Roche Holding AG

Ladies and gentlemen, welcome to Roche's first quarter sales webinar 2026. My name is Henrik and I'm the technical operator for today's call. Kindly note that the webinar is being recorded. I'd 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 are 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'd like to follow the presented slides on your end as well, please feel free to go to wolf.com slash investors to download the presentation. At this time, it's our pleasure to introduce you to Thomas Schoenecker, CEO of Wash Group. Mr. Schoenecker, the stage is yours.

Thank you very much and good morning and good afternoon to everyone. I'm very much excited to share our Q1 2026 results with you. Overall, very strong performance in sales in the first quarter and including there are some clinical and regulatory milestones that we have achieved. Now let's start on the performance side. Q1 was strong with group sales at plus 6%, driven by pharma with plus 7%. Diagnostics grew plus 3% despite headwinds from the China healthcare pricing reforms, which we are still experiencing in the first half year. Excluding China, diagnostics was at plus 5%. In addition, a weaker and earlier flu season impacted the sales of Sufluza and on the diagnostic side, the respiratory sales in point of care, but also or patient care and the molecular business. This is across the both divisions, approximately 170 million Swiss francs, which more or less also explains the difference to the consensus. Now, moving to key milestones, Q1 was very busy with significant pipeline progress. On the pharma side, we found gerodestrin in adjuvant ER positive for two negative breast cancer in the US using a priority review voucher. And we do expect approval across two indications in the adjuvant and in the second line plus before the end of this year. Sanmo was filed in the U.S. Gaciva, we've had a series of filings in the U.S. and EU across SLE and INS. There are still a number of important readouts, or there have been a number of important readouts. For example, the positive PhenHANES-1 results in RMS. This is the last one from three phenobrutinib Phase III studies where you also saw the results presented at AAN, and there was an IR call yesterday as well on this topic. Now, together with FanHance 2 and Fantrapid, this is the first and only BTK inhibitor with positive phase 3 across both RMS and PPNS, and we do expect a filing in the next couple of months. I know that Theresa will go into more details here. Gazaiva, I think, is very much a success story. We've had four positive readouts in a row. The latest one was in Majesty in membranous nephropathy. and it follows positive readouts in ln so there was nephritis sle and nins in obesity we announced positive phase two results for petrolintide in the study we've shown excellent tolerability in fact we had more dropouts in the placebo than in the control arm and this tolerability makes it an ideal candidate to combine with our very strong ct388 which the glp1 gip which actually showed at week 48 similar weight loss than a leading other player after week 72. So we have a very strong GLP-1 GAP. We have a highly tolerable amylin, and we find this is a good combination. Now, moving to business development, I just want to highlight two deals. On the pharma side, we extended our collaboration with C4 Therapeutics on the greater antibody conjugates. And this is a promising novel platform which could potentially overcome certain therapeutic windows and resistance issues that other drug modalities have. On the diagnostic side, we acquired Saga, or we're in the process of acquiring Saga Diagnostics, and they provide a minimal residual disease test to really monitor disease progression so that we can pick out those patients where we need to then change the therapy. On the regulatory side, we've had CE marks for a new test for blood screening, which includes hepatitis E. We had the Alexis ApoE for P and the Alexis NFL for neurology portfolio. Looking ahead, we still have a couple of important Phase III redoubts this year and also some launches in diagnostics. There are two more NME redoubts. One is DIVARICIP in non-small lung cancer and cefaxircin in IGN. We have two readouts for ITOFB coming in breast cancer and also lunsumio in second line follicular lymphoma. In diagnostics, we are very excited that axillio sequencer is coming this summer. And I hope that we can see you at the Diagnostics IR Day, because we will certainly highlight this there. We'll also launch the ALEXIS-P tau 217, the ALEXIS-IGRA tuberculosis test, COVUS HDV, so hepatitis D, the E-PLEX gastrointestinal panel, and so on. So we have quite a lot of launches and exciting things ahead for this year as well. Now, this slide I've shown over the last couple of years, and what you can see is that we have shown consistent strong growth over the last quarters. We have post-pandemic average growth of 8%, and even in 2023 and 2024, if you strip out the pandemic sales, we did also have an underlying growth of 8%. So we continue to have good performance on the sales side, and we will continue to drive this as we go into the next quarters as well. Now, let's look at the numbers in detail at the group. I mentioned that we grew at 7%. This was driven by pharma with 7%. Diagnostics grew 3%. And as mentioned, this is due to the healthcare pricing reforms in China. And excluding China, diagnostics was at plus 5%. Overall, the impact on the flu season is about 1%. It's about 170 million that I was mentioning before. Now, let's take a closer look behind the drivers as well. First, all segments deliver growth. And now, looking at it one by one, I will start with the oncology. A strong Fesco conversion from Projecta continues. The HER2 franchise grew 2.5% in the first quarter. And we do expect a total of two franchise to peak this year, with a strong tail remaining. Ticentric returned to single-digit growth, and this was really driven by new indications. Alicenza had an exceptionally strong Q1 with double-digit growth. We are expecting overall low single-digit growth for full year 2026. In hematology, PolyB sees continued strong uptake in first-line DLBCL, and Colombi and Lonzumio continue to grow in later lines of DLBCL and follicular lymphoma. Hemlibra saw a very strong Q1 with market share gains and volumes. On the neurology side, Ocrevus keeps growing nicely by the strong uptake of the subcutaneous formulation. I know Theresa will go into more details here as well. And Evristi is expanding its global leadership position in SMA globally. On the immunology side, Xolia continues with a strong uptake in food allergy. We're expecting strong growth for the full year 2026, despite the first biosimilar launch in the second half year. This will be the first, and there will be no other biosimilar that will come in for the next two years after that. GASIVA, we are still very much excited about all the positive trials that we had. I mentioned four positive phase three in a row. And we're excited about the launches in lupus nephritis, which is ongoing. On the ophthalmology side, we saw an acceleration and continued market share gains here as well. And I know Theresa will go into details here as well. Diagnostics, a strong growth in pathology, but also core lab growing. despite the China healthcare pricing reforms. I think I mentioned all of this already. Now, let me briefly talk about expanding NVIDIA collaboration with this large-scale AI factory. So, we've had a very long-standing collaboration with NVIDIA over a number of years. And this collaboration really started in 2016, together with NVIDIA, specifically on the DNA sequencing side. because given the amount of data that we're going to produce, and specifically also with the chemistry from Stratos that we brought in, the amount of data needs to be digested and converted, and you need really high-performing chips in order to be able to do that. There's no sequencer in the world that actually produces as much data as our sequencer, so we really needed to go novel steps, and here the partnership with NVIDIA was really critical. And since then, we've also made a number of acquisitions in this space, like prescient, for example, but also entered into strategic collaborations for drug discovery as well. And we've significantly built up our internal capabilities when it comes to AI as well. Now, with the recent agreements, we are expanding our GPU compute infrastructure. And with that, we have the largest AI factory in the pharma industry. And also what's important earlier in this month, we joined forces with Anthropic, IBM, Meta and Microsoft to launch a collaborative licensing zone for the development of AI foundational models called Shared AI License Foundations or SAIL. Now, Roche Genentech is the only pharma company among the founding members. And you can see we're really pushing forward on the AI side. And why are we doing this? Because we believe that AI will have a disruptive potential across the entire value chain in our company, from drug discovery to manufacturing, diagnostics, imaging. And we're really pressing forward on this with all the great people we have in the space in our company. Now, this will allow us to accelerate the development of therapeutics and diagnostics. Now let's turn to the outlook. We've made substantial progress across all the therapeutic areas since the start of the year. You see a lot of green ticks. There's a strong momentum from a very strong year of pipeline readouts in 2025, now also going into 2026, with a number of key milestones that have been achieved. On the regulatory side, We have just submitted GeoDestrin in adjuvant breast cancer. We used a priority review voucher. And with that, we're expecting a launch later in this year, so still in this year. We've also filed the cyber in SLE in the U.S. On the key readouts in Q1, I would like to highlight, on the one hand, geodestrin in the first line, you are positive breast cancer, persevere. The study failed, but we saw a numerical benefit in first separating. The results will be presented at ASCO. Again, I want to reiterate that more than 70% of the opportunity is in the adjuvant setting. This is really a smaller patient population. And we still have another trial in the setting ongoing that could still allow us to enter in the first line setting as well. Now with fenabrutinib, we have the first and only BTK inhibitor with positive phase three studies across RMS and PPMS, and we will be filing in the coming months. Petrolintide, excited about the clean placebo-like safety profile with double digit weight loss to be achieved. This makes Petrolintide a good candidate to combine it with our very strong GLP-1, the CT388. The phase two in this combination will be initiated. And just to say, we're making very rapid progress with the CT388 molecule. We've just also initiated another two phase three studies here. Looking forward, we still have six pivotal phase three studies reading out, including two enemies, Diverisib and Cifaxersen. We have a very exciting pipeline, so I do believe that given all the readouts we had in the last couple of years, this will give us a much better view in terms of growth in the next coming years. And then between 27 and 2030, we have up to 19 NMEs that could launch. And as you can see, many of these enemies have quite significant sales potential attached to them. And we will not stop there. We will continue to do BD activities. We'll continue to try to speed up more molecules so that we can even increase this number. So I think this will really lay the foundation then also for growth in the next decade, which makes us confident that we can continue to have a good growth momentum. Now, let me reiterate a couple. Geodesurant, you will see already on the market at the end of the year. There are two more enemies that we'll read out this year. In addition, with divirisib and cefaxircin, in addition, we expect two enemies to be filed in the coming months. One is phenobrutinib, and the other one is the mickeyboard. And again, the implication is that we don't only have a good short- to mid-term outlook, but also a very solid base to deliver long-lasting future growth as well. On the diagnostic side, we have outlined several platforms. On the left-hand side, these are all one billion plus opportunities. So in diagnostic terms, blockbuster opportunities. And very, very excited about Sequencer coming just around the corner. And we will show it to you at Daya Day. Here with the sequencer, we have clear differentiation on speed and accuracy, specifically also on cost, because you don't have to have a full plate to achieve lower costs if you compare that with some other leading companies in this space. On the test side, and this is just a small selection of the tests that we're launching, but you can also see the complementarity to the pharma portfolio with Alexis NFL in combination with multiple sclerosis, PTAL 217 with Alzheimer's. We really have a good strategy to combine and bring together diagnostics and pharma. And I know Matt will cover more on what's coming your way on these slides as well. Now, let me wrap up with the guidance. The guidance is confirmed at mid single digit sales growth and high single digit core EPS growth and further increase in dividend in Swiss francs. With that, very happy to hand over to Alan.

Yeah, thanks, Thomas. Sales call today, so just a brief comment on sales itself, currency, and then once again confirming the guidance. When we look at sales, yeah, let me start really with the big frame. I start on the left-hand side, you compare to the right-hand side, the sales on Q1 2026, I think minus 5% when you look at Swiss francs. You see on the right-hand side, this big red bar with minus one point six billion. That is really the currency impact from the conversion. Then you shift a little bit to the left and then you see the plus six percent in CR. And I will go into currencies on the next slide. But let me talk very quickly about the plus six percent at CR. you see it split down on on pharma with a plus 842 excluding the loss of exclusivity products and then loss of exclusivity minus 63 when you put the two bars together you get to the plus seven percent in cer and the minus 63 i think is a small number yeah you've heard we're expecting a loss of exclusivity impact on sales of roughly a billion negative we stick to that Certainly was a good start. Actemra helped us, Mepsara helped us, but we think these two products will slow down really for the rest of the year and that I think makes the one billion still doable, if you like, and still realistic. When we go to the right-hand side, diagnostics, as Thomas framed it well, and I'm sure Matt will talk a lot about it, diagnostics was a plus 148, excluding China. That is representing the 5%. In CR, and then you see the China healthcare pricing reform is minus 60 when you put the two together, you get to the plus 3% in CR. And there has been also an effect from respiratory. Good now, as promised, let's talk about currency and that's the next slide. And here you see it. And it's very clear that the Swiss rank has appreciated. basically against all currencies. So you see on the left hand side to see our growth was plus six percent. And you see on the right hand side, the minus five percent, respectively, the minus four point seven percent in Swiss francs. And you see, really, I think that the major driver here is the US dollar. you might have noticed that we have used the US dollar now carefully to bring that in. You know, when you look at the plus 6% in CR and the minus 5% in Swiss francs, if we were converting to US dollar, we would have grown with 9%, which I think supports the constant currency growth clearly. Good. With that, let's go to the outlook here. And that is certainly always challenging because we're always assuming that currency rates remain stable until the end of the year. And that makes this outlook, how should I say, not very probable. Nevertheless, we want to give you an orientation. So first of all, as shown on the last slide, significant impact in Q1 with the minus 11 percentage points on sales. When we assume that the currency rates at the end of March remain stable until the end of the year, then I think really you see what you see at half year with the minus seven percentage points on sales and the minus 10 percentage points on cooperating profit and core EPS. When you look really at the full year with a minus four percentage points on sales and minus six percent on cooperating profit, and core EPS respectively. If you were taking today's rates, I would argue that's broadly in line what you see in the full year projection. So let me remind everybody, I think last year in Q1, we had a positive impact from currencies. So I think the volatility is enormous. Why do I say this? Because the projections for full year, we will see what we really end up with. I also respect the point. It's very hard to follow our numbers with this volatility that we're going to see, knowing that we have roughly 50 percent of our sales in the US dollar. I don't want to dwell too much about the guidance. I think guidance is confirmed. We're very well on track here to achieve the guidance. Let me reiterate once again that the loss of exclusivity impact of roughly 1 billion is still expected for the full year 2026. And that gives me the pleasure to hand over to Theresa.