2020

30.01.2020 – Roche Holding AG

Roche reports very strong results in 2019

Basel, 30 January 2020 

  • Group sales increase 9%1 at constant exchange rates and 8% in Swiss francs, driven by new products, more than compensating for impact of competition from biosimilars
  • Pharmaceuticals Division sales up 11%, resulting from high demand for recently launched medicines, led by Ocrevus, Hemlibra, Tecentriq and Perjeta
  • Diagnostics Division sales grow by 3%, primarily due to its immunodiagnostics business
  • New treatment options approved in the fourth quarter:
    • in the US: Tecentriq combination therapy for the initial treatment of a form of lung cancer; Xofluza for people at high risk of developing flu-related complications
    • in the EU: Kadcyla treatment after surgery of HER2-positive early breast cancer
  • Core earnings per share grow ahead of sales at 13%
  • On IFRS basis, net income increases 32% to CHF 14.1 billion, due to strong underlying operating results and the base effect of high goodwill impairments in 2018
  • Board proposes dividend to increase to CHF 9.00. Subject to shareholder approval, this would be the 33rd consecutive dividend increase

Outlook for 2020: Sales are expected to grow in the low- to mid-single digit range, at constant exchange rates. Core earnings per share are targeted to grow broadly in line with sales, at constant exchange rates. Roche expects to further increase its dividend in Swiss francs.

Key figures CHF millions % change
January - December 2019 2019 2018 At CER1 In CHF
Group sales 61,466 56,846 +9 +8
Pharmaceuticals Division 48,516 43,967 +11 +10
Diagnostics Division 12,950 12,879 +3 +1
Core operating profit 22,479 20,505 +11 +10
         
Core EPS - diluted (CHF) 20.16 18.14 +13 +11
         
IFRS net income 14,108 10,865 +32 +30

Commenting on the Group’s results, Roche CEO Severin Schwan said: “In 2019, Roche achieved excellent operating results. I am delighted about the launches of our new cancer medicines Polivy and Rozlytrek, additional indications for Tecentriq and Kadcyla and priority review of risdiplam, our new medicine for a neurological disorder. Based on the progress made in rejuvenating our portfolio, Roche is very well positioned to grow going forward. For 2020 we expect sales growth in the low- to mid-single digit range in spite of the even greater impact of the competition from biosimilars.”

Group results
In 2019, Group sales rose 9% to CHF 61.5 billion and core EPS grew 13%, ahead of sales. The core operating profit increased 11%, reflecting the strong underlying business performance. The IFRS net income increased 32%, due to strong underlying operating results and the base effect of high goodwill impairments in 2018.

Sales in the Pharmaceuticals Division increased 11% to CHF 48.5 billion. Key growth drivers were the multiple sclerosis medicine Ocrevus, the new haemophilia medicine Hemlibra and cancer medicines Tecentriq and Perjeta. The strong uptake of newly introduced medicines generated CHF 5.4 billion in growth, more than offsetting the impact of the competition from biosimilars for MabThera/Rituxan and Herceptin in Europe and Japan (decline combined CHF 1.2 billion) and MabThera/Rituxan, Herceptin and Avastin in the US (estimated decline CHF 0.3 billion).

In the US, sales increased 13%, led by Ocrevus, Hemlibra and Tecentriq. Ocrevus sales were driven by the demand from both new and returning patients. The first biosimilar versions of MabThera/Rituxan, Herceptin and Avastin were launched in the market later in the year.

In Europe, sales stabilised as the strong demand for new medicines, including Ocrevus, Perjeta, Tecentriq, Alecensa and Hemlibra was able to offset the impact of lower sales of Herceptin (-43%) and MabThera/Rituxan (-33%).

Growth in Japan (+9%), was also driven by recently launched products, despite considerable competition from biosimilars. The launches of first biosimilar versions of Avastin in late 2019 had a limited impact on sales in the reporting period.

In the International region, sales grew 15%, mainly driven by a significant increase in the number of patients benefiting from Roche cancer drugs in China with strong sales of Herceptin, Avastin and MabThera/Rituxan.

Diagnostics Division sales increased 3% to CHF 12.9 billion. The business area Centralised and Point of Care Solutions (+3%) was the main contributor, with growth driven by the immunodiagnostics business. Growth was reported in Asia-Pacific (+6%), Latin America (+12%) and EMEA2 (+2%). In North America, sales were stable.

In December, Roche completed the acquisition of Spark Therapeutics, Inc. (Spark Therapeutics), based in Philadelphia, USA. Spark Therapeutics’s investigational gene therapies have the potential to provide long-lasting effects, dramatically and positively changing the lives of patients with conditions where no, or only palliative, therapies exist. Greater understanding of the human genome and genetic abnormalities have allowed Spark Therapeutics’s scientists to tailor investigational therapies to patients suffering from very specific genetic diseases. This approach holds great promise in developing effective treatments for a host of inherited diseases, including blindness, haemophilia, lysosomal storage disorders and neurodegenerative diseases.

Also in December, Roche signed a licensing agreement with Sarepta Therapeutics, Inc., providing Roche with exclusive commercial rights to SRP-9001, Sarepta’s investigational gene therapy for Duchenne muscular dystrophy (DMD), outside the US. DMD is an X-linked rare degenerative neuromuscular disorder causing severe progressive muscle loss and premature death. SRP-9001 is currently in clinical development for DMD.

Regulatory achievements
In 2019, regulators around the globe granted approvals for new Roche medicines, line extensions of existing medicines and new tests or recommended the approval of our products. These decisions are important milestones in our efforts to rejuvenate our portfolio.

Achievements in the fourth quarter of 2019

Pharmaceuticals Status Product Indication
US FDA Approved Tecentriq combination First-line metastatic non-squamous non-small cell lung cancer (NSCLC)
US FDA Approved Xofluza For people with high risk of developing flu-related complications
European Commission Approved Kadcyla Adjuvant (after surgery) treatment of HER2-positive early breast cancer
US FDA Priority review Risdiplam Spinal muscular atrophy (SMA)
US FDA FDA filing acceptance Satralizumab Neuromyelitis optica spectrum disorder (NMOSD)
EU CHMP Approval recommended Polivy Adults with relapsed or refractory diffuse large B-cell lymphoma who are not candidates for a haematopoietic stem cell transplant
Diagnostics      
EU CE-mark Accu-Chek SugarView app Therapy-relevant information for non-insulin dependent type 2 diabetes or pre-diabetes

Key approvals of medicines January – September 2019

Product Indication Key markets
Tecentriq (in combination with chemotherapy) Metastatic PD-L1 positive triple-negative breast cancer (TNBC) US, EU
Tecentriq (in combination with chemotherapy) extensive-stage small cell lung cancer (ES-SCLC) US, EU
Tecentriq (in combination with chemotherapy) metastatic non-squamous NSCLC that is not EGFR-mutant or ALK-positive EU
Tecentriq (in combination with Avastin and chemotherapy) metastatic non-squamous NSCLC EU
Hemlibra severe haemophilia A without factor VIII inhibitors EU
Rozlytrek ROS1/NTRK-positive tumours Japan (NTRK), US (ROS1 & NTRK)
Polivy relapsed or refractory diffuse large B-cell lymphoma after at least two prior therapies US


Key development milestones

Our pipeline delivered a strong, constant flow of positive study results – the basis for Roche’s future growth.

Achievements in the fourth quarter of 2019
Positive results from the phase III IMbrave150 study evaluating Tecentriq in combination with Avastin show statistically significant and clinically meaningful improvements in overall survival (OS) and progression-free survival (PFS), compared with sorafenib, in people with unresectable hepatocellular carcinoma (HCC) who have not received prior systemic therapy.

The phase II Nobility study of Gazyva/Gazyvaro for adults with proliferative lupus nephritis met the primary endpoint with Gazyva/Gazyvaro, in combination with standard of care (mycophenolate mofetil or mycophenolic acid and corticosteroids), demonstrating superiority compared to placebo plus standard of care.

Further study results announced in the fourth quarter

Study, compound Indication Outcome
Aphinity study, Perjeta-based treatment regimen HER2-positive early breast cancer Clinical benefit further strengthened by evidence of six-year results
Phase III IMspire150 study, Tecentriq in combination with  Cotellic and Zelboraf previously untreated BRAF V600 mutation-positive advanced melanoma Primary endpoint of PFS met
Pivotal part 2 of the Sunfish study, risdiplam People aged 2-25 with type 2 or 3 SMA Primary endpoint met: change from baseline in the Motor Function Measure 32 scale after one year of treatment
CLL14 study, Venclexta/Venclyxto plus Gazyva/Gazyvaro Previously untreated chronic lymphocytic leukaemia Remissions achieved were sustained over time



Diagnostics – key launches in the fourth quarter of 2019
In November, Roche announced the launch of the cobas mobile solution, an innovative tablet application, making it possible for laboratory personnel to stay connected at all times. Enabling faster decision-making and enhancing the walk away time, the cobas mobile solution allows laboratory personnel to interact directly with their analysers from anywhere in the lab, thereby improving efficiency and convenience.3

In December, the Accu-Chek SugarView app received the CE Mark, allowing the launch of this innovative diabetes management solution in Europe and countries around the world accepting the CE Mark. Now officially classified as in-vitro diagnostics (IVD) software, the app will be made widely accessible by Roche initially for certain smartphone models via the Google Play Store, thus enabling broader access to therapy-relevant information for non-insulin dependent people with type 2 diabetes or pre-diabetes.

Diagnostics – key launches January – September 201
9

Ventana PD-L1 (SP142) Assay Triple-negative breast cancer US, countries accepting the CE-mark
Navify Tumor Board 2.0 Decision support system US, Canada
Ventana HER2 Dual ISH DNA Probe Cocktail assay Breast and gastric cancer Europe, the Middle East and Africa, Latin America and Asia-Pacific; to be submitted for FDA approval
cobas MTB-RIF/INH test Antibiotics-resistant tuberculosis Countries accepting the CE-mark
cobas pro integrated solutions Serum Work Area (clinical chemistry and immunochemistry) laboratory solution US – FDA clearance
cobas Babesia whole blood test Whole blood screening for Babesia (a blood parasite) US – FDA approval

Pharmaceuticals Division

Sales CHF millions As % of sales % change
January - December 2019 2019 2018 2019 2018 At CER In CHF
Pharmaceuticals Division 48,516 43,967 100.0 100.0 +11 +10
United States 26,711 23,233 55.1 52.8 +13 +15
Europe 8,453 8,693 17.4 19.8 +1 -3
Japan 4,143 3,701 8.5 8.4 +9 +12
International* 9,209 8,340 19.0 19.0 +15 +10

*Asia–Pacific, EEMEA (Eastern Europe, Middle East and Africa), Latin America, Canada, others

Key pharmaceutical products in 2019
Avastin
(+4%). For advanced colorectal, breast, lung, kidney, cervical and ovarian cancer, and relapsed glioblastoma (a type of brain tumour). The sales growth was driven by the International region (+13%), in particular in China due to increased numbers of patients treated. In the US (+2%), continued sales growth was seen in all approved indications, with sales growing at 9% through the first six months of 2019 but impacted by the first biosimilar launch in July 2019.

MabThera/Rituxan (-4%). For forms of blood cancer, rheumatoid arthritis and certain types of vasculitis. In Europe (-33%) and in Japan (-44%), sales were affected by biosimilars. In the US, sales increased 3%, with growth in both the immunology and oncology segments and also driven by the subcutaneous formulation. In the US, the first biosimilar version of MabThera/Rituxan was launched in November 2019, which has had only a limited impact on sales so far. In China, growth resulted from increased numbers of patients treated.

Herceptin (-12%). For HER2-positive breast cancer and HER2-positive metastatic gastric cancer. Sales were impacted by biosimilar launches in Europe and Japan from mid-2018 and in the US (-8%) in part by the switch to Kadcyla in the adjuvant setting and in part due to the launch of the first biosimilars in July 2019. This development was partially offset by increased sales in China.

Actemra/RoActemra (+8%). For rheumatoid arthritis, forms of juvenile idiopathic arthritis and giant cell arteritis as well as CAR T cell-induced severe or life-threatening cytokine release syndrome. Sales growth was reported in all regions, driven by the constant uptake of the subcutaneous formulation and strong sales in the US and Japan.

Xolair (+1%, US only). For chronic idiopathic urticaria and allergic asthma. Growth was reported in both indications.

Lucentis (+8%, US only). For eye conditions, including neovascular (‘wet’) age-related macular degeneration, macular oedema following retinal vein occlusion, diabetic macular oedema, and diabetic retinopathy. Growth was driven by sales increases in all approved indications and the ongoing rollout of prefilled syringes.


Highlights for medicines launched since 2012
Ocrevus
(first approved in 2017; CHF 3.7 billion, +57%). For the treatment of both the relapsing (RMS) and primary progressive (PPMS) forms of multiple sclerosis (MS). More than 150,000 people with MS have been treated with Ocrevus globally, in clinical trial and real-world settings; data continue to show a consistent and favourable benefit-risk profile. The strong demand for this treatment in both indications has continued. In addition to sales increases in the US, it continues to show strong initial uptake in international markets, including Germany, Italy, Spain and UK.

Perjeta (first approved in 2012; CHF 3.5 billion, +29%). As therapy for HER2-positive breast cancer. Sales grew strongly in all regions. The increased patient demand for Perjeta for adjuvant early breast cancer therapy supports its continued strong growth.

Tecentriq (first approved in 2016; CHF 1.9 billion, +143%). Approved either alone or in combination with targeted therapies and/or chemotherapies in various forms of non-small cell and small cell lung cancer, certain types of metastatic urothelial cancer, and in PD-L1-positive metastatic TNBC. Strong sales growth was reported by all regions. In the US, the new indications for ES-SCLC and triple-negative breast cancer drove sales growth.

Kadcyla (first approved in 2013; CHF 1.4 billion, +45%). For treating HER2-positive breast cancer. The increased demand for Kadcyla was driven by the US (+74%) and the International region, supported by its use in treating patients with residual disease after surgery.

Hemlibra
(first approved in 2017; CHF 1.4 billion, >500%). For treating people with haemophilia A with factor VIII inhibitors. It is also approved to treat people with haemophilia A without factor VIII inhibitors. Hemlibra is the only prophylactic treatment that can be administered subcutaneously and with multiple dosing options (once weekly, once every two weeks or once every four weeks). The uptake is very strong in the US, Japan and Europe.

Esbriet (first approved in 2014; CHF 1.1 billion, +9%). For idiopathic pulmonary fibrosis. Sales continued to expand, driven by growth in Europe and the US.

Alecensa
(first approved in 2015; CHF 876 million, +38%). To treat ALK-positive lung cancer. Alecensa showed continued sales growth across all regions, with Europe and the International region being the main drivers.

Gazyva/Gazyvaro
(first approved in 2013; CHF 552 million, +43%). For chronic lymphocytic leukaemia (CLL), rituximab-refractory follicular lymphoma and previously untreated advanced follicular lymphoma. Sales expanded in all regions.

Polivy
(first approved in 2019; CHF 51 million). Part of combination therapy for the treatment of adults with relapsed or refractory diffuse large B-cell lymphoma who have received at least two prior therapies. FDA granted accelerated approval.

Rozlytrek
(first approved in 2019; CHF 7 million). For lung cancer with a specific gene mutation and solid tumours carrying a certain gene fusion. Rozlytrek received approvals in the US and in Japan.

Top-selling pharmaceuticals Total United States Europe Japan International*
CHFm % CHFm % CHFm % CHFm % CHFm %
Avastin 7,073 4 3,019 2 1,794 2 871 0 1,389 13
MabThera/Rituxan 6,477 -4 4,488 3 590 -33 109 -44 1,290 -1
Herceptin 6,039 -12 2,707 -8 1,013 -43 243 -5 2,076 10
Ocrevus 3,708 57 3,049 44 495 148 - - 164 161
Perjeta 3,522 29 1,528 13 1,092 24 280 90 622 71
Actemra/RoActemra 2,311 8 944 8 705 4 398 9 264 14
Xolair 1,969 1 1,969 1 - - - - - -
Tecentriq 1,875 143 1,180 148 349 138 188 126 158 138
Lucentis 1,826 8 1,826 8 - - - - - -
Kadcyla 1,393 45 635 74 432 19 82 7 244 56

* Asia–Pacific, EEMEA (Eastern Europe, Middle East and Africa), Latin America, Canada, others


Diagnostics Division

Sales CHF millions As % of sales % change
January - December 2019 2019 2018 2019 2018 At CER In CHF
Diagnostics Division 12,950 12,879 100.0 100.0 +3 +1
Business Areas            
Centralised and Point of Care Solutions 7,819 7,768 60.4 60.3 +3 +1
Molecular Diagnostics 2,109 2,019 16.3 15.7 +6 +4
Diabetes Care 1,918 1,980 14.8 15.4 +1 -3
Tissue Diagnostics 1,104 1,112 8.5 8.6 0 -1
Regions            
Europe, Middle East, Africa 4,897 4,986 37.9 38.7 +2 -2
Asia–Pacific 3,437 3,334 26.5 25.9 +6 +3
North America 3,253 3,213 25.1 24.9 0 +1
Latin America 854 844 6.6 6.6 +12 +1
Japan 509 502 3.9 3.9 -2 +1

Centralised and Point of Care Solutions sales were up by 3%. The immunodiagnostics business grew 6%, again making this unit the largest contributor to the division’s sales growth. The positive impact of instrument launches and the ongoing rollouts, mainly in China, the US and South Korea, was partially offset by the decline in the coagulation monitoring business in North America.

Sales in Molecular Diagnostics increased by 6%, with 6% growth in the underlying molecular business. Growth was driven by blood screening as well as by the sequencing business. Regional growth was led by Asia-Pacific (+16%) mainly in China, and EMEA (+6%).

Diabetes Care sales increased by 1%, driven by North America (+15%). The sales growth mainly came from the Accu-Chek Guide product line. This was partially offset by price pressure in Germany, UK and Italy.

Tissue Diagnostics sales were stable. Sales growth for advanced staining reagents was offset by lower instruments sales due to shipment delays. Regionally, the decline in sales was led by North America (-6%). In the Asia-Pacific region sales increased by 14%, with China being the main growth market.



About Roche
Roche is a global pioneer in pharmaceuticals and diagnostics focused on advancing science to improve people’s lives. The combined strengths of pharmaceuticals and diagnostics under one roof have made Roche the leader in personalised healthcare – a strategy that aims to fit the right treatment to each patient in the best way possible.

Roche is the world’s largest biotech company, with truly differentiated medicines in oncology, immunology, infectious diseases, ophthalmology and diseases of the central nervous system. Roche is also the world leader in in vitro diagnostics and tissue-based cancer diagnostics, and a frontrunner in diabetes management.

Founded in 1896, Roche continues to search for better ways to prevent, diagnose and treat diseases and make a sustainable contribution to society. The company also aims to improve patient access to medical innovations by working with all relevant stakeholders. More than thirty medicines developed by Roche are included in the World Health Organization Model Lists of Essential Medicines, among them life-saving antibiotics, antimalarials and cancer medicines. Moreover, for the eleventh consecutive year, Roche has been recognised as one of the most sustainable companies in the Pharmaceuticals Industry by the Dow Jones Sustainability Indices (DJSI).

The Roche Group, headquartered in Basel, Switzerland, is active in over 100 countries and in 2019 employed about 98,000 people worldwide. In 2019, Roche invested CHF 11.7 billion in R&D and posted sales of CHF 61.5 billion. Genentech, in the United States, is a wholly owned member of the Roche Group. Roche is the majority shareholder in Chugai Pharmaceutical, Japan. For more information, please visit www.roche.com.

All trademarks used or mentioned in this release are protected by law.

Disclaimer: Cautionary statement regarding forward-looking statements.
This document contains certain forward-looking statements. These forward-looking statements may be identified by words such as ‘believes’, ‘expects’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’, ‘seeks’, ‘estimates’, ‘future’ or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Various factors may cause actual results to differ materially in the future from those reflected in forward-looking statements contained in this document, among others: (1) pricing and product initiatives of competitors; (2) legislative and regulatory developments and economic conditions; (3) delay or inability in obtaining regulatory approvals or bringing products to market; (4) fluctuations in currency exchange rates and general financial market conditions; (5) uncertainties in the discovery, development or marketing of new products or new uses of existing products, including without limitation negative results of clinical trials or research projects, unexpected side effects of pipeline or marketed products; (6) increased government pricing pressures; (7) interruptions in production; (8) loss of or inability to obtain adequate protection for 12/12 intellectual property rights; (9) litigation; (10) loss of key executives or other employees; and (11) adverse publicity and news coverage. The statement regarding earnings per share growth is not a profit forecast and should not be interpreted to mean that Roche’s earnings or earnings per share for any current or future period will necessarily match or exceed the historical published earnings or earnings per share of Roche.

References
1 Unless otherwise stated, all growth rates in this document are at constant exchange rates (CER: average 2018).
2 EMEA = Europe, Middle East and Africa
3 Available for up to eight cobas 8000 modular analyser series or cobas pro integrated solutions

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