Roche reports strong performance in the first half of 2017

RocheIn the first half of 2017, Group sales rose 5% to CHF 26.3 billion. Core EPS grew 6%, ahead of sales. Core EPS growth reflects the strong underlying business performance. IFRS net income increased 2%. Sales in the Pharmaceuticals Division increased 5% to CHF 20.5 billion. The recently launched medicines Tecentriq, Ocrevus and Alecensa contributed CHF 0.5 billion of new sales, which represents half of the division's growth. Perjeta continued its strong sales increase. This growth was partially offset by lower sales of Tarceva, Tamiflu and Pegasys. In the US, sales advanced 8%, led by Tecentriq, Xolair, MabThera/Rituxan and Ocrevus, recently launched for the treatment of relapsing and primary progressive forms of multiple sclerosis. In Europe, sales were stable. Growth of Perjeta and Actemra/RoActemra sales was offset by lower sales of Avastin. In the International region, sales grew by 5%, led by the Latin America and Asia-Pacific subregions. In Japan, sales were stable. Growth of Alecensa sales (+42%) was partially offset by Avastin (-3%), which was negatively affected by the biannual government price cuts in April 2016.

Diagnostics Division sales increased 5% to CHF 5.8 billion. Centralised and Point of Care Solutions (+8%) was the main contributor, led by the growth of its immunodiagnostics business (+13%). In regional terms, growth was driven in particular by Asia-Pacific (+13%), with continued strong growth in China (+20%). Sales increased 3% in EMEA, 8% in Latin America, 1% in North America, and 2% in Japan.

Core operating profit increased by 3% in the Pharmaceuticals Division and by 5% in the Diagnostics Division. The growth rates of both divisions were impacted by the base effect of income in 2016 from changes to the Group’s Swiss pension plans, partially offset by income from older medicine divestments in the first half of 2017.

Core EPS increased by 6% and net income on an IFRS basis increased by 2%. IFRS net income was impacted by impairments of intangible assets. These increased by CHF 0.7 billion net of taxes, notably from the partial impairment of the Esbriet product intangible.

Important new product approvals in Pharmaceuticals
In the second quarter of this year health authorities approved several new medicines: In April, Tecentriq received accelerated approval from the US Food and Drug Administration (FDA) for the treatment of people with locally advanced or metastatic urothelial carcinoma who are not eligible for cisplatin chemotherapy. In the same month, Lucentis was approved by the FDA for the monthly treatment of all forms of diabetic retinopathy. In May, Actemra/RoActemra subcutaneous injection was approved by the FDA for the treatment of giant cell arteritis. This is a chronic and severe autoimmune condition that has not seen any new treatments in more than 50 years. In June, the FDA approved Rituxan Hycela (rituximab and hyaluronidase human) for subcutaneous injection, for the treatment of adults with specific forms of blood cancer. This new formulation combines the monoclonal antibody used in intravenous MabThera/Rituxan with hyaluronidase, an enzyme that enables injection of the medicine under the skin. Also in June, a new tablet formulation of Esbriet was approved by the European Commission for the treatment of mild to moderate idiopathic pulmonary fibrosis (IPF), following approval by the FDA in early 2017. In July, the Australian Therapeutic Goods Administration approved Ocrevus for the treatment of relapsing forms of multiple sclerosis (RMS) and primary progressive multiple sclerosis (PPMS).

Clinical trial results support Roche medicines
The primary analysis of the phase III Haven 1 study in adults and adolescents and interim analysis of the phase III Haven 2 study showed positive data. The studies evaluated once-weekly subcutaneous emicizumab prophylaxis for the treatment of adults and adolescents or children with haemophilia A and inhibitors to factor VIII. The primary endpoint was treated bleeds, and results showed a statistically significant and clinically meaningful reduction in bleed rate of 87% (Haven 1) with emicizumab prophylaxis compared with on-demand treatment with bypassing agents.

New data from additional analyses of the pivotal phase III Gallium study in people with previously untreated follicular lymphoma confirmed that the improvement in progression-free survival (PFS) with Gazyva/Gazyvaro-based treatment over MabThera/Rituxan-based treatment was sustained, irrespective of chemotherapy regimen. This updated analysis includes a further six months of follow-up.

Data presented at EAN5 showed Ocrevus significantly reduced disease activity and disability progression in patients with RMS and PPMS, as measured by No Evidence of Progression or Active Disease (NEPAD), a novel composite endpoint in MS. Ocrevus significantly reduced the risk of RMS and PPMS patients requiring mobility aids versus comparators. In patients with PPMS, Ocrevus reduced the risk of more severe forms of disability progression versus placebo.

The phase III Aphinity study showed adjuvant (after surgery) treatment with the combination of Perjeta, Herceptin and chemotherapy (the Perjeta-based regimen) significantly reduced the risk of breast cancer recurrence or death in people with HER2-positive early breast cancer compared to Herceptin and chemotherapy alone. At the time of the primary analysis, with median follow-up of 45.4 months, the reduction in risk of invasive breast cancer recurrence with the Perjeta-based regimen was greatest in people with lymph node-positive or hormone receptor-negative disease.

The phase III Alex study showed Alecensa reduced the risk of disease worsening or death (progression-free survival, PFS) by more than half (53%) compared to crizotinib when given as initial (first-line) treatment for people with anaplastic lymphoma kinase (ALK)-positive advanced non-small cell lung cancer (NSCLC).

Clinical study updates
The phase III IMvigor211 study that evaluated Tecentriq in people with locally advanced or metastatic urothelial cancer whose disease progressed during or after treatment with a platinum-based chemotherapy (previously treated) did not meet its primary endpoint of overall survival compared to chemotherapy. The results observed in people treated with Tecentriq in IMvigor211 were generally consistent with those observed in a similar group of people in the Phase II IMvigor210 study.

In July, the EU Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Tecentriq as a monotherapy for the treatment of adults with locally advanced or metastatic NSCLC after they have been previously treated with chemotherapy. People with EGFR activating mutations or ALK positive tumour mutations should also have received targeted therapy before receiving Tecentriq. This positive recommendation is based on results from the large randomised phase III Oak study and the randomised phase II Poplar study. The CHMP also adopted a positive opinion for the use of Tecentriq as a monotherapy for the treatment of adults with locally advanced or metastatic urothelial carcinoma who have been previously treated with a platinum based chemotherapy or who are considered ineligible for cisplatin chemotherapy. This positive opinion is based on results from the randomised phase III IMvigor211 study and cohorts 1 and 2 from the single-arm phase II IMvigor210 study.

New generation of diagnostics products
The cobas MRSA/SA nucleic acid test for use on the cobas Liat System for the qualitative detection and differentiation of methicillin-resistant Staphylococcus aureus (MRSA) and Staphylococcus aureus (SA) is now available in countries accepting the CE mark and ideal for use at the point of care. This menu expansion serves specific needs of European markets. This is the first real-time PCR test that simultaneously detects MRSA and SA with one sample in less than 30 minutes. MRSA and SA are both significant sources of healthcare- and community-associated infections.

Also introduced to the markets were the Avenio ctDNA (ctDNA - circulating tumour DNA) analysis kits for oncology research. These are the first blood-based distributed oncology tests and provide accurate insights into different stages and types of cancer. They represent a portfolio of three next-generation sequencing (NGS) liquid biopsy assay kits for oncology research: the Avenio ctDNA Targeted Kit, Expanded Kit and Surveillance Kit. The kits include all reagents, bioinformatics and software to make ctDNA-testing accessible to all NGS laboratories.

Roche launched the Avenio Millisect System, which utilises an automated, digitally assisted process to reliably and efficiently isolate clinically relevant cells from tissue biopsies for diagnostic testing in the US and countries accepting the CE mark. It allows for efficient tissue dissection and maximises medical value for all molecular downstream applications.

The Elecsys HIV combi PT assay was approved by the FDA. This highly sensitive and specific assay further expands Roche's broad testing menu for infectious diseases in the US. With the addition of this assay, laboratories will be able to screen for common co-infections, such as hepatitis C and syphilis, which can be tested simultaneously with HIV, reducing the need for sample splitting and additional analysers. The FDA also granted approval for the cobas CMV (cytomegalovirus) test for use on the fully automated cobas 6800 and cobas 8800 systems. Healthcare professionals use the CMV test to assess how transplant patients on therapy are responding to treatment.

Outlook for 2017 raised
In 2017, Roche now expects sales to grow mid-single digit, 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.

Commenting on the Group's results, Roche CEO Severin Schwan said: "In the first half of the year, both our Pharmaceuticals and Diagnostics Divisions showed strong performance, very much driven by new product launches. Particularly pleasing is the very successful launch of Ocrevus for the treatment of two forms of multiple sclerosis. Based on our half-year performance, we raised the outlook for the full-year to mid-single digit sales growth."

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. Thirty medicines developed by Roche are included in the World Health Organization Model Lists of Essential Medicines, among them life-saving antibiotics and cancer medicines. Roche has been recognised as the Group Leader in sustainability within the Pharmaceuticals, Biotechnology & Life Sciences Industry eight years in a row by the Dow Jones Sustainability Indices (DJSI).

The Roche Group, headquartered in Basel, Switzerland, is active in over 100 countries and in 2016 employed more than 94,000 people worldwide. In 2016, Roche invested CHF 9.9 billion in R&D and posted sales of CHF 50.6 billion. Genentech, in the United States, is a wholly owned member of the Roche Group. Roche is the majority shareholder in Chugai Pharmaceutical, Japan.

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