Roche Holding AG (ROG) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Roche's First Quarter Sales Webinar 2025. 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'd like to follow the presented slides on the internet 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 Thomas Schinecker, CEO of Roche Group. Mr. Schinecker, the stage is yours.

Thank you very much, and I'm happy to share our Q1 2025 sales with you today. Now let's look at our performance. We had really a good start in 2025 with group sales growing 6%, and this was driven by Pharma with, again, very strong sales growth of 8%. So you can see that we continue our very strong momentum on the Pharma side. Diagnostics was flat, and this was due to health care pricing reforms in China. Matt will cover that. Again, this did not only impact us, it impacted the entire industry, and this is something that we had flagged also at the full year results presentation in January. The LOE impact was also in line with guidance. So now let's look at the key milestones in Q1. On the Pharma regulatory side, we had EU approval of Columvi plus GemOx in second-line DLBCL, and this is based on the very strong Phase III STARGLO data, and it's the first and only bispecific with an EU approval in second-line DLBCL. We also had the U.S. approval of Susvimo in DME for the second indication and TNKase in acute ischemic stroke. We have the filing in the U.S. and in the EU for Gazyva in lupus nephritis, and this is based on the positive Phase III REGENCY data, which was presented at WCN and is also published in the New England Journal of Medicine. And we had the filing in the EU for Lunsumio in third-line follicular lymphoma. We've had a number of positive Phase III readouts. Let me highlight the SUNMO Phase III readout from Lunsumio and Polivy in second-line DLBCL. And we are now excited to move now our second bispecific into chemo-free combination with Polivy into earlier lines of treatment of DLBCL. More information on the positive outcome will be shared later in this year at a medical conference. We've also taken a number of Phase III decisions. As we mentioned at the full year call, we said there are potentially 7 NMEs that could move into Phase III, which would be a record in terms of how many NMEs we move into late-stage. And these are all based on the Bar criteria. In Q1, we did make 2 decisions to move 2 of them into the last stage of development, into Phase III, based on the latest data, trontinemab being one of them in Alzheimer's disease. The positive data was shared at ADPD and Phase III is expected to start later this year. And the second one is NXT007 in hemophilia A and the Phase II data for this will be presented later in this year. We also had a very exciting business development deal, this collaboration with Zealand Pharma on petrelintide, the leading long-acting amylin, and there will be more on this in a couple of slides from myself, but also Teresa will share more information on this. On the Diagnostics side, we had menu expansion on the cobas liat, so our point-of-care PCR system with lab-like performance with CT/NG really building out our menu, specifically here on STI, and we continue to place more of these systems in the market. Also very excitingly, we had the unveiling of a novel SBX Sequencing technology, so sequencing by expansion. And I will also provide a little bit more context as well as Matt will provide more context. And we shared real-world and live experience of customers here at the AGBT. We have a significant news flow upcoming in 2025 for both Pharma and Diagnostics, and Teresa and Matt will go into more granularity here. Clearly, there are a number of Phase III readouts coming, including multiple NMEs, that could lead to launches next year across oncology with giredestrant, neurology with fenebrutinib, immunology, astegolimab and ophthalmology with vamikibart. Equally, we still have a number of Phase III enabling readouts coming, which could enable us to move another 5 molecules into Phase III, again, keeping to the Bar criteria. Diagnostics is looking forward to several key launches still in 2025, including the Elecsys pTau181 and the high-sensitive Troponin-T next-generation assays. Now let's move on and let's take a closer look. We've had strong sales of 8% on the Pharma side, so continuously very strong momentum. Diagnostics is flat. And I already mentioned that this was driven by health care pricing reforms in China not only impacting us, but the entire industry. Now I used to have a favorite slide. Now I have a new favorite slide, which is this one, which really shows that, over the last 4 quarters, we've had a significant growth of 8% across our entire business. But if you go back until '23, we really had an underlying growth of 8% consistently. So we have consistently performed very strongly over the last 2 years and 1 quarter. And this is a strong pickup in our growth versus the '20 to '22 time frame. Now let me go to the key growth drivers, and I will start at the right top. Our Perjeta/Phesgo conversion is now at 47%. Both of our -- on the hemophilia side, or hematology side, both of our CD23 bispecifics are advancing now into second-line DLBCL and this is increasingly -- increasing our opportunity significantly, Columvi, GemOx receiving EU approval and the positive Phase III results from SUNMO, NXT007 moving into Phase III, as already mentioned. On the neurology side, very importantly, ZUNOVO received a permanent J-Code granted on 1st of April, so we should definitely see a pickup here. As mentioned before, we do believe that the subcutaneous version of OCREVUS will add CHF 2 billion incremental sales. And right now, the consensus is at about CHF 8.5 billion, and we feel very comfortable with that consensus. And the CHF 2 billion incremental will obviously be -- there will be more sales for the subcutaneous version, but there will also be some switches. Evrysdi receiving U.S. approval for tablet formulation and Xolair still doing extremely well with now more than 50,000 patients on treatment. Vabysmo keeps expanding market share in all approved indications, and Teresa will talk about that as well. And she will also talk about the market contraction in the branded segments because of less funding for co-pay assistance foundations. But we keep seeing very strong momentum, as you can see here, with 17% -- I think Vabysmo is 18% growth, and we do believe that we can continue this kind of momentum going forward. Diagnostics, I've already mentioned as well. Now, the Young portfolio continues to drive growth in the near to midterm. If you look at the right-hand side, now the Young portfolio accounts for 59% of our sales, up from 55% the year earlier. We have 4 pivotal NME readouts for new NMEs, as I mentioned also before, astegolimab in COPD, vamikibart in UME, giredestrant in breast cancer and fenebrutinib in multiple sclerosis. And we do believe that this new portfolio will continue to drive growth at least until 2028. And we know that Diagnostics will continue to contribute positively in terms of growth, especially with the new products. And all positive readouts that we should expect over the next years will then add to this growth. We don't have a cliff situation. And with that, we're at a more favorable starting position than many of our peers. Now let me just highlight a couple of things on the recent announcement that we've made of our investment in the U.S. We have a strong legacy of partnership with 130 countries around the world. We basically have the full value chain present in most of our key markets, such as the U.S., in Europe with Germany, Switzerland, Japan and China. It's always been our strategy to build out a full value chain in each of these markets, to be present where the patients are. And a key part of this legacy of investment is also our research and development and manufacturing footprint in the United States. Now Tuesday's announcement to invest further [ 50 billion] into R&D and PP&E in the U.S. until the end of the decade, let me put that into a bit of context. This would be almost a doubling of our investment in the U.S. over the next 5 years compared to the previous 10 years where we invested $67 billion in R&D and PP&E. Let me also say this does not mean that we change what we said before in terms of CapEx availability between CHF 3 billion to CHF 4 billion annually. This is already included in any of these comments that we've made in the past. It also doesn't change what we have said in the past in terms of R&D spending. You can expect R&D to be flat this year and that we keep very disciplined when it comes to our spending. Currently, we have 13 manufacturing and 15 R&D sites in the U.S. across Pharma and Diagnostics, and we are planning to add 2 new sites. First is this announcement of investments, including the construction of a new R&D site in Boston. We've discussed this as a team, that we have a very strong presence on the West Coast in terms of R&D, but we didn't have a presence on the East Coast. And so we strategically said we wanted to tap into the ecosystem in the Boston area, which is, I would say, next to San Diego and San Francisco, the third key ecosystem that we want to be present in. And that's why we've committed to make an investment here and also in collaboration with Harvard. And then there is also one new manufacturing site that we will establish in the U.S. where we've been in negotiations with different states in the U.S. We have not named the location yet, but we'll do that soon. And this is basically also for the manufacturing of peptides, so the incretins and also the amylin. And so both of our new sites will have a strong focus on CVRM. Let me also highlight that we are probably in a much better position than most other companies in terms of our manufacturing capacity that already exists in the United States. Our drug substance capacity utilization is at 50%, which truly gives us a lot of flexibility to adjust our manufacturing volumes. And this is due to the fact that -- and you can see it on the right-hand side that we've driven a fivefold productivity increase in terms of yields from our cell lines. So what that's enabled us to do is actually some of our medicines that we already produced in the U.S., we could increase the manufacturing in the U.S. basically overnight of these medicines. And the only remaining medicine that we have to tackle when it comes to tariffs is one that's currently not being produced in the U.S., and we already started the tech transfer of this medicine a number of weeks ago. Let me also highlight that we -- when we acquired Genentech, not only did we keep manufacturing there, so we didn't move to Ireland, for example, we also kept our IP there. And with that, we've been a significant taxpayer in the U.S. Again, so I would just highlight here we're probably in a better position than many others. Taken together, I do believe this sets a stage for the next era of growth and innovation for us as a company to benefit patients in the U.S. and abroad. But also I just want to reiterate we'll also continue to invest in countries like China, where we're also expanding our manufacturing footprint. Now let's move to the outlook, and I want to highlight 2 areas. One is Roche Sequencing and the other one is our efforts around CVRM. And I know both Matt and Teresa will go into more details on this. At AGBT, we unveiled our novel Sequencing solution, which combines our high-throughput sensor module that we developed over the last years. And now comes the secret sauce, that's the SBX chemistry, the sequencing by expansion chemistry, which actually expands the DNA 50x so that you get a better signal to noise ratio. With that, you increase the accuracy significantly and you increase the speed and throughput because you don't actually need to slow down this molecule. As it goes through the pore, it goes through very quick and you get a very clear and clean signal. With that, we have a very high accuracy, which is fit for clinical applications. We are extremely fast, and we have a lot of throughput. And what also is unique is the flexibility, because with technologies that are used today, you have to run a full plate to benefit -- get the benefit of the price and cost. You don't have to do that with this technology. So we do believe that we are in a pretty good position here as well. Let me talk about our commitment to become a leader in CVRM. In Pharma, we now have a broad portfolio of differentiated assets that address unmet needs in obesity, diabetes and a number of adjacent indications. Let me just highlight there are probably more than 200 comorbidities that are linked to obesity, the GLP-1 GIP from the Carmot acquisition. And also in Q1, we announced a collaboration with Zealand Pharma to develop petrelintide, a long-acting amylin analog. And I know Teresa will go into that detail. Also in Q1, we announced our plan to build a Boston Innovation Center in partnership with Harvard, and this will be focused on CVRM drug discovery and development. On the Diagnostics side, again, let me highlight this, we are the global leader in this space. We know all of the key opinion leaders. We have the leading portfolio of cardiac and metabolic markers. We develop holistic solutions for the management of the diabetes and cardiac indications. And this includes CGM that offers unique, smart algorithms and easy one-step application. But I know that both Matt and Teresa will cover more here. Let me just highlight here, on the 2025 pipeline for Pharma, the positive news flow and also the negative news flow. In green, you see the positive and, in red, the negative. On the negative side, let me just highlight SKYSCRAPER-07 in ESCC, which missed its primary endpoint. Let me also highlight that when SKY-06 failed the middle of last year, we stopped all of the tiragolumab studies that were still in progress and could be stopped, as we mentioned at the time in this investor call, and we only let the ones run where it was not appropriate to stop these trials anymore. On OCREVUS high-dose, which missed its primary endpoint, again, I just want to say we're comfortable with the OCREVUS consensus where it is right now, which includes the CHF 2 billion incremental sales, which are driven in a combination of subcut and IV. And let me also say that we don't see a cliff situation also for OCREVUS beyond the end of the decade because of OCREVUS subcut and OCREVUS high concentration, which you see in green here as well. On the positive side, again, I just want to mention trontinemab and NXT007 moving into Phase III, Columvi with the EU approval, Lunsumio with a positive Phase III readout in second-line DLBCL, obesity for GYM 329, where we are starting a Phase II combination with incretins and atopic dermatitis and MASH, 2 new indications vamikibart, DME for Enspryng and the high-concentration OCREVUS that I mentioned. Let me just close by saying that we confirm the 2025 guidance, as you can see on this slide, sales growing mid-single-digit, core EPS growing high-single-digit and dividends to further increase. With that, thank you very much, and I hand over to Alan to take us through the finance slides.

Yes. Thanks, Thomas. As everybody knows, the sales call today. I hope everybody is well. So my contribution will be brief today. Yes, let me jump into the sales. And what you see here, the reported sales in Swiss francs quarter 1 2024 compared to quarter 1 2025. So in total, a 7% increase. Let me start with the highlighted 6% in constant currencies. And you see we have different factors here. I think one element is really here on the Diagnostics side. You see the China health care pricing reform that Thomas has mentioned already, which was a reduction for sales on Diagnostics. On the other hand, excluding China, they've grown by roughly 5%, which I think is quite an achievement. So Matt will dive into this. And you see, on the Pharma side, I think really good underlying growth. Then, as expected, the loss of exclusivity impact with a certain erosion in Q1. As you know, we expect more erosion for Actemra in the quarters to come. So still, we stick to our expectation that we're going to lose CHF 1.2 billion in that segment over the year. You see currency is a positive in Q1, translating into Swiss francs, so to get to the plus 7%. And I will dig into that but let me say, enjoy the moment. When you look really then at the exchange rate impact on the sales growth, that is the 6% on the left-hand side in constant rates that you know already. It's now 6.4% as we added the decimal. And you see on the right-hand side, in Swiss francs, the 7.2% growth. And then you see really the currency fluctuations in between. And you see a major contributor to the performance has been the U.S. dollar, which has strengthened in that period. We all know what happened in April, and I will talk about that in the next slide, and here it is. Because, as you know, what we do is we keep all the currencies stable at the end of Q1 and then basically project them until the certain quarters, but also until the end of the year and then measure the impact and announce that here. But let me see, I would say one thing, after end of March, as mentioned, I think we have seen a major volatility and a major weakening of the U.S. dollar, and I will get to that. When you really look at full year 2025 impact here, as of April 23, so really recently, and you assume all these currency rates remain stable until the end of 2025, we will have a currency impact at full year on group sales of minus 5 percentage points, so quite significant. But as I said, we're also not alone. I think other companies will be affected by this as well. I know it is of interest what that means for core operating profit and for core EPS. So let me give you these projections, which are certainly highly speculative and very unlikely that they will really realize. But for core operating profit full year, it would mean a minus 7 percentage points and, on core EPS, an impact of minus 8 percentage points. So that's quite significant. As I've said, you see Q1, enjoy the moment. I think, for the next quarters to come, I think, if the currencies stay where they are basically today, I think we will see a much worsened picture. Good. I think Thomas said everything about the guidance. I want to just reiterate here that we confirm the guidance for 2025. And with that, happy to move over to Teresa.

Great. Thank you, Alan. In Q1, Pharma delivered CHF 11.9 billion in sales with an 8% growth at constant exchange rates. You see the U.S., Europe and international all delivered strong growth with 6%, 5% and 18%, respectively. And Japan is now returning to growth with a 3% -- up 3% in Q1. Overall, Pharma volumes were up by 13% in Q1. So let's kick things off with a look at the sales growth across the Pharma portfolio. Please note that all absolute values and year-over-year growth rates are presented in Swiss francs at constant exchange rates. As Thomas mentioned, our Young portfolio continues to deliver strong growth, led by the key brands, Phesgo -- I'm sorry, Phesgo, Vabysmo, Hemlibra, Polivy, OCREVUS. Together, these added CHF 700 million of new sales at constant exchange rates in Q1. For the first time, Phesgo is our #1 growth driver, and that's thanks to the very strong performance in our international region. So now let's take a closer look at our key therapeutic areas, starting with oncology. Oncology sales increased by 2% to CHF 3.9 billion in Q1. This growth was primarily driven by the HER2 franchise. Phesgo continues to impress with incredibly strong 52% growth in Q1. The global conversion rate continues to climb. We're now at 47% across our 58 launched countries with the growth in China accelerating noticeably following the NRDL listing earlier this year. Perjeta conversion to Phesgo is ongoing, and we are looking forward to sharing the final APHINITY analysis, which is that 11-year follow-up, at an upcoming conference this year. Kadcyla continues to deliver good growth, driven by uptake in the adjuvant setting. Switching gears over to Tecentriq, sales in the first quarter remained stable. And as we mentioned, at full year, we believe Tecentriq is close to peak with limited to no growth going forward. The U.S. launch of Itovebi is continuing as planned, and we are expecting EU approval later this year. Looking ahead through the end of 2025, we have 2 highly anticipated Phase III readouts for giredestrant with evERA and persevERA expected in the second half. And additionally, we are looking forward to initiating our Phase III trial of divarasib, our KRAS inhibitor on top of standard of care in first-line non-small cell. So now let's move on to hematology. Hematology growth remains strong, starting the year with 14% growth, CHF 2.1 billion in sales. Hemlibra showed strong growth momentum across all patient segments. As expected, the U.S. Q1 year-over-year sales were flat, and that follows the very strong growth we saw in Q4. We had 20% growth in Q4 in the U.S., and that was impacted by a buying pattern from one of our largest distributors. So we sort of expected this and signaled it as we head into -- we signaled it at full year. Ex-U.S., however, we saw very strong growth in Q1 with the international markets growing 72% and the EU markets growing 7%. And basically, all countries contributed across those regions. For our full year, we are confirming the ambition of mid-single-digit global sales growth for Hemlibra. There is also some exciting news on our next-generation bispecific in hemophilia, NXT007, which I will cover in the coming slide. But for now, let's move on to our malignant hematology portfolio. Polivy first-line DLBCL continues to drive strong growth, and we've reached yet another milestone with more than 50,000 patients treated globally. U.S. first-line DLBCL patient share continues to climb. We're now at 31%, and we are looking forward to presenting the updated Phase III POLARGO data in relapsing remitting DLBCL at an upcoming medical conference at midyear. Columvi and Lunsumio, our CD20/CD3 bispecifics launch performance is on track for both in their lead indications, third-line plus DLBCL for Columvi and third-line plus follicular for Lunsumio. We expect to achieve the combined peak sales potential of CHF 700 million in those initial indications, which are relatively small. I do want to highlight that both of these bispecifics are making good progress to move into earlier lines of treatment and, therefore, bigger markets, specifically those first moves into second-line DLBCL. As Thomas mentioned, Columvi recently achieved EU approval based on STARGLO, which demonstrated an OS benefit with a hazard ratio of 0.59, making it the first and only bispecific in the EU approved in second-line DLBCL. And in the U.S., we are still expecting FDA approval around midyear. As mentioned before, we're also excited about the positive Phase III SUNMO data for Lunsumio and Polivy in second-line plus DLBCL, which offers patients another chemo-free treatment option, and we are looking forward to sharing that full data set with you in the near future. Staying with Lunsumio, there is quite the rich outlook in 2025 for hematology. We have the U.S. PDUFA, as Thomas mentioned, for the subcutaneous portion -- the subcutaneous formulation of Lunsumio in third-line follicular, and that is set for September 22. We are also expecting the Phase III CELESTIMO readout in second-line follicular later this year as well. And then additionally, we are expecting Phase III readouts for Venclexta in first-line MDS and PSCI in aHUS. So now, as promised, let's take a look at NXT007. Certainly, the key news here is that we are moving NXT007 into Phase III trials. This is the next-generation Factor VIII bispecific monoclonal antibody that we have in development with Chugai. Preclinical results indicate that it has the potential to achieve 0 treated bleeds for hemophilia A patients without the need for additional Factor VIII treatment. We've mentioned before that NXT007 is 30x more potent than Hemlibra. And we believe that this really could be a game changer for hemophilia patients. The aforementioned -- so we are moving into Phase IIIs. We are launching 3 Phase III trials this year, including 1 head-to-head with Hemlibra. I think this gives you a very good sense of our excitement for NXT007. And quite frankly, it really only makes sense to be including Hemlibra, which is the standard of care, as the comparator for any new trials in hemophilia A. All of these trials are expected to initiate in 2026, and we are also exploring device options. Phase II data for NXT007 will be shared at an upcoming medical congress and covered as part of the IR event on June 23. So up next, let's head over to our neurology franchise. Neurology continues to deliver strong growth of 10% at constant exchange rates, achieving CHF 2.4 billion in sales. OCREVUS growth momentum remains strong at 6% globally. A lot has happened with OCREVUS in Q1, so let's delve a little bit deeper into the Q1 news flow. So as you know, the permanent J-Code for OCREVUS ZUNOVO, our subcut formulation, was granted on April 1 in the U.S. We believe that this will lead to an acceleration of U.S. uptake, particularly in the second half of the year. The early market response has been very positive. And we know that some practices were not only actively waiting for the permanent J-Code but were also deciding against adding additional infusion shares in favor of starting on or switching patients over to OCREVUS ZUNOVO. Importantly, based on internal patient claims data, we see that about 50% of ZUNOVO patient starts are naive to OCREVUS. So that continues to give us confidence that this new formulation will open up new patient populations to OCREVUS and not simply cannibalize existing share. Of course, in Q1, we also shared the negative OCREVUS high-dose readout in RMS. And while disappointing, I think it is important to remember why we ran this trial. The purpose of the high-dose trial was really to understand if patients would experience greater efficacy with a higher dose of OCREVUS. And while this trial didn't meet its primary endpoint, the results clearly support OCREVUS standard dose as the optimal dose to slow disability progression. And this is actually great news for patients. So now that we have the answer to what is the optimal dose of OCREVUS, we are quickly moving forward with the development of a novel subcutaneous formulation that has a higher protein concentration, which will significantly reduce injection volume, which allows us to move into a more convenient on-body device with the goal of bringing OCREVUS closer to home. So more on this exciting development will be shared at a later stage, but we are moving with urgency into this next phase of the life cycle for OCREVUS. In the meantime, OCREVUS franchise modeling remains largely unchanged. We predict the franchise to peak at the end of the decade and do not expect, as Thomas mentioned, an abrupt cliff situation due to OCREVUS subcut, providing some level of protection to the franchise. For 2025, we continue to expect high single-digit global sales growth, and we continue to be comfortable with the OCREVUS consensus peak sales of CHF 8.5 billion, including the CHF 2 billion incremental sales opportunity for OCREVUS subcut. Moving on to Evrysdi, Evrysdi continues to deliver strong growth, and we expect the full year growth rate to be at roughly the same level as the 18% that we achieved in Q1. The tablet formulation received its U.S. approval in February, which offers patients a simplified storage option, eliminating the need for cold chain and easing administration. EU approval is expected before midyear for the tablet. The early launch momentum for Elevidys in DMD continues to be strong in ex U.S. and ex EU countries with CHF 43 million in sales in Q1. We were profoundly saddened that a young man with Duchenne's passed away following treatment with Elevidys, having suffered acute liver failure. Following this event, ongoing studies were put on temporary clinical hold by EU regulators. And as always, Roche and Sarepta are focused on doing what is most important for patients and patient safety is always our paramount concern. Based on the totality of data, however, we do remain confident in the efficacy and safety profile of Elevidys, and we are not changing forecast guidance at this time, and we will work with EU regulators to minimize any potential delays to the program. Trontinemab in Alzheimer's, we presented the more mature Phase I/II data set at ADPD and more on that on the next slide. But importantly, we have made the decision to move tronti into Phase III and look forward to initiating that trial later this year. On the outlook for neuro, we expect a steady news flow through the end of the year. The Phase III readouts for fenebrutinib in RMS and PPMS are expected at the end of the year. And there are Phase II -- 2 Phase II readouts for GYM 329 expected in 2025, one in combination with Evrysdi in SMA and one as monotherapy in FSHD. But before we leave neuro, let's take a closer look at the 2 molecules we highlighted at the recent ADPD conference, tronti and prasinezumab. Starting with tronti, as we mentioned, we presented updated data from our Phase I/II Brainshuttle trial of tronti in Alzheimer's. And you can see that, that rapid and deep amyloid clearance continued to be achieved at different doses. Importantly, 81% of patients on the 3.6 mg per kg dose achieved amyloid PET negativity within just 28 weeks. At the same time, the safety and tolerability profile remained very favorable. ARIA-E and ARIA-H rates were below 5% across the 114 patients treated in Parts 1 and 2. Based on these very positive results, we've decided to move tronti forward into Phase III with the trial start planned for later this year, and we would expect final readout of that Phase III trial in 2028. So now let's briefly move on to Parkinson's. At ADPD, we presented the Phase IIb PADOVA data. Despite missing the primary endpoint, the results show a delay of confirmed motor progression in PD, especially in L-DOPA treated patients. We are waiting for additional data from the ongoing label extension and with the benefit of that additional data and in close alignment with regulators, next steps for Prasi will be decided around midyear. Just to remind everyone, we continue to see Prasi as a high-risk, high-reward opportunity. So now let's continue on to immunology. Our immunology franchise achieved CHF 1.6 billion in sales and grew 8% at constant exchange rates. This growth was primarily driven by Xolair and its strong launch trajectory in food allergy. Xolair's benefit in food allergy was further confirmed by positive updated data from OUtMATCH, which showed that Xolair is more effective and has fewer side effects than oral immunotherapy for treating food allergy. For the full year, we expect growth in the mid-teens for Xolair. And as a reminder, we don't expect any biosimilar launches in 2025. Actemra saw a minor decline of 1% due to biosimilar impact. U.S. biosimilar launches continue to be slower than we expected, while EU biosimilar penetration is increasing as planned. And we anticipate that the overall biosimilar impact will accelerate in the second half of this year. And as Alan mentioned, we are confirming that 1.2 biosimilar impact for the full year across the portfolio. More on Gazyva on the next slide but let me just mention here that the positive REGENCY results were recently published in the NEJM. Our TL 1A program had quite the busy start to the year. First and foremost, we have finally received our INN just last week, and so we are now officially known as afimkibart. We also started trials in 3 indications, all of them achieving FPI in Q1, Phase III in Crohn's disease, a Phase II in atopic dermatitis and a Phase I in MASH. Further indications are currently being evaluated. Afimki is one of our internal fast-track molecules where we work across all levels of the organization to ensure development at speed. And this is a direct outcome of our R&D excellence work and afimki is one of the programs where you can really see the impact of that. Considering the outlook for the rest of the year in immunology, we have Phase III trials for Gazyva in SLE and astegolimab in COPD expected to read out. And for aste, as a reminder, we continue to see this as a high-risk, high-reward opportunity. Now let's take a closer look at Gazyva in lupus. We shared the positive REGENCY results at the WCN conference in February. Gazyva demonstrated a superiority over the standard of care with a clear benefit in complete renal response. Safety was in line with the very well-characterized profile of Gazyva with no new safety signals, and the U.S. PDUFA has been set for October and EU filing has been completed. Phase III readouts for additional indications are expected in 2025, ALLEGORY in SLE and INShore in INS. And then, obviously, the MN trial is ongoing. Moving on to ophthalmology, ophthalmology grew by 17% in Q1, achieving CHF 1.1 billion in sales. Vabysmo is now the most prescribed treatment in AMD in the U.S. Market shares in the U.S. continue to expand with AMD now at 33%. That's up 3%, DME up 2% and RVO up 3%. This is also true for ex U.S. launch countries where we continue to see market share increases across all indications. Additionally, the share of treatment-naive patients starting Vabysmo in the U.S. is now approaching 60%. And I think this further confirms Vabysmo's positioning as a first-line treatment. As Thomas mentioned, at the same time, U.S. sales were impacted by a contraction of the U.S. branded market, and this is primarily caused by funding shortfalls from the co-pay assistance foundations. This dynamic in the U.S. is likely to persist and the overall impact of that constriction will likely take several quarters to wash out. Outside the U.S., we see very strong uptake. EU conversion to the recently launched PFS is rapidly increasing. It's already at greater than 70% in all the markets where it's available and the China launch accelerated markedly after achieving NRDL listing in January for all 3 indications. Taken all together, we still expect roughly 20% sales growth globally for Vabysmo this year, but we do have to caveat that there is a difficult to predict development or it is sort of difficult to predict how the U.S. branded market will develop in the coming months. Some good news for Susvimo, U.S. approval in DME was achieved and EU filing for AMD is expected later this year. And similarly, we expect data for our IL-6 vamikibart in UME later in 2025. Wrapping up our tour of the therapeutic areas with a quick look into our CVRM franchise, like Thomas, I am very excited about our recently announced collaboration with Zealand to partner on petrelintide in obesity. Together with Zealand, we believe that monotherapy petrelintide has the potential to become a foundational therapy in weight management with improved tolerability and a mode of action differentiated from GLP-1s as amylins work by increasing that feeling of satiation while GLPs work by reducing hunger. Petrelintide's favorable physiochemical properties will allow for easier co-formulation and co-administration with other peptides. So thus, in addition to just exploring as a monotherapy, we are also exploring different combination opportunities, starting with a fixed-dose combination of petrelintide and CT-388. Our belief in the best-of-class potential is also based on the strong Phase I results shown here. Placebo-adjusted weight loss of up to 6.9% was achieved at 16 weeks. And at the same time, safety and tolerability were quite favorable with the vast majority of treatment-emergent adverse events reported as mild. A Phase II in obesity without type 2 diabetes is currently ongoing. Now, the Zealand collaboration very nicely complements our existing obesity and diabetes portfolio, and we see great potential for monotherapies and combinations to address the various unmet needs in obesity, diabetes and the linked comorbidities. And we're making very good progress with multiple molecules expected to advance in 2025. It is quite a list. The interim data for CT-388 in obesity will become available this year and will inform our Phase III go decision in the second half. I did want to reiterate what we shared at half year, that we only plan to share the final Phase II results for this study, which are expected in early 2026. We will, however, announce a Phase III decision once it is taken. Data for CT-868 Phase II in type 1 diabetes with overweight and obesity is also expected this year. Our Phase II trial for CT-996, our oral, will also begin this year, as will our Phase I for CT-173, our PYY in obesity, and the Phase II trial for GYM 329 plus a GLP-1 in obesity. For 2026, we -- as I mentioned, we expect the CT-388 plus petrelintide Phase II study to be initiated. As Thomas mentioned earlier, Roche is committed to becoming a leader in CVRM and the scope and speed at which we are expanding and developing our portfolio, I think, really underscore this. And so to close my section, let's look at the key news flow slide. So we've added quite a number of checkmarks since we last showed you this slide at the full year presentation. I won't go through them in detail since we covered most already, so just a quick run-through. Columbia received EU approval in second-line DLBCL. Gazyva completed U.S. and EU filing in lupus nephritis. Susvimo achieved U.S. approval in DME, Lunsumio with positive Phase III results in second-line DLBCL, NXT007 in hemophilia A and trontinemab in Alzheimer's are both moving into Phase III. And as Thomas mentioned, TNKase achieved U.S. approval in acute ischemic stroke. Of course, we also had to add a Red Cross for the OCREVUS high-dose study in RMS with the GAVOTTE trial in PPMS still ongoing. But of course, our hopes for a positive trial in that indication are diminished somewhat with the result that we saw with MUSETTE. So now that is all for me, and I have the pleasure of passing it over to Matt to cover Diagnostics.

Thanks very much, Teresa. So good morning, good afternoon, everyone. It's my pleasure to present the Q1 2025 Diagnostics division sales results. As you heard already from Alan and Thomas, with sales of CHF 3.5 billion, the Diagnostics division sales were stable versus Q1 2024. And this was really driven by the health care pricing reforms and volume-based procurement in China. As Alan mentioned, excluding China, the growth of the business was plus 5%. So let me walk you through that on a customer area level. So sales in our Core Lab decreased at minus 1%. But this is really impacted by the reimbursement reductions in the VBP in China. This resulted in a decrease of immunodiagnostics by 3%, which was partially offset by 4% growth of our clinical chemistry business. Excluding China, Core Lab grew at 8%. Now, sales in our Molecular Lab increased at plus 2%, and this is due to strong growth in our Blood Screening segment at plus 6% but this was offset by a minus 5% in our infectious disease business. Now this infectious disease decline was driven by a decrease in our HIV business in Africa. This is a result of the USAID funding pause for testing. Now, excluding this effect, Molecular Lab grew at plus 6%, and we are optimistic that the USAID pause will end and that this business will resume. We will keep you updated in the coming quarters. Now, sales in our Near Patient Care business decreased at minus 5%. This is mainly driven by the decline of our blood glucose monitoring business at minus 7% due to the market shift to continuous glucose monitoring. And this was partially offset by a healthy plus 6% growth of our molecular point-of-care liat business. We'll talk about the STI approval for CT/NG later. And I would note that we are confident that our CGM solution and cobas Lumira will drive growth of our Near Patient Care business in the future. As I've said, at the full year, we don't expect material contribution from CGM in 2025, but our manufacturing scale-up is going as planned and our launches are going as planned and look forward to updating you on that in future calls. So now switching to the regional view, I'll take you through the business performance by geography. In North America, we saw strong growth of plus 7%. In EMEA, the business grew at plus 4%. In LatAm, we saw strong growth at plus 11%. And in APAC, we saw a decline of minus 15%. And as previously mentioned, sales growth in Q1 was impacted by the health care pricing reform and VBP in China. As a result of this, the sales in China declined by 23%. Now, we expect this effect to continue over the course of 2025. And since this is primarily due to the price decrease, there's obviously a corresponding impact on the profitability of this business. I would call out that we're implementing operational excellence and cost discipline measures to offset this. And I would also call out that we had a strong quarter in terms of instrument placements in China and that China is still a critical market for us, and we remain the market leader. And our mission, again, for the division for this year is to grow by low to mid-single digits. And now I'd like to talk to the engine of our growth for the future is really our instrument placements. And here, in the full year of 2024, we saw strong growth across all of our customer areas versus 2023. And let me point out a few areas of growth by customer area. So in the Core Lab, this is our cobas pro, which is our high-throughput serum work area, and our cobas pure, which is our mid-throughput serum work area, placements grew by 65%. In our Molecular Lab, placements of our fully-automated cobas 5800, 6800 and 8800 systems for low- to high-throughput testing in molecular diagnostics grew plus 22%. And I would call out here that we've seen continuous growth of these platforms even through the pandemic into the endemic phase, which really shows that they are the standard for automated molecular diagnostics testing in the clinical laboratory. Moving to Pathology Lab, we saw placements of our benchmark ULTRA and ULTRAPLUS have combined growth of plus 10%. In digital pathology, our DP200 and DP600 grew by 36%. And I would call it, we got the primary diagnosis claims for these last year, which is going to accelerate our position in digital pathology. And our primary staining business, the HE 600, placements grew at plus 4%. Now, in Near Patient Care, placements of our cobas liat, our lab-equivalent PCR solution, grew at plus 7%. And I look forward to updating you in the future on some of the growth of our newer platforms in the next year. But lastly, we also saw strong growth of pre-analytics and connectivity by 12% and our navify lab operations with good growth of plus 16%. So now I'd like to come to some of those new launches that you heard Thomas mention and start with our cobas Mass Spec solution, which got a CE mark at the end of 2024. So with this launch, we plan to establish and shape the IVD market for automated, simplified end-to-end mass spectrometry testing. This will drive market expansion and a transition from a segment dominated by lab-developed tests to one with mass spec as a part of the routine Core Laboratory environment. I'm pleased to report that we've had significant progress since launch with a number of placements throughout Europe. We also achieved CE launch for our system and steroid assays on track and vitamin D assays in February 2025. And we delivered some of the key installations already this year. And I'm pleased to share that the initial sites reported a very fast installation time and positive system performance in terms of uptime and serviceability. I recall that we are on track to launch approximately 40 assays in the first wave throughout 2025, which will cover the vast majority of routine testing for mass spec and a second wave will come in the following years. So now going back to some of that innovation that you heard Thomas mention about our Sequencing solution, which is the really exciting unveiling we had at the AGBT conference, what really makes this solution so exciting is, as you heard, the marriage of the Genia technology with the Stratos SPX technology. And the Genia technology is a nanopore technology, which is complementary metal oxide semiconductor. It allows for extremely high-resolution nanopore signal-to-noise ratio. And you combine that with the Stratos SPX technology, which is a surrogate polymer encoding what's called an expander, as you saw from Thomas' slide, it's 50x larger than a native nucleotide and also enables really high signal-to-noise ratio. Combining these together, you're going to get high throughput, high unprecedented throughput, high accuracy and high flexibility, which you don't have in standard next-generation sequencing. And so the NGS market, which is valued at USD 6.4 billion, is projected to grow at around 9% per year over the next 3 years. And the clinical segment will experience strong double-digit growth driven by applications like therapy selection and minimal residual disease monitoring in oncology. Our Roche SBX technology has the potential to really be transformational. And you see here on this slide some of the data presented at AGBT from the Broad Institute. Now, here, the Broad Institute demonstrated the high-speed potential of the technology, completing the entire sequencing workflow from library preparation through a whole genome sequence analysis with variant calling in under 7 hours with the SBX-Fast workflow. And I would call out, as you heard from the founder of Stratos Genomics, Mark Kokoris, on -- at the AGBT webinar, that this was not even an optimized protocol, and we're hopeful that we can even improve this in the future. I would emphasize that this data showed a level of accuracy that could lend itself well to clinical applications as demonstrated by the strong Q and F1 scores. This workflow could be practice-changing in clinical environments where a fast genome is important for decision-making such as the NICU. And third, as you heard me say before, this sequencing chemistry enables batch flexibility and makes it cost-effective to run small batches. We demonstrated flexibility in read length with one workflow offering the classic short read range and the other having the potential for longer reads to improve coverage. The unveiling of our SBX technology showcases our commitment and the capability to deliver innovations that could transform the sequencing field. So now moving to our Near Patient Care business, I'd like to speak about our liat CT/NG for which we received FDA clearance with CLIA waiver in January of 2025. So the molecular STI market is valued at about CHF 1 billion in 2023. There's over 2 million STI infections for chlamydia and gonorrhea in the United States and it affects over 200 million people yearly worldwide. With the cobas liat CT/NG, we'll offer the first FDA-cleared, CLIA-waived molecular diagnostics point-of-care solution for CT/NG and expand Roche's menu of lab-equivalent PCR solutions for rapid and accurate diagnosis at the point of care. With this launch, we can leverage our installed base of over 13,500 liat analyzers to drive access to our point-of-care molecular menu. And so now, following Teresa, I'll provide a report on our key launches for the Diagnostics division. So the 14 launches shown here, we achieved 2 in Q1, the liat CT/NG, as I just covered, and our chest pain algorithm, which will -- helps triage in the emergency room for suspected myocardial infarction. We are making good progress towards the other launches, which are on track, and I look forward to providing further updates in the future. Last but not least, I'm also pleased to invite you to our Diagnostics Day on May 27, a hybrid event in London and also online. Here, we have a prepared and exciting agenda, and we'll further discuss our forthcoming Roche Sequencing solution as well as our pipeline and portfolio highlights across our customer areas. And with that, I will pass it over to Bruno and thank you very much for your attention.

Thanks, Matt. And just quickly to summarize here, Matt already mentioned the next upcoming IR event will be the live diagnostics event in London again. And then as mentioned already by Teresa, in June, on June 23, we will have an hematology update basically covering all the data for malignant and nonmalignant hematology, which are presented at the summer conferences, so including ASCO, EHA and ICML, and then also ISTH. That's the first time when we will show the clinical data for 007, which were the basis of the decision taken now to move the molecule into Phase III. And with that, I think we are ready to open the Q&A session.

The first one in the row is Sachin Jain from Bank of America. Sachin, please.

Can you hear me?

Yes, we can hear you.

Two questions, please. So first, I'm going to kick off with Teresa, if I may. So Teresa, can you just comment on how you see U.S. sequential growth from here? Should we expect continued sequential decline through the year, given comments for several quarters to wash out? And if that's the case, to get to the 20% global growth that you're sort of roughly guiding to, is the bulk of that coming from ex U.S. where we have lower visibility? And then the second is a big picture one you'd expect, Thomas, on sort of U.S. policy. You commented on the rise of tariffs you thought were absorbable. What assumptions within that have you made given the wide variety of scenarios? And then on your U.S. manufacturing R&D commitment, you and others have made commitments to the U.S. in recent months. Is there an expectation that this commitment from the industry can reduce or influence tariff proposals from the administration? Or just sort of what's the big picture intent?

Do you want to go ahead with Vabysmo?

Sure. So starting with Vabysmo, so basically, the dynamic that's happening in the U.S., we all know that, within the U.S. retinal space, there has always been a very large sort of unbranded market dominated by Avastin. Over the course of the last couple of years, what we've seen is a decline in that portion of the market and more patients funneling into the branded therapies. With the early closure of the co-pay assistance fund, or the CAF, we are now seeing the unbranded market and in particular the Avastin share continue to grow while the branded market constricts. Within that branded market, however, Vabysmo is growing in every indication that we have. And so we will continue to see growth in the U.S. It may just be at a lower rate since the overall branded market has shrunk, if that makes sense. But we will definitely continue to see our share of that branded market continue to grow. We do also anticipate significant growth outside the U.S. as new countries come online and as the prefilled syringe continues to enter into new markets. So overall, we think it is a story of growth everywhere in the world, and that dynamic in the U.S. will likely just take a little time to wash out.

Good. Yes. Sachin, thanks for that excellent question. What I can say is that we've looked at a very wide range of different scenarios. And I think we cannot go through all of the scenarios today, although I'm sure that everyone would like to. But we've put in mitigation measures to mitigate against these different scenarios. What I can say already is, if we look at the first half of the year and also Q2, we will not see much of an effect from the tariffs. One reason is that we have shifted inventories and that should mitigate a significant impact already this year. And the other part is we already started to increase manufacturing of a number of medicines in the United States. So we are very actively working on mitigating all of these topics. And we also, in our budget, are making sure that we can absorb potential tariffs throughout the year. So we're really working hard on all of those different topics. Regarding our engagement with the U.S. government, I can just say that we are in exchange with the U.S. government. We are in exchange with the U.S. government through the industry association and -- but also with other governments like the EU and certain EU member states. And I don't want to disclose all of those conversations at this stage, but I can just tell you that we are on the case.

Okay. Then we move on. Next questions would come from Matthew Weston, UBS.

Thank you, Bruno. Can you hear me?

Yes, we can hear you.

Perfect. It's just one question from me, please, and it's for Teresa. It's a follow-up to Sachin on Vabysmo. So you made clear the success that Vabysmo has as the market leader in AMD in the U.S. I just want to dig into this charitable foundation issue. So the previous opthmo market leader was a leading donor in the charitable access foundation market. Now that you're a leader, shouldn't we expect that Roche steps up its contributions to the charitable foundations? And if not, why not, Teresa? Is it potentially linked to the DOJ's continued investigation into charitable donations? Or it seems that, after the recent court win and appeal win, that looks like it's broadly resolved?

So Matt, as I'm sure you can appreciate, all charitable foundation giving is done through our foundation, which is completely separate, and it would be inappropriate for me to comment on how they do their giving. So unfortunately, I really can't answer your question.

Okay. Understood. Can I just quickly follow up? Your answer to Sachin's question suggested that you felt that the CAF market was just winding down. But can I just check that there's no structural reason why we should assume that CAF from everybody's donations should wind down? It's simply that, at the moment, the charitable foundations are short of money.

At the moment, the charitable foundations seem to be without money.

To say that, I mean, that will be just a rebasing of the market and it just will take a couple of quarters to wash out. But overall, I mean, the growth rates you saw in Q1 with 18% is round about what we expect for the full year.

Okay. Then let's move on. The next one is Emily Field from Barclays.

Maybe one on NXT007, what dosing intervals will you be targeting in the Phase III studies? And then for the comparator study versus Factor VIII, will you be using a long-acting Factor VIII as one of a -- as a comparator? And then going back to obesity on CT-996, I was wondering if you could make any comments on the back of the high-level orforglipron data that we saw last week, if you're able to comment on any structural differences between the 2 molecules? And if that is sort of the framing of targeting what you think you could achieve with CT-996 in a pivotal study?

Great. So with regards to the NXT007 trial design, both in terms of dosing and in terms of which factor we would use, those are both great questions, which, when we have the Phase III trial design, I will be able to answer for you. But right now, it would be premature. In regards to your question around the Lilly molecule and our CT-996, that structure has not yet been disclosed. And I think ,as we sort of repeatedly said, reducing everything down to just structure sometimes is a little bit overly simplistic. One molecule or one atom here and there can really, really make a big difference. And so I think we are very confident in the data that we've seen thus far with our oral molecule, and we are looking forward to advancing it in other trials. And we've -- at this point, we've seen just Phase I data, just to be clear.

Emily, did this answer your questions?

Yes.

Okay. Next questions come from Justin Smith from Bernstein.

Just one for me. Sorry if I'm being slow. On Vabysmo, are you basically saying that the global area under the curve of the drug is the same or it's just going to come down?

So the overall size of the -- so if you think about the U.S. market as a pie, the size of the pie will likely remain the same. The amount of that pie that goes to the unbranded options is likely to get a bit bigger. So the slice that's left for the branded market, we would expect Vabysmo to continue to take share. And so I just want to continue to underline we do believe that Vabysmo will continue to grow. And as Thomas mentioned, the same level of growth that we saw in Q1 is the level of growth that we're hopeful to see throughout the rest of the year.

And again, this is just now a base effect for a couple of quarters, and then it will wash out, and we will see continued growth like we've seen now in the first quarter, we'll continue to see growth going on for Vabysmo.

Just very quickly, so I get that. And then so in terms of ability of ex U.S. to pick up any slack, does that help as well?

I mean, remember, ex U.S., we still have a number of markets that aren't yet approved or reimbursed, and we're still in the midst of launching the prefilled syringe ex U.S. So there is actually a tremendous amount of opportunity that remains. And we're still in very early days in very big markets like China, which just launched in January with NRDL coverage for all 3 indications. So there is still a tremendous amount of room for Vabysmo.

There's a significant amount of growth left in Vabysmo.

Exactly.

The next question is going to James Quigley from Goldman Sachs.

I've got 2 on some of the upcoming news flow for the second half of this year. So firstly, on giredestrant, again, I know this isn't necessarily the best indicator, but primary completion dates listed on clinicaltrials.gov for persevERA and evERA have now slipped into 2026. So you've already confirmed '25 readouts, but is there any risk of slipping into '26? Also, similarly on the SERD space, we've seen some data from Astra, Lilly and Pfizer. So I was wondering what your take is on this, particularly with continued success in the ESR1 mutation population and then what are your thoughts on the commercial opportunity? And secondly, on fenebrutinib, we spoke to some KOLs recently that suggested that, in terms of Aubagio's apparent overperformance in recent Phase III trials relative to the original Phase III program, patient population was the biggest -- the biggest change there. So from what you've seen, is there anything sort of different or novel for your trials versus what we've seen for the other 2 competitor trials in their populations? And when you were planning the studies, to what extent did you assume an uplift in efficacy for Aubagio?

And I'm sorry, James, could you repeat the first part of your second question? I didn't catch it.

So first part of the second question, we spoke some KOLs recently who said that, in terms of Aubagio's apparent overperformance in the current Phase III -- in the Phase III trials for your competitors versus its own Phase III program, the key change there was patient population. So is there anything different in your patient population versus what we've seen for tolebrutinib and/or evobrutinib?

So I'm still not sure I totally understand what your question -- your second question is. The first one is fairly easy. These are event -- the giredestrant trials are event-driven trials. It is possible that we may see slippage just because they are event-driven. And as soon as we have concrete information, we will certainly share that. And we continue to believe that our SERD is materially differentiated from a structural standpoint from the other SERDs out there. And so while I think the additional data from other trials is certainly informative, it's not definitive. And I think that would probably be the way that we would look at it. So you're talking about fenebrutinib. Okay. Got it. So the question -- the second question was fenebrutinib and did we see anything different in our Phase III patient population?

Yes. So in fenebrutinib, Aubagio has done better than people thought, right? So that seems to be the reason as to why tolebrutinib and evobrutinib didn't -- weren't successful. And KOLs we spoke to have said that's because of the patient population. So have you adjusted for that patient population in your trial? What were you expecting in terms of the Aubagio efficacy when you originally planned the trials as well?

Got it. So I would say that, based on the Phase II data that we have seen from fenebrutinib, based on the fact that it is a materially different BTK from the other BTKs that are out there, it's noncovalent. It's more -- we believe preclinically that it's more potent, that it's more selective. We've seen very strong Phase II data with fenebrutinib. Virtually, we are quite confident that we have a molecule that is very different from the other molecules that are out there. So from a patient population, I'm not entirely sure that there's anything materially different in the patient populations that we're looking at. But I think we do believe that we just, frankly, have a better BTK and one that we were able to bring forward into Phase IIIs at what we believe to be the most appropriate dose. And I think that's the other thing that has potentially impacted some other trials, is they just weren't able to get to the level of dosing that they needed. We believe we've gotten to the level of dose that we need. But obviously, the trial is still ongoing, so we haven't been able to formally look at the baseline characteristics for all the patient populations. But there wasn't anything in how we structured the trials that we think would be materially different.