Roche: Ensuring sustained success in a more challenging environment

Roche: Ensuring sustained success in a more challenging environment JP Morgan - January 2011 Dr. Erich Hunziker, Deputy Head of the Corporate Executive Committee and CFO

This presentation 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 presentation, 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 intellectual property rights; 9 litigation; 10 loss of key executives or other employees; and 11 adverse publicity and news coverage. Any statements 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 this year or any subsequent period will necessarily match or exceed the historical published earnings or earnings per share of Roche. For marketed products discussed in this presentation, please see full prescribing information on our website www.roche.com All mentioned trademarks are legally protected 2

A position of strength Operational Excellence adapting to a changing environment Continued focus on innovation 3

Even in an economic downturn demand for healthcare increases; but funding is and will become more challenging No. of healthcare events Funding of healthcare Population growth Access to healthcare Health awareness Higher life expectancy Research activities Social security systems Slowdown of Economy Co-paymentsystems Payments by individuals Today 2020 Today 2020 4

Emerging markets show strong growth and are a Roche focus point Growth (CAGR) 2008-14 US, EU 3-4% APAC, LATAM, CEMAI 9-13% Total 5-6% IMS Health Pharma Market Ranking 2013 US $ Bio 1 2 3 4 5 6 7 8 9 10 United States Japan China Germany France Spain Italy Russia Brazil Canada 289.8 93.3 66.7 46.1 40.1 26.6 26.1 23.4 22.9 20.5 11 12 13 14 UK Venezuela Turkey India 20.4 20.2 16.3 15.6 Source: CAGR 08-14 Decision Resource/groupH (+/-1.5% assumed) 15 Mexico 12.4 Source: IMS Health, Market Prognosis June 2009 5

Biotech products drive growth in both divisions Pharma Division Diagnostics Division 67% 85% Biotech products as % of sales H1 2010 7

Long patent protection Biosimilars facing high hurdles Long primary patent protection of our key biologics Patents Avastin Lucentis Rituxan/ MabThera Herceptin Pegasys US 2019 2019 2018 2019 2018 EU ROW/EM similar marketed by Novartis earlier earlier similar Biosimilars outlook US: 12 years data exclusivity 2 routes for biosimilar approval: - Proof of similarity - Proof of inter-changeability Both requiring clinical trials (still to be specified by FDA) EU: legal and regulatory hurdles likely to remain high for biosimilars ROW/EM: investment in countries with strong IP regulations (China) Brand awareness important 8

Biosimilar draft guidelines in Europe Phase III clinical trials (double blind, equivalence) as normal route for showing similarity, in particular where no pharmacodynamic (PD) pathway In Oncology usually no PD established End points: Response Rate, PFS where most sensitive. OS data to be collected Clinical trials required for diseases with different mode of action Rheumatoid Arthritis, Oncology Metastatic, adjuvant Extrapolation only to indications with same mode of action Not for different diseases, different mode of action, different dosing, different safety requirements The requirements for clinical evaluation of biosimilar mabs are open to broad interpretation in the current draft guideline. Roche believes that a number of aspects needs to be clarified prior to final implementation 9

Novartis Pfizer/Wyeth Roche: Limited exposure to patent expiries 40% 35% 30% 25% 20% 15% 10% 5% 0% 2010 2011 2012 2013 % Sales Lost calculated by subtracting given year sales ( 10, 11, 12, 13) from full year sales from year prior to LOE. Data excludes sales lost impact of products with LOE prior to 2010. Source: Evaluate Pharma 10 % of US Sales Lost to Generics / Biosimilars Roche/Genentech Johnson & Johnson GlaxoSmithKline Eli Lilly AstraZeneca Merck/Schering Plough Sanofi-Aventis

Key Pharmaceuticals & Diagnostics products A risk-diversified portfolio of drugs and BUs 35 2 with > than CHF 6 bn Sales (CHF bn) 30 25 20 15 10 5 0 1 with > than CHF 5 bn 11 with > than CHF 1 bn '03 '04 '05 '06 '07 '08 '09 Avastin MabThera/Rituxan Herceptin Diabetes Care Pegasys Immunochemistry CellCept NeoRecormon Tarceva Clinical Chemistry Xeloda Lucentis Molecular Dx Boniva/Bonviva * Sales 2009 >CHF 6bn* >CHF 1bn* >CHF 5bn* 11

Actemra/RoActemra in Rheumatoid Arthritis Successful launch Actemra/RoActemra quarterly sales CHF m 120 100 80 60 40 Uptake remains very encouraging In US, Actemra prescribed by nearly 60% of rheumatologists, patient share currently 4-7% following anti-tnfs In Japan, launch restrictions lifted, improving patients access to Actemra Upcoming filing for sjia in US and EU 20 0 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 12

Tamiflu Sales at normalized levels Tamiflu quarterly sales (CHF m) 1'200 1'000 Retail Pandemic¹ 800 119 267 663 600 400 746 54 97 260 727 95 200 0 Q1 07 1 Governmental & Corporate 460 Q2 07 65 192 Q3 07 458 Q4 07 233 65 45 50 36 Q1 Q2 Q3 08 08 08 75 106 Q4 08 304 Q1 09 349 Q2 09 Q3 09 533 Q4 09 422 Q1 10 23 170 Q2 10 7 91 Q3 10 13

Continuous growth in sales and margin Group sales (CHF bn) Operating profit 1 (CHF bn) and margin 30 25 20 15 19.8 22.8 22.0 24.0 24.6 12 10 8 6 5.8 CAGR: 11% 33.2% 8.0 7.5 7.0 35.5% 8.8 45% 40% 35% 30% 25% 20% 10 4 15% 5 2 10% 5% 0 HY 2006 HY 2007 HY 2008 HY 2009 HY 2010 0 HY 2006 HY 2007 HY 2008 HY 2009 HY 2010 0% 1 before exceptional items 14

A position of strength Operational Excellence adapting to a changing environment Continued focus on innovation 15

Approach Comprehensive scope, differentiated measures Pharma Medicines gred pred Pharma Partnering Group Functions 1 Research & Early Dev. Development Tech Ops / Sites Commercial US/EU Commercial - ROW G&A/Procurement 1 Finance, IT, HR, Communication, Legal Strong impact Moderate impact 16

Financial impact Expected savings of CHF 2.4 billion by 2012 1 CHF million 1 830 70 270 2 440 70 320 440 120 Other 2 pred Group Functions Development 370 420 Tech Ops & Sites 80 140 Pharma Medicines 900 1070 Commercial 2011 2012 1 In addition to synergies of CHF 1 billion from the Genentech integration 2 Pharma Partnering, gred, Diagnostics sites 17

Impact on headcount by function Expected reduction of 4 800 positions by end of 2012 Pharma Medicines pred Diagnostics Other 1 Positions affected Transferred Positions 2 Positions reduced Commercial -2 650 Tech Ops/Sites -1 350 Development -800-4 800 +1 500-4 800-600 -640-260 -6 300 1 Group Functions, Pharma Partnering, gred 2 Total number of positions transferred to other sites (800)/3rd parties (700) 18

Financial impact One-off restructuring costs of about CHF 2.7 billion CHF million 800 400 2 700 200 200 400 1200 Non-Cash 1 500 400 600 1500 Cash 900 2010 2011 2012 Total 2010-12 19

Early debt redemption of USD 2.5 bn note due 2012 33% of Genentech transaction related debt repaid by September 2010 100% Exercise of call option on 9 September 2010 to redeem USD 2.5 bn notes originally due 2012 75% 50% 25% 0% 9 10 11 12 13 14 15 16 17 19 21 39 EUR USD CHF GBP Repayment of USD 3.0 bn and EUR 1.5 bn floating rate notes in Q1/2010 Of the CHF 48.2 bn bonds and notes issued to finance the Genentech transaction, cumulative 15.7 bn (33%) will have been repaid as per September 2010 1 Outlook 2010: USD 0.5 bn Genentech legacy note repayment at maturity in July 2010 1) Original net proceeds in CHF 20

0utlook for 2010: on track to achieve the goals Sales growth (in LC) Group & Pharma (excl. Tamiflu): mid single-digit Diagnostics: significantly above market Synergies 2010: CHF 800 m 2011: CHF 1,000 m R&D investment Core EPS growth (in LC) Slightly below 2009 level Double-digit Debt 2010: 33% reduction (revised from 25%) 2015: Aim to return to net cash position 3 yr Dividend outlook Maintained (as announced in 2008)* Barring unforeseen events; Total Tamiflu sales of up to CHF 1 bn assumed for 2010; LC=Local Currency * Continuous increase in dividend pay-out ratio over the period 2008-2010 21

Financial impact 2011 vs. 2010 Guidance to be provided with 2010 year-end results Illustrative Results from Operational Excellence Risk factors Profit contribution of underlying business growth Price decline US health care reform Tamiflu Avastin mbc Operating Profit 2010 22

A position of strength Operational Excellence adapting to a changing environment Continued focus on innovation 23

Competitors strategies to address the trends Two distinctly different groups emerging Diversification Becoming more Healthcare than pure Pharma (incl. OTC, vaccines, medical devices, generics, branded generics, bio-similars, eye care, etc.) Focus Pharma / Diagnostics (no generics or biosimilars) Roche 24

Our strategic franchises Focus on areas with high unmet medical need CNS High unmet medical need - high risk/high reward The new oncology? Metabolism Only dalcetrapib targets primary care; aleglitazar: specialty product. Virology Focus on hepatitis; existing infrastructure to launch new products. Inflammation Oncology RA biologics: area of high growth Actemra strongly positioned Leader in oncology with strong pipeline-regulatory requirements evolving, raising the bar for new products (including competition) 25

Our Distinctiveness Diversity of approaches fueling global scale and reach Federation of >150 partners Autonomous centers Worldwide execution Genentech R&ED Roche DBAs* Roche Dx Chugai Research Early Dev. Late-stage development Manufacturing Commercialisation Diversity Scale, Reach, Speed * DBA: Disease Biology Areas 26

Roche Group pharma R&D pipeline today phase I (38 NMEs) Status as of November 10, 2010 phase II (17 NMEs + 7 Als) phase III (8 NMEs + 23 Als) Registration (1 NME + 10 Als) RG3639 dulanermin cancer RG1273 pertuzumab EBC HER2+ RG105 Rituxan NHLfast infusion RG105* MabThera inhl maint 1 st line RG7256 BRaf inh(2) BRAF mutated melanoma RG1273 pertuzumab mbc HER2+ 2 nd line RG435 Avastin adj BC HER 2+ RG435* Avastin mbc combo docetaxel 1 st l. RG7112 MDM2 ant (2 ) solid & hem tumors RG3502 T-DM1 EBC RG435 Avastin ovarian cancer 1 st line RG435 Avastin mbc combo std chemos 1 st l. RG7160 EGFR humab solid tumors RG3616 hedgehog path inh advanced BBC RG435 Avastin mbc combo Herceptin 1 st line RG435** Avastin mbc 2 nd line RG7167 CIF/MEK solid tumors RG3616 hedgehog path inh operable BCC RG435 Avastin adj NSCLC RG1415 Tarceva NSCLC EGFR mut 1 st line RG7304 Raf & MEK dual inh solid tumors RG3638 Met Mab mnsclc RG435 Avastin adj BC HER2- RG105** Rituxan ANCA assoc vascul RG7321 PI3 kinase inh solid tumors RG7159 GA101 anti-cd 20 aggr. NHL RG435 Avastin adj BC Triple neg RG1569 Actemra sjia RG7334 anti-plgf solid tumors RG7204 BRaf inh met. melanoma 2nd/3rd l. RG435 Avastin relapsed ovarian ca CHU Edirol osteoporosis RG7347 anti-nrp1 solid tumors RG7433 navitoclax (ABT-263) sol & hem tumors RG435 Avastin high risk carcinoid CHU EPOCH chemo induced anemia RG7414 anti-egfl7 solid tumors CHU topoisomerase I inh gastric cancer RG435 Avastin glioblastoma 1 st line RG7420 MEK inh solid tumors RG667 palovarotene emphysema RG435 Avastin mcrc TML RG7421 MEK inh solid tumors RG3637 lebrikizumab (anti-il13) asthma RG597 Herceptin sc formulation HER2+ RG7422 PI3 K/mTOR solid & hem tumors RG4930 OX40L humab asthma RG597 Herceptin adj BC HER2+ (2yrs) * approved in EU RG7440 AKT inhibitor solid tumors RG7415 rontalizumab (IFN alpha Ab) SLE RG1273 pertuzumab mbc HER2+ 1 st line ** filed in US RG7444 FGFR3 oncology RG7416 anti-lt alpha RA RG1415 Tarceva adj NSCLC RG7459 IAP antag(2) oncology RG3648 Xolair chronic idiopathic urticaria RG1415 Tarceva NSCLC EGFR mut 1 st line RG7593 CD22 Mab vcmmae solid tumors RG3484 HPV16 cervical neoplasia RG3502 T-DM1 mbc 1 st line HER2+ RG7594 Antiangiogenic solid tumors RG7128* nucleoside polymerase inh. HCV RG3502 T-DM1 mbc 2nd line HER2+ RG7597 Her3 Mab solid tumors RG7227 danoprevir (protease inh) HCV RG7159 GA101 anti-cd 20 CLL NME CHU anti-glypican Mab liver cancer RG7201 SGLT2 inh type 2 diabetes RG7159 GA101 anti-cd 20 inhl Additional Indication RG7413 rhumab Beta7 ulcerative colitis RG1594 ocrelizumab RRMS RG7204 BRaf inh met. melanoma 1st line RG4934 anti-il-17 Mab RA RG3487 nic alpha7 AD RG1569 Actemra Ankylosing Spondylitis Oncology RG7449 anti-m1 prime Mab asthma Inflammation/Immunology RG7090 mglur5 antag (2) TRD RG1569 Actemra sc formulation RA RG7185 CRTH2 antag asthma Virology EVO NMDA receptor antag TRD RG1569 Actemra early RA RG7348 nucleoside analogue HCV Metabolic/Cardiovascular RG1569 Actemra RA DMARD IR H2H CNS RG7342 HCV pol (9) HCV RG1583 taspoglutide T2D Ophthalmology CHU serine palmitoyltransf inh HCV RG1658 dalcetrapib atherosclerosis CV risk red. Others RG1512 P selectin humab PVD RG1439 aleglitazar CV risk reduction in T2D RG4929 11 beta HSD inh metabolic diseases RG1678 GlyT1 inh schizophrenia RG-No Roche Genentech managed RG7273 ABCA1 inducer dyslipidemia CHU Chugai managed RG3645 Lucentis diabetic macular edema RG7418 anti-oxldl sec prev CV events EVO Evotec RG3645 Lucentis AMD high dose RG7426 BHT-3021 type 1 diabetes RG105 MabThera is branded as RG1450 gantenerumab (A-beta) Alzheimer s Rituxan in US and Japan RG1578 mglur2 antag (2) depression RG1662 GABA-A a5 inv ago cogn. disorders RG1569 Actemra is branded as RG7166 triple reuptake inh depression RoActemra in EU RG7412 anti-abeta Alzheimer s RG7417 anti-factor D geographic atrophy 27

Impact on product pipeline Industry-leading late stage pipeline maintained Number of NMEs Virology CNS Metabolic Inflammation Oncology 10 GlyT-1 inh aleglitazar taspoglutide dalcetrapib up to 14 HCV pol inh ocrelizumab MS 1 GlyT-1 inh SGLT2 inh 1 aleglitazar taspoglutide dalcetrapib lebrikizumab 1 4 ocrelizumab Hedgehog inh MetMAb Hedgehog inh 2 taspoglutide dalcetrapib BRAF inhibitor T-DM1 BRAF inhibitor T-DM1 ocrelizumab Actemra ocrelizumab pertuzumab RG7159 (CLL) pertuzumab RG7159 (CLL, NHL) pertuzumab 2007 2008 2009 2010E 1 LIP and phase III decision pending 28

Impact on product pipeline Progressing Personalized Healthcare T-DM1 Metastatic breast cancer (HER-2 expression level) MetMAb Non-small cell lung cancer (MET status) Pertuzumab Metastatic breast cancer (HER-2/3 expression level) Lebrikizumab 1 Asthma (periostin level) RG 7128 Hepatitis C (HCV viral load, genotype) RG7204 Metastatic melanoma (BRAF V600E mutation) 1 LIP and phase III decision pending 29

Diagnostics Continued high growth driven by need for medical value Potential to improve healthcare efficiency Innovative tests in areas of medical need Testing efficiency Patch pump diabetes care Digital Pathology tissue analysis medical value Diagnosis MRSA screening HPV early diagnosis Companion Diagnostics IVD <2 % total worldwide healthcare spend Influences >60 % of critical decision making dual HER2 protein & gene BRAF test patient selection 30

The Roche advantages We do not sacrifice our long-term future by short-term cost cutting: innovation remains key! We have established an entrepreneurial model for our R&D setup We are preparing for fundamental changes in the healthcare environment Roche delivering now but still investing into the future! 31

We Innovate Healthcare 32

Impact on headcount by geography Main impact in US and Europe USA CH Europe (excl. CH) ROW Positions affected Transferred Positions 1 Positions reduced -3 550-770 +1 500-4 800-1 300-680 -6 300 1 Total number of positions transferred to other sites (800)/3rd parties (700) 33

Financial impact One-off restructuring costs of about CHF 2.7 billion CHF million 2 700 300 400 IT / Other costs Portfolio prioritization costs 800 Site closure and transfer costs 1200 Employee-related costs Total 2010-12 34

Avastin: Portfolio within a portfolio Key treatment option in multiple tumor types 2009 Sales Ovarian Metastatic Breast Superior PFS front line Superior PFS in multiple 1 st line trials Superior PFS in 2 nd line 20%-25% Renal Superior PFS in 1 st line Recurrent Glioblastoma Unsurpassed PFS and OS 75%- 80% Advanced Non-Small Cell Lung Cancer Superior OS 1 st line Superior PFS 1 st and 2 nd line Metastatic Colorectal Superior OS 1 st and 2 nd line Superior PFS 1 st and 2 nd line 35