Earnings call transcript: Roche Q4 2024 sees strong sales growth, margin boost

Roche reported robust financial performance for the fourth quarter of 2024, with significant growth in both sales and core operating profit. The company’s strategic focus on innovation and disciplined cost management contributed to these results, as detailed in the recent earnings call. Roche’s stock remained stable following the announcement, reflecting investor confidence in its future outlook.

Key Takeaways

• Group sales increased by 7%, with core operating profit rising 14%.
• Roche launched key products and maintained a strong pipeline with 17 blockbuster medicines.
• The company experienced substantial growth across major regions, particularly in international markets.
• Roche’s dividend increased for the 38th consecutive year, indicating strong cash flow.
• The 2025 outlook includes mid-single-digit sales growth and high single-digit EPS growth.

Company Performance

Roche demonstrated strong performance in Q4 2024, driven by a 9% increase in its base business. The company’s strategic emphasis on new product launches and innovation has bolstered its competitive position, particularly in the pharmaceutical sector. Roche’s operations in the US, Europe, and international markets saw significant growth, with international pharma sales surging by 17%.

Financial Highlights

• Revenue: Increased by 7% year-over-year.
• Core operating profit: Rose by 14%.
• Core EPS: Grew by 12%, excluding tax effects.
• Operating free cash flow: Up 34% to CHF 21.2 billion.

Outlook & Guidance

Roche provided an optimistic outlook for 2025, projecting mid-single-digit growth in group sales and high single-digit growth in core EPS. The company anticipates 12 key Phase 3 readouts and the potential entry of 7 new molecular entities into Phase 3 trials. Roche is also preparing for a limited impact from biosimilars, with significant growth expected from new medicines.

Executive Commentary

CEO Thomas Schinecker expressed confidence in Roche’s ability to deliver strong results, stating, "We managed to deliver great results in 2024 and I hope it shows that we do what we say and we also deliver." CFO Alan Hippe highlighted the company’s robust cash generation, while Chief Commercial Officer Theresa Heggie noted the continued growth of Roche’s young portfolio.

Q&A

During the earnings call, analysts inquired about Roche’s strategy for extending intellectual property on key franchises and its plans for business development. Executives emphasized their confidence in Giridestrant’s multi-billion dollar potential and confirmed that no biosimilar entry for Xolair is expected in 2025.

Risks and Challenges

• Potential impact of biosimilar competition on key products.
• Market saturation in mature segments could limit growth.
• Macroeconomic pressures, including currency fluctuations, may affect financial performance.
• Regulatory challenges in launching new products and maintaining market approvals.
• The ongoing transition from the COVID-19 market may impact diagnostics growth.

Full transcript - Rogers Corp (NYSE:ROG) Q4 2024:

Thomas Schinecker, CEO, Roche: Thank you very much and hello to everyone wherever in the world you are. I’m really excited to share with you the results of 2024 for the Roche Group because I believe this year has really been an excellent year for us. So let’s look at the performance. So overall, Group sales was at 7%. The base business, meaning excluding COVID-nineteen, grew even with impressive 9%.

Pharma 9% and Diagnostics 8%. We saw the last and final impact of COVID-nineteen sales in reduction in 2024, so there is no more impact going forward. The final impact was CHF1.1 billion, so exactly in line with the guidance that we gave at the beginning of the year. The LOE impact was CHF 1,000,000,000, so slightly better than the guidance we had given. To round out the very strong performance of the organization, let’s look at the 3rd line here.

Core operating profit growth, plus 14 percent. Group core operating margin, up 2.1 percentage points. Core EPS growth, plus 12% if you exclude the tax effect, which we guided for or plus 7% if you include it. Operating free cash flow up 34% at CHF 21.2 billion, certainly the number that Alan loves the most. Key milestones achieved in Q4, you see them on this list here, EU approval for Vibayasmal prefilled syringe.

We had positive readouts for tretinumab and also in the PRASI trial, we see potential benefit in certain subpopulations with this disease. On the diagnostic side, it was a very busy quarter with the mass spectrometry launch, the 6,800, 8800 launch and so on. And also on the deal side, we made good progress, introducing Poseida to our organization, allogeneic CAR Ts, not only for oncology, but also in the autoimmune diseases and the DL L3 ADC deal in small cell lung cancer. 2025 will really be a significant year for us in terms of Phase III readouts, but also in Phase III enabling readouts. So movement from Phase 2 and Phase 3 where we have up to 7 Can you hear me?

Yes, now you can hear me. Okay, perfect. Sorry about that. Good. So now let’s look at how we did versus the guidance.

At the beginning of the year, we talked about mid single digit sales growth for the year 2024. We definitely ended up at the upper end of this guidance at 7%. Also at the beginning of the year, we talked about mid single digit core EPS growth excluding impact from the resolution of tax disputes in 2023. We raised that guidance in mid year and we’ve clearly exceeded this guidance with 12%. Again, if you include the impact, we are at 7%, which is in line with the sales growth and we further increased the dividend.

This means that we have increased the dividend for the 38th consecutive year. And as you will see at the end, we plan to do that also for the 9th consecutive year. Here, you can see the slide that we always show. You can see that the Roche Group grew 7%. If you exclude COVID, we had a very strong growth of 9%.

So again, very strong performance in the group. Now this is one of the slides that I like very much. On the left hand side, you see the Group sales growth over the last couple of quarters years. And then the right hand side, you can see the growth if you exclude COVID-nineteen. Clearly, we are one of the companies that had significant sales of COVID-nineteen between 2020 2022, in fact, around CHF 19,000,000,000 and we are also very proud of the contribution we did at the time.

But also it means that as COVID-nineteen went away and we always communicated that it would go away, we had in 2023 the situation that we had to compensate this loss. And we did so with significant base business growth, so excluding COVID-nineteen. And this growth has been very strong over the last 2 years. You see 2023 8%. If you take the average of 24%, you’re at 9% growth.

And in fact, in the last three quarters, we reported 9% growth each quarter. I think this is a very strong performance from the organization. Now let me quickly take you through this slide. A couple of highlights that I would like to make. First of all, we have now 17 medicines that have blockbuster status.

Furthermore, in oncology, Perjeta Fasco conversion rate is now increasing to 46%. PolyV US patient share first line DLBCL now climbing to 29%, establishing itself to the new standard of care and it’s also an opportunity to further build upon it with combinations with the CD20, CD3 bispecifics that we have. HEMLIBRA patient share in the U. S. EU now reaching 42%.

And we are now also looking forward to the Phase 3 enabling readout of NXT007, which is the next generation HEMLIBRA. In neurology, OCREVUS subcutaneous, now with roughly 50% patient share being naive to OCREVUS and the J code is only to come in 1st April. Elivitas with good launch momentum and clearly Theresa will touch on that and on the promising 2 year follow-up data from the Phase 3 IMbark study. XOLAR Food Allergy with continued strong uptake now at more than 40,000 patients on treatment, mid teens to be expected in terms of growth in 2025. The biosimilar prefilled syringe, now also approved in EU and is set to become the number one ophthalmology brand in 2025.

In Diagnostics, strong base business growth of 8% as mentioned before. Now let’s take a brief look into the future. First, I can say that we have completed our strategic review and we are really now in implementation throughout the organization. So we’re set for the future. I would like to touch on the formation of our near patient care organization in diagnostics.

So in diagnostics, we have 4 customer areas: Core Lab, Molecular Lab, Pathology Lab, and Near Patient Care. In the first three, we’re the number 1 globally. The area where we want to become number 1 is Near Patient Care. And here, we’ve done the acquisition of LumiraDx, and this has been covered quite a bit by Matt and myself in recent presentations. What’s really special about this platform, it’s a handheld platform.

And on this technology, you can do multiple different technologies in terms of measurement: clinical chemistry, immunochemistry, coagulation, potentially molecular diagnostics. And it’s room temperature. And it’s really disruptive from a cost of goods position. Accu Chek CGM was launched last year. This will enter us into a very fast growing, very large market.

Cobas Liat, we just recently announced the menu expansion into SDI, and we’ll continue to build out the menu. But we have 2 more platforms in our pipeline. One is around blood gas, the other one around lab like immunoassay performance, where we are to continuously invest into the new patient care segment and we’ll continue to build out that segment as we go into the next years. Now let’s go to pharma. You’ve seen the very strong momentum that we have in our organization, and this is really due to the young portfolio that we have in terms of medicines.

And you can see on the right hand side that in the meantime, 56% of our pharma sales are coming from these new medicines. In fact, in 2024, we launched 2 new medicines. 1 is PSG and the other one is Itofy. And I would definitely say Itofbi is best in class and we have very hopes on Itofbi. In 2025, we have a total of 4 potential enemies that with a positive Phase 3 readout could lead to launches in 2026.

We have a 6th one a 5th one, which is teragolumab, but we didn’t mention on here because as we know, the hopes for teragolumab are lower, but there are still certain trials ongoing. Let’s see how that runs out. But those are the 4 that we would like to highlight for 2025. What’s also important is that we are one of the companies that has very little biosimilar exposure until the end of the decade. So, we have less headwinds than many other companies have in our industry in this time period.

Now, let’s look specifically at the pharma pipeline in 2025 and what we can expect. Here, you see a list of a number of our key assets in our pipeline. In fact, we have more than 7 NMEs with peak sales potential of more than SEK 3,000,000,000 and SEK 4 with peak sales of SEK 2,000,000,000 to SEK 3,000,000,000 We have 6 marketed products that each have trials ongoing with potential line extensions that could add another SEK 1,000,000,000 to SEK 2,000,000,000 each per asset. Now 2025 will be a special year because we have 12 key pivotal readouts, so approximately 1 per month. And we have 4 readouts that are linked to new enemies that could be launched in 2026.

And even more important, I would say, is that we are refilling our late stage pipeline. We have 7 enemies that could enter into Phase 3. So and that would be really for us a record if I compare that to last 10 years or so to bring 7 additional enemies into late stage would be really significant for us. Now let me finalize with the 2025 guidance. And you can see that we expect LOE impact of about CHF 1,200,000,000, so slightly higher than what we saw in 2024.

And we aim for Group sales growth in mid single digit sales range and core EPS growth in the high single digit range. And dividends, we aim to further increase in Swiss francs. Thank you very much. And with that, I hand over to Alain.

Alan Hippe, CFO, Roche: Yes. Thanks, Thomas. Hello from my side. Great to see everybody. I hope everybody is fine.

Certainly, what I also hope is that Theresa is getting better soon. Very pleased with the performance this year and would like to thank the whole team and everybody who has contributed to that performance on one hand and certainly everybody who has contributed to the well-being for patients. Good. Let’s get into it. And this is the overview.

Sales, you see plus 7%, 3% in reported in Swiss francs. I’m sure Teresa and Matt will do quite a thing to explain the sales and dig deeper here. Underlying, as you’ve heard from Thomas already, so without the COVID sales, plus 9%, quite impressive performance. And when you look at the corporate profit with a higher momentum, plus 14%, think very clearly good cost containment. And really when you see the increases that we have in the cost lines well below the sales growth.

Yes, then we get to core net income and core EPS. Yes, and I would hit the 2 right away. Very clearly, what brought the dynamic down, the growth dynamic of these numbers are two elements. One is taxes. We have paid $1,100,000,000 more taxes than last year.

Part of that is the tax impact or the resolution of tax disputes we had last year as a positive, the $774,000,000 that certainly contributes to that increase. The other part is high interest charges, roughly $320,000,000 or $400,000,000 when you just look at interest, that we had more. And that explains the core EPS growth of 7%. If you exclude the resolution of tax disputes from 2023, you go to a core EPS growth of +12%. IFRS net income down 19% in constant rates minus 26% in Swiss francs.

Two major impairments happened here, where we certainly have to acknowledge that the expectations of these investments and assets didn’t fulfill compared to what we had in mind when we bought these assets. So we had to impair end of 2024. Yes. And then the number I love most, Thomas is completely right, is the cash flow, 34% up, 28% in Swiss francs, CHF 20,100,000,000 in constant rates in as reported and CHF 21,200,000,000 in constant rates. That’s really it’s not a record number.

I think once we had a higher one, yes, but it’s long ago, it’s a fantastic number and certainly helps us to mitigate the debt increase and the interest charges. The free cash flow also on a high level, as you can see, so really money available to do further M and A, but also to pay the dividend. When you look at this group sales growth and here you see the bridge, full year 2023 on the left hand side and full year 2024 with $60,500,000,000 on the right hand side. First really, let’s go through the divisions just to give you the broad overview. I think you see the DIA (BME:DIDA) based business has grown over a 1,000,000,000 COVID impact a minus 552,000,000 Pharma grows above a $5,000,000,000 Rona pre sales impact from last year to $522,000,000 And then you see the loss of exclusivity, which is roughly $1,000,000,000 was a minus $952,000,000 And then you see the currency impact, which brings the 7% sales growth in concentrates to a 3% in Swiss francs.

When you look at the P and L, as said, I think the cost discipline is obvious. I mentioned the sales. You see the other revenues with plus $215,000,000 This is as you know the line where we have the royalties in where we have the profit shares in and all of this. Here I would argue, VENCEXA profit share contributed to that number and then XOLAR outside of the U. S.

That caused an increase of a +215. When you look at cost of sales, with a 5% increase, a minus 720 impact, I think the 5% is a major achievement because we had volume growth of 11%. When you look at pharma, 14%, diagnostics at 3% volume growth. I think that’s a very respective outcome. I think for pharma, I can say $640,000,000 increase.

Here, half of that, basically half of that is triggered by a provisional release we had in 2023. This is really the RONA provision, as you know, that we released. I think that’s a big explanation here. So they would have looked much better without that. Diagnostics, dollars 80,000,000 with quite some volume as well.

Then you go for R and D. R and D, modest growth rate with plus 1%. Very clearly, the reprioritization in the portfolio on the pharma side is going on and moving on. On the other hand, we have invested more on the cardiovascular side. And then you see really SG and A was plus 5%.

Let me explain that. M and D plays a major role here. In pharma, an increase of $319,000,000 very justified because when you look at the growth rates, Offer buys more, crevice, fresco, I think that’s where we have to invest and we did. And when you look at Diagnostics, higher logistics costs of $90,000,000 on the M and D side. And then there’s an element of corporate.

And you might ask yourself, okay, why is that coming? Well, one element is we centralized more in the company. So there were more costs coming from other units into SG and A. Diabetes care is one element that we integrated, just to mention example here. That’s roughly $100,000,000 And then the rest is informatics.

In informatics, we have invested in artificial intelligence, ERP and other technologies, which I think is very justified. And when you look at other operating income and expenses, the -166,000,000 decline solely is driven by less gains on disposals compared to last year, leads us to a cooperating profit of 20 $800,000,000 with an increase of 14% compared to a sales growth in constant currencies of 7%. While you look at the margins, I think with such a performance, certainly the margins go up. You see for the group in constant rates, 2.1 percentage points. Same applies to the Pharma division with plus 2.1 percentage points.

And Diagnostics has grown with 1.3 percentage points. So really a great performance across the board, and you see both divisions improved their margins. When we go to the core net financial result, you see really an increase of $310,000,000 reported. Major driver here is the interest expenses. As you know, the debt has risen.

On top of that, we have changed a couple of mature bonds with other bonds that have higher interest charges, which is clear in the current environment. So I think that was the driver here. Equity securities was something small as that’s our venture fund, small number. And then the net interest income is driven by the cash that we had on the balance sheet and that we just reinvested in a very cautious form. Good, the core tax rate.

That’s quite an interesting story. Let me start on the left hand side, with the 11.9% in 2023, which was certainly a great outcome, very much driven by the 774 $4,000,000 positive tax impact. So you have to readjust for that. That’s a minus 4.3 percentage points, brings us to 16.2 percent adjusted effective tax rate for 2023. When When you compare that to the adjusted effective tax rate full year 2024 with 17.1%, I would argue, I think really very comparable to last year, major change here is the profit mix that comes in with different jurisdictions and different tax rates.

What came into it, on one hand, is certainly the 2 pillar, the pillar to top up tax, the Swiss minimum tax, so to say, with plus 1 percentage point. And then we had a couple of resolution of tax disputes we cannot really budget for and it’s very hard to foresee. That brought the tax rate down by minus 1.4 percentage points to 16.7%. I know everybody’s eager to know what’s going to happen in 2025. Guidance here is very clearly 19.5%, 18% for the, if you like, effective tax rate and then 1.5 percentage points for the minimum tax.

So we stick to that. Core EPS development. And that tells a story a little bit about the year. I think really you see on the left hand side where we started with, we deduct the effect of the resolution of the tax disputes. You get to 18.02.

And then you see operations is really, that’s the driver of the result in 2024. What worked against us, less product disposals, the -181,000,000 that I’ve mentioned already. You see the financial income and expense, which has risen, that’s a minus $320,000,000 And then you see the tax rate change, I’ve elaborated about already. And that brings us to the 12% increase in core EPS and you see it the driver is clear operations. When you look at the non core and the IFRS income, I start with the corporate profit.

I’ve talked about with plus 14%, the outstanding performance that we have seen. You go to the IFRS net income line, you see the minus 19% in constant rates that I’ve mentioned already. And when you go through the lines, I’ve seen the global restructuring plans very comparable what we had last year. I’d say, hey, Alan, that’s the difference. Well, we have a positive effect in that line in 2024 coming from the Becqueville divestment of $240,000,000 Amortization of intangible assets, I would argue, pretty stable.

And then you see the impairments of intangible assets, a decline of minus $3,400,000,000 Very clearly here asset driven by 2 major impairments that we have taken where the assets really didn’t meet our expectations we had when we acquired them. And that really is the major driver. So goodwill impairment was $3,100,000,000 $800,000,000 additional impairments on the assets. M and A and Alliance transaction is not much of a move here. And legal and environmental, I think in 2023 had a positive impact because we released a provision for a court case.

And I would argue in 2024 normal business. Leads us to an IFRS And then you see the total financial result and taxes when you put it together. So that’s 1,400,000,000 more compared to 2023 in total, as I’ve said and outlined at the beginning already, leads us to an IFRS net income of 9,200,000,000. Good. Yeah.

I think, this is not just a number. This is the slide I love the most. When I look at 2024 and that’s the cash generation. Cash generation has been outstanding. When you look at concentrates from $15,800,000,000 to $21,200,000,000 reported on the right hand side $20,100,000,000 I think really an outstanding number.

And what excites me the most is, I think very, as expected, operations drove that number. And you see that in the first green bar with $3,700,000,000 But then we also worked on the net working capital. And you see net trade working capital, $1,300,000,000 And I can say both divisions really brought that number home. So to say, this is really a fantastic outcome. And when you then look, create other networking capital movements, I think that helped as well.

Investments in intangible assets, what we want to do. So we invested $600,000,000 more here. So overall, I think a fantastic achievement. When we look really at the cash flow margins, they jumped as well. And as I’ve said, I think both divisions contributed.

GroupNet net debt development. So what does this cash flow generation mean for the net debt development? Let me first outline where we landed. End of December 2023, a minus $18,700,000,000 net debt. End of 2024, a minus $17,300,000,000 So really an improvement of 1,400,000,000 dollars So really we overcompensated everything.

So I think that’s a great message. How did that work? I think the operating free cash flow, yes, I’ve talked about it in here is an investment in intangible assets of 1,500,000,000 dollars I think just to mention that. When you look at the non operating free cash flow, taxes was $3,700,000,000 Treasury is $1,100,000,000 And then you see certainly dividends and M and A. Dividends paid $8,000,000,000 M and A and transactions $3,100,000,000 So you can argue including the $1,500,000,000 for intangible assets we have invested into M and A and in terms of assets, which certainly drive the pipeline at $4,600,000,000 Then you see a currency translation effect.

As much as we love a strong US dollar in the P and L, it hits us on the balance sheet on the debt side because 70% of our debt and we have $34,700,000,000 gross debt on the balance sheet, 70% of that is in US dollars. And when the dollar strengthens, I see that number gets higher. And then you see a couple of other effects here. So that leads us to the $17,300,000,000 certainly very pleased with that as well based on the strong cash flow that I’ve explained already. Good.

With that, let’s go quickly through the balance sheet. First time, we have more than $100,000,000,000 in assets in the balance sheet. And what you see is cash and marketable securities. Yes, we brought that up. We had a couple of bond emissions that helped us and certainly $7,300,000,000 give you a lot of assurance that we can pay the dividend.

Other current assets, I think very clearly slight decline. Why? Vacaville went away. I think that’s $600,000,000 and inventories went down by $300,000,000 which I think is a great message. When the non current assets slightly up, dollars 4,800,000,000 here, very clearly deferred tax assets played a role here.

With the restructuring plans, I think the intangible assets impairments, all of that contribute to this as well as the acquisitions that we have done. On the current liabilities, so we move to the right hand side, accruals are the reason for the increase on the current liabilities and the non current liabilities, very clear, that’s the gross debt. Gross debt increased from $29,200,000,000 to $34,700,000,000 so by $5,500,000,000 and that’s reflected in that number. And you see overall, the equity has increased by $2,900,000,000 Good. With that, currency.

Yes, a little bit of a pain in the last 2 years. And when you look at 2024, you still see that on the left hand side, this orange line is below the black line, and the black line is the average for 2023 and the orange line is the average for 2024. And whenever these lines are below, that’s not a good impact for us, if you like. So you see on the right hand side the result for the full year, a minus 4 percentage points impact on sales, a minus 6 percentage points impact on core operating profit and a minus 6 percentage points impact on core EPS. I think when you really look and we do that exercise, we assume really at year end that every currency rate stays the same during the year and we project them for the full year, which is very, very hypothetical.

But then we expect any impact for 20 25, which is certainly encouraging. If we were looking at today, we even have a positive impact. But, well, we all know currencies are very, very volatile, but it looks like a better year compared to the last 2. Now a very formal slide, I know, and a little bit boring, but important to get to the right starting point for 2025. So let me start really with the core EPS as reported in 2024 of CHF 18.8.

And what we have to or what you have to adjust for is the foreign exchange losses, which are so far not really reflected in that number or not reflected in the number. So in the green bucket, what you see is an adjustment of CHF 0.53, CHF 0.53 exchange rate effect. This is a result of dividing the 2024 currency losses of CHF 291,000,000 as well as the 2024 losses on net monetary position in hyperinflationary economies of CHF 163,000,000. This is shown in Note 4 of our consolidated financial statements on Page 62 of the Finance Report 20.24. This number, net of taxes and non controlling interest by the number of diluted shares of $802,000,000 The $802,000,000 shares you get in Note 29 of the Finance Report Page 121.

So when you do that exercise, you get to the 53. If you do that exercise, you might ask yourself, oh, this implies a pretty low tax rate for that impact, yes, when you do that. So you can do the math here. It would imply a tax rate of 6.4%. Let me take that topic right away because the one impact of 163,000,000 has no tax impact.

So that’s one element here. And the other piece is the 291 has a tax impact, but in the holding. And the holding, we have certainly another tax rate compared to what we have in the group. So that leads you to the 53 ruble and the adjustment here. So the starting figure

Speaker 2: for the

Alan Hippe, CFO, Roche: outlook for 2025 is CHF 19.33 per share. Good. With that, yes, that’s a bit formal, I know. With that, I think really nothing to say about the guidance Thomas gave that. And with that, it’s my pleasure to hand over to Theresa.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Great. Thank you, Alan. So apologies for the mask. It is not a fashion statement. I am feeling a little bit under the weather, and so I want to make sure that I’m protecting my colleagues.

But I am very pleased to share with you the 2024 results for pharma. So let’s kick things off with a look at the sales performance. In 2024, pharma sales grew 8% at constant exchange rates to $46,200,000,000 excluding Ranapriv, sales grew 9%. All regions, excluding Japan, delivered strong growth, 9% in the U. S, 8% in Europe and extremely impressive 17% in international all at constant exchange rates.

Excluding RONAPRIEV, Japan declined at just 2% and that is primarily due to mandatory price cuts. And as Alan already mentioned, overall pharma volumes were up by 14%. Going into a little bit more detail, the core operating profit for pharma increased by 13% versus an 8% sales increase with a COP margin of 47.7%. Going through the lines in a little bit more detail, you can see the COP grew ahead of sales and this was really driven by cost discipline in both R and D and SG and A. Other revenue, as Alan mentioned, increased 16%.

This was primarily driven by the increases in profit share income for the higher sales of Xolair outside the U. S. And as you mentioned, Vyclexta in the U. S. Cost of sales increased by 8% in line with sales growth and remains stable at around 18% as a percentage of sales.

And again, this is including the base effect of that run and pre provision release from last year as well as that 14% of volume increase. So I think overall really good performance on cost of sales. R and D costs increased only by 1%. This is about 24% of sales and SG and A costs increased by 5% in pharma as a percentage of sales though it decreased to around 15 percent. As Alan mentioned, this was due to increased investments, including marketing and distribution costs to support our ongoing launches, particularly of a bizmo, fesco and Xolair in food allergies.

So I think, as Alan mentioned, money well spent. And then other operating income and expenses decreased by 25% and that is solely due to lower gains on disposals of products. So Thomas and Alan shared with you their favorite slides. This one is mine. Our young portfolio continues to deliver strong growth led by our key brands, the Bismo, Fezco, Ocrevus, Hanlibra, Zolair, Polivi and Invisdee.

Combined these added 3,900,000,000 of new sales last year, which is really impressive. For the first time, Polivi has achieved blockbuster status making it our 17th blockbuster of 2024 when you include VENCLEXTA. So now let’s take a deeper dive into our therapeutic areas and let’s start with oncology. Oncology sales increased by 3% to 15,800,000,000 in 2024. Let’s start by highlighting some of the latest news flow for our most recently launched NME, iTovi.

On Tuesday, we shared with you in the final analysis of INNOVA 1 20 that ITOVI met the key secondary endpoint of OS benefit. We are very much looking forward to sharing this data at future medical congresses and with regulators around the world. While the US launch is ongoing, we expect EU approval in the first half of this year. With the HER2 franchise, we finished strong, had silo delivering 7% growth and Fezco with 62% growth. Global conversion rate for Fezco has climbed to 46% from 43% in Q3 and we would fully expect to exceed 50% in 2025.

Moving on to Tecentriq, in 2024, sales overall were stable. That’s primarily driven by small cell and HCC. We do believe, as we have mentioned previously, that Tecentriq is getting close to peak, and we expect sales growth to be in the 0 to low single digit range going forward.

Speaker 4: Looking ahead at what’s to

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: come in 2025, I want to specifically call out the 2 highly anticipated Phase 3 readouts for girdestrant, Persevera in Q4 and Nuvera in Q2. And we are very much looking forward to sharing the outcomes of these potentially standard of care changing studies. So let’s turn our attention to hematology. Hematology continues to deliver strong growth. We ended the year at $7,900,000,000 in sales with 15% growth.

And let’s start by looking at HEMLIBRA. In Q4 growth was strong across all regions and patient segments with good underlying market demand. We saw a very strong Q4 performance in the U. S, 20 percent at constant exchange rates, and that was driven by large specialty pharmacy order, which is very similar to the pattern that we’ve seen in previous years. Going forward into 2025, we would expect a mid single digit growth globally for Hemlibra.

Staying with our hemophilia portfolio for the moment, as Thomas mentioned, we have the Phase 2 readout of our next generation bispecific in hemophilia, Next007 that is anticipated around mid year. If positive, this would lead to the initiation of a Phase 3 development program later in 2025. And as a reminder, we believe that next level 7, which is 30 times more potent than Hemlibra, has the potential to receive 0 treated bleeds without the need for additional factory treatment. So this would really allow us once again to change the treatment paradigm for patients suffering from hemophilia A. Moving on to Polyvi.

In the U. S, first line DLBCL patient shares keep on climbing. We’re now at 29%. Bolivia has been used in more than 42,000 patients globally. We also recently shared the 5 year polarics data indicating a positive trend in OS with the hazard ratio improving from 0.85 to 0.85 from 0.94 in the 3 year data, which we believe will further support uptake.

Columbia and LUNSUMIO launches are progressing on track. For LUNSUMIO, we completed US and EU filing of the subcutaneous formulation, which has all the benefits of the available IV formulation with the added ease of subcu. Looking ahead into 2025, there is quite a bit happening in hematology. We expect to move both Colombia and LUNSUMIO into second line DLBCL, much bigger opportunities. For Colombia, this means U.

S. EU approval based on the positive STARGLOW data with the pitufa set for July 20th. And for LUNSUMIO, we’re expecting that Phase 3 SUNMO data in second line DLBCL. For LUNSUMIO, there are 2 additional events. The U.

S. Approval of the subcutaneous formulation in 3rd line follicular, which I just mentioned, and the phase 3 readout in 2nd line follicular. We’re also expecting phase 3 readouts for VENCLEXTA in first line MDS and PSKAI in Ahus. So lots to look forward to in hematology this year.

Speaker 4: Next (LON:NXT) up, let’s talk a little bit

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: more about our recent acquisition of Poseida in its allogeneic CAR T portfolio. We’ve long believed that the Poseida AlloCAR T technology could potentially be best in class in malignant hematology. The early data in multiple myeloma suggests very strong clinical activity comparable to the auto BCMA CAR Ts. Now with this acquisition, we are going to be moving quickly to bring this approach into MS and SLE as well with INDs already granted. And we’re excited about the possibilities for patients represented by these programs.

And with the deal now closed, we’ll be able to bring you more regular updates in the coming months. So with that, let’s move on to our neurology franchise. The neurology franchise continues to deliver strong growth of 13% at constant exchange rates achieving 9,300,000,000 in sales starting with OCREVUS, the market leader in MS and more specifically OCREVUS de novo, a recently launched subcutaneous formulation. The launch is progressing as planned and we continue to see very positive signals in the US. More than 50% of the Novo patients are naive to OCREVUS and we see accounts that have not used OCREVUS IV in the past prescribe Synovo.

As we’ve said earlier, OCREVUS Synovo expands the addressable market for OCREVUS and it’s not simply just about converting IP patients to subcutaneous. So far, we have more than 25,000 patients globally on OCREVUS Synovo. And de novo. And while we are waiting for a permanent J code to be issued in April of this year, we in the U. S, we would expect that that permanent J code will lead to an acceleration of uptake in the U.

S. And we remain quite confident in our $2,000,000,000 incremental sales projections for de novo. Looking at OCREVUS as a whole, we closed the year with 9% growth. Q4 U. S.

Sales were negatively impacted by Hurricane Helene, which as many of you know disrupted IV supplies and therefore reduced IV administration capacity as well as some modest year end buying patterns. That having been said, the 1st few weeks of sales in 2025 have been quite strong and we expect global sales growth to be in line with what you saw in 2024. So overall high single digit growth. Evrisky maintains its strong global position in SMA, achieving 18% growth in 2024, and we expect similar global growth rate in 2025. We are anticipating approval of the tablet for tablet formulation for every day later this year.

The tablet simplifies storage, eliminates the need for cold chain and increases the ease of administration. Three great benefits for patients. If needed, that tablet can be dissolved in water. We are looking forward to bringing this innovation to patients and to further expand on the AVRISD best in disease profile. Elovidea is the first gene therapy for DMD has now been used in the ex US, ex EU region.

Additionally, earlier this week, we shared positive top line results from the 2 year follow-up of the embark study, which will be shared with EU regulators. And I will talk a little bit more on that in a minute. Last December, we also shared the top line results for the phase 2b PDOVAs study in Parkinson’s. This is well I’ll cover in more detail in an upcoming slide. So another big outlook year in 2025 for neurology.

In particular, this is going to be quite the year for MS. OCREVUS high dose data is expected and has the potential to be best in class, best in disease, setting a new standard care at MS. We also have the long anticipated phase 3 readouts for fenibrutinib in RMS and PPMS, which we continue to believe has best in class potential based on the strong Phase 2 data that we’ve seen. There are 2 Phase 2 readouts for GIM-three twenty nine expected in 2025 in combination with AVRISD in SMA and as monotherapy in FSHD. And last but certainly not least, we expect to share additional Phase onetwo data cuts for trontinumab in Alzheimer’s disease at ADP and CTAD.

Gated upon these results, we are planning to move trontinum to Phase 3 by the end of the year and with FPI to be achieved in the second half. So let’s take a little bit of a closer look at the 2 year embark data for elevities which we shared on Monday. The phase 3 embark 2 year data clearly reinforce the significant and sustained functional benefit for DMD patients. This benefit is seen across the primary and 2 key secondary functional endpoints of NSAA time to rise in the 10 meter walk run when compared to propensity matched external cohort control. As you can see in the graph on the left, elevities is favored in all three of these functional endpoints and functional differences between patients treated with elevities and the external control are getting larger between 1 year 2 years after dosing.

Additionally, pulled 3 year data from the studies 101, 102 and cohort 1 of study 103 demonstrated consistent and durable clinically meaningful benefits compared to external control. Combined, we believe that this underscores the positive impact that elevates can have for DMD patients, their families and caregivers. We plan to present both data updates at MDA and share the embark 2 year data with regulators to support ongoing approval processes. Moving on to, PRASI in Parkinson’s. In December of last year, we shared the PDOVA missed the primary endpoint.

However, a suggested possible benefit in patients with early stage Parkinson’s on L dopa treatment was observed. This was a pre specified analysis and these patients were accounted for 75% of the trial population. Further data evaluation is ongoing and we’re awaiting additional insights from the open label extension. Together with regulators next step for PRASI will be determined later this year. To remind us all, we continue to see this as a high risk, high reward opportunity, but given the unmet need, we did feel like it was important to let this trial play out a little bit longer.

So with that, let’s move on to immunology. In 2024, our immunology franchise achieved CHF 6,300,000,000 in sales and grew at 5% at constant exchange rates. The key growth driver here is certainly Xolair and its launch in food allergy. We are very pleased with the launch uptake having reached the milestone of 40,000 patients on treatment. As I mentioned in Q3, we expect a year over year growth momentum in the mid teens for 2025.

Our second key growth driver here was Actemra. As we mentioned in Q3, the U. S. And EU biosimilar launches continue to be slower than expected. We currently expect biosimilar erosion to pick up speed in the coming quarters, especially in second half of this year.

We had previously shared with you the exciting news of positive phase 3 data for gazyva and lupus nephritis, a program you all know that I’m very fond of. We look forward to presenting the full data set at the World Nephrology Congress in February. Our IR team is also preparing a call in parallel and that data has now been submitted to the U. S. And EU regulators and we would expect approval decisions later this year.

Going to our immunology outlook and staying with Gazyva for the moment, we expect Phase 3 data from our allegory trial in SLE later this year. Astegolumab in COPD is also expected to read out later this year. And there are multiple upcoming developments in our anti TL1A portfolio, which I will talk about now. So I am very excited to share the progress that we’ve seen with our TL1A program recently. As you know, TL1A is a highly validated pathway that’s important in As you know, TL1A is a highly validated pathway that’s important in a number of disease areas.

We’ve previously shared that our phase 3 in UC is ongoing and enrolling rapidly and that our phase 3 in Crohn’s is expecting FPI this quarter. It’s safe to say that we’re moving at pace with our IBD trials, but as you know, we are not stopping there. We did share at JPM that we are initiating a phase 2b trial in atopic dermatitis and the phase 1b trial in MASH in Q1 with additional indications under consideration. We’ve also added an anti p40 TL1A bispecific to our pipeline and that phase 2 in IBD will initiate later this year. Now moving on to ophthalmology.

So in ophthalmology, sales reached CHF 4,000,000,000 last year with an impressive growth rate of 44% at constant exchange rates. This franchise is led by Babismo, which continues to expand its U. S. Market share across all three indications. Before we get started, I did just want to call out that after our last IR call, we were informed by the 3rd party vendor that provides our market share numbers of a restatement of the Q3 U.

S. Market shares. We believe that this was related to stockouts of other products included in the market definition, primarily aliquotidivastin. To account for this, the Q3 values were restated to improve accuracy. Because of this change, you can’t directly compare the Q values here, the Q4 values here to the ones that we shared at Q3.

If you do compare the restated Q3 values to the Q4 revised market shares, we expanded in each of its three indications by roughly 3 percentage points. We expect that you’ll once again be able to see the expanding market shares when comparing Q1 2025 to the Q4 ’twenty four values you see here. We remain confident that VIBISMO is well on its way to becoming a new standard of care. Our share of naive patients within the new to brand patient segment remains greater than 50 percent, indicating very strong preference of ophthalmologists to use VIBISMO in the frontline setting. Performance in the U.

S. In Q4 was impacted by the significant channel filling we saw immediately after the launch of prefilled syringe. So we saw a little bit of a spend down in Q4, but we are seeing a strong trajectory for Provisimo in our January sales to date. Staying on the topic of our next generation prefilled syringe, we achieved EU approval in Q4. US conversion rates continue to climb to above 85 percent clearly indicating that HCPs are very eager to use the simplified administration option.

Regarding the 2025 outlook, we expect to see continued strong growth and further market share expansion. And as I said, we remain confident that the Bismo is well on its way to be the new standard of care. Moving on to Susvimo, our AMD (NASDAQ:AMD) commercial relaunch in the US is on track with roughly 100 implants completed in 20 24. As a reminder, in this stage of the launch, it’s all about getting new ophthalmologists exposure to SysVimo and trained on how to perform the implant and refill exchange procedures. This is very much a story of going slow to ultimately go fast.

For 2025, we aim for a few 1,000 implanted eyes. Also in 2025, we expect to complete the EU filing in AMD. And lastly, our new NME, the Mickey Barton, which could become the first IL-six in ophthalmology is expected to have pivotal results in UME later this year. And finally, before I get to our 2024 and 2025 news flow, I wanted to take a quick look at how our pipeline reshaping is progressing. Complementing on what you saw from Thomas earlier, I’d like to highlight our continued efforts to strengthen the pharma pipeline.

You can see the different additions and removals over time and there are 2 recent additions in Q4 that I just want to call out, the allogeneic Part T that we added as part of the Poseida acquisition and the ADC DLL3 in small cell, which was added to our pipeline via a deal with Benevent. All in all, we brought in 10 assets via high value partnerships since Q2 2023. And at the same time, our internal r and d engines, pRED, GREN and Chugai delivered 14 new enemies. Next, I want to quickly show you the final 2024 news flow. You know this slide well from all of our quarterly results last year.

There were 3 final updates in Q4, which you are aware of. The tirigolumab in first line PD L1 positive non small cell was negative. As previously mentioned, the readout for PRASI and then trontinumab in AD had positive interim data cut, which we did present at CTAD. And so with that, let’s take a look at what we can expect in 2025. As mentioned by Thomas, we expect 12 key Phase 3 readouts this year, and this includes 4 NMEs, also importantly 7 phase 3 enabling readouts.

So let me just quickly highlight some of the key phase 3 readouts. We have the geridesterate program in first line and second line, HR positive metastatic breast cancer. We have Lonsumio plus Polivian second line DLBCL. We have OCREVUS high dose in RMS and PPMS, phenibrutinib in RMS and PPMS, astagolumab in COPD and vamikibart in UME. In addition, we also have multiple phase 3 enabling readouts, including next007 and hemophilia A, tronti and AD, GIM329 and SMA and FSHD, so based on an uncontrolled hypertension, CT 868 and type 1 diabetes with obesity and CT 996 and obesity with type 2 diabetes.

As you can see, it is going to be quite a busy year, and I’m looking forward to sharing the news flow with you as updates come in. I am also pleased to say that as we get to the end of January, we already have our first green tick, and that is for the LUNSUMIO subcu filing in Europe. And now I will hand it over to Matt to guide you through our diagnostic results.

Matt Sause, Head of Diagnostics, Roche: So

Speaker 6: good morning, good afternoon, everyone. It is my pleasure to present the full year 2024 diagnostics division financial results. So as you heard, from Alan and from Thomas, our diagnostic sales grew 4% at constant exchange rate, and our base business grew at +8%. Now the increase was mainly driven by our strong base business growth of of 8%, but as you previously heard, this is the last time we will discuss COVID-nineteen sales separately from base as this disease has transitioned to an endemic state. And so now I’ll walk you through the results by our different customer areas.

So first, sales in our core lab increased at +8 percent with strong momentum driven by immunodiagnostics which grew at +9 and clinical chemistry which grew at +8. Molecular diagnostics had an increase of +4 percent due to strong growth in our virology based business which grew 10% as well as our donor screening blood screening business which grew at +17%. Now this was again offset by lower COVID-nineteen PCR lab based testing sales and excluding those, Molecular Lab grew at +8%. Our new customer area, which you heard about earlier, near patient care had a decline of -17%, and this is mainly due to lower COVID-nineteen rapid antigen testing as well as the steady decline of our blood glucose monitoring business at -4 due to the market shift to continuous glucose monitoring. Our point of care business grew at plus our base point of care business grew at plus 6% and this is really driven by our point of care molecular diagnostics business.

Excluding COVID-nineteen sales, near patient care declined -1%. Not to be outdone, our pathology lab grew at plus 17%. This was mainly driven by our advanced staining business, which grew at plus 12%, as well as companion diagnostics, which grew at plus 41%. So now I’d like to shift gears and walk through the sales results across the different regions. So first, excluded COVID-nineteen business, we see strong base business growth across, North America, EMEA and LATAM.

And in North America, the base business excluding COVID grew at +8%. In EMEA, the base business excluding COVID-nineteen grew at +6%. In LATAM, the base business excluding COVID-nineteen grew at +23%. Now in APAC, the base business growth excluding COVID-nineteen grew at +3%. And sales growth in Q4 was impacted by volume based procurement and reimbursement reduction for immunoassay in China.

Now, while our consistent ambition for the diagnostics business is to grow at mid to high single digits, as a result of the headwinds from VBP and the reimbursement reductions in China, our ambition for 2025 is to grow the business by low to mid single digits, which would be a 1 year dip with a return to our consistent ambition in the years beyond. I would also call out that China is still a critical market for us and we continue to be the market leader. So now let me walk you through the Diagnostics divisional P and L line by line. So core operating profit on sales of CHF 14,300,000,000 increased by 12% at constant exchange rate versus 2023. Cost of sales increased by 1%.

Now this is driven by favorable product mix, really due to lower sales of COVID-nineteen rapid antigen tests. R and D costs increased at plus 2%, mainly driven by the integration of LumiraDx as well as investments in some of our upcoming late stage launches such as sequencing, mass spec and continuous glucose monitoring. SG and A increased at plus 3% driven by those high distribution costs you heard from Alan as well as increased sales volume and the commercial costs associated with the preparation of these upcoming launches. This resulted in core operating profit of CHF 2,400,000,000 with a margin of 16.8 percent at reported currency. So now I’d really like to talk about some of the exciting innovation that we launched in 2024, specifically starting with our Core Lab and our mass spec system.

So I’m very pleased to announce that we successfully received the CE mark for our CoBOS mass spec system along with the Wave 1 steroid assays. The current mass spec market, which is valued at CHF3 billion is predominantly composed of lab developed tests that require, specially trained technicians, special laboratory arrangements. And with this launch, we intend to establish and shape the IVD market for automated, simplified end to end mass spectrometry testing and driving market expansion. Our ambition is to reach a CHF 1,000,000,000 in sales by the end of the decade. And this year, we will launch over 40 new assays in our first wave, which will cover the vast majority of routine mass spec testing and a second wave of tests will follow in the coming years.

With our easy to use solution which addresses the shortage of skilled labor as I mentioned earlier, as well as the lack of standardization and automation, plus it has high level of synergy with our existing serum work area, the launch of mass spec presents a real opportunity for us to expand our existing leadership in the core lab. So on the theme of expanding our leadership, I’d like to talk about our cobot 6,800 and 8,800 Version 2. Now I’d highlight that the sea launch of our Version 2 update of our high throughput PCR systems, the cobas 68800, will further extend our competitive lead in the molecular lab and is field upgradable to our installed base of 1,000 of 16800s and 8800s around the world. These were the workhorse systems where we responded to the COVID-nineteen pandemic and they’re going to be an engine for our growth into the future. This update is fully compatible with our new TAGS multiplex assay such as our respiratory syndromic, the syndromic panel flex test which we launched last year which tests for 15 different viruses from a single well sample and will strengthen our position in the mid to high throughput segment of the molecular diagnostics market.

We will have the only high throughput platform capable of syndromic panel testing. With this update, we introduced increased testing flexibility such as the addition of a stat lane for urgent samples, greater automation of molecular workflows through being able to batch up to 6 assays in a single run and we will offer customizable quality controls that will enable improved run costs. So in addition to those upgrades, we also improved the throughput. The CoBot 16 100 will increase from 384 to 5 76 task per 8 hour shift. This further solidifies and provides an opportunity to expand our leading position in molecular diagnostics.

So not only are we leading on the platform side, I’d like to talk about some of the innovation that we’re introducing as well in terms of the next generation of diagnostic assays assays. And specifically present the recent clinical study results for Alexis amyloid plasma panel which consists of 2 blood based biomarkers, p Tau-one hundred and eighty one and apolipoproteine. Alzheimer’s disease continues to be a global burden affecting more than 50,000,000 individuals annually and is projected to reach over 80,000,000 people by 2,030. However, 2 thirds of people experiencing cognitive symptoms remain undiagnosed and diagnosis usually takes more than a year and up to 2 years requiring subjective cognitive tests as well as imaging analysis. In this study, we enrolled 4 92 patients with suspected cognitive impairment across 30 different study sites.

Our results demonstrated excellent clinical performance and a negative predictive value of over 90% independent of comorbidities and demographics for both the EAPP panel as well as PTAL-one hundred and eighty one as an individual biomarker. Pending regulatory clearance, we hope this test will provide a minimally invasive blood based test to rule out Alzheimer’s disease and decrease the time to definitive diagnosis. This will have a significant impact on patients, their families and healthcare systems around the world. So we talked about favorite slides, I guess, and I’d like to say this is certainly my favorite slide. Last year we said 2024 was going to be the biggest year for diagnostic launches.

And what I’m proud to say is that we achieved all of those. We received all 12 key launches shown here, including our first CGM, the Accu Chek SmartGuide, our serology blood screening solution for the United States. We’re already taking significant market share and winning business. The first clinical mass spec solution, as I mentioned earlier, as well as our next generation clinical chemistry and ISE solutions. Now in 2025, we have additional important launches.

I’d like to call it a few by customer area. The first is what we just spoke about, our ALEXIS p Tau-1 hundred and eighty one, which as I mentioned before, could provide a convenient test to rolls out to roll out Alzheimer’s disease. Furthermore, we’ll expand our mass spec menu with more than 40 assays in the first wave. For the molecular lab, we will launch CohBar’s BVCV. It’s a molecular test to aid in the diagnosis of bacterial vaginosis and candida vaginitis, which will help complete our menu in the rapidly growing STI market segment.

Now, we’re also approaching this from the point of care side for near patient care, I’d like to call out our Covos Lee at CTNG, which is our first green tick of the year, a rapid multiplexing test that can detect and differentiate chlamydia and gonorrhea at the point of care in a CLIA wave setting, which we just received FDA approval. In pathology, we will have a major update to the Roche digital pathology platform, with enhanced image management, a fully redesigned user experience and enhanced interoperability with 3rd party scanners. Combined with the primary diagnosis claims for our DP 200 and DP 600 scanners last year, this positions us well for the rapidly growing digital pathology market segment. And last but certainly not least, I’m pleased to invite you to our upcoming diagnostics IR events. We at AGBT will be unveiling our core sequencing technology and I’d like to invite you to an IR event taking place virtually on February 20th.

During this event, we will provide an update on our sequencing technology as well as hold a Q and A session. And second is our Annual Diagnostics Investor Day on May 27th. This is going to be a hybrid event held in London and online. We have an exciting agenda covering all of our customer areas where we will further discuss our Roche forthcoming Roche sequencing solution as well as our entire pipeline across all customer areas. So I look forward to seeing you there.

And with that, I will hand it over to Bruno.

Bruno, Investor Relations, Roche: Thanks, Matt. And I will just quickly use the opportunity to have here a final slide to sum up on the upcoming IR events. A couple of them we touched upon already. The next one is to come already next week, Friday, February 7th. This will be immunology.

The data, the Gazyva in lupus nephritis, which are presented at the World Congress of Nephrology, which we will have some time to discuss. Then the update on NGS mentioned by Matt. And then on April 4th, we’ll have a neurology update. Here we have a couple of topics to cover. First of all, it’s the elavides embark 2 year data in DMD, where we just had the top line release, which we expect to be presented at MDA.

And then 2 additional data sets from ADPD, trasinezumab, the PDUFA data from end of last year and then the latest data cut for the brain shuttle. You see then as mentioned already by Matt again, that diagnostic scheduled for May 27th as a live event again in London with the NGS solution being the highlight this time. And then we already set also a date for Pharma Day in the second half, which is now scheduled for September 22nd so that you can put it in your calendars. Just looking at the intense news flow ahead of us in 2025, I think there will be many more IR calls, especially in the second half. I can imagine we will have something on hematology mid year, but then also I would say EASD, CTAT, just to call out a view of the upcoming medical conference in second half where we like are likely to have additional calls.

And with that, I think we can open the Q and A session. The first question would go to Richard Foster from JPMorgan. Richard, please.

Speaker 8: Thanks very much, Bruno. Two questions from me, please. Firstly, one on the Vibezmo. I think we understand the temporary weakness in the quarter, but I wanted to ask about the launch of a prefilled syringe for high dose Eylea and how you would see that affecting verbiizmo. Obviously, very key and you’re doing really well with yours, but in Europe, they have a prefilled syringe for high dose Eylea.

So thinking about how that might affect you in ’twenty five? And then second question, just on gyridesterant, maybe a little bit of a push out on the PERSVERA data into Q4 October on clinical trials. Just what do you see as the implications for that on your thoughts around the expectations for the results of the trial? Thanks very much.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: I’ll start with the last one. So I don’t think that has really any implications on the results. Just sometimes these things take a little bit longer, and that’s what we saw with geridustrine. The prefilled syringe. So I would just have to say right now, we’re really not seeing any impact in any part of the world from high dose EYLEA.

And the prefilled syringe that we have in the market is materially different than the prefilled syringe that EYLEA has. It has one hand administration, which when you think about it, if you’re doing 1,000 shots or 100 shots a day, having that really ease of administration is is super important. So I would say we definitely have a device preference going on our side. And quite frankly, I think just what is inside the syringe matters a lot. And but Visimo is clearly continuing to distinguish itself from an efficacy and safety standpoint.

And with the added convenience of the prefilled syringe, I would just continue to see it growing and continue to establish itself.

Bruno, Investor Relations, Roche: Maybe Richard, let me quickly add to your first question on duridescent. I think there was no real change in the underlying timelines. That’s more an issue with when certain things get updated at clinicaltrials.gov. For the both studies, Ivera and PASIVIRA, we expect the data to come in somewhere around midyear second half. We cannot be more specific.

As you know, these studies are event driven, but nothing really fundamental that changed here. Any additional questions from your side?

Speaker 8: No, Bruno and Theresa, thank you very much. That’s great. Thanks a lot.

Bruno, Investor Relations, Roche: Thanks, Richard. Thanks. Then the next questions go to Emily Fields from Barclays (LON:BARC). Emily, please.

Speaker 9: Thanks for taking my question. Just on that last point, I think Teresa said during the prepared remarks that Persevera would come in Q4. So I just wanted to clarify that and make sure that’s correct. Yeah. So then my I will ask 2 questions.

Firstly, the high dose OCREVUS. So you’ve helpfully quantified the incremental revenue opportunity that you see from subcutaneous OCREVUS. But I was just wondering if you could help us frame how to think about the commercial potential for high dose OCREVUS. Obviously, this trial is versus the standard dose. So do you see this as additive to the franchise or just transferring patients over?

And does high dose provide any opportunity to extend IP? And then secondly, I know that we’re expecting first pivotal readouts from orfagliopiran later this year, and you’ll be getting, if successful, a royalty from that. But I wanted to ask more just on whether you see the success or failure of that compound as having a read across to CT9N6. And if you could just remind us on how the 2 molecules are are differentiated. Thank you.

Bruno, Investor Relations, Roche: Emily, maybe just to quickly add, I think, as said on the timelines of geodesterant mid year to second half, it’s of course, we cannot be more specific right now, as said event driven, you will get the information as soon as we have it. And then the other question.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Yeah. So as far as high dose goes, I don’t think we’ve actually shared what our commercial expectations are for high dose. Once we get the data, we will be able to share some additional information with you, assuming that that data are positive. From a from an IP perspective, I think, you know, should high dose be positive and we begin to look at putting it into devices, I think there is definitely some opportunity for expanded IP and we’ll be able to comment more on that once we get the results. Production

Alan Hippe, CFO, Roche0: standpoint,

Thomas Schinecker, CEO, Roche: it has advantages versus a So from a production standpoint, it has advantages versus a peptide. So it’s very different in terms of the 2 molecules. Regarding royalty income, that would not be obviously this year, But in case it’s positive, then in future years, there would be additional royalty income.

Bruno, Investor Relations, Roche: Emily, did we answer your questions or do you have a follow on question?

Speaker 9: Yes. That was great. Thank

Alan Hippe, CFO, Roche1: you. Okay.

Bruno, Investor Relations, Roche: Then we move on. Next one in the row is Sachin Jain from Bank of America.

Alan Hippe, CFO, Roche2: Hi there. Thanks for taking my questions. 2, please. Theresa, just on the 2 surgeries, let me just give a bit of big picture on Advira, Persevera, how you think about the probabilities of those two studies differing and perhaps you could just touch on the commercial opportunities of both. I think Advira is generally perceived as quite small, if that’s incorrect, if you could just clarify.

And then Thomas, just a big picture question, your second favorite slide after cash, I think was the group sales slide showing sequential growth of 9, 9, 11 the last few quarters. So I just wanted to touch on what you think the 25 headwinds are the slowest to mid single digit for this year other than that, Temra, which I think is less than 1%. Is there anything we’re missing there? Thank you.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Do you want to start with that, Tanal?

Thomas Schinecker, CEO, Roche: Sure. I can go first. I think one of the headwinds was mentioned by Matt, so the volume based procurement that’s happening in China. And other than that, I would say, look, we’re at the beginning of the year. We have almost 1 month behind us, and let’s see how the year goes.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: And in terms of girdestrant, I think we do believe that this has the opportunity to be a multi $1,000,000,000 franchise when you look at all of the different indications. And I think Persevera has that patient population is first line endocrine sensitive, that’s 60% of first line patients. The PIONEERA patient population is the 1st line endocrine resistant, that’s another 40% of patients. So between the 2 of them, we really get the full first line covered. And you know, EVERA again gives us another set of that patient population that we would need to cover the entire spectrum of endocrine sensitive patients.

So I think we believe that we actually have the trials that would allow us to cover every single patient population and ultimately get to that multi $1,000,000,000 opportunity.

Alan Hippe, CFO, Roche2: Just anything on the relative probabilities of the 2 studies, the extent you’re willing to comment?

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Yes. I think the

Bruno, Investor Relations, Roche: I think when you know, Sachin, what we have been communicating is, of course, the success likelihood for the later line is a bit lower than, for example, the adjuvant setting next year. This is just logical if you look at it. You have the treatment on top of other treatments and you have a more diverse patient population which has some level of resistance which was building up over time. It’s not only ESR1 mutants, it’s also other resistant mechanisms which come to play. And I think this just leads to an overall lower success likelihood.

Next year than ’twenty six, I think this is the big one, the adjuvant study to watch out. And I think this is also the most opportunity which will allow us if successful then really to reshape the landscape and the treatment paradigm.

Alan Hippe, CFO, Roche2: Thank you.

Bruno, Investor Relations, Roche: Any other Satya, any other questions or from your side?

Alan Hippe, CFO, Roche2: No, that’s perfect. Thank you.

Bruno, Investor Relations, Roche: Yes. Okay. Then we move on. Next questions would go to Matthew Weston from UBS. Matthew?

Alan Hippe, CFO, Roche3: Thanks, Bruno. Good afternoon, everybody. 2 for me, please. The first on Acrivas de Novo. It’s clearly launching well.

One thing Thomas called out in terms of the sustainability of growth at Roche was the limited biosimilar exposure. Obviously, one of those in the future will be a normal dose of Crevasse. Can you help us understand of any additional IP that ZENOVO brings? What should we be thinking of in terms of the long term potential there? And then secondly, sorry to stick on patent expires, but one of the statements that captured a lot of attention at the Pharma Day was that you had high confidence that we would not see U.

S. Xolair biosimilar entry in 2025. Can you now give us any understanding of how far you think that protection will go, especially given you called out investing in Xolair as one of the reasons for investing in significant SG and A in Alan’s comments?

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Great. Two good questions. So when you look at the OCREVUS franchise between the between de novo, between other device formulations that we might be looking at high dose, I think you can assume that we are considering ways to extend the patent life of OCREVUS. So I can’t say more now, but I think you should consider you. You should take comfort in the fact that we’re looking at this quite actively in terms of patent expiry for Zolair.

We can confirm that there will not be biosimilar entry in 2025.

Bruno, Investor Relations, Roche: And maybe to add here, Matthew, on the IP situation for OCREVUS, I think in case OCREVUS high dose would work out, I think this would have given additional patterns. If a combination of OCREVUS, high dose and subcutaneous would then be another development opportunity would come with a newly developed injector, for example, would give another layers of IP. So I think there are several layers which should help us to prolong the franchise.

Matt Sause, Head of Diagnostics, Roche: Bruno, if

Alan Hippe, CFO, Roche3: I’m allowed apologies to others. If I can just ask one additional follow-up because you you raised high dose of crevasse. Emily asked about it as well. It’s obviously one of the next readouts for Roche. You’ve got 2 arms.

The people who are, I guess, let’s call it overweight, and I understand why you hope it will work there. In the normal weight cohort, what evidence gave you confidence that more Acrevious might give you more efficacy? Because I recall in the past, Roche always being very strident about the fact that Acribus gave full CD20 inhibition in the setting. So what can more bring?

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Yes. So I think as we designed the high dose studies, we looked very carefully at the phase 2 studies where we actually saw the increased efficacy when you reached higher saturation points. So I think we are that certainly would make sense in in overweight patients. But I think we are are our assumption is that that that might actually also extend into into normal weight patients. And that’s just based on the data that we’ve seen today.

Thomas Schinecker, CEO, Roche: Thank you. Thanks, Maria.

Bruno, Investor Relations, Roche: It was Maria. It was a retrospective analysis, which we did, I think, and we have looked into all, you know, concerning factors and imbalances in the different subsets. But it’s not that we believe that the effect we have seen would be primarily driven by weight. Exactly.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: And again, in those exploratory analyses post the Phase 3, what we did see was just slowing of disease progression with higher exposure to OCREVUS. So hence the high dose study.

Alan Hippe, CFO, Roche3: Thank you all.

Bruno, Investor Relations, Roche: Okay. Then next questions would go to Simon Baker from Redburn. Simon?

Alan Hippe, CFO, Roche4: Thank you, Bruno, and thank you, everyone else. Good afternoon. Two questions, if I may, please. Firstly, one for Alan. I know you don’t guide on cost lines, but I just wonder if descriptively, you could give us some indication of the movement we should expect in the various cost lines to get to the implied margin expansion within the ’twenty five guidance?

And then secondly, on the anti TL1A, the move into MASH, it’s obviously a very interesting and potentially very large category. I think you’re the 1st person or first company to move into the clinic in that indication. I just wonder if you could give us some color on the basis for moving into MASH with the TL1A? Thanks

Alan Hippe, CFO, Roche1: so much. Do you want

Thomas Schinecker, CEO, Roche: to take the costs question? Okay.

Alan Hippe, CFO, Roche: Yes. I think first, I have to say, Simon, guidance is the guidance, I think, for 2025, and that’s what we orient ourselves on. Everything in between certainly needs flexibility and will allow us to have. I think we have said that we want to be, how should I said, flattish about R and D. I think that’s pretty clear.

That’s why I can mention it. I can also mention that other operating income, yes, we expect a little bit less gains from product disposals. I think that’s another one. I would argue all the other lines, we will apply the best cost discipline, yes, which makes sense to do that. But overall, the guidance is the guidance.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: And I think as we mentioned, TL1A is a very clinically validated target in immune disease, but it also has an anti fibrotic component. And so I think as we were considering where were there opportunities to expand, looking at diseases that have fibrotic, have fibrotic, pathogenesis, it just made sense to kind of look at something like MASH with TL1A.

Alan Hippe, CFO, Roche4: Thanks so much.

Bruno, Investor Relations, Roche: I am struggling here. I have a technical issue. I cannot open my screen window right now. It’s hidden somehow, so I don’t know what to do. I think we probably have to stop the call for some technical reasons.

I’m

Alan Hippe, CFO, Roche: yeah.

Bruno, Investor Relations, Roche: It’s basically cannot help us anymore.

Alan Hippe, CFO, Roche0: Bruno, it’s asked me to unmute. Shall I ask a question?

Bruno, Investor Relations, Roche: Yes,

Alan Hippe, CFO, Roche0: please. James Creeper here from Goldman Sachs. So I’ve got two questions, please. So first one on the margin. So Alan, you had some nice increase in the margin across both divisions this year.

Given this increase and with the move over time away from specialty pharma areas that have been higher margin, maybe to some more primary care areas, how does it impact your ambition to defend the margins? You’re keeping R and D flat, as you just mentioned, in 2025, but how should we think about the margin levers over the medium term? And secondly, on Prazi, as you mentioned, we’re going to see some next steps this year, but what are the potential options here? Given the data you’ve seen so far, what is the probability that you could potentially move straight to registration? Or would you need to run a is it more likely you need to run a Phase 3?

And then again, how long could that last? Thank you.

Thomas Schinecker, CEO, Roche: I can take the first question. As I stated before, the goal is to at least keep the margins as percent of sales stable. That means, of course, in absolute terms, we’ll continue to increase the margins. And I always say at least ambition can always be higher than that, but the point is to at least keep it stable. And as you can see, for 20 25, we actually intend to expand our margins.

So we’ll give you more updates then as we get to the 26, about 26 and so on. But long term, that would be my clear guidance.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: And as far as, PRASI goes, so the open label extension study is continuing, and we will evaluate that data over time, talk with regulatory authorities and see if the signal that we saw in the first part of the trial sort of continues to reveal itself. A decision on what we will actually do with that trial, I think, will come after we see more more information. It would be highly unlikely that we would move straight to registration. This remains, I think, as we’ve always said, a very high risk, high reward program.

Bruno, Investor Relations, Roche: Henrik, maybe you can please take over the moderation and just ask the next one in the row to open the line and ask them to ask the questions.

Alan Hippe, CFO, Roche5: Sure. So next one in line is Richard Park Sten. So Richard, I open now your line.

Speaker 2: Hi. Thank you very much for taking my questions. First one, I’d just like to push you a little bit more on Giridestrant because generally investors are quite skeptical about the classes potential outside of the ESR-one mutant population. So can you just help us understand what gives you optimism in the PERSVERA study around broader potential outside ESR1 mutant patients? And can you confirm that the EVVERA study is powered to show benefit in that population, therefore, obviously would be lower risk.

And then secondly, on TL1A, obviously with another competitor showing proof of concept data, the potential of that class has become a lot more visible to investors. And speaking to KOLs, it sounds like development of a biomarker is an important aspect to driving uptake of the class, which seems to position you quite positively given your experience in inflammatory bowel disease and with biomarker development. So can you talk about where you’re differentiated in development of the biomarker and how yours differs to other companies? Thank you.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Yes. So let’s start with TL1A. So I mean, I think that we haven’t said much about the biomarker other than it’s there and we will consider it through the development program. I think we are very excited about this molecule and this pathway. And to your point, our prior experience in IBD and our experience with biomarker development, our experience in many different therapeutic areas and diseases where TL1A could potentially be relevant makes us very excited about the full opportunity of this molecule over time.

As you know, we’re in a head to head race with Merck (NSE:PROR). We’ve got another molecule that’s sort of further behind, but I think all of the data that we continue to see across the different molecules are out there, reinforces that this is a valid pathway that these molecules have benefit. Are out there reinforces that this is a valid pathway that these molecules have benefit. And I think we’re, yeah, we’re really eager to actually see what it can do in patients. So definitely more to come on TL1A.

To answer your last question first, so Ivera is powered for both ITT (NYSE:ITT) and ISR1 mutants. So we are confident that we have powered the trial appropriately. Just to remind everyone why I think we are so why we were so excited about the Ardessa and when the program kicked off, I mean, it is the highest preclinical potency of any oral surge that’s out there. It seems to be combinable with all CDKs and it’s well tolerated at all doses, which I think, again, it makes it makes it quite different. It has true endocrine backbone potential, which is very different than what we’ve seen with some of the other drugs that are out there.

Giridestrin has shown robust data in early trials and in metastatic settings and as a monotherapy and in combination. So I think the trials that we have out there right now, they’re they start to answer some questions. The big Kuna is kind of coming in 2026. But I think this is a molecule which we’ve seen evidence of efficacy. And so now we just need the trials to read out.

Speaker 2: Thank you. Can I just ask one follow-up? Can you just confirm that with your Tier 1A, you do have a biomarker integrated into the Phase 3 trials that are underway in plant?

Bruno, Investor Relations, Roche: Yes.

Speaker 2: Thank you.

Alan Hippe, CFO, Roche5: So Richard, I hope that answered all your questions. In that case, the next person in line would be Rajesh Kumar. So I’ll give you now the possibility to ask a question.

Speaker 4: Thank you very much for taking my question. On the game asset, can you talk through what your ambitions are in combination with obesity development place? That would be very helpful. And then swiftly revisiting trontinumab, can you give some color on the timelines of when are we going to hear from you again and what should we be looking out for when you update us on your go no go decision?

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Yes, great. So as I mentioned, at it in combination with our obesity assets. We have some preliminary data in house. We have made the decision to move forward into combination trials. And it’s still very early days.

But I think we can easily say that this is definitely something that we’ll be taking forward. So more to come, probably not too much more I can say right now. With regards to Tronte, we’ll share additional data cuts of the ongoing dose finding study at ADPD in half one and it’s CTAD in half 2. We’re currently awaiting the completion of the part 2 expansion cohorts to inform the final dose. Once we have the final dose, we’ll be able to move into Phase 3.

I think you heard at Pharma Day last year, and I reiterated at JPMorgan at the beginning of the month, that trontinumab is one of the fast track assets that we’ve been really focused on through R and D excellence. And so we’ve been working very closely to actually do as much of the front loading for that phase 3 trial as we can so that once we get the final dose, we’ll be able to move very, very rapidly into phase 3. So expect expect to hear more about more from us on that this year.

Speaker 4: Thank you.

Alan Hippe, CFO, Roche5: Do you have any follow-up question, Viroj?

Speaker 4: No. Thank you.

Alan Hippe, CFO, Roche4: Alright. That’s okay.

Alan Hippe, CFO, Roche5: So thank you so much. And the next one in line will be then Justin Smith on Bernstein.

Thomas Schinecker, CEO, Roche: We can’t hear you.

Alan Hippe, CFO, Roche1: Yes. That sounds good. Can you hear us? Yes. Thanks.

2 for me. Justin Smith, Bernstein. Number 1, just on 7, and sorry if I missed this, but it seems as though since the CMD, it’s been moved up to a non risk adjusted peak sales target of over CHF 3,000,000,000. Just wanted some color on that. And then just one on acetagolumab might be a little bit too early to ask, but one of your competitors sort of suggested that severe COPD, there’s more sufferers, but efficacy of the biologics is probably likely to be lower than in severe asthma.

So I just wondered if you had any thoughts on that. Many thanks.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: Yeah. So I’ll answer the asking question first. I mean, that’s why you run the clinical trial. Right? So we’ll see.

We think there’s a good scientific rationale for why this could work in COPD. We’re covering a very broad patient population, an area of very high unmet need. So, yeah, I would we’ll we’ll know this year if if it works. So stay tuned on that. But, again, to your point, it’s just it’s a little bit early to speculate.

In terms of next double o seven, if this if this molecule lives up to what we believe it can do, it will for sure become a new standard of care in hemophilia A and therefore easily a multibillion dollar indication. But it is the data that we’ve seen so far is exciting. It’s early days. More to come.

Alan Hippe, CFO, Roche1: Thank you.

Bruno, Investor Relations, Roche: Okay. I’m back. So finally, I made it. Had to restart my computer. I think we have one final, analyst in the row.

I think it’s Ben Jackson from Jefferies. Ben, please.

Thomas Schinecker, CEO, Roche: I think you may be on mute. We can’t hear you. Ben, can we hear you?

Bruno, Investor Relations, Roche: Yes, we hear you.

Matt Sause, Head of Diagnostics, Roche: Thank you. Sorry about that. So just two quick ones for me, if okay. So the first would be, if you’re able to provide any color about the shifting back of the Mikibah in DME into 20 6. Is there any particular reasons behind that?

And perhaps, is there any competitive thoughts behind that decision? And then second, just to finish off, any additional changes in thinking about BD, especially with areas of interest following the Posada acquisition? Does that perhaps associate the need for adding more oncology to the pipeline? Or is that all still within scope? Thank you.

Thomas Schinecker, CEO, Roche: Yes. Let me just answer the second question first, and then I can hand over to you. You’ve seen the 5 therapeutic areas that we are really focusing on, cardiovascular metabolism, oncology, neurology, those 3 contributing about 50% of global disease burden. Immunology really plays across many disease areas. And then we have, of course, a very strong franchise in ophthalmology.

So you can imagine that these are the areas that we are looking into in terms of further strengthening our pipeline. Now, as we’ve done over the last couple of years, we always look very much at the science. How much data is available that gives us the confidence like we’ve had the data available for TL1A. And then we also look at the financial terms and we try to just think about whether or not it makes more sense. I think we’ve been very diligent on that and I think we’ve made a number of very interesting acquisitions.

Now let me just highlight on Poseida because we already had the partnership with Poseida in oncology. And we actually saw some of the data in the lupus nephritis and there were some publications on that. And so in order to go and move into autoimmune disease, where we see that there is a big role for CAR Ts in the future, we also said we will go into this acquisition. So deals like that, I think, are really in the sweet spots. And you can see that we will continue to be very disciplined and will continue to make sure that the deals fit into our strategic agenda.

Theresa Heggie, Chief Commercial Officer, Pharma, Roche: And in terms of Mickey Barton, we expect to have data in house later this year and will then obviously be making decisions about how we move that program forward. I think it’s worth noting that we have several different opportunities to advance IL 6 in ophthalmology, including bispecifics and tri specifics. So vamikibart is certainly only 1 molecule in a whole collection of molecules that could potentially bring IL 6 promise into ophthalmology.

Alan Hippe, CFO, Roche1: Ben,

Bruno, Investor Relations, Roche: did we answer all your questions? Okay. If there are any additional questions if there are no additional questions, then I would hand back to Thomas for a final remark. Thomas, please.

Thomas Schinecker, CEO, Roche: Thank you very much, Bruno, and thanks to everyone for your great questions. I believe we managed to deliver great results in 2024 and I hope it shows that we do what we say and we also deliver. You can count on that. And we have a great momentum as we go into this year. And we also have a rich pipeline news coming this year.

And as mentioned, we are very focused, we are very disciplined so that we continue to deliver for our investors. Thank you very much.

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