The relevance of Roche s strategy in the current market environment

Transcription

1 Maket dynamics in the Healthcae Industy The elevance of Roche s stategy in the cuent maket envionment D. F.B. Hume, CEO Roadshow Zuich, Mach 18 th

2 This pesentation contains cetain fowad-looking statements. These fowad-looking statements may be identified by wods such as believes, expects, anticipates, pojects, intends, should, seeks, estimates, futue o simila expessions o by discussion of stategy, goals, plans o intentions. Vaious factos may cause actual esults to diffe mateially in the futue fom those eflected in fowad-looking statements contained in this pesentation among othes: 1. Picing and poduct initiatives of competitos; 2. Legislative and egulatoy developments and economic conditions; 3. Delay o inability in obtaining egulatoy appovals o binging poducts to maket; 4. Fluctuations in cuency exchange ates and geneal financial maket conditions; 5. Uncetainties in the discovey, development o maketing of new poducts o new uses of existing poducts; 6. Inceased govenment picing pessues; 7. Inteuptions in poduction; 8. Loss of o inability to obtain adequate potection fo intellectual popety ights; 9. Litigation; 10. Loss of key executives o othe employees; and Advese publicity o news coveage Fo maketed poducts discussed in this pesentation, please see full pescibing infomation on ou website Five majo dynamics in Healthcae maket The gowing impotance of doing it diffeently - five answes 2004 esults and outlook 2

3 1. Consolidation in the Phama industy ongoing Top ten companies now above 50 % top 10 maket shae (%) Roche / Syntex AHP / Cyanamid Ciba / Sandoz Roche / Chugai Pfize / Phamacia Sanofi / Aventis Pfize / W-L GW / SB Rhone-Poulenc / Hoechst Asta / Zeneca Roche / Böhinge M. Hoechst / MMD 25 Glaxo / Wellcome Roche / Genentech Souce: Wood Mackenzie 2. Industy cente is shifting to the US Euopean makets losing gound Maket dynamics 1990: US and Euope simila maket size 2004: US twice the size of Euope move of talented people to the US Highe R&D investment in the US 1990: Euope invested twice as much as the US ( 21 bn) 2004: US invested aound 30 % moe ( 29 bn) US now leading invento of New Chemical Entities 70 % of sales of new medicines since 1998 geneated in the US 3

4 3. Funding becoming moe limited Funding of Healthcae Social secuity systems unde pessue Slowdown of Economy Co-paymentsystems Payments by individuals today Geneisation isk Not the same fo all US$ bn 20 Soft isk Had isk E 2007E 2006E 2005E 2004E Souce: Deutsche Bank

5 5. R&D poductivity has been in decline But the impotant question is sales value pe dug Indexed annual sales Indexed eal R&D spend Indexed NME appovals no. of of dugs > U$ 1bn > U$ 3bn Outlook: Futue gowth will depend on the success of diffeentiated, tageted, and cost effective teatments $ bn Global Phamaceutical Maket - Dives & Restaines Combination Poducts Cost Conscious Pescibing Tageted Theapy Ageing Population Global Geneics Initiative Geogaphic Makets Pimay Cae Maket Matuity Pesonalized Medicine Maket Segmentation Global Phama Maket Foecast Value Range

6 Five majo dynamics in Healthcae maket The gowing impotance of doing it diffeently - five answes 2004 esults and outlook 1. Roche is a clea value playe Medical Diffeentiation high low Volume stategy high volume events e.g. Geneics Roche Focus Value stategy high value events e.g. Oncology, AmpliChip CYP450 low Pemium fo innovation high 6

7 Gowth in Phama diven by diffeentiated poducts Highe pices fo innovation Specialty Cae volume is not changing but pice pe unit is highe fo Specialty Cae and has gown faste Volume (stand. units bn) Av. Pice pe Unit 1 (CHF) 2,000 1,800 1,600 1,400 1,200 1, Pimay Cae 290 (16%) 1,481 (84%) Specialty Cae 290 (16%) 1,559 (84%) Pimay Cae Specialty Cae Standad unit defined as Numbe of units divided by Smallest common dose of a poduct fom. Numbe of units = Numbe of tablets, ml o gams sold x numbe of packages sold x Size of package. Souce: IMS (top 200 dugs woldwide), Maakon analysis 2. Non-mega-meged companies do bette Maket shae Change in ethical dug maket shae ( ) "Mega-meged" companies -2.8 % Only top ten anked companies consideed in chat Souce: Wood Mackenzie "Non-mega-meged" companies +10 % Meck & Co, J&J, Eli Lilly, Roche Pfize, GSK, BMS, Aventis, Phamacia 7

8 3. Unique innovation model Roche expetise combined with extenal dynamism Phama Diagnostics Alliances and collaboations Spin-offs 4. Biologics - inceasing pat in Innovation Roche: biggest poduce second biggest biotech company Patneing impotant Souce: FDA Biologics Othe FDA NCE appovals 8

9 5. Diagnostics and Phama unde one oof: Solutions along the value chain Enable bette medical decision making test test test test test / dug test pedisposition sceening tageted monitoing geneal sceening diagnosis theapy selection monitoing Ealie diagnosis peiodic disease status checks ealie teatment Pevention lifestyle, nutition, medicine Patient statification diffeentiated teatment use of phamacogenomics efficacy avoid advese events Five majo dynamics in Healthcae maket The gowing impotance of doing it diffeently - five answes 2004 esults and outlook 9

10 2004: Substantial pogess in fou key aeas Oganic gowth well above the maket 1. Stategy: Pue Healthcae focus Focus on high value businesses OTC divested 2. Opeation: Recod level Sales gowth substantially above wold maket - in both divisions Recod level of Goup Opeating Pofit Substantial impovement in opeating magin1 (Goup pp) Stong incease in Net Income fom continuing businesses (+41 %) and moe than doubled Goup A leade Net in Income 1 befoe exceptional items, continuing businesses Copoate Govenance Focus on healthcae and innovation Solid financial basis Recod opeating pefomance 2004: Substantial pogess in fou key aeas Conditions in place fo balanced financial income 3. Finance: Solid basis going fowad Goup debt consideably educed by CHF 6.3 bn Net liquidity almost doubled (to CHF 11.7 bn) Equity atio up to 57 % (fom 49 %) 4. Copoate Govenance & Sustainability: Among the leades Independent Lead Diecto appointed New CEC stuctue Policy on clinical tial data base established Inclusion of Roche in majo SRI indices 1 1 FTSE4Good, Dow Jones Sustainability Index (DJSI) Focus on healthcae and innovation A leade in Copoate Govenance Solid financial basis Recod opeating pefomance 10

11 2004: Sales gowth well ahead of maket % change in USD CHF bn CHF bn CHF local gowth Phamaceuticals Roche Rx Genentech Rx Chugai Rx Diagnostics Goup continuing OTC (discontinuing) VFC (discontinuing) Goup consolidated until 30 Septembe : Goup esults 1 Recod opeating pofit Sales EBITDA % of sales p p Opeating pofit befoe exceptional items % of sales p p Changes Goup oganisation Opeating pofit % of sales p p Financial income Except. inc. bond con/ed Taxes tax ate in % p p Net income % of sales p p 1 vs excluding OTC & VFC Goup continuing 2 CHF bn % change CHF local CHF bn Goup % change CHF local 11

12 Opeating pofit 1 Continuous impovement each yea CHF bn % % % 23.5% % % % 25.7% % 19.0% 17.5% % Goup continuing Phamaceuticals Diagnostics 1 befoe exceptional items Call to action : Roche Phama - An industy leading phase III pipeline with 28 ongoing and planned pojects* building the base fo futue gowth MabThea CLL Taceva panceatic Ca Avastin RCC MRA RA Phase III III ongoing MabThea maintenance inhl Xeloda mcrc 1st/2nd line combo Xeloda adjuvant CRC combo Xeloda adjuvant BC Avastin NSCLC Avastin adjuvant CRC Avastin panceatic Ca Avastin mbc Bondonat MBP Heceptin adjuvant BC Heceptin mbc combo homonal CERA enal anemia MRA SoJIA MabThea AI diseases MabThea RA TNF non-espondes Xolai pediatic asthma Lucentis MD ED-71 osteopoosis Phase III III to to stat Taceva NSCLC 1st line Taceva adjuvant NSCLC Heceptin gastic Ca Avastin ovaian Ca CERA chemotheapy-induced anemia MabThea RA DMARD failues * excl. filed pojects 12

13 Value ceation though maketed mega bands and a isk balanced, diffeentiated pipeline Pegasys Heceptin Diabetes Cae Cuent Xeloda Molecula Diagnostics NeoRecomon Avastin Futue Boniva Bondonat (MBP) Taceva R744 (CERA) MRA Immuno- Diagnostics CellCept MabThea Insulin sensitize MabThea in in RA Outlook Phamaceuticals 2005 local cuency sales gowth above the wold maket 2005 opeating pofit magin 1 boadly in line with that of 2004 Diagnostics 2005 local cuency sales gowth above the wold maket On ou way to achieve an opeating pofit magin 1 of aound 23 % in 2006 Goup Balanced financial income in 2005 baing unfoeseen events 1 befoe exceptional items 13

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