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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; and11 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
33
Roche DiagnosticsGrowth through Innovation
Dianne Young, Investor Relations Officer - DiagnosticsLandsbanki event, Paris, March 18 2008
4
Overall Performance
Business Areas
Strategy for Future Growth
Personalised Healthcare
5
Roche DiagnosticsIntegral component of the Roche Group
Roche Diagnostics
Roche Pharma
Genentech
Chugai
20 %
Roche Group Sales 2007 CHF 46 bn
Roche Diagnostics 2007
Sales 9,350 CHF m
R&D spend 787 CHF m
R&D % sales 8.4 %
EBIDTA 2,580 CHF m
Operating profit 1,648 CHF m
No. employees 23,062
Sales 9,350 CHF m
R&D spend 787 CHF m
R&D % sales 8.4 %
EBIDTA 2,580 CHF m
Operating profit 1,648 CHF m
No. employees 23,062
6
Roche is the #1 In-Vitro Diagnostics company
3 %3 %4 %
6 %
10 %
12 %13 %
19 %
Roche Siemens* Abbott J&J BeckmanCoulter
BectonDickinson
bioMérieux Bayer
1 Source: company reports, Boston Biomedical Consultants and Roche analysis based on peer sales YTD Sept 20072 in vitro diagnostics market; excludes Life Science research market * Siemens includes Dade (2007 deal)
Estimated market share 20071, 2
7
1,148
3,216
692
4,294
Applied Science MolecularDiagnostics
ProfessionalDiagnostics
Diabetes Care
Market sales and position 2007Strongly positioned
MarketPosition
#7 #1 #1 #1
CHF 9,350 m
8
27.6%28.6%
31.7%31.2%
28.5%27.6%
18%19%18%17%16%
'02 '03 '04 '05 '06 '07
2007: Strong cash generationHigh margins relative to peers
EBITDA(% of Sales)
Roche*
Peers**
*Before exceptional items **peer group: Abbott Dx., Bayer Dx., Beckman Coulter, Becton Dickinson, Dade Behring, JNJ
9
Overall Performance
Business Areas
Strategy for Future Growth
Personalised Healthcare
10
0
1
2
3
4
5
2005 2006 2007
Immunochemistry Clinical ChemistryPOC products other
Professional DiagnosticsDouble-digit immunochemistry growth for 7th consecutive year
• Gained market share through strong instrument placements
– Elecsys 2010, cobas 6000, cobas e 411 systems
• Immunochemistry sales benefiting from new markers
– NT-proBNP, Trop T, TSH, Vitamin D, MPA
• Clinical Chemistry testing volume increased, dampened by pricing pressure
• Key transactions to access new markets– BioVeris acquisition (clinical trials)– OCD/ Novartis* agreement (HCV)
CHF billion
+8 %1
+13 %
+3 %
1 local growth * Ortho-Clinical Diagnostics, Inc. and Novartis Vaccines & Diagnostics
+7 %
11
Diabetes Care New product portfolio restoring growth
• Accu-Chek Aviva driving growth in key markets
• Accu-Chek Compact Plus and Accu-Chek Active strong contributors
• Accu-Chek Spirit (insulin pump) continues gaining momentum
• Launched:– Accu-Chek Performa
– Accu-Chek Compact Plus (new)
– Accu-Chek 360o
2004 2005 2006 2007
3%3%
10%
5%
DeclineMature flagship
product
Accu-Chek Advantage
StabilisationRejuvenated portfolio
Accu-Chek Performa
Accu-Chek Spirit
GrowthLeverage portfolio
Accu-Chek Compact
PlusAccu-Chek
Aviva
12
Molecular Diagnostics Automated platforms supporting virology market share
• Growth +3 % excluding industrial business, which declined as guided
• Blood screening:
– Continued up-take cobas s 201 system & cobas TaqScreen MPX Test in EU
– WNV test for cobas s 201 system FDA approved
– Contract with Japanese Red Cross renewed 5 yrs
• Virology benefiting from successful launch of CAP/CTM HIV Test in the US
1 local growth
+4 %
-1 %
0
400
800
1200
2005 2006 2007Virology Blood ScreeningOther Industrial Business
-2 %1
-49 %
CHF million
13
Overall Performance
Business Areas
Strategy for Future Growth
Personalised Healthcare
14
Applied Science Molecular Diagnostics
Professional Diagnostics
Diabetes Care
Life Science In Vitro Diagnostics
Researchers
Academia Pharma Biotech
Patients
Patients Consumers
Professionals
Wards/ClinicsCommercial labs Hospitals Physicians
In Vitro Diagnostics
Roche Diagnostics - overviewOperating five businesses in three distinct markets
Ventana Medical Systems
15
The Challenge…
Cost pressures
Unmet medical needs
Information complexity
Skilled labor shortages
Roche Diagnostics - Professional testing strategy Innovate to improve healthcare
Our Response…
We will innovate in
…to improve healthcare
Testing Efficiency Medical Value
16
Professional testing strategy – Testing efficiencyAddress increasing customer complexity
InstrumentInnovation
MenuBreadth
Workflow& IT
Testing Efficiency
17
Professional testing strategy – Testing efficiencyTotal solution provider to laboratories
InstrumentInnovation
• Modular platform
• Multiple configurations
• All lab sizes
Workflow& IT
cobas IT 3000 cobas IT 5000
Work AreaManagement
LaboratoryInformation System
cobas IT 1000
Point of CareData Management
MenuBreadth
Full menu on single platform
Cardiac: NT-proBNP, Trop TEndocrinology: Vitamin D3 Transplantation: MPARheumatoid Arthritis: anti-CCPSepsis: IL-6, ProcalcitoninVirology: anti-HCV, CMV
18
Professional testing strategy – Medical valueAddress unmet medical needs
Medical Value
DevelopNew
Content
ApplyContent forNew Uses
DecentralizeTesting
19
Professional testing strategy – Medical valueNew tests, new uses, new places
DevelopNew
Content
GenomicsRNA/ DNA
ProteomicsPeptides / Proteins
22 markercandidates
>12 markercandidates
Colon Cancer
ApplyContent forNew Uses
Rule-out HF (ER)Short-term monitoring (ER)
Targeted screening (Primary Care)Long-term monitoring (Outpatient/Primary Care)
Therapy stratification ACS (ER)Preoperative testing (Inpatient)
Population screening (Primary Care)
20082003 NT-proBNP Trial Program
DecentraliseTesting Hospital
PrimaryCare Patient
Patient Self-testing
20
Acquisitions - complement current portfolio Expanded technology offering for in vitro diagnostics
Testing on TissueIHC FISH/ CISH/
SISHProtein
expression
ElecsysAmpliChip
microarray
TaqMan
PCR
Testing after NA/ protein extraction
Molecular Diagnostics
Professional Diagnostics
In Vitro Diagnostics
Applied Science
Life Science
Researchers
Academia Pharma Biotech
Professionals
Wards/ClinicsCommercial labs Hospitals Physicians
Diabetes Care
Patients
Patients Consumers
In Vitro Diagnostics
Ventana Medical Systems
21
Applied Science
Life Science
Researchers
Academia Pharma Biotech
Diabetes Care
Patients
Patients Consumers
In Vitro Diagnostics
Roche Diagnostics - overviewOperating five businesses in three distinct markets
Molecular Diagnostics
Professional Diagnostics
In Vitro Diagnostics
Professionals
Wards/ClinicsCommercial labs Hospitals Physicians
Ventana Medical SystemsVentana Medical Systems
22
Applied Science
Life Science
Researchers
Academia Pharma Biotech
Roche Diagnostics – Applied ScienceFocusing on strategic growth areas
MicroarraySequencing
Genomic research
RT-PCR
LightCycler
Sequencing
Microarrays
Market: 800 m USDGrowth: +3 %
Market: 600 m USDGrowth: +13 %
454 Life Sciences
5%
NimbleGen3%
Source: Analyst reports, Company reports, Roche Analysis All growth rates in local currency
23
Roche Diagnostics – Applied Science Complete solution provider for Genomic Research
Genomics
Targ
etD
etec
tion
Proteomics Cytomics
RT-PCR 2D-GE MS Function Flow IHC/ISH SequencingMicroarray
DNA, RNA Proteins Cells Tissues
24
Diabetes Care
Patients
Patients Consumers
In Vitro Diagnostics
Roche Diagnostics – Diabetes CareEstablish “Circle of Care” management of diabetes for patients and providers
Provide comprehensive solutions beyond glucose monitoring
Restore growth with complete Accu-Chek portfolio
Delivery
Circleof Care Advice
Monitoring
25
Overall Performance
Business Areas
Strategy for Future Growth
Personalised Healthcare
26
LifeSciences Pharma
Roche Group – StrategyDifferentiation through Personalised Healthcare
In VitroDiagnostics
• Innovative and medically differentiated products/services
• Patient-tailored treatment that deliver tangible improvement to the health, quality of life and life expectancy of patients
• Leading in the development & commercialisation of targeted drugs & companion diagnostic tests
Increasingmedical value
to patients& physicians
27
Roche’s competitive edge: driving personalisedhealthcare entirely ‘within house’
• Strengths in two research-oriented healthcare areas
• Synergies in research, development and marketing
• Well positioned to take a leading role in the move towards personalised healthcare
Opportunities for synergies
Leader inPharma
Leader in Diagnostics
Earlydetection
DiagnosisPatientstratifi-cation
Treatment Monitoring
28
Dia development process and milestones
RegistrationBiomarker Discovery
Phase IIIClinical benefit and economics
Phase IIPPV and NPV
Phase ISensitivity & specificity
BM Dx candidate identified
BM assay on clinical platformNon-clinical test-
performance
ReplicationConfirm markers and reproducibility of assay
Clinical impact
Clinical utility
Clinical validation
Analytical DevelopmentTranslation of assay onto a clinical platform
Pre-clinical assay development ~2yrs Clinical Phase ~3yrs
Dx & Rx Divisions have unique R&D processesNeed for the alignment of interfaces
BM = Biomarker
RegistrationPhase III
Key registration
trials
Phase IIb
Early clinical efficacy
Phase IIa
Proof of
Concept
EIH EnablingPre-clinical
safety
Lead Optimisation
Lead Identification
Target Validation
New Medicines Proposal
Project Initiation
Clinical Candidate Selection
Entry Into Humans
Phase IEarly clinical
safety
Entry Into Lifecycle Management
Full Dev. Decision
Filing Decision for First Indication
Research ~7yrsDevelopment ~8yrs
Pharma R&D process and decision points
29
Research CommercialiseDevelop
Applied Science
Molecular Diagnostics
Professional Diagnostics
Creating the interface Align to Pharma Disease Biology Areas
Inflammation/ Autoimmunity
Virology
Oncology
Diagnostics LiaisonManagers
Pharma
Diagnostics
Metabolism
CNS
Ventana Medical Systems
30
Integration of biomarkers across developmentFor every Pharma project
External & Internal Innovation
Research Development Marketing
Co-Develop with Diagnostics
Phase IPhase 0 Phase II Phase III FilingPhase IV
MarketTargetSelection
Lead Generation/
Optimization
Modeling & Simulation
Biomarker Development
More Internal Innovation
Clinical Research & Exploratory Development
Clinical Development
Confirmatory PhasePoCExploratory PhaseDiscoveryPhase
31
RocheOncology Pipeline PCR Elecsys/ Others
Roche Capabilities Ventana Capabilities
Herceptin
’ Tarceva
MabThera/ Rituxan
Pertuzumab
R7159
R7112
R7160Earl
y D
evel
opm
ent
Late
D
evel
opm
ent/
M
arke
t
R1507
R7204
IHC/ ISH
Companion Diagnostics program for each projectStrong oncology drug portfolio, combined with diagnostics capabilities uniquely positions Roche to lead in PHC
32
Raw materials
Platforms
CompanionDiagnostics
Drug development& Biomarker support
Knowledgesharing
Shared
Services
Pharmaceuticals
Diagnostics within the GroupBecome the “Diagnostic partner of choice” to Pharma
Molecular Diagnostics
Professional Diagnostics
In Vitro Diagnostics
Applied Science
Life Science
Researchers
Academia Pharma Biotech
Professionals
Wards/ClinicsCommercial labs Hospitals Physicians
Diabetes Care
Patients
Patients Consumers
In Vitro Diagnostics
Ventana Medical Systems
33
Summary
• Focus on medical value
• Strengthen and expand current business
• Fill strategic gaps
• Lead in personalised healthcare
PharmaIn VitroDiagnostics
Increasingmedical
valueto patients
& physicians
LifeSciences
34
Appendix
35
Sales in CHF billion USD2006 2007 CHF local growth
% change in
2007: Industry-leading sales growth continued
Pharmaceuticals 33.3 36.8 10 11 15
Diagnostics 8.7 9.3 7 6 12
Roche Group 42.0 46.1 10 10 15
36
Professional Diagnostics* 3,929 4,294 9 8 14 %
Diabetes Care 3,020 3,216 6 5 11 %
Molecular Diagnostics 1,175 1,148 -2 -2 2 %
Applied Science 623 692 11 11 16 %
Roche Diagnostics 8,747 9,350 7 6 12 %
2007: Diagnostics sales by business areaGrowth driven by Professional Diagnostics
* Amalgamation of Centralized Diagnostics and Near Patient Testing
% change in USD2006 2007 CHF local growthSales CHF million