Roche Holding AG

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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 own as well, please feel free to go to roche.com slash investors to download the presentation. At this time, it's my pleasure to introduce you to Thomas Schienecker, CEO, Rush Group. Mr. Schienecker, the stage is yours.

Thank you very much and hello and welcome everyone to today's call. I'm looking forward to sharing our half year 2023 results with you. For the first For the first half year of 2023, we saw the base business of both pharma and diagnostics divisions grow very strongly with a total of 8%. Group sales declined 2% at constant exchange rate, and this was due to the expected decline of sales from COVID-19 products. And this was in line with the guidance that we gave out in the beginning of the year of roughly 5 billion Swiss francs for the year. Pharma grew very strongly at 8%, and this was driven by key products and new launches, such as Vabaismo, Ocrevus, Hemlibra, Evristi, Fesco, Ticentric, and Polyvii. For the first half year of 2023, we really saw an outstanding performance of the Bias Mall, which reached sales of roughly 1 billion Swiss francs and is on track to achieve more than 2 billion Swiss francs for the year. The diagnostics-based business grew very strongly with 6%. However, overall sales were impacted by the expected decline of COVID-19 sales. For the half-year profitability, we had obviously the COVID-19 sales decline and also a base effect from an altimerous patent settlement that happened in the first half of the year. Now, coming to the news flow. We've achieved in Q2 numerous very important milestones. Covidimab, or Columv, was approved in third-line diffuse large B-cell lymphoma in both the US and in Europe. This is the second CD3, CD20 bispecific antibody that entered the market after we launched Lunsumio last year. In June, the FDA also granted accelerated approval for Levitas, the first gene therapy for Duchenne muscular dystrophy. Together with Serapta, we're excited to bring this medicine to patients, to young boys who have today no treatment options. And we're looking forward to the additional readout of Levitas later in the year. And we can now bring it to markets that accept FDA approval. We had several important data reads out also in this quarter. Let me highlight Ocarina 2, which was the study for six-month subcutaneous Ocrevus that showed positive data. And this will be presented at the next medical conference, and we also will submit to regulatory authorities towards the end of the year. or we will expect actually approval at the end of the year. We also had a very strong readout for feniprutinib, our BTK inhibitor, the only reversible BTK inhibitor in development in multiple sclerosis. And this again showed extremely strong efficacy data in reducing brain lesions in patients with relapsing forms of this disease. Another readout which I think is worth highlighting is Morpheus. which demonstrated outstanding efficacy of teragolamab, ticentric, and avastin in first-line liver cancer. Based on this data, we decided to initiate a Phase III study. I'm also excited to share that we've entered two new partnerships. In our most recent deal, we brought Sudaceron, an angiotensin RNA inhibitor for hypertension, which is in license from Analum. This medicine has best in disease potential. We also added KSQ4279, which is a potential first-in-class USP1 inhibitor for solid tumors. This protein is involved in DNA damage repair. There's a number of upcoming news flow in the second half of the year. They face three EMBARQ data for elevated endogenous muscular dystrophy and a number of other late-stage readouts. For diagnostics, we also expect a number of updates towards the end of the year. On this slide, you can see that at half year, our sales reached close to 30 billion Swiss francs, minus 2% at constant exchange rate. But if you exclude the impact from COVID-19, you see very strong growth of 8%. Pharma grew 8%. At this stage, pharma has no impact from COVID-19. The entire impact at the moment is within the diagnostics division, which had an impact of 2.7 billion on COVID testing sales in the first half of the year. Without this effect, the base business is growing strongly at 6%. The quality rates, growth rates are impacted by COVID-19 and H&R erosion, but both impacts are in line with our expectations and the guidance that we provided at the beginning of the year. I would like to mention that there is one impact in Q4 of about 1.1 billion Swiss francs in the business of pharma. This was the RonaPrieve order in Japan last year in Q4. Now, this slide is another opportunity for us to really dive more deeply into the sales movements. As you can see, both pharma and diagnostics are growing well. Diagnostics-based business is growing with 421 million. This is a 6% base business growth. You can see the loss in diagnostic testing sales for COVID-19 at 2.7 billion Swiss francs and the AHNR erosion of 635 million. Again, both factors are completely in line with our expectations and our guidance for the year. You also see the impact of the foreign exchange rate, which was close to 2 billion. Our portfolio rejuvenation is progressing very nicely with ophthalmology, neuroscience, hemophilia gaining momentum. And again, wanting to highlight Vavaismo, which is really taking bigger and bigger share, and we expect more than 2 billion of sales for Vavaismo this year. This slide we've been showing throughout the pandemic, and it really shows the performance of the underlying base business. And we see continued strong performance of the base business in both divisions. And especially in Q2, both divisions reached high single digit growth in the base business. In pharma, you can see the orange and gray line being identical this year. So far, there's no impact or no net impact of COVID-19 so far, but there is an impact that we're expecting Q4. In diagnostics, we see the impact, but the impact will get smaller and smaller throughout the remainder of the year. And overall, the impact from COVID-19 will be done for both divisions by end of Q1 2024. With the washout of COVID sales this year, we expect 80 to 90% of the sales to have washed out, and the remaining impact will be in Q1 next year, which we estimate to be roughly about a billion. Now, looking at the profitability, cooperating profits declined 6%. And this was driven, on the one hand, by the decline of COVID-19-related sales, but also the base effect of the ultramarital patent settlement, which happened in the first half of last year. And you see, without this base effect, actually, we had 0%, so the cooperating profit was stable. Similarly, the core EPS declined here by 5%. Again, driven by the same effects. Again, excluding the ultramarine patent settlement in the first half of last year, this would have been minus 2%. Again, this is an effect that will not repeat itself in the second half of the year. So we are completely in line with what we said in the beginning of the year in terms of our guidance. On this slide, you can see the very young portfolio that we have in pharma. We actually have one of the youngest portfolio of all the different pharma companies with 20 new medicines that we've launched since the end of 2015. And these medicines will carry us forward for the next years. I already mentioned Elevitis, which recently received accelerated approval for Duchenne muscular dystrophy from the FDA, and Columv, which is now approved for third-line DLBCL in the US and Europe and will take it into earlier lines. On the right-hand side, you can see that this portfolio of medicines, of 20 medicines, now accounts for more than 50% of the pharma sales, which is up 9 percentage points from half-year 2022. You can see the increasing contribution, again, of Abysmal as well. I'm excited to share that we have signed two new partnerships agreements, one in the late stage, one in the early stage. We announced the in-licensing of Silbacerin from Alnylam Pharmaceuticals. This is an antisense, or this is an RNAi molecule targeting angiotensinogen, and this really has the potential to change the way hypertension is being treated. There are 1.2 billion people in the world that suffer from hypertension, 80% uncontrolled, so obviously the existing medicines do not work appropriately, and the effect on patients is a reduction in life expectancy by five years. By targeting further upstream and by being able to only give this medicine twice a year, we believe not only will we achieve better adherence, but we will also achieve more consistent, durable blood pressure control. This is already in phase two stage of development with more data reading out in the second half of this year. This asset has the potential to be best in disease, and we are looking forward to providing more updates in the future. I've already mentioned also KSQ-4279. This is a first-in-class small molecule inhibitor. And what this molecule does, because USP1 is actually involved in DNA repair mechanisms, what it does in combination with other medicines, it makes the tumor more susceptible to cell death by adding cancer medicines. And with that, we believe we can increase efficacy of medicines. With that, let me also take the time to invite you to our Roche Pharma Day, which is our annual event focusing on pharma division, strategy, and portfolio. It will be in London, and the event will take place in person and virtually. I would like to also call out two other events. One is an IR event around ECTRIMS, where we are planning to share more data on the Ocvos six-month sub-Q formulation results, and also the phase two data from fenabrutinib. Later, we'll also share at CTAD at the end of October, more data on trantinamab, our brain-child Alzheimer medication, and we're looking forward to sharing that data with you as well. Now, let me provide a quick update on the remaining news flow. We recently announced positive results for Ocubus, as mentioned earlier, and Theresa will speak more about the benefits of this. We've had a negative result on TNKs. And in addition, we will have a number of readouts that will still happen this year. I know one is on top of mind of everyone, that's SkyOne. This is an event-driven trial. Readout is expected for Q4 or Q1 at the end of this year or beginning of next year. With that, let me say we confirmed the guidance. We have a very strong positive sales trajectory, both in the pharma and the diagnostics division in both the base business. And we expect roughly 5 billion Swiss francs of COVID-19 effect, as we have mentioned in the beginning of the year. And we are also confident that our guidance in terms of H&R was correct as well. With that, again, I would like to confirm the guidance, low single digit decline in sales. Core EPS growth broadly in line with sales decline and a further increase of the dividend. With that, I hand over to Theresa.