third quarter sales webinar 2023. My name is Henrik and I'm the technical operator for today's call. Kindly note that the webinar is being recorded. I would like to inform you that all participants are in listen-only mode during the call. After the presentation, there will be a question and answer session. You're invited to send in questions for this throughout the entire session using the Q&A functionality of Zoom. In addition to that, you may also raise your virtual hand to address your questions verbally. For participants joining via phone, to raise your hand, use star nine on your phone's dial pad. When you then get selected to ask your questions, please follow the instructions from the phone and press star six to unmute yourself. One last remark, if you would like to follow the presented slides on your end as well, please feel free to go to roche.com slash investors to download the presentation. At this time, it's our pleasure to introduce you to Thomas Schieneker, CEO, Roche Group. Mr. Schieneker, the stage is yours.

Thank you very much. And hello, everyone. Good morning. Good afternoon. Good evening. I'm very much looking forward to sharing our Q3 2023 results with you today. Now, for the first nine months of 2023, we continue to see strong growth for both divisions, resulting in 1% at contract exchange rates for the group. If we exclude COVID, we're growing 9%. Combining COVID and the effects from AHNR, we are compensating 4 billion Swiss francs and we're growing, so you see this is a very strong performance by the organisation. Year-to-date, pharma grew 9% at constant exchange rates, with the newer medicines really as the key growth drivers, and Theresa will talk about that a bit more. And let me especially call out two medicines. One is Revizemore, where we now expect annual sales to be above 2 billion Swiss francs. Also, I would like to call out Polyvi in first-line diffused large B-cell lymphoma, where we see a rapid uptake in the US after the FDA pool, but not only there, but also in other countries. The diagnostics-based business is also doing extremely well, now growing at 7% year-to-date in constant exchange rate, much faster than the market. Again, you see the strong portfolio that we have in diagnostics. We expect COVID-19 sales now to decline with roughly 4.5 billion Swiss francs and the H&R by a similar erosion to be roughly 1.1 billion Swiss francs. Now, given our good base business growth and the headwinds of now about 5.6 billion Swiss francs, we'll end up at the upper end of our guidance. In Q3, we've also achieved a number of very important milestones. T-Centric for the subcutaneous formulation received its first approval in Great Britain. With that, we have the first PD-1 PD-L1 that is available in subcutaneous format. We received the EU approval for a RISD for babies under two months old, and this is now available for babies from birth onwards. For LVDs, for the first gene therapy in Duchenne muscular dystrophy, we received two approvals outside the US, and we expect the pivotal Phase III and BARC results for LVDs shortly. We also had a number of very important readouts. One is the pivotal phase three ALINA results for licenza in adjuvant out-positive non-small cell lung cancer. These results will be presented at the presidential session at ESMO on October the 21st. These are really unprecedented results if you look at the hazard ratio and in terms of improvement above the standard of care. Let me also highlight the positive phase two cardio one results for SILVASERAN in hypertension. Now, only two months after we signed the agreement with Alalim, we already had a positive phase two results. So very happy how this is progressing. We also had two important launches in the diagnostics division. the CCM Vertical, which is an automation that Matt will talk about that will enable more automation through different floors and in less space of laboratories. We are the first to market with an IL-6 immunoassay that detects early onset of sepsis in newborns, again filling our medical value pipeline on the diagnostic side. Finally, we have a number of important new flows coming up in Q4. Now let's take a closer look at the sales. So the year-to-date group sales are at 44.1 billion Swiss francs. You see we're growing at 1% in constant exchange rate, excluding COVID-19. That's very strong, 9%. And you see both pharma doing well with 9% and diagnostics doing well with 7%. You also see the currency headwinds that we had, especially also the headwinds got stronger in the third quarter. Now let's look at the quarterly results over the past quarters, and especially Q3 2023, where we're growing 7%, which again, very strong result. If you exclude COVID, we're growing 10%. Also, the H&R by similar erosion is slowing down. The negative impact of COVID-19 will now last only another two quarters. And I actually have one slide on that, so you exactly see how the COVID business will continue to develop. On this slide, it's easy to then also see the base business, the underlying business, and how this has been performing. And it's performing extremely well in both divisions. On the pharma side, you can see that the two lines are basically identical. So we had no COVID effects so far this year on the pharma side. On the diagnostic side, we had significant effects, but the base business is doing very well, as you can see on this slide. Now, going to the COVID effects. Let me highlight that Roche had played a very important role during the pandemic, and you can see that with 3 million patients treated, more than 2 billion COVID-19 tests sold, and more than 18 billion Swiss francs in sales generated, and that at a very ethical pricing. If you look at the development of the sales over the last quarters, You can see that we're now at a very low level of COVID-19 sales. And we believe this is the level that approximately we will continue over the next quarters. And you can see that in Q4 2022, we still had 1.7 billion Swiss francs of COVID sales. A large part of that, in fact, about 1.1 billion Swiss francs, was one Rona-proof order in Japan, so on the pharma side. And then you see another effect of about 0.9 billion that we have in Q1 2023. Again, we had a Rona-proof order in Japan of approximately 600 million. But this will wash out completely. And the underlying very strong performance of the organization will shine through as soon as we have those supporters behind us. Now, let me highlight the performance across the different parts of the group. Here, you can see a strong base business growth of diagnostics, the 7%, contributing almost 700 million Swiss francs. I mean, not many companies in diagnostics actually have that size, so you can see we're adding a company almost every year in our diagnostics business. On the pharma side, You know, the newer products are performing fantastically well. We're almost adding 4 billion. Here, you see the reduction in COVID sales. Corona-free, almost no effect so far. But what becomes very apparent is the foreign exchange effects of about 3.4 billion. On the right-hand side, you can see the portfolio diversification. H&R is now a much smaller slice of our sales. So we've really been growing through the erosion of biosimilars and actually also through the situation that we've had with COVID-19, really being able to replace those sales, as you can see in the first quarters. We've launched 20 new medicines since end of 2015. And with that, those medicines are really driving the growth. And on the right-hand side, you see that we now have about 50% of our sales that are coming from these medicines. And this share will go up also in the coming months. Now let's move to the news flow. As mentioned before, in Q3, we had positive readouts for Alicenza in adjuvant ALK-positive non-small cell lung cancer. We had a positive readout for Fesco, the on-body injector in HER2-positive breast cancer. We unfortunately had one negative readout for Van Clexta. And we expect additional readouts towards the end of the year for Dyscentric in adjuvant head and neck cancer, for Van Clexta in MDS, and very importantly, Elevitis in Duchenne muscular dystrophy. In diagnostics, we had two launches that are on this list, but Matt will talk about a number of additional launches and the other three will come before year end. So overall, we've updated our guidance on the diagnostic side in terms of good base business growth. We've updated our guidance in terms of COVID-19 sales with roughly now minus 4.5 billion Swiss francs. The H&R sales of roughly minus 1.1 billion Swiss francs. Now, given our goods-based business growth and the headwinds of now, in total for the year, 5.6 billion Swiss francs, we will end up at the upper end of the guidance. So overall, the sales guidance remains unchanged. And the same goes for our core EPS guidance, broadly in line with sales decline. And also, we will further increase dividends in Swiss francs. With that, I hand over to Theresa.

Thank you, Thomas. So, as Thomas mentioned, it was another strong quarter for pharma. Year-to-date, we had sales of 33.6 billion Swiss francs at a constant exchange rate growth of 9%. That was 11% alone just in Q3. All regions have delivered strong growth and new products more than offset biosimilar and generic erosion. As you heard from Thomas, accelerating currency changes in Q3 are likely the cause of some of the smaller sort of misses that we saw in consensus as the fundamentals of our core products remain strong. And let's talk a little bit about that in more detail. so as you know we have one of the youngest portfolios in the industry comprised of best in disease products the bismo okravis hemlibra polyvi evrizdi fezgo to centric these continue to drive significant growth and combined these added 3.9 billion swiss francs of new sales at constant exchange rates the bismo continues to be our number one growth driver and is well on track to achieve 2 billion in sales in swiss francs for the fiscal year okravis continues to deliver double-digit growth and we are excited by the recent sub-q positive data that was released and the opportunity that that twice a year subcut will provide to us in opening up new markets for okravis Polivi is the next drug that I'd like to highlight as it consistently beats consensus expectations. This strong growth performance of 126% at constant exchange rates really underscores the strength of the first line DLBCL launches that are happening around the world. And we'll talk about that in more detail in the coming slides. On the negative side, I'd also like to mention the total A, H and R erosion. Thomas highlighted this as well. We're at about 850 million Swiss francs, which is less than we had anticipated at the beginning of the year. We suspect we'll end at about 1.1 billion in erosion, which is a little better than we had anticipated as we begin to see a leveling off in some regions. So now let's start to take a closer look at our overall performance. And as always, we'll start with oncology. Oncology sales are up by 5% at constant exchange rates to 14.5 billion Swiss francs. That's up one percentage from half year. In honor in Breast Cancer Awareness Month, we're gonna start with a deep dive on the HER2 franchise. As we have previously guided, Kedsilah has modest growth, which is driven by international and early breast cancer compensating the decline that we see in the US and the EU in the metastatic setting. Kedsilah sales are expected to remain stable going forward. Progetta remains driven by international with conversion to Fesco ongoing. Fesco continues to impress 66 percent growth with a 37 percent conversion rate in our 44 early launch countries. We are seeing strong conversion in even some of our most difficult markets like the U.S., where you wouldn't necessarily expect strong conversion. conversion. We're 20% now in the U.S. We expect Fesco to achieve blockbuster status by the end of the year, and our ambition is to reach a 50% conversion rate for Fesco in the coming years. While it is noteworthy that we have, what's also noteworthy, I think, is that as Fesco has continued to gain momentum in certain markets, we actually see an overall increase in our HER2 positive breast cancer franchise there as more patients actually get more access to Fesco. So I think there were some questions about the performance of Progetta in Q3. So maybe I just want to pause here and try and address some of them. So first of all, I think when you look at that sort of dip in Progetta in Q3, that's actually not uncommon for Q3. We seem to have some phasing effect that happens with Progetta in Q3. Last year, I believe we were down 3.3% in Q3. uh year over year but i think largely what you're seeing is that the success of the of the fezgo conversion i mean i think spain is actually a really great example here spain launched in may of this year and already by september had a 21 conversion so what i think you're seeing is some of that progetta business moving more quickly into fezgo than maybe was anticipated um overall the her 2 portfolio has a strong and consistent growth of 14.4 and so i think there's you know there's really nothing nothing different underlying the fundamentals here. I'm going to skip to Centric and hematology as we'll talk about them in more detail in a coming slide and head straight to Allicenza, which continues to perform strongly with 9% growth in constant exchange rates and our core indication of first line ALK positive metastatic non-small cell lung cancer with a whopping 70% share in our major markets. I think we were very excited to share with all of you the ALENA data, which is our positive phase three adjuvant data in ALK-positive non-smell cell lung cancer, which you all got a little bit of a sneak preview on on Tuesday. So fortunately, that means we can share a little bit more detail with you now. The results that we saw in Allicenza in the ALENA trial were unprecedented. We saw a staggering 76% reduction in the risk of disease recurrence or death. with a hazard ratio of 0.24, which is really just amazing. Additionally, we saw clinically meaningful improvement in CNS DFS as well with a hazard ratio of 0.22. So these are really just breathtaking results. The full results were selected to be presented in the presidential session at ESMO this Saturday. So see you there. And we have a first in class global filing, which is currently ongoing. We would expect US and EU launches to commence in 2024, and we would expect to add about 50, I'm sorry, $500 million in sales with this indication. I think it is really noteworthy to just kind of pause and reflect on the fact that this is one of the patient populations that actually is more likely to get tested early on. About 45% of patients that we believe will be eligible for this drug will actually get tested early enough to take advantage of treatment in the adjuvant setting, which is a really great signal that many patients will be able to benefit from allicinza and actually have a better outcome with their cancer. But this is not the end for development with allicenza. We have additional growth possible through our ongoing phase three and unresectable non-small cell lung cancer. That's the HORIZON trial, as well as another ongoing phase three tapestry in the tumor agnostic setting. So allicenza is just a really tremendous molecule and something to definitely keep your eyes on. Moving on to hematology, I think we've said for some time that malignant hematology is a place to watch, and I think we now see a rejuvenation of this portfolio as new medicines begin to come into the market. I'm going to start here in the obvious place, which is Polivi. The strong performance of the first-line DLBCL launch continues, and we now have over 10,000 commercial patients on the Polarix regimen. We see strong first-line shares in The IPI 0 through 5 achieved. The U.S. is at 14%. Germany is at 29%. The U.K. is at 23%. Japan is at 32%. So you really see adoption beginning to take hold and accelerate in these key markets. In addition, we have four to five years before we would expect any additional competition in the first-line DLBCL space, which not only means that we can entrench Polivi as the standard of care, it also gives us our own opportunities to further improve that standard of care by developing new in-house combinations, such as Skyglo, which is the Kolinvi plus Polivi plus Archip trial, which was initiated in Q3 and has already had its first patient in. Similarly impressive is the growth that we're seeing with Gaziva. This is driven primarily by Gaziva in combination with fenclexta and imbrutinib in first-line CLL. And then, again, we have our two bispecific launches that are currently ongoing. Lunsumio, which is having just a really great launch in third-line follicular lymphoma. We are already seeing double-digit market shares in key early-launch countries, including the US, Germany, and Switzerland. And Columbia just recently approved in... in the us and the eu and q2 and third line plus dlbcl and that launch is ongoing and again going fairly well we do have additional opportunities for much more significant growth with both insumio and columbia as we look into the additional trials which will be launched in earlier line settings but again i think by these bispecifics are unique they have a great competitive differentiation and it will be very exciting to actually see them get their new data in and begin to be able to help patients in earlier lines of therapy. In terms of key data, we have two key data sets that have been submitted to ASH, the Phase 1 B Lunsumio and Columbia combos and DLBCL, and then we will also see some DLBCL subtype data for Polarix. So look forward to that. Moving on to Ticentric, I want to spotlight actually two new areas that have had the most activity during Q3, sub-Q and HCC. And to be fair, I should also mention that October is Liver Cancer Awareness Month, just so that everybody is treated equally. For Ticentric Subcut, we have achieved our first approval. We were the first sub-Q PDL PDL1 to be launched with approval in Great Britain. We dosed our first commercial patient several weeks ago. As a reminder, Fezgo in the UK is at 92% conversion rate, which shows high demand for something like this that can actually not only provide more convenience to patients, but also help patients. help increase freeing up resources in healthcare systems. Subcut reduces admin time from seven to seven minutes from a 30 to 60-minute infusion. And so we would really expect, again, for those healthcare systems where they have constraints, that we would see similar adoption to what we have seen with Fesco. We expect to receive EU CHMP opinion in Q4 for Dicentric Subcut and US approval in 2024. Taking the next step in HCC, our phase three to centric plus tiragolumab plus Avastin trial in phase one, I'm sorry, in first line HCC was also initiated in Q1. And that follows the positive phase one to Morpheus data that was presented earlier in the year. For our inline indication, sales growth is largely being driven by HCC and some EU markets, and the ongoing adjuvant non-small cell launches XUS, as well as just sort of general global expansion. Through the end of the year, we've mentioned that we are expecting the first approvals for CHMP with Decentric SubQ, but then also the data from the adjuvant head and neck Trial, which is coming in Q4. This is a very large potential indication in an area of very high unmet need. And then obviously the skyscraper one results with centric posterior goliumab in first line non-small cell lung cancer with those final OS results expected in Q1 of next year. And just as a reminder, that is an event driven trial. So moving on to hemophilia, in Q3, Hemlibra continued its trajectory of extremely strong growth, adding 17% in constant exchange rates, and we would expect this growth to continue. Hemlibra is unquestionably the global standard of care in hemophilia A, with more than 22,000 patients treated globally, and US and EU patient share increasing to 40%, and that's a single percentage point gain in just one quarter. Growth expected to continue globally with patient shares in France and the UK already exceeding 60% and continuing to climb. And why is it that we have such confidence in Hemlibra continuing to be able to entrench itself? It has just a fantastic profile. The key differentiators of Hemlibra remain extremely strong, which just does make it the treatment of choice for prophylaxis in heme. More than 60% of patients are already on every other week or every month dosing with zero risk of developing inhibitors over time. We have a wealth of long-term safety and efficacy data, which shows superior benefit versus the factor eights and an improvement in joint health. We are currently improved in over 100 countries for non-inhibitor. We're reimbursed in 60. So again, even more geographies could potentially seek to benefit. And so again, as we look forward into the rest of 2023, we would expect further patient share gains in that non-inhibitor population, as well as expanding share in key accounts. with additional growth potential. But I think when we ask around Hemlibar, the number one question on everybody's mind is actually what's going on from a competitive standpoint. So not unexpectedly, we're seeing very little, no impact from the first generation of gene therapies, which have been approved I think not unsurprisingly, we're not really seeing the pickup of those therapies at this time. And then with the approval of Altuvio, again, very much as we had expected, we're primarily seeing share being taken from other factor eights. And we're, you know, in the very handful of instances where we hear about these HemLibra switches, and I'm using air quotes for those of you who maybe are just listening, this is largely people who remain on HemLibra but just switch their factor eight. And again, we're talking about a very small number of patients even in that bucket. So again, we feel very confident about the growth trajectory and the potential option, the potential growth rates for HemLibra going forward just based on a very differentiated profile. Moving on to immunology, we see overall sales in immunology were stable in Q3, despite the loss of esbriant sales to generic competition. Zoller sales increased by 3%, driven primarily by the growth in CSU. Earlier this month, the FDA approved the Zoller Autoinjector, which provides patients with new options for dose inconvenience, very important in this very competitive field. You can see that Actemra delivered a very solid performance in its chronic indications, driven by the US and EU. It is worth noting there's no remaining COVID sales for Ektemra at this point, so its performance is really driven by its core indications. This is a little bit higher performance than we might necessarily have expected for Ektemra, and that's probably due to some turbulence in the year-over-year. sales as COVID has sort of washed out, but we really are seeing a good and positive growth in our core indications here. Through the end of the year, we look forward to updated phase two data for ASO factor B and AGI nephropathy, which will be shared at the ASN Kidney Week at the beginning of November. And then we are still awaiting the Zoller OutMatch study results in food allergy. Switching over to neuroscience, it has been quite a busy quarter for Ocrevus. Ocrevus remains the leader in MS market share in both the US and the EU. It is now at 24% global share and growing, which is supported by a much higher retention rate than we see with other MS medicines. We've seen strong year-over-year growth of 12% at constant exchange rates, and we do expect this momentum to continue for 2023 and beyond. Last week at ECTRIMS, we presented multiple new SEDA sets for Ocrevus and Phenobrutinib. I will talk about those in a moment, but before I move on, I would be remiss if I didn't highlight the fact that we have a neuroscience update call happening on October 30th that will discuss not only in more detail the trials that I'm about to cover at a very high level, but we'll also cover our R&D activities in other areas like Alzheimer's and SMA, including the data that will be presented in CTAD for Tarnitinumab. So now on to the data. So, Ocrevus sub-Q. In July, we announced the positive top-line results for Ocrevus subcut, and last week at ECTRIMS, we provided the detailed results. The study met all of its primary and secondary endpoints and demonstrated that Ocrevus subcut twice a year is non-inferior to Ocrevus IV and RMS in PPMS. This can be seen in the B-cell depletion graph on the left, as well as the MRI data on the reduction of brain lesions shown in the table on the right. Combining the safety and efficacy of Ocrevus IV with the added convenience of a subcut has the potential to expand overall anti-CD20 usage and really drive Ocrevus class share. As you know, we really think of the IV and the subcut markets as two very different markets, and this gives us the opportunity to reach a base of patients that we just simply haven't been able to reach with the IV formulation. This is going to be particularly meaningful in treatment settings that have limited infusion capacity, or will healthcare systems have more limited resources? The initial launch, which is expected in 2024, will be with a syringe pump, and it will be able to be administered at home by a health care professional or in an office or in a pharmacy. And in addition, we are currently evaluating self-administration options via an on-body injector, a patch pump, and we expect this option to be available in the midterm. More details on this program will be provided at a later point in time and a little bit closer to launch. Ocrevus subcut is a very significant potential new opportunity for Ocrevus, and we're excited to be able to bring that to patients next year. Moving on to our 10-year results in the real-world family planning data for Ocrevus, it's almost hard to underscore how important these data are when you really think about what is most meaningful to patient populations. The 10-year follow-up data for RMS and PPMS adds to the impressive body of evidence that we already have for Ocrevus in safety and efficacy. Over 80% of RMS patients were free from disability progression and 92 were able to walk unaided. For PPMS, we observed that more than a third of patients were progression-free after 10 years. And what is important to MS patients? It's important that that progression is delayed. It is important that they can continue to work, that they can continue to be active with their friends and their family. These are typically very young and active people who are stricken with MS. So these data are, again, frankly just stunning and put a lot of confidence into the need to treat early with Ocrevus. Similarly, using real-world data, we performed the very first analysis of the effects of anti-CD20 MS treatment on family planning. Again, highly relevant for MS patients who on average are 29 years old when they're diagnosed. This is the time of life when they're just starting to begin their family planning. These data showed minimal MS disease activity was observed in patients from preconception to pregnancy and in the first trimester postpartum and that okravis did not increase the risk of adverse pregnancy or infant outcomes as you might imagine we have been sharing these data quite extensively with physicians around the world and one physician shared back with us that okravis is the best treatment option for patients considering family planning and i think these data really really go a long way to giving young people who want to delay progression, who want to start families, all the reasons in the world to say that Ocrevus is the right therapy for them. And last but not least, before we leave MS, let me talk a little bit about phenobrutinib. As a reminder, phenobrutinib is a potent, highly selective, and the only non-covalent reversible BTKI in Phase III for MS. It has the potential to be a best-in-class BTK, and this is underlied by the positive Phase II phenoptin results in RMS, which met all the primary and secondary endpoints. We had previously presented this data based on MRI results for brain lesion reduction, and they show how Phenobrutinib patients are four times more likely to have no new T1 or T2 lesions at key time points versus placebo. And the efficacy that we reserved in this trial is consistent with other high efficacy disease modifying therapies in MS. At ECTRIMS, we added to this with the CSF data on brain penetration, sort of the Holy Grail in MS treatment. And the graph in the middle demonstrates that Phenobrutinib was able to efficiently penetrate the blood-brain barrier. And this is where we do believe we will be able to deliver potentially really differentiated efficacy outcomes. The updated Phenopta data was very well received, and it has actually been selected as a clinical highlight by ECTRIMS 2023. No new safety data. was identified in the study and across all, nor has any new signal been identified across any of our ongoing clinical trials. We have no confirmed cases of Hies' Law across any of our trials, and we currently have a large safety database with more than 2,500 people dosed across multiple indications. Our phase three studies in RMS and PPMS are ongoing and do include a head-to-head in Ocrevus and PPMS, and this is the only trial that is actually directly comparing with the current standard of care, which is Ocrevus. And those trials are expected to read out around 2025. So again, another important new molecule to watch. And before we leave neuroscience, we will touch quickly on Evrizdi. Evrizdi is on track to become the number one SMA therapy globally in the coming quarters. We are now at more than 11,000 patients treated globally. As a reminder, we were at just 7,000 patients at the end of last year, so a really great ramp rate. Evrizdi is well tolerated with a retention rate in the first 12 months of more than 90% globally, and we have already reached market leadership in the US with 25% share. In Japan, we are at a whopping 58% share for EvrizD. U.S. growth is driven both by switching in naive patients with increased penetration in that treatment naive patient setting. And again, as you've heard me say repeatedly, it's really important to penetrate that naive setting. Those are mostly adult patients. Those are patients that have not really ever treated their SMA. It is the largest group of patients that are out there. And we continue to see good inroads into actually helping those patients actually begin to treat their disease. We have the positive phase two Rainbow Fish results, which confirm that strong efficacy and safety in patients that are less than two months old. Those results were presented at WMS this year, and we achieved that EU label expansion just back in August. So what are we expecting throughout Q3? I'm sorry, throughout the rest of 2023, we would just continue, we would expect to see continued growth in market share gains, again, driven by both switch and naive patients. It's again, hard to underscore what a transformational drug SMA really is for SMA patients. And it's definitely another one to keep your eyes on. So no pun intended, something else to keep your eyes on, ophthalmology, and of course, Vibismo with strong growth. We've already hit blockbuster status year to date on sales. We are well on our way to more than $2 billion in sales for the full 2023. That growth is driven by the unique clinical profile of Vibismo. So those three Ds, the dual pathway, the drying, the durability, we're just coming off of EU Retina. And I think we heard in the hallways that the clinical experience that you see from physicians treating patients matches the real-world data experience that we see in things like Truckee, which match our clinical trial experience. So, you know, again, we continue to be really, really confident in Anvibisimo as a potential new standard of care. U.S. market shares in AMD and DME have further expanded to 19% and 12%, respectively, based on August claims data. That's up from 15% and 9% back in May. In the U.S., use and treatment naive patients has accelerated. It now accounts for 37% of all new treatment starts. In the ex-U.S., that is actually 40% of our patients are now naive, and that's up from the teens in the U.S. back in Q1. Outside of U.S., launches are also exhibiting very strong uptake. Many of our early launch countries have already achieved double market share just after a few quarters of launch, including Japan, Germany, U.K., Switzerland, Australia. And impressively, the U.K. and Switzerland have reached more than 20 percent market share in just one year after launch. In the second half, the global rollout will continue with several key EU markets getting reimbursement. By the end of 2023, we expect to have reimbursement in all of the EU5, which will drive further growth. And looking forward, the U.S. EU filing for the potential third indication of a BISMO has been completed and an FDA decision for RVO is anticipated by the end of this year. Before we leave ophthalmology, I think it's also good to mention where we stand with our latest developments for SUSFIMO. SUSFIMO, as a reminder, is that device that is implanted in the eye. The root cause for our voluntary recall last year has been identified, and a technical solution is now in place. SUSFIMO trials should restart by the end of the year. We anticipate a U.S. commercial relaunch in 2024, and ex-U.S., we would expect to be able to bring SysVimo to patients in 2025 and beyond. And then last but not least, I wanted to highlight our partnership with Alnylam and Zalbicerone, a potential best-in-class treatment for hypertension. Compared to existing hypertension treatments, Zalbicerone represents a novel drug modality, which also has a slightly different and potentially improved MOA. It has already achieved positive phase one results. Thomas mentioned earlier that in September, we saw the phase two CARDI1 study of monotherapy. Zalbicerone met its primary and key secondary endpoints, and those results will be presented at AHA in November. Zalbusuron has the potential of improved adherence and compliance to treat with a possible biannual subcutaneous detchling regimen, which when you think about the 1.2 billion people in the world, 80% of whom can't control their hypertension, and we know that leads to worse cardiovascular outcomes, the potential addition of Zalbusuron twice a year could really be incredibly meaningful for those patients. Working closely with Alnylin, we continue to assess the potential expansions of Zalbisteron, exploring other cardiovascular diseases, including things like heart failure or other potential opportunities to maximize this therapy's potential. The clinical development program, as you know, is ongoing. Cardio 1 has run out positively, Cardio 2 data, which is, in addition, an add-on to one standard of care data will come in the beginning of next year, CARDIA-3, which is a third phase two trial, which is an add-on to two standards of care that will initiate in 2024. And L-NILAM has recently announced that we plan a cardiovascular outcomes trial Patients who have uncontrolled hypertension at high risk for a negative CV outcome, these will have a MACE-type endpoint, and that trial design will be based on the CARDIA-3 readout. So more to come here. And finally, before I hand it over to Matt, I want to take a quick look at the changes in our key news flow side since half year. So from a regulatory perspective, we mentioned the RVO filing is complete for the EU for Vibismo and the PDUFA is set for the end of the year with the FDA. For our phase three readouts, we talked about the positive readout with Alina. Thomas mentioned the positive Fesco on body injector pivotal one phase one readout. A LITTLE BIT EARLIER, THOSE DATA ARE GOING TO BE SHARED AT THE BEGINNING OF NEXT YEAR. AND THEN WE DID HEAR FROM ABVEY A COUPLE OF WEEKS AGO THAT THE KANOVA TRIAL IN A RELATIVELY SMALL SUBSET OF PATIENTS WITH MULTIPLE MYELOMA DID NOT MEET ITS PRIMARY END POINT. WE HAVE THE PHASE ONE CARDIA ONE DATA THAT ALSO RELEASED POSITIVE RESULTS, AND THAT WAS IN ADDITION TO THE INITIAL NEWS FLOW SLIDE. And then through the end of the year, I think Thomas mentioned all of these, head and neck, venclexta, furtocentric, venclexta and MDS, alevides and DMD, long-awaited. And then, of course, we had one trial actually pull forward into Q4 2023, and this is our PA3 kinase in combination with palboin fulvestrant, the ANOVA 120 data, which is expected in Q4 of this year and could potentially be the first positive readout for P3 kinase in a volisib which is also in a broader development program. So sorry, Matt, I went a little bit over, but with that, I will hand it over to you.

Thanks very much, Teresa. So good morning, good afternoon, everyone. It's my pleasure to present the third quarter 2023 Diagnostic Division sales results. So with sales of 10.4 billion Swiss francs, the diagnostics division declined by 18% or minus 2.5 billion Swiss francs at constant exchange rate compared to the first nine months of 2022. And this decline is entirely driven by the decrease of COVID-19 testing sales by minus 3.2 billion Swiss francs at constant exchange rate and is offset by strong base business growth of plus 7%. So on this slide, you see the performance of the diagnostics business over the last seven quarters. And I'd like to start by focusing on the orange line. This represents our base business performance. In Q3 of 2023, our base business continued to grow at plus 7% with strong sales momentum across all regions and across all product categories. Now I'd like to turn your attention to the total diagnostics division sales, which includes COVID-19. The impact of COVID-19 is less in the third quarter, with total sales in Q3 2023 declining by 5%. This trend confirms what you heard from Thomas, that the COVID-19 business is washing out of our overall diagnostic sales. For the remainder of 2023, we're expecting mid to high single digit growth of our base business, while overall COVID-19 sales will continue to decrease. Now, let's go through this by the product categories. So first, sales in CoreLab increased by 9% with very strong momentum driven by immunodiagnostics and our clinical chemistry business. Base sales, excluding COVID-19, increased by plus 12%. Our molecular lab, our PCR business, had a decline of minus 35%, and this is due to lower COVID-19 PCR lab-based testing sales. However, excluding the COVID-19-related business, our molecular lab is growing by plus 7%, and this is due to strong growth in cervical cancer testing, blood screening, and our virology-based business. Pathology Lab, which is really focused on helping people and diagnosing cancer, had strong growth at plus 15%. This is mainly driven by advanced staining, immunohistochemistry reagent growth, and our companion diagnostics. Our diabetes care business had a decline of minus 6%. Now this sales decline is driven by the shift from traditional blood glucose monitoring to continuous glucose monitoring. Finally, in our point of care business, we had a decline of minus 70%, and again, driven entirely by COVID-19, rapid antigen, and molecular point of care sales. The base business grew by plus 5%, and this was due to a strong respiratory season in the Northern Hemisphere in Q1, and good Q3 performance. So let's look at this across the different geographies. Overall, When you're excluding COVID-19, we saw strong base business growth across all of our regions. So starting in North America, the base business growth, excluding COVID-19, grew at plus 6%. In EMEA, excluding COVID-19, plus 5%. In APAC, excluding COVID, plus 11%. and in Latin America, excluding COVID-19, an astounding plus 21%. So really, all of the regions have seen a strong growth of their base business and good competitive market share capture and overall performance. So now I'd like to talk a little bit more about some of the innovation that you heard a bit about from Thomas in his opening, specifically some of our innovative products for the clinical laboratory. Now, maybe talk a little bit about the COBOS Connection Module CCM vertical. Post COVID-19, many laboratories are dealing with challenges related to availability of skilled workers and high pressure for cost savings. Creating efficiency in the laboratory and workflow automation is a critical success factor for our business in the central lab, winning more customers, consolidating and growing market share. The CCM vertical provides automation for our core and molecular lab product lines and can process up to 2,500 samples per hour. Now, this is an extension of our existing COBOS connection module sample conveyor system. But with the newly developed elevator and overhead modules, now this enables vertical sample transportation in the lab and also between floors and between different rooms. This high throughput solution enables a reduction of laboratory errors due to manual transportation as well as space optimization in the laboratory and allows us to compete in tenders where funds for building works, et cetera, aren't available. It makes us competitive anywhere automation is a requirement. So continuing on that theme of innovating on the automation side, I'd like to talk about the launch, the upcoming launch, pardon me, of our C703 and Cobos ISE neo-analytical units. Now, we unveiled these units in May 2023 at Euromed Lab for the first time. These new additions to the serum work area family provide the highest throughput and automation in the industry for ISE and clinical chemistry. Again, creating further differentiation for our core automation laboratory portfolio. The smart hardware design reduces maintenance to once per month and features simplified serviceability with 56% less calibration events than our current analyzers. This allows laboratories to address labor shortages, increase efficiency, and improve output. The new systems will launch in the second quarter of 2024. So all that automation makes us very competitive in terms of delivering the best analytical solutions for our customers. And what's also important is that we continue to innovate in menu and give more medical content that enables us to deliver answers to patients. Our serum work area consists of over 240 assays, which makes it the broadest core laboratory clinical chemistry slash immunoassay menu in the industry. Every year, we are expanding our already industry-leading menu with new launches and indications. Over the last three years, we've achieved 16 regulatory approvals per year on average. This is a mix of C, Mark, and FDA. And I'd like to call out the additions to the menu in hepatitis, which increases our competitiveness in the always-growing infectious disease market. and also some of our recent high medical value launches, such as GAD, a new multivariate test index assay for the prediction of liver cancer caused by hepatitis C infection, and the NT ProBNP claim extension in heart failure, where our strong HF heart failure protocol was recently added to the European Society for Cardiology guidelines. Additionally, I want to point out our latest FDA approval of the cerebral spinal fluid Alzheimer's biomarker test for total tau protein. We plan to continue to expand our menu for Alzheimer's and neurological disease as a driver for our future growth and diagnostics. So this broad menu with differentiated high medical value combined with our best in class automation will continue to differentiate us in the largest diagnostic segment in the market. Again, following on what you heard from Thomas, I'd like to speak a little bit about some of our high medical value solutions, specifically sepsis. So in the third quarter, we obtained the IL-6 CE claim extension for neonatal sepsis in countries that accept the CE mark. Each year, there are 3 million cases of sepsis in newborns, causing 400,000 to 700,000 neonatal deaths. This makes it one of the leading causes of mortality among neonates. Sepsis progresses rapidly, with mortality rates increasing 8% per hour that treatment is delayed. The current standard of care is blood culture, which has a long turnaround time, approximately 48 hours. and requires one mL of blood, which is difficult to obtain from newborns, especially newborns with low birth weight. The Alexis IL-6 demonstrates excellent performance for the detection of neonatal sepsis, and our test is capable of providing results in just 18 minutes. Roche is the first company to offer IL-6 on an automated platform with a dedicated claim for aid in neonatal sepsis diagnosis. So similar to Teresa, I'll take you through our diagnostics key launches in 2023. What we're really proud of is that of the launches you see here, we've achieved nine of those in 2023 already, and the rest are all on track for delivery by the end of the year. So with that, thank you very much, and I'll pass it to Alan.

Thanks a lot, Matt. Quite a pleasure. Hello to everybody. I hope you're all safe and healthy. Happy to lead you through a couple of additional information about the sales and certainly the exchange rates. I think let me remind, well, all of us that we are going through a period of fast changing exchange rates. And I think really there is diligence needed that we draw the right conclusions here. Good. So let's go into it. I think really when you look where we have landed, I think I'm very pleased with the performance of the company. Really outstanding. I will make a comment here. I would like to thank the employees as well, because all of them have made great contributions that we have done well for patients. As said, I think the group sales have increased by plus 1% in constant rates. Strong base business growth, which we cannot emphasize enough, and we will do it again and again, which is certainly overcompensating for the COVID-19 sales decline and certainly as well the impact of biosimilars for AHNR. When you look at volume, which I think is quite helpful, you have to have that information addition. I think in pharma, we achieved a strong volume growth of 14%. In Daya, certainly volumes declined by minus 18%, whereby the group volume has increased by 5%. Good. I think really, as said, since half year 2023, the strengthening of the Swiss franc against other currencies has progressed and even accelerated. I will share the additional information. And I understand it's all for us a little bit of a challenge to do the right modeling with this fast changing currency rates. Therefore, I think really reporting in constant rates is certainly a helpful tool here. uh let me go to the guidance very quickly and i come back to that as you've heard i think really guidance remains as it is we have provided some additional information about our expectation for the kovit 19 sales loss for 2023 we think it's roughly a minus 4.5 billion now you know i think originally we have given information of roughly minus 5 billion. And when it comes to AHNR and the biosimilar impact, we think now it's going to be more of a minus and roughly minus 1.1 billion for the year instead of the originally said 1.6 billion. So as Thomas said, I can emphasize while our expectation is that we definitely end up full year 2023 on the upper end of the guidance. And let me emphasize as well here that we have a connection between sales development and core EPS development. So very clearly, I think these things, if you like, move into the same direction. So let me now go through the regional sales development. As outlined, I think if you exclude the COVID sales, I think we have grown with 9% in constant rates. I think last time we had such a dynamic and I really had to look it up. That was in 2019. So really quite a while ago. It's a fantastic dynamic that we are showing here for the underlying business. So let me go through the regional topics here. Pharma had a strong growth and Theresa has elaborated about it. Pharma growth was 9%, so in constant rates, 2.9 billion. And all regions, as you can see, contributed quite nicely to this. I think at the forefront is the US, with the plus 8% in constant rates, 1.4 billion. Region international, as you can see in the middle. has also shown a strong sales performance with an increase of 12% equaling 800 million and then followed by Europe with 7% or 400 million and then Shugai with plus 10% and 300 million. So really I think hitting on all cylinders here and then the diagnostics division and Matt has explained it on one hand certainly we had the sales loss due to COVID But that was really mitigated quite significantly by the base business, which has grown 7%, so roughly 700 million. So really, overall, there's a currency impact for me, more a reporting topic. I come to that later on when I go to the results, because you see really in all major markets where we all have major value chains and major spend, we're doing pretty well and generating good cash. so let's go to the currency rates right away and what you see here on the left hand side is the growth in uh in concentrates yeah of plus one percent and then you see on the right hand side the growth in swiss francs of minus 6.3 percent which leaves us yeah with a difference of minus 7.3 percentage points and they already mentioned 3.4 billion um currency impact You see where it was driven by and which currencies. I think dominant is the US dollar. We've even seen an acceleration over the recent quarters. And you see here down by minus 2.4 percentage points, which equals 1.1 billion. So that's the major piece here. And then we have APAC and here certainly it's the renminbi with a minus 0.1 percentage points of the 1.6 percentage points. So roughly 500 million. And then last but not least, the Japanese yen with minus 1 percentage point equaling roughly 500 million. The euro contributed another 230 million or minus 0.5 percentage points. So I think very clearly the Swiss franc has strengthened basically against every other currency. I think now we come to the expected currency impacts for 2023. And let me start really with the left-hand side. And you know these tables. uh how should i say it it's pretty obvious yeah that for both tables on the left hand side you see that the 2023 average currency rate uh is below 2022 okay that's that in itself is is not surprising and what you see on the right hand side then is that when you bring all of that together you see really the minus seven percentage points uh for year to date september 2023 and then there is our projection And the projection is assuming that the currency rates at September 30th, so end of September, remain stable until year end of 2023, which now we don't have a lot of time left in 2023, is rather tangible. And you see really what that means. I think you see really on sales the minus 7 percentage points, so that remains stable. On cooperating profit, a minus 10 percentage points. And the core EPS, a minus 12 percentage points. is that a completely new phenomenon for roche i also looked up that a little bit we're looking backwards i think we had such a spread between sales incorporating or respectively core eps already in 2009 in 2011 in 2015 so this is nothing really new what i want to say is this is absolutely manageable and let me give a little bit of background here why at least i feel like um you Yeah, perhaps not so much of a big deal here. Certainly, I think on one hand, with the weak U.S. dollar, will the U.S. dollar stay as weak as it is? We can debate here. But we have seen a strengthening in these periods since 2011 or 2009 quite significantly. But what is for me much more important is that we have a very, very good natural hedge in our company. That means when you look at the minus seven percentage points, major driver here is the U.S. dollar. When you look at the operating profit, so the currency impact is even more pronounced. What does that tell us? Well, it tells us that the profit portion of the U.S. dollar is even larger in the cooperating profit than it is in the sales. And I think, honestly, then you look really at the U.S. dollar itself. Well, we have the major part of our financial debt, 18.7 billion in the U.S. dollar. That means that the major part of the interest that we're paying, we pay in U.S. dollar. We have a lot of our R&D spent, the largest portion of our R&D spent in the U.S. dollar. We have high operational costs in the U.S. dollar. On top of that, basically every M&A transaction, every licensing transaction that we're doing, we pay in US dollar. What I want to say is I think the natural hedge that we're having is pretty clear. I think that also applies to China, if you like, that applies to Japan with Shugai, that applies to Europe. So I would argue I'm not too concerned about the currency impact here. And therefore, I think it's really good to follow the constant exchange rate concept. Good. With that, I think you see the outlooks confirmed once again. I think what we've adjusted, as you know, the AHNR biosimilar impact now projected to be at roughly 1.1 billion. The COVID loss impact now projected at roughly minus 4.5 billion. And the last point I'm having is to do a little bit of promotion for upcoming IR events. Theresa had already mentioned the neuroscience update on October 30th, which will be certainly exciting with the ECTRIMS data and CTET data. This on the subcontainers version of Ocrevus will be fun to look at a little bit deeper into it. Some data on phenibrutinib, which is good. The brain shuttle will be a topic here. I'm personally looking forward to the digitalization day on November 29th, where we certainly will talk about artificial intelligence and machine learning. And we'll also show a couple of use cases where we think we make a difference. You know, that is a pretty tangible event. where we really show quite some use cases. The ASH update is to follow. It will be a virtual event, but here about Lunsumio and Colombia, I think quite interesting. And then we have the Diagnostics Day in May of next year, at the 22nd, where we will have definitely deep dives in the new technologies with max spectronomy, CGM, but all the other things that might be on the plate here. And I'm sure that will be a very, very exciting event. And with that, I think we're looking forward to your questions. Thanks.

Thanks a lot, Alan. And with that, we will open the Q&A session. The first questions actually come from Mark Purcell from Morgan Stanley. Mark, please.

Yeah, thanks very much for taking my questions. I have three. Firstly, on Polyvi, clearly a very strong uptake you're seeing, not just in the US, but ex-US in particular. I think you've historically targeted a 50% share of the first line setting. Can you provide an update on that, given that the launch appears to be above your expectations? Secondly, more strategically, following the acquisition of the Allen Island SRNA and hypertension, your ambition to go into other cardiovascular disorders, including heart failure. Could you sort of maybe talk a little bit more about how you're thinking about heart disease more broadly? Is inflammation, you've got a heritage with IL-6. Do you see IL-6 and targeting inflammation more broadly as an exciting opportunity across heart failure, kidney disease, and chiming in with the L9M collaboration? And then the last one is on tirugolamab. Following the inadvertent disclosure of the data, has there been any impact, such as post-progression switching of patients, anything with respect to regulators in terms of statistical penalties? So just trying to understand if anything has changed as we wait for what is anticipated to be a 20% overall survival benefit in Q1 next year. Thank you very much.

Thank you very much for the question. I would take the more strategic question. You were talking about the deal we made with Alnylam for Sylvesterin. So every year we look at hundreds of companies and we do the same this year and we continuously evaluate early stage opportunities and also late stage opportunities. to see which molecules would make sense. Where is the scientific rationale? How does the financials look like? And with that, we're looking for really transformative medicines, first in class medicines, potentially best in disease medicines. And based on that, we make the decisions. And we felt that with this deal, we have a potentially transformative medicine that could be applicable to a large proportion of the world because hypertension is one of the biggest disease burdens in the world. And so we are open to looking at those opportunities. You were mentioning other things. If there is really a transformational medicine, then we're open to do it. We will not do something that wouldn't go into that category.

And I'll take the other two. So for Polivi, based on the trajectory that we have and the ambition that we have, it's probably something more like about 65% first-line DLBCL. So I think we have high hopes based on the pickup that we've seen and where we believe we can go with this molecule. And then with the TIGIT inadvertent disclosure, there has been no impact. We remain completely blinded to the outcome of the study, and we have not had any adverse impacts from that inadvertent disclosure.

Mark, we answered all your questions?

Yeah, that's great. Thank you, Bruno.

Okay, then let's move on. Next one in the row would be Louisa Hector from Birdmark. Louisa.

Thanks, Bruno. And thank you for the presentation. On the, just the moving parts of sales as we start to look out even into 2024. So we can see there will be significantly less erosion, but I just wanted to check you know, the products we should make sure we're modeling correctly. So I have in mind Actemra, Lucentis, maybe a bit more Esbriet. And I was just wondering whether any of the subcutaneous patent expiries are something we need to consider around Europe when I'm not sure if they kick in next year. And then the offsets, all the positives. So obviously the new launches gathering pace. So just to kind of outline the pushes and pulls on sales into next year. Yeah. And on diagnostics, I just wondered if you could make some more comments around the mass spec launch plans on track for next year, I believe. Just some commentary around what you're offering there and when you might expect to have orders, visibility on orders, and to check that there's no cannibalization of your existing portfolio with the mass spec coming online. Thank you.

Thank you, Louisa. Let me take the first question. I think the COVID sales are pretty easy to model. We've now shown you the Q4 sales we had last year and the Q1 sales this year. And basically, we do expect that after that, pretty much all of the COVID sales will wash out, similar to the levels we've seen in Q2 and Q3 this year. Beyond that, we see H&R erosion slowing down. And beyond Lucentis and Aspirate, as you mentioned, the only other medicine where we would expect biosimilar competition is Actemra. And we would expect biosimilar competition in Actemra at the very end of this year and in the U.S. in 2024.

Sure. And I'll take the mass spec question. So, again, we're confident about our plan to launch the mass spec instrument in the second half of next year and also very excited about the pipeline. Now, the pipeline is going to include things like vitamin D, therapeutic drug monitoring, immunosuppressives and steroid testing. We do not anticipate any cannibalization of our existing business. In fact, given that this will be integrated with our serum work area, this again, similar to what you heard in my presentation, makes us even more competitive in the core laboratory and will allow us to also accelerate our share capture more broadly. So very positive on the launch for the forthcoming launch.

I fully agree, Matt. I think it will pull through to clinical chemistry and immunochemistry because it will improve our offering overall versus our competition. Yep. Does that answer your question?

Louisa, could we answer your questions? Great. Okay. Then we will move on in the row. And the next one is Claire Rose from Citi.

Yeah. Hi, it's Andrew Baum here. Thank you for taking the questions. A couple of these. The recent capital markets day, you did a lot of self-diagnosis, which was helpful, interesting, but there wasn't so much on the operational details of execution, particularly on narrowing the scope. of the pipeline focus, as well as addressing the speed and augmenting the pipeline through BD. So the question is, when will we start seeing tangible evidence of what I'm sure is the fairly frenetic activity inside the company? And then the second question is on obesity. So with Zilbesseran, you have entered into cardiology, which is a new area certainly for you in the last decade. You have a presence with an anti-myostatin drug. Could this be the basis of a combination therapy with an incretin to accentuate the weight loss? And is this a strategy that you are actively pursuing?

Right. So first, I cannot really go into details in terms of M&A and BD. I hope you understand. So we can announce that when there is a deal to announce, but I wouldn't want to speculate in any direction. Again, we are looking at things all the time and and we'll update you depending on how things play out. Regarding the broader R&D excellence, we are now, in the beginning of September, we informed the organization about all of the findings and we're now in a rollout in the organization to work on all the different elements where we see areas of improvement but let me highlight you know there are also areas of strength as we see that in the past we did launch a number of of very interesting assets regarding anti-myostatin antibody yeah it's a right now in a study in combination with Evristi, strengthening the muscles of people with spinal muscular atrophy. But as you mentioned, the GLP-1s and the GLP-1 GAP in cretins have one big problem, and this problem is muscle loss. and so it's an option that we're looking at how this antibody can play a role there in the future many thanks okay when we move on the next one would be um steve scala from count

Thank you so much. I have two questions on Hemlibra and then one on guidance. On Hemlibra, why wouldn't the one-third of Hemlibra patients on Q-week dosing not be great candidates for all 2VO? I think the answer is that you think Hemlibra is a great drug, but that being the case, then why is Rush developing NTX007? So that's the first question or maybe two questions. Secondly, on guidance, on slide 15, the guidance for diagnostics-based business growth is forecast to be good. In the Q2 deck, the guidance was forecast to be solid. I know you will dismiss this as an insignificant change, but the company made the change deliberately to switch these words, and I'm just wondering why these types of changes typically signal less optimism. So thank you. Those are the questions.

Great. So I'll go ahead and start with the Hemlibra question. So for those folks who are on once a week Hemlibra, I think we still believe that for those patients who desire a prophylactic treatment on board, there's a lot of great reasons, including long-term safety and efficacy data, the zero chance of developing inhibitors, why someone would remain on Hemlibra. I think it's probably also worth calling out that real-world data is beginning to indicate that even the long-acting factors are not always used once per week. So they are often used more frequently than that. And I think we should just remember that the bar for switching a well-controlled patient is extremely high. Patients who are confident in their therapy, who are living the life that they want to live on the therapy that they're on, and are having a good experience are very difficult to, there's really no impetus for them to switch. When it comes to why we're developing 007, we are looking at 007 because we want to think about ways in which we could raise the bar on ourselves. This molecule has a higher binding affinity, it has improved half-life, it could get to monthly dosing, but ultimately in clinical trials, it will have to prove that it is better than Hemlibra to really have a good shot whether that's further reducing bleeding or something around joint health. I mean, I think all of those things are currently under consideration. But 007 is going to have to cross the same bar that everyone else is going to have to cross in order to unseat hemlock breath.

Maybe let me just comment generally on the guidance. I mean, our base business is doing very well. You've seen the first three quarters, we have a base business growth of 9% and also the diagnostics based business doing well with 7%. And so moving from solid to good was an indication that the growth is above our expectations on the diagnostic side. So it's a positive. I want to highlight that. Now, you may ask yourself, so why did we only say solid at the beginning of the year? And I can explain that. You know, when we look at the diagnostic sales, we have a near COVID effect. So certain elements in the COVID business that are... closely linked to the COVID sales. Let me give you an example at Custom Biotech. Of the top five selling companies for COVID PCR testing, four of them were using our enzymes. And we never declared that as COVID sales simply because it's an enzyme. You don't know exactly into which product is it going. And so we only declared the COVID sales. Now, if you would exclude that effect, the diagnostic is growing even 9%. Right. So we knew we had a certain headwind in terms of near COVID effects. And that's why we said solid. But diagnostics is performing super strong. And that's why we believe we are more than overcompensating also these near-COVID headwinds.

And if I could just add to what Thomas said, if you apply that to the core lab where that's reported, that would take the growth from 9% to 12%. And really, again, that shows the overperformance of the business. But again, we have these related but not directly COVID test-related sales that need to be corrected for. Yeah. Thank you.

Steve, could we answer your questions? Yes, thanks. And we go on. The next one in the row we have Manuel Papadakis from Deutsche Bank.

Thank you for taking the question, sir. Maybe I'll take a couple of product questions, please. One on CatSilo, one on Fezgo. Fezgo, just in light of the 50% conversion ambition, any color you can give us in terms of how evenly you expect that to be geographically distributed? And then how resilient you think the performance will be once by a similar purchasing map is available from 2025, particularly in Europe. And then second one on Caterpillar, you talked about stable outlook. Just to understand the timeline and rationale for that, we've got head-to-head neoadjuvant data pending relatively soon based on the precedents likely to show superiority for a competitor. Tell us if you disagree and if you don't disagree, why and over what period are you confident in a stable outlook? Thank you.

Great. So, you know, with Fesco, that 50% conversion ambition and where we expect it geographically, I think you can sort of, I think, almost anticipate where it would go. It would likely go in the highest penetration in those parts of the world where healthcare systems are under most strain. So certainly places like the UK, which is already at 92%, but you could anticipate other countries in Europe in particular being very well-primed to have a very high penetration rate for Fesco. as well as other countries outside of the U.S. I think even in the United States, we're increasingly seeing healthcare systems being limited in their healthcare resources, whether that's infusion shares, infusion nurses space, and frankly, just patients wanting to spend less time in hospitals. to get their treatment. So I think we're likely to see more penetration than maybe we had even originally hoped in most of the parts of the world. It is worth pointing out that we don't expect our first protected biosimilar until 2026. So we have some fairly good runway here. And I think what we've seen in particular with some of the SudCup formulations and other products is that they too tend to be fairly protective from biosimilars, even as even when those biosimilar products become available, just because they get entrenched in the workflow in the office. And that is, again, it's hard to unseat. If patients are happy, the offices are happy, and it works for the workflow in the office. In terms of Kedsila, yes, we do expect this to be a relatively stable outlook. The expansion is really meant to compensate for the meta, or the expansion compensates for loss of metastatic sales. We don't see any biosimilars in development for Kedsila. So what we're really talking about is is competition from other mechanisms of action. I think what we have always said with HER2 is as As other things come into the HER2 space, you will see more of a gradual drifting down of our HER2 products versus any kind of CLIST scenario, because you will see earlier lines compensating for later lines. You'll see different geographies compensating for bigger geographies. You'll see Fezco compensating for Progetta. And there's just a lot of puts and takes in the HER2 space as we progress through. So I think we still remain confident that Ket-Silo will be stable for the next couple of years. And again, as I think we've mentioned previously, we just don't see any biosimilars in development. This is a complicated molecule to make, and we would anticipate that we will likely be alone for a while with Quetzalo.

All questions answered, Emmanuel?

Yes, sir.

And we move on, and I have no name here, so just a telephone number, so maybe you can please identify yourself.

I opened the line.

Hi, John Priest from JPMorgan here. Can you hear me?

Yes, we can hear you.

Excellent. So just two questions from our side. So the first just around Dyscentric. So growth appears to be tempering here. So how are you seeing the potential impact from the approval of Keytruda in the adjuvant lung? And where do you see the future growth trajectory for this product? And then maybe a second question. Thomas, as you said, you're excited for the DMV gene therapy readout expected this quarter. So maybe just what your expectations are going into that, what the confidence levels are and kind of how big is that XUS opportunity for Roche in the trial patient population, kind of aged four to seven?

Great. So let's start with adjuvant lungs. So I think, you know, first and foremost, the adjuvant lung space is a relatively new space. I think adjuvant in general is an evolving market. What we've seen so far in early launch countries like the U.S. is that we've been able to hold our own in our labeled indication. Even with with the with the with the coming in of the of the key to the data and certainly ex us we're still in the process of launching and gaining reimbursement in many countries and adjuvant. So, you know, holding our own in the US so far and then again. significant expansion in adjuvant in other parts of the world still yet to come. When it comes to dyscentric growth overall, I mean, I think we'll continue to see penetration in HCC. We'll continue to see penetration in adjuvant lung. We'll continue to see some modest growth driven by dyscentric subcut. which is largely likely to replace IV versus necessarily drive new business. But the real opportunity to drive sort of that next wave of growth will come with things like the head and neck trial reading out positively or the SkyOne data reading out positively. And then obviously we've got adjuvant HCC as well. So I think the story is not closed yet on Ticentric. There's still room for it to grow in the indications that we currently have, still additional indications that we are awaiting data on and more to come in the coming year. Thomas, do you want to take DMD?

Yeah, sure. So for the chain muscular dystrophy, which is a very severe disease, you have basically mostly boys that are impacted here because it's an X chromosome linked mutation in the dystrophin gene. And unfortunately, boys only have one X chromosome. We don't have a backup copy. And these boys, by the time that they're 10 or so, they're in a wheelchair. By the time they're in their late teens or early 20s, they're dead. So the unmet need is huge. There's something needed very, very urgently to help these boys survive and lead a normal life. Now, we don't know the outcome of the trial yet. So we are as curious as you are on how the trial will read out. But this would be a significant opportunity to tell patients what that translates to is about two to three billion in peak sales, but the sales will come gradually as the label is going to be extended. We have now in Q3 already two markets outside of the US where we have received an approval. And all I can say is I really, really hope that this trial is positive because this would be a huge hope to these boys that otherwise would have to die.

All questions answered. Very clear. Thank you. Yeah. And we move on to Laura Perrotta from Olay Group.

There seems to be a technical problem here.

Okay, let us first move on and then we try it a second time. Next one would be Peter Welford. Peter.

Hi, thanks for taking my questions. I've got three left, but they're fairly short. Firstly, on the buys, though, I wonder if you could just give us an update on what you're seeing in Japan. I think it was a relatively early launch country and some encouraging sort of commentary. But equally, sales this year seem to have been relatively sluggish quarter on quarter, even currency aside, given some of the trends we hear. Is there any sort of factor we should consider there? But you just talk a little bit about what you're seeing in the Japanese market. Secondly, then just on China, I guess this is probably primarily for Matt, but I'm curious, relative to a lot of your peers, you seem to have a relatively robust business in China in diagnostics. In fact, maybe it's even growing. I'm not sure you can specifically comment, but a lot of peers have talked about the anti-corruption initiatives and some of the headwinds they're seeing there, particularly for instruments, but also even for ongoing consumer sales. Perhaps you can talk about what you're seeing for diagnostics in China during this quarter. And I guess maybe open it up to Teresa as well. You know, is there any impact on access to doctors you're seeing at all? And then just thirdly, a quick one on Elavidis again, if I say so, just on DMD. Curious, do you have freedom to price in your countries as you see fit? The reason why I ask that is obviously Roche recently has priced fairly, fairly, I guess, sensibly across in the US, if you like, and adopted a worldwide pricing. Whereas obviously in this case, you know, it's a drug that could be very costly, but clearly in different markets owned by different people. So could you just talk a little about the price increase for that drug? Thank you.

Great. So I'll start with Philbizmo. So the Japan launch was quite strong. We're currently at 14% share with 50% of those patients being naive. I think they continue to work hard to educate their retinal physicians and are making progress. So I don't think we're disappointed in any way with how the launch in Japan is going. And then maybe, Matt, since your China business is bigger than mine, I'll let you answer that. But I'll answer the DMD question quickly, which is, yes, we have freedom to price in our markets.

Sure. Thanks for the question. Like I said, our APAC business, excluding COVID, is growing 11%, and China is a major contributor to that. So our China business is performing quite well. And specifically to answer your question about the Anti-Corruption Act, no, we don't see an impact on our business from that. Again, China is one of our most sophisticated organizations, and we feel it's running quite well.

And from a farmer perspective, plus one.

Peter, everything answered? Yeah, that was great. Thank you. Okay, then we'll give it a second try. Laura Pirotta from Olay Group. Laura, please. Okay, this remains somehow blocked. There's nothing I can do right now. Then I would just ask you please to reach out to the Investor Relations team. And we are at the end of the Q3 call. So the IRA team will be available for the rest of the day. Happy to take your calls. And with that, I wish you a good day. Bye-bye.