Roche Holding AG

Ladies and gentlemen, welcome to Roche's first quarter sales 2021 webinar. 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 is a question and answer session planned. 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 on the phone and press star six to unmute yourself. At this time, it's my pleasure to introduce you to Karl Mahler, Head of Investor Relations and Group Planning. Karl, the stage is yours.

Thanks a lot, Henrik. Welcome to our Q1 conference call. Hope you're all safe and well on your side. We have about one and a half hours reserved for you. presentation, however, that is Q&As, and you should have plenty of time, sufficient time for the questions and answers. As Henry explained, it's a Zoom call, so you can raise your hand, you can go in the chat, unmute yourself with star six, and of course, you also can directly send me an email in case you want to. Personally, I believe that we had a really good start into the year with very strong new product sales for Pharma, excellent diagnostic business. So I would say Roche is offering some stability, good stability in these very unstable times. And with this one, over to you, Sarah.

Thank you, Karl. And actually, you summarized it well. We had a good start. into 2021. So if we can go to the first slide again. No, I think we jumped too far now. If we can go back. Okay, now I can start with this one as well. Good. So then just a word in terms of our fight against COVID-19 has been quite a lot of media coverage on our rapid test, this home test, a nasal test. And you see this also reflected in the numbers. We see continued strong demand for that test. Let me just emphasize again that Our test is very sensitive if the virus load is high. And we know that, of course, those people who have a higher virus load are the most infectious people. That is primarily people with symptoms, but that can also be people without symptoms where you have a high virus load and as such very infectious patients. So we really do believe that as long as populations are not yet sufficiently vaccinated, these home tests can really be a very important weapon to interrupt infection chains. Now on the antibody cocktail, again, I just want to remind you about the stunning data we have seen from our phase three results. We have seen a 70% reduction in hospitalization and death rate. I mean, this is really, really significant. And I think nobody doubts the medical value of those antibody cocktails. Logistics is an issue because the medication needs to be infused. Typically this happens in the hospital setting. So we have to make sure that patients really get to the point of care, but healthcare systems are adapting. And again, we believe this is a major contribution in the fight against COVID-19. If we now can go to the numbers. Next slide, please. Right. Bill and Thomas will cover this in much more detail, but let me just summarize. on a high level what we see in the first quarter and how this all comes together. Pharma down by 9% and there's a number of factors playing into that development. It's very much in line with what we have expected and as Karl already pointed out, we see continued good growth with the newly launched medicines of plus 20%. Then, of course, we saw a major impact of the biosimilars. As Bill will show later, the impact in the first quarter was particularly high. So we expect that to ease out for the full year. And we still expect to remain in line with our original guidance of 4.6 billion. And then very important as well is we have a negative base effect in the first quarter because of the impact of the pandemic. As you remember, last year, Q1 was a very strong quarter where we had very good growth. And then the pandemic started us to hit severely in the second quarter. So we have a negative base effect this year in the first quarter, but you will see this exactly being reversed in the second quarter as we build on a much a smaller base. And as we hope that more patients will resume their doctor visits and as such, we will see some normalization of treatment patterns. Now diagnostics, very much the contrary to pharmaceuticals. So here we benefit from the pandemic, unlike in pharma with the additional demand for COVID-19 testing. But what I highlight actually in the first quarter is the fact that the routine business, the underlying business, so this is the non-COVID-19 business, has started to recover. So what we see here, and I think this is noteworthy, is that on the diagnostic side, we already see a recovery. And I think that is a good sign because for healthcare systems normalizing overall, because the first thing which you see is that people get again to the doctor, they get their diagnosis, and then later on, we would hope that that also leads to a better coverage in terms of treatments, et cetera. So that's really what I wanted to share on that slide. If we move on. Putting all of that together, you can see a 3% growth in the first quarter. So we continue to grow in spite of all these negative effects from the pandemic and the biosimilars. If we look for the outlook for the full year based on the results, if we turn to the next slide, we are very confident to achieve our goals. What you see here actually is again a split of the sales development, a really strong impact of biosimilars, which should ease now over the rest of the year. We hope for a recovery from the pandemic. And perhaps really also interesting to see here that the new products now already account for 50% of pharma sales. Next slide, please. Okay. Here again, the dynamic for the two divisions, diagnostics, very much shown by COVID-19, very much driven by COVID-19 testing, and also supported by the recovery of the routine business. On the pharma side, a continued impact of the pandemic on our regular business. So we hope that this will recover. And then of course, we had a very severe impact in particular in the first quarter from biosimilars. Next slide, please. Okay. Good. A lot has happened on the pipeline side. We've had important readouts. Just highlight here the entries into phase two. We had a number of entries into phase three. So that's obviously extremely important for the long-term growth of our franchises. And I should say also on the diagnostics, I would argue that we have already a leading franchise and cutting edge systems out there. We are now coming again with a new generation of systems, new launches, which should further solidify our market leading position. Next slide, please. So you've seen, we confirmed the outlook. And with this, I hand over, I think it's you first, Bill.