Roche Holding AG (ROG) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Roche's analyst event on Diagnostics Division at AACC. My name is Henrik, and I'm the technical operator for today's call. Kindly note that the webinar is being recorded. [Operator Instructions] One last remark, if you would like to follow the presented slides on your end as well, please feel free to go to roche.com/investors to download the presentation. At this time, it's my pleasure to introduce you to Birgit Masjost, Head of Diagnostics Investor Relations. Birgit, the stage is yours.

Hello and welcome, everybody, to our AACC analyst and investor event on our Diagnostics Division today broadcasted live from Chicago. Let me give you a brief overview on the agenda of today. So we'll start with a presentation delivered by Thomas and his leadership team, and then we'll follow up with this with a Q&A. So I think it's fair to say that the Roche Diagnostics Division has had a great sales and profit growth over the past 5 years, actually strengthening its financial as well as strategic importance for the Roche Group. It's great to see, I think, that even in unstable times such as the COVID-19 pandemia, the DIA R&D organization has been able to deliver a steady flow of highly innovative and high-medical-value products fueling this growth. Plus, the organization underwent a full transformation focusing the business on the whole patient journey from screening to monitoring as well as creating efficiencies and reallocating the funds to R&D. So today, we would like to take a look at the future, which will be determined by our ability to quickly adapt to a volatile environment such as the COVID-19 pandemia and other macroeconomic trends, even more, though, by our ability to innovate, which is demonstrated by our recent and upcoming launches. So with this in mind, I would like to hand over to Thomas for his update and insights on the Roche's half year financials.

Thank you very much, Birgit. And great to be here with all of you at least virtually today shortly after the half year results presentation. Today, I'm here with a number of people from my team. I'm very proud to be working with these people here. You have Palani Kumaresan, our Head of Research and Development; Ann Costello, who's heading our global business area, which includes all the marketing and research and development; Matt Sause, who's our Head of North America; and Cindy Perettie, who leads the molecular customer area for us. So really proud to have them here today. And they will give some more insights on the portfolio and are also here to answer your questions. So let me now take you just quickly through the financials. And you've seen it last Thursday, but just to repeat it shortly, we'll give you those insights. So overall, the group sales were good with 5% at half year. The Pharmaceuticals Division contributed with 3% growth. Diagnostics Division was 11%. Now if we look at the underlying growth, the underlying growth was very strong. You see that the diagnostics-based business was growing by almost CHF 400 million. And you see that the underlying pharma business was growing by close to CHF 1.6 billion, really outgrowing the effects of the biosimilar erosion of Avastin, Herceptin and MabThera. You also see that we still had the positive effects from Diagnostics COVID-19 sales of CHF 627 million and a very small contribution on Ronapreve, but we do expect more contribution in the second half of the year on Ronapreve sales in Japan specifically. And if you look on the right-hand side, you see that, 5 years ago, AHR used to be a big piece of our portfolio. And now we've been able to transition to a new portfolio over time, and you see that also in the fact that the erosion of the -- with the biosimilar impacts is actually getting smaller. Now let me take you through the Diagnostics numbers in specific; first, around the Core Lab growing 4%. Now there are some underlying information that you need to have in order to fully interpret those numbers. There are a couple of businesses within the Core Lab, but the -- really the big pieces are the clinical chemistry and immunochemistry, the Serum Work Area that we have. Here we are growing 6% and 8%, respectively, in the first half year, so very strong, and that although we had a quarter of lockdowns in China. So actually that business is growing around double digits, so very, very strong. So what's bringing down the growth, next to the lockdowns in China? And that's our CustomBiotech business. It's a B2B business where we're supplying raw materials to other companies. So that's an effect, but really the underlying business into the market is super strong, as you can see. Point of care growing 46%. This is driven by the rapid antigen testing but not only. Actually, the base business is doing very well with 7% growth. Molecular Lab, at 1%, but here, again, we had a decline in COVID-19 testing. And without that, we were growing 16%. Diabetes Care at minus 5%. As I mentioned last year, in every call, but also in the beginning of the year, we had a settlement last year in the first quarter. Without that, actually, the underlying business is flat. Pathology is growing at 10%. Now if we look at the quarterly sales over the last 2 years -- or more than 2 years, 2.5 years, you see in the blue line the overall sales. In the dotted line, you see the base business sales growth. And we've had fantastic base business sales growth last year and also a very strong start this year. We had 3% growth in Q2. And actually, without the China effect of lockdowns, we're growing at 6%, and that's on top of a very strong Q1 in 2021. We do expect that COVID testing will decline in Q3 specifically. We'll see how Q4 looks like, but we already see that trend. Now if I look into July, COVID testing is going down significantly, specifically around rapid antigen testing. PCR is holding up more than rapid antigen, but we see a very strong pickup actually in July on the base business, which is really good to see. Now let me quickly take you also through the P&L. First, we are keeping our margins stable at 25.7%. The core operating profit is growing in line with sales. And actually also our investment into research and development is growing in line with sales at 11%. You see cost of sales growing 14%, so slightly higher than sales. This is a product mix effect. We had a lot of rapid antigen testing sales, where we have lower margins, and this is impacting this line. R&D growing -- sorry. M&D growing 3%. Here, this is all driven by distribution costs of rapid antigen. If you just look at M&S, the marketing and sales, it's flat at 0%. G&A, slightly positive. That's a very small number, but you can see also here what Birgit was talking about is this reallocation of funds towards research and development to drive our pipeline of innovation. And with that, I hand over to the person that's bringing the innovation to you, Palani Kumaresan.

Thank you, Thomas. It's not me. It's the organization, of course. A warm welcome from my side as well. And I will give you a quick update on our COVID-19 portfolio. This slide provides you an overview of our contributions to-date since the start of the pandemic. In January of 2020, we launched the very first SARS-CoV-2 test. And soon after, 2 days after the WHO announced or declared COVID-19 a global pandemic, on March 13, 2020, we were coming out with our FDA emergency use authorization for our COVID test and which has actually withstood all the different variants since then. And we have also launched over 20 solutions through this pandemic. In terms of sheer number of tests, we have contributed with over 1.65 billion tests around the world. We have also really approached pricing in a very responsible manner throughout this pandemic across our portfolio. Not only tests, we also launched a very important platform, cobas 5800, which you will hear shortly more about from Matt. We also did 2 important acquisitions on GenMark and TIB. In the next couple of slides, I'll briefly walk you through 2 solutions that we have recently launched/are upcoming and are additions to our portfolio. The first one that we recently launched is an FDA emergency use authorization for our SARS-CoV-2 duo test across all our PCR, the major platforms, the 5800, 6800 and 8800. Now this test is quite unique in that it gives both a qualitative readout, a positive/negative result, plus a quantitative viral load that is calibrated to the WHO standard. Now a lot of us have done PCR tests. When we get our test results back, some of you would have noticed, if it's positive, you also get a Ct value, which is the cycle threshold, which essentially indicates the cycle, PCR cycle, number at which the result turned positive. So higher the Ct value, lower the viral load, and vice versa, but the important point is the Ct value can really be variable from system to system or from supplier to supplier. And that's exactly what this test is designed to address, bring that standardization. The value of this test can be multiple fold. It can be used in determining when to discharge a patient, their infectiousness or how to adjust therapy and so on. The next test that's coming up, which I'm very excited about, is our Elecsys IGRA SARS-CoV-2 test. IGRA stands for interferon gamma release assay. And it's a T cell test which measures interferon gamma release upon stimulation of the T cells with peptides or antigens specific to SARS-CoV-2. So we build this test with close to 200 SARS-CoV-2 specific peptides across multiple parts of the genome, the spike, membrane, nucleocapsid and also the open reading frames, to stimulate a robust response and have a strong performance of this test. So not only will it help with answering questions around past exposure or vaccination status but more importantly help answer some of the still unanswered questions around disease severity, long COVID and so on. Now switching gears, I want to briefly talk about the variants of concern that are in circulation right now very much and what are we doing about them. This data comes from the CDC's website. And on the left-hand side, what you see is, for the past 3 months, shown by every week, the ratio of different variants that we see in the U.S. And on the right-hand side, you see a detailed view for the first 2 weeks of July. As you can see, BA.5 is right now the predominant variant in the U.S.; and this is very much the case worldwide as well. Now some of you are also probably aware BA.5 is extremely transmissible and, by some account, has R-naught values of 10 or higher. Now mind you, we have to accept that calculating accurate R-naught values right now in the pandemic, at this stage of the pandemic, is a challenging task. Now what are we doing about it? On this slide, you see the phylogenetic tree that shows the variants that we have seen year-to-date. A lot of these are subvariants of Omicron, and you also see some recombinant variants here with Delta and a couple of different subvariants of Omicron. Through the TIB part of our portfolio, we have launched 10 variant tests to date, including that for BA.5. These PCR variant tests are very effective because they are cheap and they also have fast turnaround time compared to a sequencing test which can take a week or longer. We expect more variants to arise in the coming months. And we will be able to address them through launches of these variant tests from our TIB part of our portfolio to track their spread. Now taking a step back. This slide shows you a subset of emerging and reemerging diseases, infectious diseases, around the world. A lot of these are concentrated in low- and middle-income countries, but we also see them coming up in other parts of the world. Some of these are likely to have a pandemic propensity. Now we don't know which ones those would be, but we know for sure that there is very likelihood that we will have more pandemics in the future, especially with climate change, appearance of these vectors in different parts of the world. On our side, what we are doing is we have a small focus team that really closely monitors this. And what -- and this is the team that was able to really zero-in on COVID-19 in December of 2019 and enabled us to develop our solutions very rapidly. We are also forming important pandemic preparedness collaborations such as one with the world-renowned Fraunhofer institute in Germany. Now I want to end with a slide on monkeypox, which as all of you know, the WHO declared it a public health emergency of international concern on Saturday. When we started seeing the disease emerge in non-endemic regions outside of Central and West Africa, in the world, we very quickly launched 3 assays to help monitor the epidemiological spread of the disease. The 3 assays are from our TIB part of our portfolio and are listed here, one looking at the orthopox family, the other one looking at variants of monkeypox. And the other one helps determine some of the subvariant, whether it's coming from the West Africa or Central Africa. Now this is clearly an evolving and dynamic situation, but one thing we are seeing is the spread is less rapid compared to COVID-19. It's also more concentrated in a subpopulation, and the severity and mortality of the disease is lower. Nevertheless, we are gearing up to make sure we are prepared for any kind of solution at scale as needed. So with that said, let me hand over to Ann to walk you through some of the recent launches.

Thanks a lot, Palani. So it's my pleasure to walk you through some of the recent launches that we've had at Roche Diagnostics. I'm going to start with the Elecsys HCV Duo immunoassay. And this is actually the latest addition to our Elecsys portfolio, our infectious disease portfolio. And this assay actually allows the dual detection of antigen and antibody, and by doing that, it simplifies the HCV screening algorithm. And what's even more important actually is that it shortens the diagnostic window by up to about 3 weeks compared to HCV antibody testing. Now what I can say is that HCV, unfortunately, is still a major health care burden. And you [ guessed ] there are about 58 million people that are chronically infected with HCV, and we see about 1.5 million new infections per year. Now the other unfortunate thing is that about 80% of the people that are infected are unaware, which really makes the case for screening and for making screening easy and accessible for people as well. That's also very important right now because there's actually a cure for HCV. And it's also very important to be able to treat these patients because HCV infection is one of the leading causes of liver cancer as well. Another exciting launch that we have is the HPV self-sampling solution. And with HPV, as you know, it is a leading cause of cervical cancer, a cancer that is pretty much preventable if it's caught early enough. And about 600,000 women are diagnosed with cervical cancer every year, and about 300 (sic) [ 300,000 ] or so of those women unfortunately actually die from cervical cancer. And 90% of those women are in low-, middle-income countries. So this is why it's really important to make sure that screening is accessible for these women. And one of the barriers actually is sampling and the collection of the sample. And it's certainly something that is not always comfortable for women, but it's also a cultural barrier. So with the self-sampling solution that we have, it means that women would be able to collect the sample themselves. It can be done in the doctor's office. It can be done in clinics, but it is really something that I think will absolutely open the screening for many more women and making sure that we have the ability to screen and to treat these women. It's also very complementary to our portfolio of screening tests such as our HPV tests and our CINtec portfolio for triaging and diagnosing cervical cancer. Now switching gears and talking a bit about our pathology portfolio, very excited also to see the launch of the BenchMark ULTRA PLUS system. The BenchMark ULTRA PLUS is actually the next-generation platform built off our leading platform, the BenchMark ULTRA. And we've had the ULTRA in the market for some time, and we've been able to get a lot of very good input from our customers on what they would like to see in the next-generation platform. And here one of the major things is the optimization of the workflow. We have been able to shorten the reagent validation. We've been able to increase the turnaround time. And something that's very important for the labs is that there are much fewer manual interventions as well. With -- there has been a complete rework of the software, and so the software now is much more user friendly. And it's also optimized as well for the slide protocols; and brings together actually all of the BenchMark systems so they can all use the same software and talk to each other, which is very important for the workflow in a pathology lab. The other thing that's really important for us here is the sustainability of our -- of waste. And that is something that our customers have been quite vocal to us and many others in this field. And we've been able to reduce the waste but also to do a degradation of the waste so that it is much easier to dispose of. On top of that, we have the menu that we already have on the BenchMark that's 200-plus IHC assays as well as ISH assays. And the other thing that we've done here is we have reduced the packaging around the assays as well, which makes it much easier for transport and again is very much in line with our sustainability goals. Staying with pathology. We have just recently introduced the DP 600 slide scanner. This is the digital pathology system for those high-volume labs, particularly where they have a very high capacity -- where they need a very high capacity. This has about 240 slides at a time. That's about 40x of the DP 200, which is the original system, but that really means that the workflow can be produced for much faster and much more efficiently and with less hands-on time. And it's also you can add slides as you go as well. What's important here, though, is to keep the quality, so we have used exactly the same optical system as we have in the DP 200 to make sure we can keep the quality consistent. And we are -- also have it integrated with our NAVIFY workflow software. And on top of that, we have integrated the AI-driven image analysis both from ourselves as well as some applications from some of our partners. And with that, I would like to hand it over to Matt.

Thank you, Ann. So now I have the pleasure of talking about some of our upcoming launches for Roche Diagnostics, and with that, I will start talking about some of the new systems we have coming in the very near future. You see on the slide 2 rows. The top row is our Serum Work Area solutions. And on the far left, you see our cobas pure. cobas pure will be our low- to mid-volume system. It's designed to bring serum workstation consolidation on a compact footprint. We launched this in the CE mark countries in Q1 of 2021 and we anticipate U.S. launch in Q3 of 2022. Moving along that top row, on the far right, you see our cobas pro high throughput. This instrument has features targeting the largest reference laboratories. It was also CE marked in 2021, and we will pursue U.S. registration. Looking down to the second row, you see our molecular solutions. On the far left, as Palani alluded to earlier, you see our new cobas 5800. This is our mid- to low-throughput automation for the molecular lab. We received CE mark launch in Q4 2021; and we are on track, fully on track, to place 500 systems this year. We plan to launch that in the U.S. in Q4 of 2022. What I would point out is all of these systems will share an identical menu, and we will then have solutions for labs in every segment of the U.S. testing market. Furthermore, with the 5800, we're going to be able to expand molecular automation to labs that have previously not had it in the past. So with that, I'd like to move on to our game-changing cobas mass spec. So mass spec testing is currently carried out in large reference labs with specialized labor. The cobas mass spec will be the first fully integrated IVD platform for mass spec, creating an entirely new market segment. It will be seamlessly integrated with our existing Serum Work Area. It will enable automation and address labor challenges in reference labs and allow more hospital core labs bring mass spec testing in house. We will launch this system with 40 analytes, including vitamin D, therapeutic drug monitoring, drugs of abuse and steroid testing. We expect CE mark in 2024 and will subsequently pursue U.S. FDA approval. So from here, I'd like to change gears and talk about the upcoming launch of our point-of-care solution, the cobas pulse. So for patients presenting in a hospital setting, it's critical to identify dysglycemia for appropriate patient management. The cobas pulse is an industry-first professional blood glucose management system with simple usability and expanded digital capabilities similar to that of a smartphone. We anticipate U.S. 510(k) approval in Q4 of 2022. In parallel, we're launching the cobas infinity edge smart, which is an open digital ecosystem for point-of-care professionals which will integrate with the cobas pulse. And the cobas infinity edge is designed as an open platform, allowing health care professionals to easily access and adopt third-party innovators' new digital tools via the Roche digital marketplace. And so with that, I'd like to talk about some of our high-medical-value tests. And I'll start with preeclampsia. Preeclampsia is a severe complication. It affects around 3% to 5% of all pregnancies and is the second leading cause of maternal death, constituting around 14% of maternal deaths globally. Instance in the U.S. has been growing steadily over the last several decades. This condition is associated with increased blood pressure and poses severe health issues for mother and baby, and it's associated with extensive hospitalization. Clinical management for this condition is challenging, as timely decision-making is critical. The Roche preeclampsia ratio test received breakthrough designation from the U.S. FDA on July 8, 2022. And we look forward to U.S. registration. This will serve as a rule-out test, which will allow caregivers to focus on the patients that need the most urgent care. The Roche preeclampsia ratio test will be available on our existing Serum Work Area systems. And this will enable broad market access by being able to leverage our extensive installed base in the U.S. With that, I'd like to turn to the Alzheimer's disease. Alzheimer's disease is a condition with very high unmet medical need. 1 out of every 9 adults over the age of 65 is currently living with Alzheimer's disease. Diagnosis is a challenge due to subjective cognitive tests and the lack of available specialists to carry those tests out. We are pursuing an Alzheimer's disease IVD plasma panel triage test. It has received breakthrough designation from the FDA, and we will pursue U.S. registration. We have submitted a confirmatory cerebrospinal fluid Alzheimer's disease test that is clinically correlated with the existing gold standard of PET scan for definitive diagnosis. We also received breakthrough designation for this test, and we anticipate a Q4 2022 launch. Similar to preeclampsia, we will be able to leverage our broad Serum Work Area installed base to ensure broad patient access. Additionally, Roche is clinically investigating the Elecsys amyloid plasma panel test together with gantenerumab from Roche pharma Genentech and we are currently awaiting the results. So with that, looking across all of our launches for 2022, I'm very excited about our pipeline of products both this year and in the following years. We are fully on track with our key launches planned for 2022. We have a strong output of transformative diagnostic solutions across instrumentation, testing and digital solutions in line with our commitment to innovation. Thank you for your attention. I'll pass it back to Birgit.

Thank you very much, Matt. So I would like to start with the Q&A now. And I would like to ask our live audience to raise their hands if they would like to ask a question. So in the meantime, I will start with a question which came in on my e-mail account. It's from Jack Meehan from Nephron Research. So Jack has the following 2 questions. "In molecular testing, there has been a lot of instrumentation placed over the last 2 years during COVID. Have you seen labs consolidating vendors or equipment yet? What is your latest thinking on long-term share shifts in the industry?" And the second question, "Can you give an update on Roche's strategy in liquid biopsy for cancer screening? Does Roche plan to participate as a service provider or an IVD supplier or both?" So I think, the first question, I would like to have Thomas answer; and then maybe, the second one, Cindy. Okay, great. So Thomas, go ahead.

Yes. So if you look at it, we placed, I think, more than 1,100 6800s, 8800s. And we actually know through our IT systems that they are still very active in the market. And the other thing that we see is that the demand is still high. So we're still producing 6800, 8800 because the market is recognizing that it's the most automated machine instrument that is out there. On top of that, with the cobas 5800, as Matt was mentioning, we are on track to place 500 systems of that also this year. You see that the demand is significantly higher than what we have seen pre-pandemic. And it's consistently that way, so it's not that there are so many systems out there that covers all the demand that's out there. That's the first thing. The second thing is, yes, we see the consolidation. And in very big reference labs, we see that they want to consolidate to single suppliers. And we see that the Roche solution is a preferred solution because of the high level of automation, because of the pre-analytics solution that we have with cobas prime that no one else has. And I think also because, during the pandemic, we were actually very responsible with pricing. And others kind of overstretched that part, I would say. Good. I hand over to Cindy.

As it relates to early cancer detection, this is definitely a space that we remain interested in. And it's early days. The ability to be able to detect cancer through the blood is something that is going to be fantastic if it moves into the screening space. We placed an investment late last year in Freenome, and that's part of our remaining interests. The question around would we be a service provider or IVD, I don't have a direct answer to, but you can imagine, with a market in early cancer detection, you would need both to serve that.

Thank you very much, Cindy. So the next question is from Divyaa Ravishankar. I'll give you the permission to talk now so you can ask your question. It's Divyaa Ravishankar.

We can't hear you. Maybe you are still on mute.

Yes, yes, you're still on mute. You need to unmute yourself. No, okay, then maybe I'll take a question from the chat first. It's from Brian Weinstein from William Blair. And it's actually a question -- first, so we have a couple of questions here. First questions is on Foundation Medicine. So how does Foundation differentiate itself in what is now a very competitive therapy selection market with several new players and seemingly a lack of differentiation and outputs offered? Second question, "Do you think RNA sequencing capabilities are a necessary addition to your testing portfolio at Foundation, not just DNA? And then what happens to pricing and therapy selection as new players enter the market?" And then we have another one from him which is on Point of Care. "We've been hearing for years point of care is coming, and again it is a theme at AACC, and have been talking about it a lot since the pandemic highlighted value of diagnostics testing closer to the patient. How does Roche think about this market? What assets do you have here today? And what do you think you need to truly compete across point of care? Where does Roche see point-of-care testing going?" So the first one is on Foundation. I think again I would like to assign to Cindy. And then the point-of-care question, maybe Ann wants to answer.

So from a Foundation Medicine perspective for differentiation, today, we provide testing for treatment-related monitoring as well as testing for treatment -- for therapy selection. So we have both liquid and tissue biopsy; and most recently launched FMI tracker, which is in the treatment-related monitoring area. So that is a differentiator. Today, there isn't other companies that are offering comprehensively both tissue, liquid as well as monitoring portfolio. The second piece of that question was around RNA-seq capabilities, and that is an area of emerging interest. And it's something, from a Foundation Medicine perspective, that they're working on from a research and development side. And then finally, the last component was around pricing and therapy selection. And I believe it was are we seeing pricing being driven down based on the fact that there's a number of competitors. Today, the pricing in the U.S. is set by CMS. And that's something that is a reimbursement that Foundation Medicine achieved, so we haven't -- because we're FDA approved and we have CMS reimbursement, that isn't something that we've struggled with to date.

So I think Thomas wants to take on point of care -- or Ann...

Go ahead, Ann...

Yes, yes. I can start. I think we've all seen that COVID has had a very impactful -- a very impact -- big impact on point-of-care testing. And we have been in the point-of-care testing for many, many years. And we are very focused on hospital point of care for the -- either the ICU or the emergency room. Also we have been in the doctor's office with our Liat system, so we've been very much invested in point of care, but I think the important thing is what COVID has done and the huge interest that has come in point-of-care testing because of COVID. And we certainly see opportunities there to look further and to look into primary care into clinics and to -- also in some cases even into home testing. So we really think this is a -- I will say, a tipping point for point of care at this point. And we certainly are very well positioned to be able to participate in that market as well.

Maybe I can also add. So if we look also pre pandemic, that trends -- probably has also accelerated. It's you basically saw a divergence. You saw centralization. You saw bigger and bigger labs, highly automated, as little manual labor as possible so that you can bring down the cost. And at the same time, you saw a decentralization trend which was towards point of care and towards the patient. Now that trend came more from a medical value perspective. So for example, in cardiac, where you need to have -- if someone has a heart attack, you need to be able to react very quickly. You can't wait until the results comes back from the lab and you can't wait until you send samples to the lab. Or it can be a convenience topic, right? That's the other point, but the trend, I would say, pre pandemic was really about in a decentral setting, lab-like performance in a price point that is higher than what you have in the lab but not a factor 100 higher, but you could afford to have a bit of a higher level. Now what we've seen in the pandemic is that actually rapid antigen was something that was used. And rapid antigen doesn't have that kind of quality because it doesn't -- it's not as accurate as a PCR test or as a lab test, right, but it was a convenience perspective. It was also, specifically during the big waves, when you didn't have enough testing, you were able to supplement testing. It was more about screening out people with a high level of virus who were infectious, et cetera, but it's actually not the preferred method to diagnose people because you have -- you don't have such a high level of accuracy if you're below a certain level of virus. If you're below 0.5 million virus particles per ml, the accuracy goes down significantly on rapid antigen. Now that was good for the pandemic. Is it going to be good enough for the future? That's the other question, but if you can come up with technologies that have maybe not as accurate as lab but almost as accurate, then I think this could be a disruptive technology on the point-of-care side that could drive more decentralization, so that's why we're interested in looking also at these kind of technologies. But the other thing that we're looking at is how can we bring lab-like performance actually to the home. And that doesn't always mean that the test has to be done in home, but the sample can be taken at home. And then that's what we call the self-sampling for HPV but for other things as well. And that also brings in a bit of convenience level in the point-of-care setting. So we do see these trends and we do see that these trends have strengthened, but the quality piece will be more important, again, also after this pandemic.

Okay, I think, the next question, I finally got from [ Divyaa Ravishankar ] into our Q&A tool. So she is asking, "What is the future of the Roche Liat platforms? Do you expect to capitalize on the decentralization trend on testing?" So maybe one for Cindy.

[ In regards to what ]...

On the Roche Liat, yes. "Do you expect to capitalize on the decentralization trend on testing?"

I think Ann would be better suited...

Ann, okay.

Absolutely. I mean I think the cobas Liat really proved to be an amazing tool for us in the pandemic, and for our customers. And absolutely, we have had a huge interest in expanding the menu of Liat, which of course we're in the process of doing. And I think this is something that will certainly outlive COVID, but also we see opportunities in many other settings. So in pharmacies, in doctors' offices. We also see it even in the decentralized setting, as Thomas talked about as well, so we're very excited about the future for cobas Liat.

Great. Thank you, Ann. So the next question is from Odysseas Manesiotis. He is asking, "Team, could you give us some more color on your nanopore and Xpandomer chemistry sequencing technologies? What are your thoughts around launch time lines? And how is it differentiated to peers such as Oxford Nanopore?" I think this is one for you, Palani.

Sure. I mean I can take it a high level. I mean right now we cannot share a lot of the specific details. It's very much a work in progress, but it's coming along very nicely. It gives me a lot of confidence when I look at our Xpandomer chemistry which we acquired from Stratos Genomics. It's a very -- I mean, as many of you might be aware of -- how it looks at nanopore sequencing is you're not sequencing native DNA, which is what a lot of the other nanopore sequencing technologies look at, where you're threading the native DNA which then threads very fast through the nanopore. And you lose precision and accuracy in base calling. Versus the Xpandomer chemistry, it takes a very different approach which allows for much greater precision. The data we are seeing is extremely positive, and I'm really happy with the progress we are making at this point in time.

Great. Thanks, Palani. So the next question, I would like to take from Griffin Soriano. He's asking, "What are your thoughts on the MRD market in terms of clinical utility, total addressable market and adoption curve? Do you have assets internally? Or do you expect to look inorganically to enter this market?" For Thomas -- or what do you think, for Cindy?

I think, for Cindy.

So we also think that the MRD market is a very interesting market to be able to understand when a patient has had a response and monitoring them for reoccurrence. And so that is a place where we -- Palani's team has invested in research and development efforts there.

Next question is from Brian Weinstein again. "So what are you seeing in the clinical chemistry space? Can you talk about positioning there, anything you're highlighting at AACC here? Where are those markets pre pandemic versus currently? How is the integration with GenMark going? Has it held up versus original expectations?" So I think, the first question, for Thomas; and the second one, for Cindy, about GenMark.

Yes. So on the clinical chemistry side, I mean, you've seen the portfolio from Matt with the cobas pure that's brand new. We have the cobas pro and launching the cobas pro high throughput, and so we're the only company that really has a family approach across all of these different settings. We're a company with the broadest menu of tests of -- I think probably we have now around 240 different tests on these different platforms, so I think that's a high level of differentiation between what we have and other companies have, but I think for me what the game changer is going to be is mass spectrometry. And it is going to be a game changer because today you have a certain amount of testing that's moving to mass spectrometry, but also from clinic chem or from immunochemistry, that's moving over. But it's not as much as moving over because it's still so manual, mass spectrometry. And with that, it's not really suitable for an [ IVD ] setting and [ a setting where you need ] to also control costs. And I believe, with our first-in-class and best-in-class solution, being able to integrate it into our solution, overall we'll be able to also get more pull-through on clinical chemistry and immunochemistry next to what we will see in the mass spectrometry because it's so differentiated to anything else that's on the market.

Okay, on the GenMark front, the integration is going well. We've been able to employ some of the best parts of the Roche Group, which is the commercial, the ability to have the commercial reach that GenMark didn't have prior to the acquisition, but we're also keeping the company separate such that they can continue to have the agility in their drug development pipeline -- or in -- sorry, in their diagnostic development pipeline. Today, they have a very differentiated test with their BCID platform and have been able to evolve their respiratory platform as well as a number of panels in the -- in development today, so we're very happy with how the integration has gone. And we see great potential in their future.

Okay, perfect. So yes, I think, since nobody raised their hand anymore, last chance: If you would like to ask a question, please raise your hand. And we can even have your question here live. Or otherwise, type it into the Q&A, but yes, if that's not the case, then I would like to close it with this. And I would like to thank the panel for being with us today and thank the audience for their interest in Roche Diagnostics. Thank you very much and bye-bye.

Bye.

Thank you.