Roche Holding AG (OTC:RHHBY) Q2 2025 Earnings Call Transcript

Roche Holding AG (OTC:RHHBY) Q2 2025 Earnings Call Transcript July 25, 2025

Bruno Eschli: [Operator Instructions] One last remark. If you’d 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 Thomas Schinecker, CEO of Group. Mr. Schinecker, the stage is yours.

Thomas Schinecker: Thank you very much, and good morning, good afternoon or good evening, wherever you are. I’m really happy to talk to you about our half year results, which have been extremely strong. So let me kick it off on this slide. So overall, our group sales increased by 7%. So very strong growth by Pharma with 10%. In fact, if you look at the momentum in Q2, Pharma even grew by 11%. Diagnostics was flat, so very similar to what we saw in the first quarter, and this is purely due to the China health care pricing reforms. Without those pricing reforms, Diagnostics grew 6% in the first half of the year, so in line with past expectations. But what’s even more exciting is the strong bottom line performance with core operating profit growing 11% and thereby our core operating margin increasing by 1.1 percentage points and core EPS even growing faster at 12%.

Also, we want to update our full year LOE impact guidance, which we are now lowering to CHF 1 billion instead of the CHF 1.2 billion. In the second quarter, we had a number of key milestones, among others, the EU approval of Itovebi and also the U.S. approval of Susvimo. We had mixed results with astegolimab, 1 positive study, 1 negative study, and Teresa will talk to you more about that. And there have been a number of Phase III decisions that have been taken. One is prasi in Parkinson’s disease. Also here, Teresa will talk to you about that, and she will actually be able to share the open-label extension data with you on which basis we made the decision to take that into the Phase III. But also zosu as potentially new antibiotic for gram-negative bacteria, this would be the first in 50 years.

So for this year, we’ve taken 4 medicines into Phase III, the number to come. So you can see that we are really refilling the pipeline of new medicines. And it’s going to be an exciting year for that with between 8 to 11 medicines moving from Phase II to Phase III, all post bar and all with the data that supports this move. On the Diagnostics regulatory side, we also had 2 approvals, and Matt will talk to you about that. There’s also more significant news flow ahead this year, which we’ll keep you updated on. Now let’s look at the overall numbers. Again, 7% is very strong growth for the group, but really driven by Pharmaceuticals. I already mentioned Diagnostics. And this is in line with the performance that we’ve shown over the last 2.5 years.

In fact, if you look at the last 2.5 years, starting in ’23, when we had to phase out the pandemic sales, which at one point in time were 12% of our sales, we managed to do that by having very strong growth of 8% during that time period. And even since then, if you look at basically the last 2 years, we’ve been growing at the average rate of 8%, as you can see here on the right-hand side. Now the last quarter, there has been an impact in Diagnostics, as we mentioned, and this impact should get lighter for us towards the end of the year, because some of this impact already happened in Q4 last year. Now let me talk you through a couple of growth drivers. Let me start with Vabysmo, which continues its very strong momentum. Vabysmo is growing at 18%.

Q&A Session

So 17% is the overall ophthalmology growth, and we continue to gain market share in the branded market of about 3 percentage points. At the same time, we see a contraction of the overall market because of less cap funding in the United States. Xolair continues to do extremely well with an amazing momentum and now more than 60,000 patients on this medicine in the United States. Also in oncology, we are continuing to do well with 7% growth. We have the EU label update for administration outside the hospital for Phesgo. Alecensa keeps expanding as well. And also on the hematology side, we have now for Polivy in first-line DLBCL, patient share is now reaching 33%. And we continue also to drive expansion of Columvi and Lunsumio and I’ll get back to Columvi a little bit later.

Also, Hemlibra continues to do well, and we have the next-generation Hemlibra in-house, and I know also Teresa will share some data on that. The neurology portfolio, where we are the global leader, continues to do well as well with 10% growth. Ocrevus with a good momentum. We received J-codes for the subcut version 1st of April, of course, with only every 6 months dosing of Ocrevus patients. It’s going to take a little bit until we see that in the numbers, but we are confident in our outlook on Ocrevus and the additional revenue that we can achieve by adding the subcut version on top. Also, as I mentioned for Evrysdi, we received the EU approval for the tablet formulation. We’re very confident in our growth over the next couple of years because we have a very strong momentum in our on- market portfolio.

And we also know that we have a number of key readouts coming in the ’27 to ’29 time frame, all of which are driven by a strong Phase II data and post bar. And so we’re very confident that we can continue our strong momentum even beyond this decade. And there are a number of pivotal NME readouts that are still going to happen this year. Now let’s look at some of the product highlights. And let me start with Diagnostics. As we mentioned before, last year was really a historic year in terms of launches for Diagnostic, but we have more to come. The sequencing solution will be launching next year. And here we have a solution that can really be disruptive in terms of throughput, in terms of cost position, in terms of speed and accuracy. And I know Matt will talk to you more about some recent data that will support that view.

And so we are very excited to get ready for this launch when we already have first customers which are using this instrument in early access. On the Accu-Chek SmartGuide, the CGM solution, we launched that last year, and we’re continuing to ramp up here in manufacturing. And also mass spectrometry, we launched end of last year. So again, very good momentum, and we are bringing new reagents to the mass spec. So we’ll see this momentum increase even. Now all of those 3 are really for us new segments and segments that will enter us into markets that are multibillion. So you could say, in terms of Pharma kind of language, all of these would be kind of blockbusters on the Pharma side. And also on the assay side, we continue to make good progress.

And I know also Matt will cover the specific assay which we have in our Pathology business. On the Pharma news flow, just again, to highlight Itovebi with the EU approval, prasi and zosu with the transition into Phase III. A couple of updates on the other programs. Tiragolumab, we already stopped all we could in the middle of last year, because we knew that these programs are likely not going to be successful, and we just let the rest run out. And it’s confirmed our decision really to do that last year because we can really see that there is no impact of this antibody. On the Columvi side, let me just say, we now have 35 countries in the world that have approved this therapy. The data is very strong in terms of the hazard ratio and the benefits to patients compared to standard of care.

And it’s also in the U.S. NCCN guidelines. So even though we received a CRL based on the ODAC decision that happened a couple of weeks earlier, we are confident in this medicine, and we are confident also that this will get used also in the United States based on these guidelines. Astegolimab already mentioned, and Elevidys, I know also Teresa will go into that. Also here, we are very convinced of the risk- benefit profile of that gene therapy in ambulatory patients. There are 760 patients in the world in this patient group. And this is the only therapy that is available for these patients. These young boys otherwise have no treatment option. And if you talk to KOLs, if you talk to patients who have received this, they are very much convinced of this gene therapy.

So we hope that between Sarepta and the FDA, they will find solutions that patients can continue to receive this kind of treatment. Let me just quickly talk about Phase III Go decisions. And we always said in the beginning of this year, this is going to be a very important year in terms of refilling our late-stage pipeline. We already have 4. There will be probably 4 coming towards the rest of the year, maybe even more. And this would be a record for us in terms of how many new medicines go into the late stage. NXT007, this is an antibody that’s, yes, using the recycling technology of Chugai and has a higher level of efficacy. Trontinemab, I think we talked about that many times about the unique possibility to use Brainshuttle technology to get the antibody into the brain with very low levels of side effects.

Prasi, I know Teresa will talk about that. And I already mentioned zosu, which is also very important because we know that there will be a next pandemic and one of the next pandemics could be a bacterial pandemic. Let me also talk about R&D excellence, and I know that you’ll get a much deeper and extensive update at Pharma Day. But over the last 2.5 years, we have consistently applied the bar across our portfolio. That means we’ve attritted some of the molecules that were higher risk and lower value, and we have substituted that with more higher-value assets and we generated more data and complemented that also with external innovation. One of the goals that we’ve had is to increase the share of best-in-disease potential to 80%, and we are in good progress to achieve that.

We moved from 58% to 67%. And also by doing this pipeline prioritization, what also happened is that we increased the average peak sales per pipeline project. So this is not per NME. This is per pipeline project. So per NME, it can be much more substantial than that, which is an increase of 55%. And if we look at the total value of our portfolio, it in this time period has increased by 26%. And it’s our commitment that we will continue to do that and continue to only move forward projects where we believe these potentials are there. But we, of course, know that in Pharma, some of the development times are, for example, in late stage, 3 to 4 years. So some of the molecules, like, for example, astegolimab were pre-bar era. Now let me also talk about one other aspect that’s really important, and it’s about resource reallocation.

You saw probably in the slide deck that we kept our R&D spending flat. But that doesn’t mean that we don’t have massive reallocation going on inside. You can see that as a swan kind of on the lake, and we are doing a lot of work, but it may look very calm, but I can tell you there’s a lot of reorganization and reshuffling going on. In total, we’ve been able to save about CHF 1 billion. The goal by 2030 is around CHF 3 billion in savings that we can reallocate into our business. We do that, for example, by — we reduced the number of CROs we’re working with. We used to work with 12. We’re now working with 3. We renegotiated those contracts. We renegotiated contracts in research. We take out manual work in different parts of the organization by implementing AI.

We reduced the system landscape and simplified the organization. So we do a lot of things to really cut out costs, so that we can fund the external innovation, which you see here, so that we can fast track certain programs, but also that we can implement new systems, which make the work that our people do much more effective and cost efficient. And this reinvestment, with that we managed to fast track a number of key assets like afimkibart, which we accelerated significantly; CT-388, which we also accelerated trontinemab. When we look at the cycle times that we now have, we managed to get now a cycle time acceleration of a total of about 11 months through R&D excellence. The goal is, of course, much higher by 2030. But this is in a time period where if you look at the average industry cycle times, they have actually increased.

And it’s very important to also reinvest some of the money into key productivity initiatives, including new systems, automation and AI, so we can take out costs out of the system. Now let me talk about guidance. I already mentioned the LOE impact, which we assume is going to be less. The group sales growth, mid-single digit, core EPS, high single digit. Of course, the first question is, well, if you’re growing 7% already in sales, your core EPS is growing by 12%, aren’t you being conservative? I would say, our reputation is to be conservative. And we also know that we have a lot of geopolitical turbulences these times. And so what we said is we’re going to observe the situation. Obviously, we’re tracking very well, if you compare it to the guidance, and we have the opportunity to revisit that decision in the next couple of months.

Let me say also that Roche, in our history, we’ve never missed the guidance. And if you look at the last 3 years, we’ve exceeded our guidance in every year, including we also raised the guidance last year. So of course, we want to continue to deliver, and I can promise you, we will continue to deliver. And so whatever happens in terms of the U.S., we will continue to deliver. With that, thank you very much, and I hand over to Alan.

Alan Hippe: Yes. Thanks, Thomas. Yes, hi to everybody. Thanks for coming in. I hope everybody is fine. Very pleased with the results that I have the pleasure and the honor to provide here, and especially with the operational performance that we can show. Well, I want to talk about the results, so the P&L. I think a couple of points on the cash and on the balance sheet. And certainly, I think well these days, important to talk about currency. This is the overview. When you really look at the 7%, I’m sure that Teresa and Matt will give a lot of details about the sales development. When you look really at the core operating profit with more momentum than the sales growth, I think that underlines good cost management. Core net income, even with a higher momentum, plus 13%.

Here, the financial result helped with a couple of currency impacts. I will come to that in a positive way. And then you see really core net income and core EPS pretty much in line. IFRS net income, up plus 23%. Explanation is simple, lower impairments compared to last year, around about CHF 800 million. And then when you look really operating free cash flow, it looks a bit poor at first sight. But well, first, Zealand, CHF 1.2 billion, which has been an in-licensing deal, so it goes through the intangible assets and therefore, is part of the operating free cash flow, where M&A is not come to this. So I think that’s a difference to last year. And then we have a higher level of net working capital, especially on the Pharma side on the accounts receivable, which is not a worry that will balance out until year-end.

On the free cash flow side, what fuels, if you like, the distance even a little bit more is higher tax payments, but also this will balance out until year- end. Good. When we look really at the group sales growth and the bridge here, you see left-hand side, half year 2024, right-hand side, half year 2025. You see the 7% increase in CER, you see the currency impact. Let me start with Diagnostics. And so you see the minus CHF 326 million in constant rates. This is the China health care pricing reform impact on the Diagnostics side. If you move one bar further, you see the plus CHF 348 million. And this is really the plus 6% on the Diagnostics side, if you exclude the China effect. Pharma, I think with strong momentum, as said already, Teresa will shed more light on this.

And here, you see then on the next bar, the negative impact from loss of exclusivity products with a minus CHF 347 million. You know we have that CHF 1.2 billion out as additional information to the guidance. Thomas made a remark on this already. We bring that down to CHF 1 billion due to the half year impact that you’re seeing here. And then you see the currency impact, which I would argue speaks for itself. That said, let’s go to the core operating profit and the P&L, at least the first part of the P&L. Sales is clear. Other revenue pretty stable here. When you look at the cost of sales, plus 8%, pretty much in line, I would argue, with the sales growth. But what is important, the volume has risen by 12%. And this is 15% on the Pharma side and 1% on the Diagnostics side.

Having that in mind, I think that’s a pretty reasonable increase that we’re seeing here. And you ask yourself, okay, when you look really into the divisions, you will see that we had a plus 8% in Diagnostics as well. This is the China health care pricing reform, manufacturing ramp-up, especially for CGM and certainly the increased installed instrument base. R&D, pretty flattish. Thomas explained that. I think we have great savings on the R&D side coming from R&D excellence. I think that is contributing to that stable development. Then you have SG&A. And SG&A, well, 2 major drivers. One driver is on the Pharma side, where we have put more money behind marketing and distribution, really just to fuel the momentum of our products, especially Vabysmo and Xolair.

And then we have on the Diagnostics side, really, really good cost management. So the last point to mention here is really informatics, where we have invested more in AI and more into cloud. Good. Other operating income and expenses, well, we have done less divestments, and we have less gains from divestments of products compared to last year. That explains the minus CHF 168 million. Good with that, I think you see core operating profit at roughly CHF 12 billion, nice margin increase, plus 11% overall. Good. When you look at the margins, you see the margins went up quite well overall, plus 1.1 percentage points for the group in constant currencies. The Pharma division with plus 1.7 percentage points at constant currencies. You see the drop in Diagnostics, which is not surprising given the impact from China.

Therefore, I would argue, overall, pretty good development. Core net financial results. And as I’ve said at the beginning, it’s interesting because the net financial result has improved with plus CHF 84 million in constant currencies. And when you look at the large green bar on the right-hand side under other, then it’s very clear we had here the net foreign exchange results, which played a role, and the net monetary positions in hyperinflationary economies that was a CHF 89 million here, which played a role, and that gave us quite a boost here. When you look really at the interest expenses, it’s also a positive. That’s pretty clear because most of our debt is in U.S. dollar. And as the U.S. dollar has weakened, we received a positive impact here.

And then you look really at the investments that we have in the Roche Venture Fund. And when you look, the portfolio was negatively impacted here by the U.S. dollar as well. Good. With that, let’s go to the core tax rate, and that’s an easy one this time because the tax rate is basically stable. We had a couple of positive, a couple of negative effects here. For the full year, certainly, you know that I’ve said for the full year that we expect a group tax rate of 19.5%. I think given really the relatively good result at half year, I would go now to 19% for the full year. Good core EPS. And I would argue that’s one of the slides which demonstrates the best how well we have performed on the operational side. You see really a comparison half year to half year.

We’re up in constant rates by 12%, as mentioned by Thomas already. But you see really major trigger here is operations. So what went against us is less product disposals. That’s one element here. All the rest really washes out. But as I said, I think the thing we’re really proud of is the operational impact here. Good. Noncore and IFRS income. You see the core operating profit growing by 11%, as mentioned already. You see really when you go down on the right-hand side, the IFRS net income is up by 23%, as mentioned at the beginning. And then you look at the impairment of intangible assets, which has improved significantly. You know that we have revisited the Pharma portfolio. I think we cleaned the portfolio, and therefore, we also cleaned quite some stuff in the balance sheet.

So that’s a result of it. And therefore, I think really the IFRS net income has a nice momentum. Good. Cash. Here, you see really how the cash has developed half year 2024 constant rates to half year 2025 in constant rates. And then you see the currency impact, which gives us then the reported number. When you look at it, I think really the green bar, operational performance, really great. Net working capital, I’ve mentioned that. I think really here on the Pharma side, increased accounts receivables due to the sales of Ocrevus, Xolair and Vabysmo, I think something which will balance out until year-end. So I think that should be fine. And then you’ve seen the investments in intangible assets, the impact of Zealand, the Zealand Pharma deal of CHF 1.2 billion, which I would argue explains the majority of the difference here.

And then you see really when you move over the relatively small currency impact that we had on the cash side. Good. When you look at operating free cash flow and the free cash flow margin, so to say, well, certainly, it’s not a surprise that this went down. Given that we had the Zealand deal, I think that’s really reflected in the Roche Group. It’s also reflected in the Pharma division. The Diagnostics division very clearly impacted by China. When you look really at the cash generation of the business, then it decreased by 13%, which is in line with the 14% decrease in the core operating profit. So I think well explained. Group net debt development. You see net debt went up from CHF 17.3 billion end of the year 2024 to CHF 21 billion at end of June 2025.

You see the ingredients, I think the operating free cash flow, I think Zealand is part of it. And then the nonoperating free cash flow is taxes and treasury. And then you see an interesting point in dividends, M&A and alliance transactions, and that is a positive impact from currency translation. That’s the U.S. dollar once again. Roughly 70% of our debt is in U.S. dollar, nominated in U.S. dollar, so had a positive effect here, which certainly helped a little bit on the net debt development. I think what went a little bit against us, you will see in the balance sheet is that our cash position is reduced, but still at a very comfortable level. And here we are. When you look at the balance sheet, I think, first, you can see that the decrease in assets at half year has been driven by the reduction of cash and marketable securities, but still CHF 12 billion on hand.

And the decrease was partially offset by higher trade receivables, especially in Pharma. When you, by the way, look at the liabilities, the reduction in the noncurrent liabilities is really a reduction of long-term debt and quite significant, roughly CHF 4 billion reduction in debt. When you look really at the equity ratio, I think that looks fine. You see really we’re at 35% now, so a little bit down compared to year-end, but you know that the dividend we pay, the CHF 8 billion, is equity deductible. So the equity gets reduced by the CHF 8 billion dividend, and we are basically close to where we have been at year-end. So I think that speaks for the profits we’re making, that we are building up the equity, and we should have a quite nice equity ratio at the end of the year.

Good. Let’s look at currency. Well, that’s the picture for quite a while, to be honest. And you see really that the Swiss franc has strengthened basically against all the major currencies. And you see really that the U.S. dollar is the driver here. But certainly also the Chinese renminbi and APAC plays a role here, but also other currencies here. So that is, how should I say, that doesn’t give us a great platform for the end of the year. When you look really at the currencies itself, you see on the left side that the 2025 average currency rates remain below 2024 for both the U.S. dollar as well as the euro. So let’s move to the right-hand side. You see at half year, the minus 3 percentage points, the minus 5 percentage points on core operating profit and the minus 4 percentage points on core EPS.

And yes, I think for the full year, you see the minus 5 percentage points, minus 6 percentage points and minus 6 percentage points on core EPS, which would result from the assumption that we keep all the currencies at the end of June constant until year-end, which is pretty unlikely that this will happen. Just for the sake of information, I think we run the whole model yesterday, with the currency rates of yesterday. And I can argue that the result is not very different to what you see here. It’s slightly different, but not very different. So it looks like that this is a little bit the direction we’re going. Good. Thomas said everything about the guidance. While tariffs is the major point which holds us back to make a step here and it looks a bit inconsistent.

I agree. Nevertheless, the risk is there. The uncertainty is there. You’ve seen the adjustment on the loss of exclusivity impact to CHF 1 billion. So I think a pretty reasonable picture, and we will assess the situation further in the next couple of months. Now I come to a pretty formal point that I want to raise here. And the Roche Board of Directors proposed an exchange of Genussscheine to participation certificates, Partizipationsscheine. A pretty formal move. As shared in our press release, I think yesterday, the Board of Directors proposes a switch. The exchange of Genussscheine is really an outdated equity instrument, really outdated old instrument. There is not even a good translation for Genussscheine, to be honest. So I think really good to go for the participation certificate.

And this follows the Roche Articles of Incorporation. It is an adjustment driven by the revised Swiss corporate law. It’s really now a more modern instrument that we now bring in. Let me emphasize that the participation certificates are economically equivalent to the Genussscheine. So economically, there is no change. Following the exchange, the participation certificates replacing Genussscheine will be listed on the Swiss Exchange and have the same dividend entitlement as well as the same entitlement to any liquidation proceeds as the bearer shares. So I think very clearly, no change, just a formal change. Welcome to the digital world, because so far we still work with paper here at Roche, and we have to get rid of this. And I think now it’s the time because really the time is running out until we can use the physical coupons of the Genussscheine as well as the Inhaber.

So we are really forced to do that move. There will be detailed explanations of the proposals of the Board of Directors, and they will be made available before the shareholder assembly in 2026, where the final approval will be made. It’s very important. So there is a time line until March 2026, where you can revise it, look at it and get comfortable with the move. And as I said, this is more of a formal change than really a change in substance. And then certainly subject to the shareholder approval in the 2026 AGM. The exchange is expected to be implemented shortly after the 2026 AGM. Good. Thanks for your attention here, and I’m happy to hand over to Teresa. And all that comes to my mind, Teresa, is double digit. That’s first time.

Teresa A. Graham: Absolutely. This decade. Exactly, first time in this decade. So thank you, Alan. Let’s start by taking a look, as Alan mentioned, on the overall performance of Pharma. So Pharma sales grew 10% at constant exchange rates, reaching CHF 24 billion. All regions delivered strong growth, including the U.S., which grew at 10%. And as Alan mentioned, overall Pharma volumes were up by 15%. Core operating profit increased by 13% with a margin of 52.2%, driven ahead of sales by effective cost management, particularly in R&D. Going through the P&L lines in a little bit more detail. As Alan mentioned, that other revenue line was stable with higher profit share income from higher sales of Xolair ex U.S. and Venclexta in the U.S., offset by lower income from out-licensing agreements.

The cost of sales increased by 8%. That’s slightly below sales growth against a 15% volume growth. R&D costs declined by 1% and SG&A costs increased by 4%, as Alan mentioned, primarily in support of the ongoing launches. Other operating income and expenses did decrease by 52% due to lower gains on disposal of other products. So now let’s take a look at what was actually driving that growth. So just as my normal quarterly reminder, all absolute values and year-over-year growth rates in this graph are presented in Swiss francs at constant exchange rates. At half year, our top brands, Phesgo, Xolair, Hemlibra, Vabysmo, Ocrevus and Polivy added roughly CHF 2 billion in new sales at constant exchange rates. Phesgo continues to be our #1 growth driver, but with Xolair at a really close second with just an outstanding launch in food allergy.

You can also see the strong performance across regions here with all geographies contributing to the growth. Now let’s continue by having a closer look at our key TAs, starting with oncology. Oncology sales increased by 2% to CHF 7.8 billion, primarily driven by our HER2 franchise. Phesgo posted an impressive 55% growth at half year. In Q2, we received a positive CHMP opinion in the EU for administration outside of the hospital. Importantly, this does include administration at home. We will talk a little bit more about Phesgo on the next slide. For Perjeta, conversion to Phesgo continues. And at ESMO Breast, we shared the final positive OS analysis of our Perjeta plus Herceptin APHINITY trial in early breast cancer. This long-term follow-up included data of more than 11 years and showed an overall survival hazard ratio of 0.83.

And rounding out the HER2 franchise, Kadcyla continues to deliver good growth driven by the uptake in the adjuvant breast cancer setting. Moving on to hormone receptor positive breast cancer. Let’s talk about Itovebi. The U.S. launch is ongoing with more than 500 patients on treatment, and we just received EU approval earlier this week. At ASCO, we presented the positive final OS results from INAVO120 with a hazard ratio of 0.67. Let me also mention that for full year, we expect to land above CHF 100 million in global sales as we are still very much in the early launch phase with Itovebi. Moving on to Tecentriq. We previously guided for Tecentriq overall sales remaining stable, and that is what we expect going forward. For Tecentriq, we had 2 positive Phase III readouts, both of which were shared at ASCO, IMforte in first-line small cell and ATOMIC in adjuvant DNA mismatch repair colon cancer.

Both indications represent smaller opportunities in the range of about CHF 700 million at peak. And finally, Alecensa. We continue to see strong growth across all regions driven by adjuvant ALK-positive non- small cell and increasing market shares in first line, just really continued strong performance for Alecensa. Looking ahead to the rest of the year, there are 2 highly anticipated Phase III readouts for giredestrant with evERA and persevERA expected in the second half. And additionally, we’re looking forward to initiating our Phase III with divarasib, our KRAS inhibitor, on top of standard of care in first-line non-small cell. Now let’s take a little bit of a closer look at the future of our HER2 franchise. And first, let’s talk about Phesgo.

So as you know, Phesgo is the first monoclonal antibody-based treatment in breast cancer with the flexibility to be administered outside of the hospital, including at home. This convenience, combined with Phesgo’s strong clinical profile, are driving global conversion rates, which are now approaching 50%. When you look at this chart, you may see a small dip in Q2 in the graph here, but that’s really due to us adding more launch countries to the calculation on the global conversion rates as the global expansion progresses. And you can see the same thing happened at 2 earlier time points each time just before an inflection occurred. Overall, with Phesgo, we expect to reach a global conversion rate north of 50%. On the right side of the slide, we see that an evolution of the HER2 treatment paradigm is currently ongoing.

And as we’ve previously said, we are confident that our portfolio will remain an integral part of most future combinations. The orange boxes highlight where due to new clinical data from competitors, a further evolution of the treatment paradigm is to be expected, which will lead to more fragmentation in how patients are treated. But as you can also see immediately, there are also settings, including the adjuvant setting with patients with PCR and the adjuvant-only setting where Phesgo will remain the standard of care. Based on the anticipated changes, I want to confirm the outlook for our HER2 franchise, which we’ve previously provided. We expect continued growth of the franchise through 2026 with peak sales of around CHF 9 billion, driven by the continued global penetration of Kadcyla into the adjuvant setting and Phesgo conversion driving additional market expansion.

The first Perjeta biosimilar is expected towards the end of 2026. However, we expect only a limited initial launch, similar to Actemra, if you need a way to think about it. After 2026, we forecast a constant rather steady decline through the end of the decade. We do not foresee a cliff situation for the franchise, but forecast a solid tail of CHF 4 billion, primarily Phesgo and Kadcyla and a bit of Itovebi. So why do we feel so confident about our place in the future HER2 treatment paradigm? So let’s take a look at what physicians said at ASCO. As mentioned already on the previous slide, we see that first-line metastatic breast cancer is moving away from a one-size-fits- all approach. This is supported by 3 key observations made based on recent study readouts in this space, all of which were presented at this past ASCO.

Overall, the results underscore the benefit to patients with more personalized treatment strategies based on individual disease biology. But there are also open safety questions, especially for the long-term treatment with certain novel assets. So questions remain on how to integrate recent data into clinical practice, particularly guarding treatment sequencing and the development of induction and maintenance protocols. We believe that the Roche HER2 portfolio remains well positioned for the evolving needs of patients and caregivers. And a recent survey amongst oncologists at ASCO actually confirms this view. 91% would use Enhertu for induction only, followed by maintenance with a different regimen. And of those 91%, 80% would consider a P+H or Phesgo-based regimen for maintenance treatments.

So for all of these reasons, we continue to feel confident in our assumptions moving forward in the HER2 space. Now let’s move on to our hematology franchise. Hematology franchise had strong growth of 19%, delivering CHF 4.3 billion in sales. Hemlibra had strong performance across all patient segments and regions with increasing adoption in non-inhibitor patients remaining the largest growth driver. For the U.S., we’re happy to see a return to growth, particularly driven by better patient adherence and higher new patient starts. For full year, we confirm the outlook of mid-single-digit growth for Hemlibra. I’ll quickly note that we shared positive Phase I/II data for NXT007 at ISTH, but as Thomas mentioned, we’ll cover that in more detail on the next slide.

For now, let’s move on to our malignant hematology portfolio. Polivy in first-line DLBCL continues to drive strong growth, and we reached another milestone with more than 60,000 patients now treated globally. And in the U.S., first-line DLBCL patient share continues to climb and is now at 33%, which is up 2 percentage points from Q1. Shifting to Columvi and Lunsumio, our CD20, CD3 bispecifics. Launch performance is on track for Columvi in third-line plus DLBCL and Lunsumio in third-line plus follicular. These initial later-line indications are expected to drive a combined peak sales of several hundred million. We have had additional news flow for both molecules, however, this quarter, so let’s dive into them in a little bit more detail. Starting with Columvi, STARGLO 2-year follow-up data in second-line DLBCL was presented at ASCO and ICML and the EU launch is ongoing.

However, you will have seen that we did receive a CRL from the FDA last week. The CRL stated that STARGLO data do not provide sufficient evidence to support the proposed second-line DLBCL indication in the U.S. population. However, the third-line plus indication remains on the market, and we are in ongoing discussions to determine whether the Phase III SKYGLO study in first- line DLBCL could serve as the new post-marketing requirement. While we are, of course, disappointed by this outcome, we want to reinforce our confidence in the benefit we are providing to second- line DLBCL patients with the STARGLO regimen. Remember that this trial had a 41% reduction in death and a 63% reduction in risk of disease worsening and emphasize that the U.S. rollout is — the ex U.S. rollout is progressing as planned with 5 approvals ex U.S. happening in just the last few days.

Lunsumio’s positive Phase III data for Lunsumio plus Polivy in second-line DLBCL from the SUNMO study was also shared at ICML. The data shows that PFS was tripled versus the control arm and support the potential for Lunsumio to become the first chemo- free combination of a bispecific antibody and an ADC in DLBCL. Furthermore, we are expecting U.S. approval of the subcutaneous formation of Lunsumio in December of this year. In terms of outlook, we are expecting U.S. — I’m sorry, in terms of outlook, we had previously communicated the second-line DLBCL opportunity for our bispecifics could reach about 1 billion combined. This, of course, now has come down several hundred million Swiss francs with the STARGLO news in the U.S. Now let’s go to the next slide, where as promised, we will take a little bit of a deeper dive into the NXT007 data.

So here, we have the mean annual bleed rate by NXT007 dosing cohort before enrollment and after starting treatment. There is a clear ABR decrease during NXT007 treatment compared to baseline. We are especially encouraged to see that there were no treated bleeds in cohorts B3 and B4 during the observation period. Also, no safety concerns were observed up to the highest dose cohort. We believe NXT007 has the potential for best-in-disease efficacy for hemophilia A patients to achieve 0 treated bleeds as well as normalized hemostasis. Additional Phase II data will be shared at an upcoming medical conference in the second half. And as mentioned in Q1, we are moving NXT007 into 3 Phase III trials next year, including head-to-head against Hemlibra.

And as always, this is the best kind of bar, because this is the bar we’re raising on ourselves. So now let’s look at our neurology franchise. Our neurology franchise achieved CHF 4.9 billion in sales with a strong growth of 10% at half year. Ocrevus continues to have good momentum, delivering 8% growth globally, and we are also encouraged by the ongoing launch of Zunovo, our subcutaneous formulation in the U.S. As a reminder, the permanent J-code was granted April 1, as Thomas mentioned, and as expected, we do see acceleration of Zunovo uptake following the availability of the J-code. In the U.S., 50% of Zunovo patients are naive to Ocrevus, and that same is true for some of our other early launch countries like Germany, for instance. Overall, we now have nearly 7,000 patients on Ocrevus Zunovo globally.

For 2025, we continue to expect high single-digit global sales growth for Ocrevus. Let me quickly jump to fenebrutinib to finish all of the Q2 news flow on our MS franchise at this time. So fenebrutinib in RMS, we presented positive 96-week data from the Phase II FENopta study at CMS. The data showed that patients on fenebrutinib had low relapse rates and no active brain lesions or disability progression after nearly 2 years of treatment. Having seen these best-in-class Phase II data, we are, of course, now even more excited for the Phase III studies, which we’ll be reading out soon. Moving on to Evrysdi. Following the U.S. approval last quarter, in Q2, we received the EU approval for the tablet formulation. The tablet formulation offers patients simplified storage, eliminates the need for cold chain and eases administration, great convenience and offers a really great convenience for patients.

Now moving on to Elevidys in DMD. As you know, in June, we made the decision to stop dosing in non-ambulatory patients following 2 cases of acute liver failure. Earlier this week, we put in place a voluntary and temporary pause of new orders for the treatment of ambulatory patients to countries that reference the FDA approval. Today, Chugai announced that in consultation with the Japanese Ministry of Health, Chugai has decided that they will also not ship Elevidys until the Ministry of Health has completed further safety evaluation. And we are currently in conversation with other global regulators across our territories to determine immediate next steps. As Thomas mentioned, I just want to be clear that we do still believe in the risk-benefit for Elevidys in the ambulatory DMD population.

We have treated 760 ambulatory patients to date. And we look forward to discussions with regulators and other stakeholders to find a path forward for the treatment of ambulatory patients who have no other therapies available to them and who are suffering from this devastating disease. Moving on to prasi in PD. You’ve seen our decision to move into Phase III trials in Parkinson’s. More on this on the next few slides. And finally, on the outlook, for tronti in AD, we’ll see the final Phase I/II data from the 1.8 milligram and 3.6 milligram dosing cohorts at AAIC, which starts just 3 days from now. And additionally, we will share the Phase III trial designs for mild-to-moderate AD with you at that conference. And for fenebrutinib in MS, we expect the Phase III FENtrepid results in PPMS at the very end of the year.

However, the Phase III FENhance readout for RMS has just slipped into 2026. Now let’s take a closer look at prasi. As just mentioned, we are moving prasi into Phase III studies for PD. And on this slide and the next, I want to share with you some data and some of the considerations that led to this decision. You see here the results from our Phase IIb PADOVA trial. And for the first time, we are also sharing insights from the open-label extension portion of the study. This is the L-DOPA population. So it’s approximately 75% of the overall trial population. And you can see that there is a visible positive trend towards reduced motor progression, and this trend is sustained at 2.5 years, which includes the 6-month open-label extension data. And of course, all caveats around open-label data apply.

We are also encouraged by the fact that we see very high retention and rollover of patients into the open-label phase, and we saw this not only with PADOVA, but we saw it in PASADENA as well. Roughly 750 patients from both our Phase II studies are now in the open-label extension. It was based on this data that we decided to move into Phase III trials, but let’s take a look at the considerations that led to that decision. So as you know, the bar is our way of determining whether or not a medicine has transformative potential, and we apply it across the portfolio to each asset entering or progressing. This is true across all stages of R&D, and we apply it also to molecules that we are seeking to acquire through partnering or M&A activities. But the bar, however, does not imply that all studies have to have a 90% success rate.

We have to make room for taking smart risks on individual programs. Otherwise, we would not be able to fulfill our mission. Overall risk is managed at the portfolio level. So let’s talk a little bit about the prasi decision specifically. I’m sure that we can all agree that there is significant unmet medical need in Parkinson’s disease. This is a large and growing patient population that has not seen major innovation in 50 years. It is also one of the few white spots in pharma, where there is very limited competition and where we have the opportunity to be many years ahead. One of the most important criteria in the bar assessment is that the programs are either first-in-class or best-in-class. Prasi has the chance to be both. It is years ahead of any competition and significant IP remains.

We also have a growing body of evidence, including in the clinical setting, that hitting alpha-synuclein makes a difference to patients. And in PADOVA, prasi was well tolerated and no new safety signals were observed. This is also reflected in our OLEs, where I mentioned on the previous slide, we have unusually high retention rates. And finally, prasi is not our only shot on goal in PD. We have several early-stage pipeline programs, including the Brainshuttle, NLRP3 programs. For all of these reasons, we made the decision to take prasi forward into Phase III. And while we acknowledge that this remains a high- risk, high-reward program, I do firmly believe that these are the kind of risks that patients actually need us to be taking. As Thomas and Levi have both mentioned many times, we take the application of the bar very seriously, and we believe that its rigorous use across our portfolio will ultimately lead to better trial outcomes and importantly, more transformative medicines for patients.

So now let’s move on to our immunology franchise. Our immunology franchise grew 14% at constant exchange rates and reached CHF 3.3 billion in sales. Growth was primarily driven by Xolair and its very strong trajectory in food allergy. The food allergy launch keeps on delivering impressive results with 34% growth at half year. Based on this strong performance, we have also updated the full year outlook for Xolair, and we now expect growth around 20%, up from the mid-teens estimate that we shared in Q1. Let me also add here that we expect the first biosimilar launch for Xolair at the end of 2026. Actemra sales grew 4% due to slower-than- expected biosimilar penetration. U.S. biosimilar launch continues to be slower than expected, while EU biosimilar usage is increasing as anticipated.

We expect that the overall biosimilar impact will accelerate into the second half of 2025. Turning to astegolimab in COPD. We are, of course, disappointed about the mixed results we shared earlier this week. The pivotal Phase IIb ALIENTO study met the primary endpoint of a statistically significant reduction in annualized exacerbation rate at 52 weeks when astegolimab was given every 2 weeks. However, the Phase III ARNASA study did not. The safety profile of aste was consistent with previously reported data and no new safety signals were identified. Analysis of the ALIENTO and ARNASA data sets will be ongoing, will be discussed with regulatory authorities and results shared in an upcoming medical meeting. Two more news flow items for this quarter.

We moved our anti-p40/TL1A bispecific into Phase II for IBD, and we took the decision to move zosurabalpin in bacterial infection into Phase III trials, which are expected to start in 2026. Considering the outlook, this is all about Gazyva. U.S. and EU approvals in lupus nephritis are expected later this year, as is the readout for the Phase III ALLEGORY study in SLE. So now let’s move on to ophthalmology. Ophthalmology grew by 17%, achieving CHF 2.1 billion in sales. Vabysmo is leading the franchise and continues to have strong growth momentum. Vabysmo achieved 18% growth at half year despite the ongoing contraction of the branded market in the U.S. Within the branded IVT market, excluding Avastin and all biosimilars, we continue to see market share expansion for Vabysmo in all indications.

Similarly, uptake in early launch countries and the ongoing global expansion are fueling overall growth. China is a really great example here, where we see very strong uptake following the NRDL listing earlier this year. Taken together, we still expect roughly 20% sales growth globally this year, but have to caveat for difficult to predict U.S. market dynamics. Some good news for Susvimo. We achieved U.S. approval in diabetic retinopathy following the DME approval in Q1. And regarding the 2025 outlook, let me highlight 2 additional items or several additional items, Phase III data for vamikibart in UME and Phase III data for satra in TED. And now on to our last TA, cardiovascular, renal and metabolism. Here, we want to introduce you to a new regular quarterly slide, which will be covering our CVRM pipeline news flow.

We want to use this to keep you abreast of the latest development updates and give you line of sight as to what’s to come. For Q2, the key highlight is certainly the Phase II start of GYMINDA. In this trial, we will investigate the combination of our anti-latent myostatin, GYM 329 with tirzepatide in obesity. Let me also update you that we have decided to discontinue CT-173, our PYY analogue, and that decision was made based on a comprehensive assessment of its developability, competitive positioning and commercial viability. For the remaining news flow in 2025, we will present Phase II KARDIA-3 data for zilebesiran in hypertension at ESC, and we expect 3 Phase III Go decisions to be taken in the second half, zilebesirann in hypertension, CT-868 in type 1 diabetes with overweight or obesity, and CT-388 in obesity.

Additionally, the first patient in is imminent for our Phase II trial of our CT-996 oral in obesity. Now let’s finish up with what you can expect through the end of the year. Here’s our key news flow with the latest updates. Most of this has already been covered on previous slides, so I won’t repeat what we’ve already discussed. But I will mention that we had a negative readout for Venclexta in first-line MDS, and we have added the 2 positive Tecentriq readouts at the bottom of the slide for IMforte and ATOMIC for completeness. And just one more slide to go before I hand over to Matt. I am very pleased to invite you to our Pharma Day on September 22. This will be a hybrid event held in London and online. We have a very exciting agenda, which will cover Pharma strategy, business topics — or business updates and an update on R&D excellence and a look at pipeline highlights across our 5 therapeutic areas.

And with that, Matt, over to you.

Matthew Sause: Thanks, Teresa, and congratulations again. So with that, it’s my pleasure to present the results for the first half of the year for the Diagnostics division. So as you heard from Alan, with sales of CHF 6.96 billion, the Diagnostics division sales were stable versus half year 2024. Now this was driven by the health care pricing reforms and volume-based procurement initiative in China. That’s the CHF 326 million at constant exchange rate. As you heard from Alan, excluding China, the growth of our business was 6 percentage points. So now let me walk you through the sales by customer area. So sales in Core Lab, our largest customer area, decreased by 2%, driven by the previously mentioned health care pricing reform and VBP in China.

Excluding China, Core Lab grew at plus 9%. Now sales in the Molecular Lab increased at plus 3%. This is due to our strong growth in our blood screening business at plus 8 percentage points. This was offset by a minus 1% decline in the infectious disease segment, driven by a decrease in our HIV business in Africa affected by the U.S.A. pause in Q1. Sales in Near Patient Care decreased by 3%. This is mainly driven by the decline of our blood glucose monitoring business by minus 4% due to the market shift to continuous glucose monitoring, and this was partially offset by 1% growth of our molecular point-of- care cobas liat business. I would note that we are confident that our CGM solution and acquisition of LumiraDx will drive growth in Near Patient Care in the future.

Sales in the Pathology Lab grew strongly by plus 12%, mainly driven by the advanced staining business growth of plus 9% and companion diagnostics growth of plus 19%. So now let’s take a look at the regional perspective for the sales performance. So we saw strong growth in North America at plus 6 percentage points. In EMEA, the volume grew at plus 5 percentage points. In LatAm, the business grew very strongly at plus 14 percentage points. Now turning to APAC. the business declined at minus 15%. As previously mentioned, the sales growth was impacted by the health care pricing reform in VBP in China. And as a result of this, China sales declined by 26%. This impact is expected to continue over the course of 2025. But because the VBP had a heavy pricing impact, there is a corresponding effect on the profit contribution, which you will see reflected on the P&L slide following this one.

I would like to call out that China is still a very important market for us, and we continue to be the market leader. Now while it’s our consistent ambition to grow our Diagnostics business in mid to high single digits, given the current headwinds in China, our 2025 ambition is to grow Diagnostics by low single digits. So now let me take you through the P&L for Diagnostics. Core operating profit on sales of CHF 6.9 billion decreased by 14% at constant exchange rates, again, due to the previously mentioned China health care pricing reform. I would note that you can see from the P&L that we have taken significant measures to manage our cost structure in light of these headwinds and stabilized our operating margin. With these measures fully in place by the end of the year, we expect our margin to be roughly at the full year 2024 level.

Now let me take you through the cost lines. Cost of sales increased at plus 8%, driven by the unfavorable impact of those same pricing reforms. R&D costs declined by minus 2% as a result of the focused cost efficiency measures I previously mentioned. I would like to point out that we are continuing to invest in key new products like LumiraDx, CGM and our AXELIOS: Roche sequencing solution, which I’ll describe on some of the following slides. SG&A was stable, again, reflecting our focused cost efficiency measures across the organization. And this resulted in a core operating profit of CHF 1.25 billion with a margin of 18% at reported currency. So now turning to some of that innovation that I mentioned earlier, and you saw as well in Thomas’ slides, I would like to talk about some of the key updates to our portfolio and research data that we’ve released, starting with our AXELIOS sequencing solution set to launch in 2026.

I would like to provide an update on some data presented at the European Society of Human Genetics, which is one of the leading international genomics conferences. At this event, we showcased our high speed and accuracy across multiple key applications for next-generation sequencing. So I would like to highlight 3 of those moving from left to right on the slide. So for those of you who remember, the human genome project took 13 years. Rapid sequencing with the SBX-Fast protocol, we were able to sequence a human genome in 4 hours and 23 minutes. And this is important, especially in applications such as the NICU, where trio testing of baby and parents is critical to rapidly identify pathogenic genomic variants. We achieved sequencing of a single genome in under 5, but all 3 genomes in approximately 7 hours.

This marks a significant improvement over the data we previously presented at AGBT and highlights the relevance of our SBX technology in clinical settings where rapid genome sequencing is key for clinical decision-making. And I would call out that no other technology is capable of this achievement. The second application is FFPE in oncology. Formalin-fixed paraffin-embedded tissue is the most common sample type used in clinical practice to preserve biological samples for oncology diagnostics. And for any NGS technology, it’s absolutely critical to be able to perform well in these sample types. What you can see on the axis on the left is the accuracy and on the bottom, the length of homopolymer, which is a sequence of basis with the same letter.

And what you’ll see there, when you compare the SBX technology to a very commonly used sequencing technology that ours performs in a superior manner, showing good confidence that we will have excellent performance in this sample type. Now moving to the far right. The third example is minimal residual disease monitoring or MRD in oncology. Minimal residual disease, especially with more cancer treatments moving into earlier disease settings is absolutely critical to understanding patients’ response to treatment, predicting disease recurrence and guiding clinical decision-making. What you can see here is we detected MRD in 15 cancer types, demonstrating high accuracy in challenging samples with tumor fractions as low as 1 x 10 to the minus 6 and starting material in the range of nanograms of cell-free DNA, again, highlighting the applicability of the SBX technology in this critical application.

Taken together, this gives us really high level of confidence in the future of this technology and our ability to both impact the market as well as clinical practice with the SBX. And we’re very much looking forward to the launch in 2026. So now I’d like to move to the theme of our expanding menu in the serum work area, specifically highlight our approval of the Elecsys PRO-C3, which received CE Mark in April of this year. So MASLD, which is caused primarily by diabetes, obesity and other cardiometabolic risk factors, affects 30% of the population and generally remains asymptomatic in most patients until advanced stages. Standard diagnostics methods such as biopsy are expensive, they are invasive and not always widely accessible. So with the launch of PRO-C3, we’ll be able to provide an accurate and noninvasive test for early detection with results in just 18 minutes.

Now what’s really important to also call out here as part of our Roche Diagnostics strategy, the combination of high medical value diagnostics along with digital tools for clinical decision-making. And this takes me to our ADAPT algorithm, which incorporates age, diabetes status, platelet count as well as PRO-C3 and is set to launch in Q4 of this year. Here, we will provide a simple fibrosis severity assessment to enable timely treatment and patient management, especially as new liver fibrosis drugs emerge. This is a key example of our Roche diagnostics strategy implemented into the market. So continuing with one of our key strategies, I’d like to talk about menu expansion again in our serum work area, specifically in China, and the approval of Pepsinogen I and II, which received regulatory approval in China in May of this year.

So gastric cancer is a major health care burden and a highly prevalent condition in China, where China accounts for 40% of new global gastric cases every year. Now atrophic gastritis is a major risk factor for gastric cancer. So timely screening and triage of high-risk patients for endoscopic follow-up is crucial. With the launch of Pepsinogen I and II, we will enable screening and triage for patients at high risk of atrophic gastritis and provide more accessible testing options for patients. And why this is important for our strategy is this demonstrates our commitment to invest in a menu of China for China assays across high-burden disease areas to ensure optimal care for Chinese patients, but also continue to create a menu of highly relevant tests that enables us to maintain our leading market position in China.

So now I’d like to move on to another example of us combining high medical value diagnostics as well as digital tools with the breakthrough device designation we received in April for our VENTANA TROP2 RxDx, the first AI-driven companion diagnostic for non-small cell lung cancer, which we developed in collaboration with AstraZeneca. Lung cancer affects 2.5 million new patients per year, 80% of which are non-small cell lung cancer. This solution will aid in identifying patients with previously treated advanced or metastatic non-squamous non-small cell lung cancer without actionable genomic alteration, but they are, if detected via this algorithm, eligible for targeted treatment with a greater level of diagnostic accuracy that could not be identified by pathologists alone.

Again, a key example of our commitment to deliver innovations that enable more precise diagnosis in oncology, and again an example of us putting together high medical value diagnostics and digital solutions to improve patient care. So with that, I would like to talk about our key launch list for 2025. We have received 4 of those by the half year, but I would also be remiss not to call out the very recent CE Mark approval of our pTau 181 blood-based rule-out test for Alzheimer’s. This is a test that is the first of its kind in that it has a 93.8% negative predictive value for amyloid pathology and was done in a real-world cohort with 22.5% of patients having detected amyloid pathology via PET scan. We’re very excited about the potential of this test to change patient care.

And with that, I hand it over to you, Bruno.

Bruno Eschli: Thanks a lot, Matt. And let me just quickly add something on the next slide, summarized here the upcoming events. Teresa already mentioned Pharma Day on the 22nd of September. And then we have one additional event scheduled, which will be an Ophthalmology Update in the second half of October. This will be linked to key data to be presented at AAO. And as you have seen on the key news flow slide, we have a couple of news flow items here coming up like vamikibart, the pivotal study in UME. We also have earlier data in DME and then still the satralizumab data in TED as well.

Bruno Eschli: And with that, I think we are done with the presentation, and let’s jump into the Q&A. The first question goes to Richard Vosser from JPMorgan.

Richard Vosser: Hopefully, you can hear me. A couple of questions, please. First question, just on Vabysmo. Could you give a little bit more color on your expectations for the second half? I think we could see increased funding at the foundations under matching program. So how are you thinking about a potential of a reacceleration of the product in the market for branded products in the second half? And then the second question, just on Columvi and trials — the first-line trials in DLBCL. Obviously, the FDA panel at the end, the FDA talked about proportion of patients in trials in the U.S. So just wondering if you could reassure us around the enrollment into the first-line trials that they have sufficient U.S. patients. Obviously, it’s against standard of care for the U.S. with Polivy in the base. So that’s not a problem, but just the U.S. proportion of patients.

Teresa A. Graham: Great. So let’s start with second half expectations. So as I mentioned, we are expecting roughly 20% growth for Vabysmo in the second half. This is, of course, subject to the caveats that the U.S. environment can be a little bit hard to predict. While we saw a 7% contraction of the overall market in ophthalmology in the U.S. in the first half. What we did see is that Vabysmo continued to grow 3% within that branded space. We are still at 60% in growing naive patients. And so the momentum for Vabysmo continues. So as new patients do come to seek treatment, I think we would continue to see Vabysmo take patient share. In terms of the number of patients for our first-line DLBCL trials. So clearly, U.S. participation in trials is a key issue that everybody is looking at.

We are as well for all of our key clinical trials. Each clinical trial that we run is run and these are large global multicenter studies, and we are working very closely with global regulators, including the FDA to ensure that we’re enrolling patient populations that are representative. And so we are very much we are very much working to make sure that our trials are — have sufficient U.S. representation and I believe that we are on a good path.

Bruno Eschli: Okay. Richard, any additional questions?

Richard Vosser: No, I’ll leave it there. Leave it to someone else.

Bruno Eschli: Then next questions go to Michael Leuchten at Jefferies.

Michael Leuchten: A question for Thomas, please and one for Teresa. Thomas, I think we’ve seen in the past that instilling financial discipline onto R&D organizations can have adverse events — sorry, adverse effects in terms of R&D productivity as well. Just wondering how you make sure that, that does not happen whilst you drive the discipline into different areas of R&D, as you outlined. And then Teresa, thank you for the outlook for the HER2 franchise. There’s one data point we’re still waiting for, which is the third arm in the DB09 trial. Can you just frame how you think about the outcome there that — and could that have an impact on how you think about the Perjeta trajectory or not?

Thomas Schinecker: Yes. Thank you very much, Michael, for the question. I’m fully convinced that we have enough money to do what we need to do in research and development. As you may remember, between 2019 and 2022, we moved quite a lot of money into research and development. And one of the things that we’ve done now over the last 2 years is really to make sure that, that money is allocated to the right locations in a very disciplined way. And I believe that there is nothing that is being cut that would impact the R&D in any negative way. In fact, just to give you one example, it’s about our collaboration or partnerships with clinical research organizations. We used to work with 12, 13 different clinical research organizations.

And what we’ve done is we’ve reduced that to a much smaller number, renegotiated that contract. And now we are working with those in the same — in Phase II and in Phase III, it reduces the white space time between cycles and it reduces the cost significantly. So it increased both the quality, speed and also the cost effectiveness of the work that we’re doing. So this is the kind of work that I think makes a lot of sense. The other things that we’ve done is, for example, use AI in different parts of the process of R&D, for example, when we put together documents, et cetera, things that used to take a couple of months to put together, we can now do it in days. So these kind of activities really cut out costs in the system and free up the resources to spend it in a more valuable way.

And that’s why we just reallocate money to things that will actually have an impact at the end for patients.

Teresa A. Graham: And DB09, I mean, certainly, it’s possible that the monotherapy arm could potentially have an impact, but we do actually believe it’s going to be manageable. The treatment paradigm in HER2-positive breast cancer is just changing, and there are a lot of moving parts. But ultimately, it’s going to come down, I think, to an induction and a maintenance phase. And I think it’s in that maintenance phase where we are incredibly well positioned. I mean when you look at DB09 so far, I mean, we’ve got 20% discontinuation of patients, 2 deaths due to pneumonitis. So I mean — and in that frontline setting, that’s very concerning to physicians. So I think ultimately, what we’re going to see is that in this first-line setting, we have an incredibly segmented treatment paradigm during — in which our portfolio will very naturally find a significant role to play.

Bruno Eschli: Michael, do you have any additional questions?

Michael Leuchten: No, that’s great.

Bruno Eschli: Okay. Then we move on. The next one in the row would be Matthew Weston from UBS.

Matthew Weston: Sorry about the short delay. Two pipeline questions for me, please. The first on fenebrutinib. I see from the slides that you’ve moved the readout in relapsing remitting MS from 2025 in the second half to ’26. Teresa, can you tell us, is there anything meaningful behind that? Or is that just normal clinical trial slippage and can we interpret that as early 2026, if it was late 2025? And then the second question, you’ve also said that you’ll start the Phase II for CT388 plus petrelintide at the beginning of 2026. Can you confirm that you’ve succeeded in the co-formulation work of those 2 molecules and that will be in a single device? Or will that be a Phase II using 2 separate injections at the beginning?

Teresa A. Graham: Great. So to answer your first question about fenebrutinib, no, there are no material changes to the trial. No changes to endpoints. It’s all very consistent. This is really just down to different recruitment speed for FEnhAncE 1 and 2, so the timing readouts have shifted slightly. We will wait for both readouts so we can communicate both together, and that’s likely to be now in early 2026, so certainly within Q1. Both petrelintide and CT-88 are currently in Phase II studies, and we will need to review the results of those 2 monotherapy studies before we can share very specific time lines and details for the Phase II combination. However, our expectation is that we will be moving into combo initiation in 2026. We also knew that petrelintide has a tolerability profile, which makes it really suited to a fixed dose combination. But that fixed dose is still in development.

Bruno Eschli: Matthew, does it answer your questions?

Matthew Weston: Yes. Just a very quick one. I totally understand waiting for the 2 FENHANCE studies. Can you confirm that Fentrepid will be — the results — headline results would be press released when we had the PPMS studies and then would have to wait subsequently for RRMS?

Teresa A. Graham: No, we will press release that when the results are in.

Bruno Eschli: Next question, go to James Quigley from Goldman Sachs.

James Patrick Quigley: Two questions for me. One on U.S. policy 1 on Hemlibra. So with U.S. policy, the administration was supposed to deliver FM prices last month, I think it was. So what are the next steps? And how does Roche respond? I mean some of you’re in the press talking about going direct to patients. So how are those discussions going? And what could that look like for Roche? And also on policy, you haven’t updated your guidance on tariffs, whereas a lot of your peers have said that at least for 2025, tariff risk is quite low. So be intrigued to hear what you say there. And for Hemlibra, there was a big beat and strong performance in the U.S. You flagged penetration in the non-inhibitor group as a percentage of driver but when I look at prescription trends and IQVIA data, that seems to suggest around 6%, 7% constant exchange rate growth versus the 21% you achieved.

So are there any other factors that support the strong Hemlibra for the performance for the quarter, particularly in the — given that you talked about fluctuation in buying patterns in the past.

Thomas Schinecker: Yes. So let me answer the first question, and let me start on the tariff question. So what we’ve also done is, obviously, move around inventories to make sure that we are protected in case tariffs will come. Also, we’ve ramped up production of all the different medicines that we already produced in the U.S. where we didn’t produce enough and we started a tech transfer of the 1 medicine that would be the most impacted. We started a tech transfer into the U.S. And hopefully, we’ll have that done in the not-too-distant future, maybe end of the year, beginning of next year. But then the question is how long does it take for the FDA to also approve the site. And I think that’s where we’re also in discussion with the U.S. government.

At the same time, and I gather that’s why you asked the question. So if we are in a pretty good situation, because we have a lot of production sites in the United States, why didn’t we not change anything with the guidance? One of the things that we’ve definitely learned these days is expect the unexpected. So you always have to be prepared. And obviously, we prepare for all kinds of scenarios. But I think it’s always good to just make sure that you’re also thinking about things outside of the usual. In terms of most favorite nation pricing. Obviously, us and other companies have had interactions with the government on that and HHS and 1 of the things we definitely discussed is this direct-to-patient model as 1 of the models because we know that PBMs in the United States take more than 50% of the profitability.

And that would be 1 of the easiest ways to impact pricing for the patient without destroying innovation. I mean at the end of the day, Pharmaceuticals is very important for United States also in terms of national security. And if they want to compete with other countries around the world, like China, I think it will be very important that the U.S. continues to invest. So there are models that could work. And it’s clear that kind of demonstration projects are the things that the U.S. government is looking at. And so these are the kind of discussions that we have. But clearly, for a bigger change, it would have to go beyond the project and would have to go through legislative procedures to get to that point. So yes, no update yet on that point, but I think we are in good discussions here.

Teresa A. Graham: And in terms of Hemlibra, so obviously, we saw a very significant growth for Hemlibra in the first half. As I mentioned in my presentation, we do expect that to normalize to mid-single-digit growth throughout the full year, the strong half year was certainly influenced by buying pattern, both in the U.S. and international. It was no 1 thing. It was sort of a series of things across different geographies, but we still continue to expect Hemlibra to be growing and to be growing quite strongly globally in 2025.

Bruno Eschli: James, did this answer your questions?

James Patrick Quigley: Does indeed.

Bruno Eschli: And the next 1 would be Peter Verdult from BNP Paribas.

Peter Verdult: Peter Verdult, BNP Paribas. Just 2 one. Teresa, on durdestrian, KOLs we’ve spoken to have set the bar to — sir in first-line metastatic at 6 months PFS as standard of care. Is that consistent with Rockview? And can I gauge your current level of confidence on the chances of showing such a benefit in the wild-type population? And then Thomas, this is a bit of a long shot, but have you had or got any insights on the proposed Europe or Swiss tariff deal with the U.S., where the Pharma will remain exempt or at least the risk of 200% tariffs or exorbitant being off the table?

Teresa A. Graham: So in terms of giredestrant, I mean, I think depending who you talk to, you hear a lot of things, but that’s sort of roughly in the ballpark of what we would expect or what we’ve heard. And in terms of confidence, I think we’ve always said that we believe that giradestrant is an active potent selective SERD, and we’re very close to having the answer. So fingers crossed.

Thomas Schinecker: Yes. So with regards to the trade negotiations between Switzerland and the U.S., I can say that we are in very close contact with the Swiss government, some or at least 1/3 of the pledge that Switzerland has done to the United States actually is from Roche. So the CHF 50 billion out of the CHF 150 billion. And I guess it’s just a question of days, if not ours before there will be some agreements, so I think it’s just a question of time. It’s been on the table, I guess, and so there should be an answer quite soon to that. Now with regards to Switzerland, I think 1 of the topics that will most likely be in such an agreement is that Switzerland when it comes to pharma, will not be — will be in — not being in the worst position than any other country in the world.

So for sure, the kind of best possible outcome. And then, of course, there will be the 232 investigation. And here, we’ve had a number of discussions with the U.S. government and there is clearly this idea that was mentioned before that there is a transition time for pharma companies to bring molecules into the United States. Again, we are in a very good position because we already have a lot of manufacturing sites, and we have the capacity, about 50% free capacity because of our cell line efficiencies. And so the 1 which would be the biggest impact we have processed that movement. Now if it’s — to your time frame, that was initially discussed, I think for us, that would be fine. But clearly, for companies that would have to start building an on-site manufacturing side, that would be difficult, right?

But I think as long as it goes into that direction, and we have not heard anything different we should be fine. But that’s why I always say expect the unexpected, right? That’s why we also haven’t touched the guidance so far, because if we have learned anything in the last 5 years is that you always need to be prepared for anything that could happen.

Bruno Eschli: Next 1 on the road would be then Shelley Chen from Barclays. Let’s maybe quickly first move on then to Emmanuel Papadakis from Deutsche Bank.

Emmanuel Douglas Papadakis: Yes, I’ll take a couple, please. Maybe question on NXT or the decision to progress to Phase III and the data you presented at ISTH. I guess the Hemlibra will give us a clear answers along with the rest of the Phase III studies, but I’d be interested to hear your perspective on the antidrug antibodies issue we saw in that data set and how that might need to be monitored in clinical practice to manage bleed risk? And then maybe a broader financial outlook question in terms of margins. You just achieved double-digit Pharma revenue growth in H1. You’ve then your confidence in revenue growth over the coming years. You talked about keeping R&D flattish. So can you talk a little bit about the margin outlook for the group over the next few years? Is it feasible for us to think about Roche reaching a 40% margin, for example, by the end of the decade? Talk to us about the direction of travel?

Thomas Schinecker: Yes, I can take the first question. And as you’ve seen this year, we’ve committed to grow our margins and grow profit faster than sales. The commitment that you have from my side is that we will at least keep margins stable for the next years. And of course, we will always try to do better at the end of the day. But the commitment that I can give now in the long term is to keep margins at least stable. And we will update every year, of course, the guidance in terms of the following year. But I think this is the long-term guidance that I can give.

Teresa A. Graham: So I’m sure you’re familiar with the specific data of the ADS. Yes, we did see ADAs in this population. But it’s far too soon to know what the actual impact of those are. I think it is something that we’ll be watching in the bigger trials. But for now, it’s not something that we believe necessarily gives us pause. I don’t think we would expect monitoring in the real-world setting, but again, it’s — we will need to run the trials to see.

Thomas Schinecker: Yes. In general, I think ADA are not uncommon, yes. We have to get more data to really understand the impact so far, there’s no evidence that this is clinically meaningful or has an impact on the efficacy of the market.

Bruno Eschli: Then let’s try again. We’ll hand over to Shirley Chen from Barclays.

Unidentified Analyst: Okay. Just a very quick 1 on Hemlibra. So grow double digit in the U.S. versus declining high single digit in Europe. So do you have any insights on why biosimilar erosion in the U.S. has been so slow? And do you have any estimation of when this could accelerate? So was camera of the lowering of the LOE impact from CHF 2.2 billion to CHF 1 billion? And then just a very quick follow-up on the DTC efforts in the U.S. market. So last week, I think we saw BMS and Pfizer announced decency program for and costs, could you please provide more color on what type of products from Roche could be appropriate for this kind of program?

Teresa A. Graham: Sure. Absolutely. So I think as I mentioned, we are seeing sort of as we would expect, biosimilar erosion for ACTEMRA in Europe, but it has definitely been slower in the U.S. This is largely due to supply challenges, we believe. And just quite frankly, we see Actemra being a little stickier. In the U.S. than we might have anticipated. But we would expect that, that biosimilar erosion will start to accelerate in the second half of the year. In terms of the BMS, Pfizer type direct to patient. And I think this is absolutely something that we would consider for the right product in our portfolio. And 1 might imagine that this could be a really good type of program that you would use with your obesity assets.

Thomas Schinecker: But not only — I mean, there are other areas as well where we can do that, but these are discussions that we are having with the U.S. government. So I hope it’s okay that we don’t go into those details right here.

Bruno Eschli: Then next questions come from Sachin Jain from Bank of America.

Sachin Jain: Just a few. Maybe I can go back on policy, Thomas. You mentioned demonstration projects and answered to a prior question. So how do you frame the possibility of MFN demo in Part B being announced anytime soon? And given your large Part D exposure, is that something you see as a potential risk for ’25 within your broad genetics comment? Secondly, just a follow-up on SERD, potentially Teresa. I’m going to try as Astra’s potentially being perceived as being more bullish too versus your sort of more balanced comments on persevERA. Some investors have interpreted that as molecule different commentary. So I wonder if you could just reappraise us sort of your views of CAM versus your damn molecule differences and if that drives a different commentary? And then finally, just a clarification on your HER2. You’ve pointed to CHF 4 billion peak. And I think your commentary was majority of and Kadcyla. Just wanted to check what your LOE assumption is within that ?

Thomas Schinecker: Yes, let me answer the first question on the policy side. I mean, yes, what I can say is that in the first discussions we’ve had with HHS, I think we had good discussions. There is — yes, I guess, currently with all the geopolitical uncertainties that we have, it’s very hard to exactly say what’s going to happen, but there is no indication that we have that there would be something substantial that would impact this year for us. And yes, it doesn’t seem like there is something going to be immediate. However, again, and that’s why, I guess, we are always on the cautionary side, we just have to also be ready to discuss everything with the government. Maybe anything you want to add something to that?

Teresa A. Graham: No. I mean, I think as you pointed out, Thomas anything is possible. But I think demonstration projects, we would most likely focus on Part D, though it is entirely possible you could see some Part B proposals possible.

Thomas Schinecker: Yes. But I think right now, what they’re looking for is companies to bring proposals and there is nothing coming directly top down, I would say, from the government, so these are discussions that we’re having. But again, yes, we’ll have to see. But we do believe if something major would come, it will have to go through legislative.

Teresa A. Graham: Yes, agreed. Great. So talking about giredestrant differentiation, I mean, I think we’ve been pretty clear and consistent on this for a number of years. So we believe that giredestrant has the highest preclinical potency versus the other oral SERDs that are out there. It’s well tolerated at all doses with no dose limitations in terms of adverse events. It’s got broad development program with head-to-head trials versus standard of care. It seems very combinable with all the CDK. It’s shown robust data in sort of early studies and metastatic studies with the breast cancer and in breast cancer as monotherapy and in combination with palbo. So I think we are — it seems to be an active molecule and seems to be 1 that is combinable.

And at this juncture, we are at a place where now we are just waiting to see how the data read out. In terms of Kadcyla, we actually we don’t see any biosimilars in the works for Kadcyla right now. So, so far, there’s been no evidence that someone has a Kadcyla biosimilar in development.

Bruno Eschli: Next 1 in a row is then Justin Smith from Bernstein.

Justin Steven Barrie Smith: Can I just ask 1 on TL1A, please? Could you just talk about the lessons learned from and then also how confident the company is that it can recruit enough patients from the U.S. for the Phase III to satisfy FDA?

Teresa A. Graham: Yes. So I think we have definitely taken a hard look at the eculizumab lessons learned and have applied all of that learning into the TLs or into our TLNA program. It is just fundamentally a different molecule. It’s a different pathway. I think we’re really enthusiastic about this. It’s a very well-defined biological rationale in IBD. And so I think it is a little bit of a different bet than ETRA was. And in terms of U.S. population, yes, U.S. patients, yes. Enrollment in this trial has actually happened at quite a good clip. And we’re seeing good interest and pickup from the U.S. patients. Recruitment is going very, very well.

Thomas Schinecker: It’s maybe also important I think to add that our low U.S. recruitment was also impacted significantly by the COVID pandemic. So I think this was — the spinal situation, I think, which is no longer present.

Bruno Eschli: Then next 1 is Simon Baker from Redlands.

Simon P. Baker: Two quick ones, if I may. Firstly, going back to Ocrevus and SUNMO, Teresa, you said 50% of U.S. patients on are Ocrevus naive. Could you give us a little more color on where they’re coming from? Are these patients from existing sites that were using IV or is this opening up territory that wasn’t previously being addressed by Ocrevus? And then a second question for Alan on the participation certificate announcement. In doing that, that will bring you in line with other Swiss companies which have a participation dual structure, and they are doing buybacks. So is that the right way to read it that a buyback is now theoretically possible. And if it is, are you able to seek permission to repurchase shares at the 2026 AGM at the same time that you’re seeking permission to change the share class?

Teresa A. Graham: So happily, with regards to your Ocrevus question, the answer is yes and yes. So we are definitely seeing our existing large academic centers adopt Zunovo as a more convenient option for their patients. But we are also seeing it open up patient population or patient access in more — in community neurologists who have more limited IV capacity. So we’re seeing pickup in both places and adoption in both places, and there are just some really neat stories out there. If you’ve ever been to an infusion room, patients talk. And so you’ll see a patient come in to get their Zunovo shot and you’ll see another patient turn around and say, “Hey, what are they getting? Why did they get to get out in 10 minutes?” And so as you start to see it really pick up in these centers, I think we would expect to see an acceleration of both switches and new patients coming on.

Thomas Schinecker: Yes, share buybacks, good question. I think share buybacks were possible in the past. I think we know that. I think on the one hand, we did the big transaction with Novartis, as you know. I think that was one move, which proves that. And the other move is that we fuel our equity compensation programs by buying back in China in the market. So I think basically, that has been possible. That’s not changing with the participation certification, but that’s not the way to go because we love the dividends. We pay EUR 8 billion in dividends every year, which is quite significant, even a significant impact on our cash side. So I don’t expect for the time being, no change to that policy.

Bruno Eschli: Steve Scala from Cowen.

Stephen Michael Scala: Two questions. First on Elevidys. Has Roche’s safety experience in ENVISION and ENVOL trials mirrored what has been seen in the U.S. trials? And are any safety events not being disclosed? So that’s the first question. Second question is on trontinemab. What are Roche’s plans for a prevention trial? Lilly seems quite encouraged by the opportunity. And if they are successful, Roche would seem to be at a competitive disadvantage? Or do you not believe that prevention holds promise?

Teresa A. Graham: So I would say in terms of prevention, stay tuned. More to come on that at a later date. And in terms of Elevidys, patient safety is the #1 most important thing to us as a pharmaceutical company. And whenever we have relevant safety information. We are the first to report it. So I would say we don’t know anything different from what is available in the public domain today.

Bruno Eschli: Then we hand over to Luisa Hector, Bernberg.

Luisa Caroline Hector: Just a couple of questions left. So could you please comment on the situation with IRA and how subcutaneous formulations may be treated some discussion about them not being considered unique, which obviously has a read into a number of products for you? And then on astegolimab in COPD, were you surprised at the mixed success of the 2 trials? And do you think you have an understanding of the reason for the mixed results?

Teresa A. Graham: Sure. So I’ll start with aste. So I mean, obviously, it’s always disappointing when you have a trial that sort of doesn’t — that isn’t positive. I mean, obviously, we would have needed both of these trials to be positive in order to have — in order to have a path forward. Was I surprised? i mean I would say that COPD is a notoriously difficult disease. And we chose to do an all-comers trial. We looked at all eosinophilic blood status. We looked at smokers, non-smokers, because that, frankly, is the unmet need in the world. These are the patients that walk through the doors of physicians who need an option and don’t have one. So we always knew that this was a big swing, particularly given that we had only limited Phase II data to move forward on.

So this was a pre bar trial. It was something that certainly was a reasonable bet to make, given kind of what we knew about the mechanism of action of astegolimab, the unmet need in the market and the competitive need to move very quickly. But I think we’ve always communicated that this was a high-risk, high-reward trial. And I think, unfortunately, it kind of read out on the — read out on the negative side. In terms of IRA yes — and Sanofi had a similar surprise. In terms of Iran subcutaneous formulation, this is actually an open question. And so we keep monitoring. And so far, we believe that subcu is it going to be impacted, that could honestly change. I think this is an evolving situation.

Bruno Eschli: Then the next questions come from Sarita Kapila from Morgan Stanley.

Sarita Kapila: Hello, sorry. Can you hear me?

Bruno Eschli: Yes, we can.

Sarita Kapila: Perfect. Just a quick 1 on. Please, could you help frame the competitive profile of petrolintide given the positive developments we saw from Lilly is Amalan at AGA, so the 11% weight loss at week 12. Do you still believe that the a meaningful differentiator? And then it looks as though GLP-1 pricing may be coming down more sharply quickly than previously anticipated. So are you confident that you have the manufacturing scale, the remit wall expertise to compete versus Lilly Novo? And then very quickly, we’ve seen a lot of encouraging data for PD-L1 VEGFs in lung cancer and a flurry of acquisitions in the space. Given your kind of leadership in bispecifics, is this a mechanism that Roche could potentially pursue?

Teresa A. Graham: And I’m sorry, I missed the first part of your last question.

Sarita Kapila: It was about PD-L1 VEGFs in lung cancer and the acquisitions we’ve seen in the space and where the Roche would be interested.

Teresa A. Graham: Yes, sure. So as Thomas often says, we look at thousands and thousands of deals a year. And certainly, oncology is a focus area, but we look at many different oncology mechanisms and mechanisms and other diseases. So I won’t comment on any specific 1 at this juncture. In terms of scale to compete in obesity, absolutely. In fact, we intend to break ground at the end of August on our manufacturing site in Holly Springs, which is a high-volume, high throughput which is very specifically designed to support our obesity portfolio. We were very aware of the likely pricing dynamics in the space and our sort of — our plans are fully geared in order to compete in that arena. In terms of petrolentide, we absolutely believe it remains highly competitive and has the potential for differentiation on tolerability, quality of weight loss or as a second line option for patients who have discontinued or can’t tolerate incretin therapy.

I think we believe that there is potentially a real opportunity for petrolentide to be a best-in-class asset, and that’s why we move forward with it.

Bruno Eschli: Then next 1 will be Rajesh Kumar from HSBC.

Rajesh Kumar: So very helpful run-through of how you applied your go and no-go framework to prasi, Help us understand how you’re prioritizing high-risk assets in the context of your portfolio. I can see that being applying — applied to NXT007, potentially lower risk than prasi. Can you just in a similar way and explain how you applied that framework to another higher-risk asset Trontinemab?

Teresa A. Graham: Sure. So I mean I think if you look at the qualifications, I mean, there’s clearly a high level of unmet need with Alzheimer’s disease. There’s clearly the opportunity for best in disease performance based on what we’ve seen with our Phase II data in terms of the ability to drop plaque and to do it very quickly and very safely. We’ve seen in our Phase II that it is a highly developable molecule with a very acceptable safety profile. And there’s certainly a very large patient population, and so therefore, a very large commercial opportunity. So I think when you look at trontinemab, we didn’t — while Alzheimer’s is a very, very difficult disease, there seems to be a very clear rationale mechanistically. We see a highly developable molecule. We see an area with significant unmet need. We see potential for best in disease. And we see a large market opportunity. So this 1 gets green checks across the board.

Thomas Schinecker: And it’s prudent foundational targets.

Rajesh Kumar: Okay. That’s very helpful. Just in terms of the risk profile, just the therapy area generally has a higher level of risk. And then you said that the risk was better managed at a portfolio level. So if I look at the next-generation portfolio, GotroNTi-PRASI, NXT007, the on low risk and then you got too high risk. So what are the other lower risk, which makes the portfolio level risk a lot more manageable?

Teresa A. Graham: Sure. Well, I think when you look at our obesity assets, those are — again, those are very proven, as Thomas mentioned, those are very proven foundational targets. We think we have a lot of external data that would suggest that these drugs are going to work, and we have our own internal data that suggests they’re going to work to potentially be best in disease. Again, very large potential markets. So those are certainly we would consider relatively more derisked assets. TL1A, very, very well-understood foundational target in multiple immunological diseases. Again, diseases with significant high unmet need, large patient populations, it’s a very well- characterized molecule coming out of Phase II study, so it’s developability characteristics are very well understood. So again, I think we think of that as being a lower risk molecule NXT007…

Thomas Schinecker: And a significant market opportunity.

Teresa A. Graham: And a significant market opportunity as well. So I mean, I think there are a number of things in the portfolio that very clearly balance out the bigger swing on something like a prasinezumab.

Thomas Schinecker: Yes. And I would add. I think that’s also quite derisked foundational target now based on all the totality of the data, including the data from Zealand. Again, if you look at Alzheimer’s, I think and you look at the data, the incredible plug removal that you see with trontinemab and the very low rate. I mean this can be really transformational. One of the reasons why you don’t see this pickup of the current Alzheimer medicines is because of the high level of side effects.

Rajesh Kumar: Very clear. And any synergies between the Alzheimer’s strategy and the obesity strategy, especially given Novo is already running an Alzheimer’s trial? Any thoughts there?

Thomas Schinecker: Yes. Maybe I can add to that. I mean, that was exactly the strategic rationale when we said we are going to acquire the common assets and why we’re going to — into this area as well. On the 1 hand, we do believe that the common assets are differentiated because of the way they bind to the receptor and there is no receptor internalization, so you have a longer durability. So there is an opportunity to differentiate here. Then there is the opportunity to differentiate with Amlin. But we also know that there are about 200 comorbidities. And if you look at areas like Alzheimer’s or Parkinson’s, there is potentially an opportunity for combining some of the assets. And here, again, we can differentiate versus some of the other players because we just have more assets in our portfolio.

So we do believe that as we segment the market in the future, there will be segments like that, that we can also go after. And if we didn’t have these in our portfolio, that will be more difficult.

Bruno Eschli: I think with that, we move on to our final participant here in the queue, which is William Wood from Riley Securities.

William McKinnie Wood: Two from us on trontinemab. I was hoping you could actually just set our expectations for the Trontinemab updates coming at AIC and how that may have informed your team to go straight to Phase III? Any color you can provide on your Phase III Trontinemab Tier 1 and 2 design duration and/or dose levels and how you think about induction versus maintenance would also be greatly appreciated?

Teresa A. Graham: So all of our details will be shared on July 27. So either buy a ticket to AAIC or make sure you show up at Pharma Day, and we’ll give you all the details.

Thomas Schinecker: Yes. Unfortunately, you have to wait a bit longer.

Bruno Eschli: Okay. Very good. I think with that, we are through all the questions. And I would like to hand back to Thomas for closing remarks. Thomas, please?

Thomas Schinecker: Yes. Thank you very much to the team for the excellent work this year, and thanks to all of you for attending today’s meeting. Again, I think we’re making a lot of progress when it comes to our pipeline. On the 1 hand, by moving a number of molecules from Phase I to Phase II but also by filling up our pipeline with more derisked assets and also higher value assets. And you can see that also when I showed the numbers on the value of our pipeline, which has clearly increased. And also when we look at our internal PTS calculations, we already see that kind of trend as we go into the next years of readout. You’ve seen in Diagnostics, we have had amazing launches last year, but keep watching out on the sequence that we’re going to launch next year, it’s going to be great.

Lastly, I want to say we are delivering on sales and profits as we promised. And I would say even we’re overdelivering. And you can be sure that we will continue to deliver. We’ll stay disciplined. We’ll stay focused and will stay fast so that we continue to deliver what we say we’re going to do. Thank you very much.