RHHBF - Roche Holding AG (RHHBY) Q1 2024 Sales/Trading Statement Call Transcript

2024-04-24 16:16:00 ET

Roche Holding AG (RHHBY)

Q1 2024 Sales/ Trading Statement Conference Call

April 24, 2024 08:00 AM ET

Company Participants

Thomas Schinecker - Chief Executive Officer, Roche Group

Alan Hippe - Chief Financial & Information Officer

Teresa Graham - Chief Executive Officer, Roche Pharmaceuticals

Matt Sause - Chief Executive Officer, Roche Diagnostics

Bruno Eschli - Head, Investor Relations

Conference Call Participants

Richard Vosser - JPMorgan

Emmanuel Papadakis - Deutsche Bank

Simon Baker - Redburn

Matthew Weston - UBS

Luisa Hector - Berenberg

Sachin Jain - Bank of America

Andrew Baum - Citi

Tim Anderson - Wolfe Research

Steve Scala - Cowen

Richard Parkes - BNP

Emily Field - Barclays

Mark Purcell - Morgan Stanley

Peter Welford - Jefferies

Presentation

Thomas Schinecker

Thank you very much and hello and welcome. I'm looking forward to sharing the Q1 results together with my team with you today. In Q1, we had a very strong base business growth of 7% growth across both divisions. And overall group sales including COVID were at plus 2% at constant exchange rates. The base business in both divisions as said was very strong, Pharma at plus 7% and Diagnostics at plus 8%. The COVID 19 sales decreased by CHF 0.7 billion and with that we have the COVID sales decline largely behind us. And we've had LOE impact of CHF 0.4 billion. And with that both is very much in line with our guidance.

This quarter we have achieved a number of very important milestones. First we received the US approval for XOLAIR in food allergy, as the first and only medicine in food allergy. And we already see an uptick in sales and there's a lot of excitement in the medical community and Teresa for sure will share more about that.

Just last week, we received FDA approval for ALECENSA in early stage in adjuvant setting for positive lung cancer and very strong data here as well with a 76% reduction in the risk of recurrence of disease or death. We filed for US accelerated approval for INAVOLISIB in first line PIK3CA mutated HR-positive breast cancer and we do expect approval later this year.

In terms of key pharma readouts in Q1, we reported positive OS results for the Phase 3 STARGLO study for Columvi in second-line DLBCL. And we had very good data for the Phase 2 KARDIA-2 results for zilebesiran in hypertension. And this was presented at ACC 2024 and Teresa will comment more on that but this was on top of standard of care.

In Diagnostics, we've had US regulatory approval for the first molecular screening assay for malaria in – for blood donations. So this is the first and only assay available to test malaria in blood donations. We've also received breakthrough device designation for the pTau217 ruling assay for Alzheimer's disease and Matt will cover more of that as well. We have four remaining pivotal readouts this year. And importantly, we have 12 Phase 3 enabling readouts that will come this year all of them addressing large opportunities such as in Alzheimer's, Parkinson's, et cetera. And I will cover that in a later slide. Also after discussing with regulatory agencies, we've made a decision to file the Phase 3 EMBARK data for Elevidys in Duchenne muscular dystrophy.

Finally in Diagnostics we have a number of key launches ahead of us. This is a very important launch year for Diagnostics. And Matt and the team will share more at the Diagnostics Investor event on May 22. As mentioned, Q1 base business sales growth was very strong 7% for Pharma, 8% for Diagnostics and 7% for the Group. As the headwinds from COVID are diminishing, this growth will shine through for the coming quarters.

Here you can see that our base business is really overcompensating both for the COVID-19 effect and the LOE effect. And we also see here that in first quarter we still had an 8% effect on the currencies. Now this is a base effect because the currency appreciation of the Swiss franc really happens after Q2 last year. And we should see and Alan has a slide on that a significant improvement here. Again, it's very hard to forecast currencies in a world with a lot of geopolitical tensions. But as it states today in terms of currencies, we should see a significant improvement in the quarters to come. And as Alan will show the projection for the whole year at this stage is at minus 2% only.

Now here you see the group sales over the last number of years. And you can see that in 2023 and in 2024, we've had high single-digit growth in our base business. You see in the blue line our total business including COVID. And for the coming quarters, you'll see that the blue and the orange line will merge and the blue line will go up to the orange line.

Also, if you look on a divisional level, you can see that on the diagnostics side, we've delivered 7% to 8% growth for quarter-over-quarter, over the last number of years. And in Pharma, we really accelerated our business over the last year. So, we do believe also that this will continue.

On the Pharma side, we continue to strengthen our pipeline focusing on projects with high impact and with first-in-class and best-in-disease potential. In Q1, we terminated early stage development for five NMEs based on clinical data, as well as prioritizing assets that deliver high value and high PTS....

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