Roche Holding AG (ROG) Earnings Call Transcript

Ladies and gentlemen, welcome to Roche Half Year Results Webinar 2023. My name is Henrik, and I'm the technical operator for today's call. Kindly note that the webinar is being recorded. [Operator Instructions] One last remark. If you would like to follow the presented slides on your end as well, please feel free to go to roche.com/investors to download the presentation. At this time, it's my pleasure to introduce you to Thomas Schinecker, CEO, Roche Group. Mr. Schinecker, the stage is yours.

Thank you very much, and hello, and welcome, everyone, to today's call. I'm looking forward to sharing our half year 2023 results with you. For the first half year of 2023, we saw the base business of both Pharma and Diagnostics divisions grew very strongly with a total of 8%. Group sales declined 2% at constant exchange rate, and this was due to the expected decline of sales from COVID-19 products. And this was in line with the guidance that we gave out in the beginning of the year of roughly CHF 5 billion for the year. Pharma grew very strongly at 8%, and this was driven by key products and new launches such as Vabysmo, Ocrevus, Hemlibra, Evrysdi, Phesgo, Tecentriq and Polivy. For the first half year of 2023, we really saw an outstanding performance of Vabysmo, which reached sales of roughly CHF 1 billion and is on track to achieve more than CHF 2 billion for the year. The Diagnostics base business grew very strongly with 6%. However, overall sales were impacted by the expected decline of COVID-19 sales. For the half year profitability, we had obviously the COVID-19 sales decline and also a base effect from an Ultomiris patent settlement that happened in the first half of the year. Now coming to the news flow. We've achieved in Q2 numerous very important milestones. Glofitamab or Columvi was approved in third line diffuse large B-cell lymphoma in both the U.S. and in Europe. This is the second CD3/CD25 specific antibody that entered the market after we launched Lunsumio at the -- last year. In June, the FDA also granted accelerated approval for Elevidys, the first gene therapy for the Duchenne muscular dystrophy. Together with Sarepta, we're excited to bring this medicine to patients who are young boys who have today no treatment options. And we are looking forward to the additional readout of Elevidys later in the year, and we can now bring it to markets that accept FDA approval. We had several important data read outs also in this quarter. Let me highlight OCARINA II, which was the study for 6 months subcutaneous Ocrevus that showed positive data. And this will be presented at the next medical conference, and we also will submit to regulatory authorities towards the end of the year -- or we will expect actually approval at the end of the year. We also had a very strong readout for fenebrutinib, our BTK inhibitor, the only reversible BTK inhibitor in development in multiple sclerosis. And this again showed extremely strong efficacy data in reducing brain lesions in patients with relapsing forms of this disease. Another readout, which I think is worth highlighting is MORPHEUS, which demonstrated outstanding efficacy of tiragolumab, Tecentriq and Avastin in first-line liver cancer. Based on this data, we decided to initiate a Phase III study. I'm also excited to share that we've entered 2 new partnerships. In our most recent deal, we brought zilebesiran, an angiotensinogen RNAi inhibitor for hypertension which is in-license from Alnylam. This medicine has best-in-disease potential. We also added KSQ-4279, which is a potential first-in-class USP1 inhibitor for solid tumors. This protein is involved in DNA damage repair. There is a number of upcoming news flow in the second half of the year. The Phase III EMBARK data for Elevidys in Duchenne muscular dystrophy and a number of other late-stage readouts. For Diagnostics, we also expect a number of updates towards the end of the year. On this slide, you can see that at half year, our sales reached close to CHF 30 billion, minus 2% at constant exchange rate. But if you exclude the impact from COVID-19, you see a very strong growth of 8%. Pharma grew 8%. At this stage, Pharma has no impact from COVID-19. The entire impact at the moment is within the Diagnostics division, which had an impact of CHF 2.7 billion on COVID testing sales in the first half of the year. Without this effect, the base business is growing strongly at 6%. The quarterly growth rates are impacted by COVID-19 and AHR erosion, but both impacts are in line with our expectations and the guidance that we provided at the beginning of the year. I would like to mention that there is one impact in Q4 of about CHF 1.1 billion in the business of Pharma. This was the Ronapreve order in Japan last year in Q4. Now this slide is another opportunity for us to really dive more deeply into the sales movements. As you can see, both Pharma and Diagnostics are growing well. Diagnostics base business is growing with CHF 421 million. This is a 6% base business growth. You can see the loss in diagnostic testing sales for COVID-19 at CHF 2.7 billion and the AHR erosion of CHF 635 million. Again, both factors are completely in line with our expectations and our guidance for the year. You'll also see the impact of the foreign exchange rate, which was close to CHF 2 billion. Our portfolio rejuvenation is progressing very nicely with ophthalmology, neuroscience, hemophilia gaining momentum. And again, wanting to highlight Vabysmo, which is really taking bigger, bigger share, and we expect more than CHF 2 billion of sales for Vabysmo this year. This slide we've been showing throughout the pandemic, and it really shows the performance of the underlying base business. And we see continued strong performance of the base business in both divisions. And especially in Q2, both divisions reached high single-digit growth in the base business. In Pharma, you can see the orange and gray line being identical this year. So far, there is no impact or no net impact of COVID-19 so far, but there is an impact that we expect in Q4. In Diagnostics, we see the impact, but the impact will get smaller and smaller throughout the remainder of the year. And overall, the impact from COVID-19 will be done for both divisions by end of Q1 2024, with the washout of COVID sales this year, we expect 80% to 90% of the sales to have washed out, and the remaining impact will be in Q1 next year, which we estimate to be roughly about CHF 1 billion. Now looking at the profitability, corporate profit declined 6%, and this was driven, on one hand, by the decline of COVID-19-related sales, but also the base effect of the Ultomiris patent settlement, which happened in the first half of last year. And you see without this base effect, actually, we had 0%. So the core operating profit was stable. Similarly, the core EPS declined here by 5%, again, driven by the same effects. Again, excluding the Ultomiris patent settlement in the first half of last year, this would have been minus 2%. Again, this is an effect that will not repeat itself in the second half of the year. So we are completely in line with what we said at the beginning of the year in terms of our guidance. On this slide, you can see the very young portfolio that we have in Pharma. We actually have one of the youngest portfolio of all the different pharma companies with 20 new medicines that we've launched since the end of 2015. And these medicines will carry us forward for the next years. I already mentioned Elevidys, which recently received accelerated approval for Duchenne muscular dystrophy from the FDA; and Columvi, which is now approved for third-line DLBCL in the U.S. and Europe, and we will take it into earlier lines. On the right-hand side, you can see that this portfolio of 20 medicines now accounts for more than 50% of the Pharma sales, which is up 9 percentage points from half year 2022. You can see the increasing contribution again of Vabysmo as well. I'm excited to share that we have signed 2 new partnerships agreements, one in late stage, one in early stage. We announced the in-licensing of zilebesiran from Alnylam Pharmaceuticals. This is an antisense -- or this is an RNAi molecule targeting angiotensinogen. And this really has potential to change the way hypertension is being treated. There are 1.2 billion people in the world that suffer from hypertension, 80% uncontrolled. So obviously, the existing medicines do not work appropriately. And the effect on patients is a reduction in life expectancy by 5 years. By targeting further upstream and by being able to only give this medicine twice a year, we believe not only will we achieve better adherence, but we will also achieve more consistent durable blood pressure control. This is already in Phase II stage of development with more data reading out in the second half of this year. This asset has the potential to be best in disease, and we are looking forward to providing more updates in the future. I've already mentioned also KSQ-4279. This is a first-in-class small molecule inhibitor. And what this molecule does -- because USP1 is actually involved in DNA repair mechanisms, what it does in combination with other medicines, it makes the tumor more susceptible to cell death by adding cancer medicines. And with that, we believe we can increase efficacy of medicines. With that, let me also take the time to invite you to our Roche Pharma Day, which is our annual event focusing on Pharma division strategy and portfolio. It will be in London, and the event will take place in person and virtually. I would like to also call out 2 other events. One is an IR event around ECTRIMS, where we are planning to share more data on the Ocrevus 6 month subcu formulation results. And also the Phase II data from fenebrutinib. Later, we'll also share at CTAD at the end of October, more data on trontinemab, our brainchild Alzheimer's medication, and we're looking forward to sharing that data with you as well. Now let me provide a quick update on the remaining news flow. We recently announced positive results for Ocrevus, as mentioned earlier. And Teresa will speak more about the benefits of this. We've had a negative result on TNKase. And in vision, we will have a number of readouts that will still happen this year. I know one is on top of mind of everyone that's SKY-01. This is an event-driven trial. Readout is expected for Q1 -- Q4 or Q1 at the end of this year or beginning of next year. With that, let me say we confirmed the guidance. We have a very strong positive sales trajectory both in the Pharma and the Diagnostics division in both the base business. And we expect roughly CHF 5 billion of COVID-19 effect, as we have mentioned at the beginning of the year. And we are also confident that our guidance in terms of AHR was correct as well. With that, again, I would like to confirm the guidance of low single-digit decline in sales, core EPS growth broadly in line with sales decline and a further increase of the dividend. With that, I hand over to Teresa.

Great. Thank you so much, Thomas. So as anticipated, it was another strong quarter for Pharma with significant momentum behind our key strategic products and some exciting advances in our pipeline. So let's get right to it. With sales of CHF 22.7 billion, we've had strong growth of 8% at constant exchange rates. We had strong performance across all regions. One thing to call out here, you see a very strong performance in Japan. This is partly attributable to about a $600 billion Ronapreve transaction, which was the last tranche of the sale that happened at the end of last year that Thomas mentioned. Without that, growth in Japan would have been 9%, largely driven by 2 launch products, Vabysmo and Polivy. Overall, Pharma volumes were up by 14%, price mix impact was a negative 6%, and we faced increasing currency headwinds of about negative 6%, which Alan will go into more detail with momentarily. Moving on to our P&L slide. Please note that this is the first time that we're using our new reporting structure to actually show the P&L. So we mentioned this last year. This is the first time you're seeing it in this new format. Core operating profit increased by 5% at constant exchange rates versus that 8% sales increase with core operating profit margin of 48.6%. Other revenue decreased by 45%, and that's primarily a result of the Ultomiris settlement, which was booked in the first half of next year -- of last year. And then other operating income, you see a significant increase here as well of 79%, and that was primarily driven by higher gains on 2 divestments, Rocephin in China and Xeloda in China and Japan. Moving on to the performance of our individual products. Again, just to comment on the graph, recall that all of these are absolute values and growth rates at constant exchange rates. You can see, just as Thomas mentioned, just incredible momentum behind our key strategic products, Vabysmo, Ocrevus, Hemlibra, Evrysdi, Phesgo, Tecentriq, Polivy, all growing extremely significantly. Combined, they added $2.6 billion of new sales, that's more than compensating for the $0.6 billion in generic erosion that we saw with Avastin, Herceptin and MabThera in the first half of this year. A couple of specific comments here. Let's start with Polivy at 114% growth. This is certainly spurred on by the FDA approval of first-line DLBCL in the U.S. But what we are seeing is everywhere where we get approval and reimbursement for Polivy, it is quickly entrenching itself as a standard of care. Some of the comments that we're hearing from our physicians are things like, it's the easy choice for a patient with first-line DLBCL because it's their best chance for cure. We're also increasingly hearing from both regulators and from clinicians that when new trials in first-line DLBCL are being initiated, there is a desire to have Polivy in the POLARIX regimen at least as an option in those trials. I think that's a really great indication that people do see this as the next standard of care. And then obviously, as Thomas mentioned, the standout on this slide just has to be Vabysmo. It is now our #1 growth driver, getting to that blockbuster status at constant exchange rates. And there's really just one word for Vabysmo, that's momentum, and we'll talk about it more a little bit later in the presentation. But let's start with oncology. Oncology sales increased year-to-date at 4%, adding $9.8 billion in revenue. Starting with the HER2 franchise, as we have been signaling, KADCYLA is essentially flat. Ex U.S. we're seeing growth, especially in China and Brazil in early breast cancer, compensating for a loss in the metastatic setting in the U.S. and in the EU. This was something that we fully expected to happen. We're seeing that dynamic play out in the market. Right now, we're at about 70% early breast cancer, 30% metastatic, and we would expect this dynamic to continue going forward and for KADCYLA sales to remain stable. Perjeta continues to grow at a healthy 9%, both in the U.S. and international. But the real standout here is Phesgo growing at 69%. We are now at 35% conversion in our early launch countries. We would expect this to grow to over 50% over time. But I think what's really most exciting about the Phesgo launch is what we're seeing is actually in places where Phesgo is gaining traction, we're seeing increased usage of Perjeta. And so combined, I think this is just a tremendous story. We added 8 new early launch countries for Phesgo since Q1, and that's sort of why you're seeing that global conversion rate remain stable despite the fact that have now had a launch -- had an increase in U.S. share. But going forward, we would expect to see continued strong growth for Phesgo and therefore for Perjeta. We'll talk about Tecentriq a little bit later. Hematology franchise. I think we've been consistently saying that hematology is a place to watch. This gives you a sense of why. Gazyva up 22%. We've talked about the incredibly strong performance of Polivy, and we'll talk more about Lunsumio and Columvi in the following slide. And then finally, last but never least, Alecensa, strong growth in the first-line ALK positive cancer setting, and we see the long-awaited ALINA adjuvant data in just a couple of months. And so very likely that we'll continue to see good strong growth in Alecensa in the adjuvant setting. Moving on to tiragolumab. We continue to have a high level of commitment to tiragolumab, and that is -- our confidence is reinforced by those positive early results we saw in first-line HCC that were just recently presented at ASCO. The first -- the Phase I/II MORPHEUS study showed a very significant PFS and overall response rate benefit for the tiragolumab plus Tecentriq plus Avastin combination with no new safety signals. This has encouraged us to start a Phase III trial, SKYSCRAPER-14 in this area. And then I think Thomas mentioned earlier the readout of SKYSCRAPER-01 in first-line non-small cell, that is an event-driven trial, and those results are now expected in Q4 or Q1. Moving on to Columvi. So Columvi is now approved in third-line DLBCL in the U.S. and the EU. It is the first and only bispecific offering a fixed-duration treatment in third-line DLBCL. Those complete response and overall response rates are very significant with a very healthy duration of response. The fact that this is an off-the-shelf treatment that provides this level of complete response in addition to this level of durability in less than 50% of the visits that we see with competition, I think makes this just an incredibly competitive molecule and definitely one to watch. You can see on the right side of this slide that we have a very robust CD20/CD3 development program for both Columvi and Lunsumio. This is really designed to ensure that we get into earlier lines of therapy as quickly as possible with both of these drugs and combinations that make sense. These both have a really important role to play in the treatment of patients. Moving on to Tecentriq. Tecentriq is the first PD-L1 with pivotal subcu trial results, which have now been filed in both the U.S. and the EU. We expect the U.S. PDUFA to be on September 15. The subcut, just to remind you, reduces administration time from -- to 7 minutes from 30 to 60 minutes for IV, which offers far more convenience to patients and HCPs as well as freeing up resources in highly constrained systems. As you recall, the Phesgo conversion in countries like Great Britain is up to 92%, which actually shows that when you actually have a dosing formulation that increases convenience and administration in this way, you could actually see very significant uptake. And we would expect to see something similar with Tecentriq. Sales growth for Tecentriq is driven primarily by first-line HCC in some European markets and the ongoing adjuvant non-small cell launches as well as global expansion. Looking forward, we are expecting to see the results in adjuvant head and neck later this year. Moving on to hemophilia A and Hemlibra. What is there to say about Hemlibra. It remains the global standard of care and frankly just keeps expanding. U.S. and EU patient share has now reached 39%. We have more than 21,000 patients on therapy. We are getting increased penetration across all approved patient segments. And I think what is actually so exciting about Hemlibra at the moment is that we're seeing in certain countries, and Great Britain is one of these, France is another, where we're just seeing the peak non-inhibitor sales surpassing 60%. And so these are already places where the inhibitor population is fully penetrated with almost every eligible patient being on Hemlibra. And we're really starting to test our own assumptions about what peak share for Hemlibra ought to be, just understanding the high level of effectiveness, high level of patient satisfaction, the fact that 2/3 of our patients are already on every other week or monthly dosing. It just starts to give you a sense of what Hemlibra has really done in terms of changing the face of the hemophilia A market. We expect to present some additional data on Hemlibra at the upcoming ISTH Conference which, again, just continues to demonstrate the high level of confidence that we have in prophylaxis and the quality of life data. I did just want to note here that the SPK-8011 pivotal Phase III gene trial -- gene therapy trial has been initiated. This trial is expected to enroll patients in both the inhibitor and non-inhibitor population. So we look forward to being able to share more data with you about that in the very near future. In terms of immunology, not too much to say here, negative 11% growth for the first half, primarily driven by generic and competition. In Esbriet, we expected that to go quickly. It did. The Actemra, it has no more COVID-related -- no more COVID-19-related sales. Thomas mentioned this a little bit earlier. But that shift from IV to subcu continues, subcu share is now at about 60%, modest growth in the space, but clearly holding its own in terms of RA share. For Xolair, we have a very respectable 4% growth, primarily driven by CSU. But interestingly, there's some exciting data coming out for Xolair later this year. The Phase III OUtMATCH study. This is Xolair in food allergy. We expect to see those results, and then we also expect to see the U.S. approval of the U.S. -- of the Xolair autoinjector in the U.S. In terms of other updates in Q2, we launched the Phase III IMAGINATION trial, which is our ASO Factor B in IgA nephropathy, has now been initiated, as has the Phase III ARNASA study, which is the second Phase III study for astegolimab in COPD. So aste is one of the newest entrants into our Phase III portfolio in development for COPD, and has the potential to become a first-in-class anti-ST2 receptor antibody. Unlike other biologics that are in development for COPD, astegolimab targets the ST2 IL-33 receptor as opposed to the ligand. So this is expressed on various immune cells, but it doesn't actually intercept the signaling protein, IL-33 itself. This gives it a very differentiated mechanism of action relative to the other things that are in the clinic right now for COPD. And what gives us confidence about astegolimab in this area? I mean I think that's largely driven by the results that we saw in the Phase II COPD ST2OP trial. And again, you can see here that you had respectable AER reductions, higher in our eosinophilic low population as well of its reduction of SGQR and increased FEV results. This trial was not powered to actually provide sort of more statistically significant results. But what it did do is directionally tell us that we really believe that there's an opportunity for astegolimab to be quite transformational in the COPD population. I think everybody knows that COPD is a very significant disease, has high mortality and morbidity. It is a very large population. And right now, there really are very few. There's no biologics approved in COPD and really very few treatments for these patients. We are enrolling a broad patient population, including former and current smokers as well as the eosinophilic low and high patients. And we really do truly believe that we might have something very special here with astegolimab in COPD, which will be the first thing that could potentially help the entire breadth of patients who suffer from this quite devastating disease. Moving forward into multiple sclerosis. On July 13, we announced positive top line results for the Phase III OCARINA study. This is our 6-month subcut study with Ocrevus. All the primary and secondary endpoints were met, and detailed data have been submitted to an upcoming conference. Results will be filed with regulators globally at the back half of this year, and we expect approval in 2022. We expect the introduction of subcut for Ocrevus to expand the usage of Ocrevus the standard of care in MS and high-efficacy therapies to clinics with limited or no IV capability, but it can also be an option for those larger clinics who currently may have IV capacity, but would actually like to be able to expand the number of patients that they treat. I think there has been some confusion about what this program actually entails. And so let me try and clarify. The OCARINA original study was Ocrevus every 6 months designed to support the potential for an HCP, a neurologist, a nurse, a pharmacist to administer either inside or outside of the clinic setting at their discretion. The initial launch will be a syringe pump and will be administered by a health care professional either at home or in the office. We are currently evaluating a self-administration option that can actually be delivered via an on batch -- on-body injector, a patch pump, and we expect this option to be available in the midterm. Details on this program will be provided a little bit later, but it is definitely something to watch. In other news, Ocrevus continues to be a market leader, 22% share globally, over 300,000 patients treated. We are the market leader in the U.S. and the EU5. Again, the data that we have in MS continues to be untouchable from a relapse and remission perspective. We have extremely high persistence and compliance and extremely high patient satisfaction. We would like to report that the Phase III high dose studies have now been fully recruited, and we would just continue to see the high efficacy market for multiple sclerosis expand in general, and for the Ocrevus share of that market to continue to be dominant. Thomas indicated that we also saw in Phase II -- I'm sorry, we also saw in Q2 positive Phase II trial results for FENopta for fenebrutinib in RMS. And so let's take a look at those. So these were recently presented at the EAN Congress, and I think there's -- they're just stunning results. As you know, fenebrutinib is a highly selective and the only reversible noncovalent BTK that is currently in development in Phase III for MS. You can see from the data that was presented from the Phase II trial that we have significantly reduced brain lesions. Patients on fenebrutinib are 4x more likely to be free from lesions at 4, 8 and 12 weeks versus placebo. These are not only comparable to anything that we've seen on the market. They are not only better than what we've seen, they're actually comparable to what we see with high efficacy treatment, including Ocrevus, which is really, really impressive, considering that this is an oral medication. The safety profile has remained consistent. As you are all aware, fenebrutinib has been trials in multiple indications over time. We have more than 2,400 patients who have now been exposed to fenebrutinib, over 1,000 MS patients, and we continue to see a very consistent safety profile. While we do see some liver elevations, they are transient and reversible and we have seen no cases of Hy's law, that we continue to very closely monitor our patients, and safety is our #1 priority. The Phase III trials, both in RMS and PPMS, are ongoing, and we are very excited to see what this could mean for MS patients around the world. Spinal muscular atrophy, Evrysdi remains on track to become the #1 treatment for children living with spinal muscular atrophy. We're now at over 8,500 patients globally. As a reminder, we were at about 7,000 patients at the end of last year. Evrysdi is well tolerated. We continue to see very high retention in the first 12 months of therapy. And excitingly, we are now starting to see that penetration into the older patient population. And that's really where the majority of SMA patients sit, patients who have never actually been on treatment for their disease. And we are starting to see penetration there, which is great. The new FIREFISH data were presented at CURE SMA, and I think just draw double underline, under the very strong efficacy and safety profile that we are seeing with SMA across all ages and across all types. Thomas mentioned Elevidys, I share his excitement for this drug. We now have the first approval in the U.S. from our gene -- for our first DMD gene therapy with our partner, Sarepta. This approval was based on a pooled analysis of a number of studies that have demonstrated functional and clinically meaningful results. The U.S. accelerated approval is in that 4- to 5-year-old ambulatory patient population. As Thomas mentioned, we do have the opportunity now. We hold the ex U.S. rights. We do have the opportunity to file in selected countries that reference U.S. approval, and those initial filings are underway. You can see on the right hand of the slide that we have a very significant development program underway for Elevidys, looking across all ages and ambulatory statuses. As we have always said, we believe that we will need the Phase III EMBARK results to file ex U.S. Those are expected in Q4 of this year. And we are really looking forward to the opportunity to bring this very promising treatment to boys and their families all over the world. And now going to Vabysmo. So again, as I mentioned earlier in the presentation, there really is no other word for Vabysmo than momentum. We have now reached U.S. market shares of 15% in AMD, 9% in DME, $1 billion sales by -- in constant exchange rates by the end of this year -- by the middle of this year, well on track to be a $2 billion brand in 2023. A couple of things that I think are particularly interesting. When we talked in Q1, we were kind of in the teens on the number of naive patients that were getting Vabysmo. We are now at about 1/3 of patients of naive in Vabysmo. You're seeing about 1/3 of patients who are naive receiving Vabysmo, and most of our switches are coming from aflibercept. Everywhere we're launching gain reimbursement, we are seeing very fast uptake. We have double-digit market shares at this point in many of our early launch countries. And really, what we just continue to hear from people is that Vabysmo is the new standard of care. They try it, they love it, their patients love it. They use more of it. It's really fantastic. In Q2, we also filed for the third potential indication for Vabysmo, RVO in the U.S., that PDUFA date is set for the 22nd of December. That EU filing is happening in the second half of this year. And starting tomorrow actually at ASRS, we do plan to present a significant new tranche of data that really looks at, and I think it gets to the heart of why we think Vabysmo is such a special medication. And I think that has to do a lot with the actual nature of the molecule, that bispecific design. I think we all know that in these diseases, neovascularization is caused by that elevated VEGF in the system. And that's why those anti-VEGF therapies, they work fairly well. But what we have in Vabysmo that is so special is we have that Ang-2 arm. We have the ability to block Ang-2, which we know leads to vascular leakage, inflammation, fibrosis, things that are anatomically very, very important to retinal specialists when they think about actually being able to control those things to preserve vision for patients. And so Vabysmo's dual pathway really does, I think, make ultimately a very big difference when we think about the benefits that we see for this drug in the drying in the duration, that dual pathway is certainly something that is really proving to make a difference. And last but not least, zilebesiran. So I am just so excited about this partnership. Thomas touched on it earlier. But this is a place of hypertension. Again, Thomas mentioned this, there's 1.2 billion people around the world who suffer from hypertension. About 80% of those people are unable to control their hypertension with the drugs that currently exist in the market today. And zilebesiran acting in the liver upstream of the traditional RAAS cascade really gives us the opportunity to have a very different level of control for these patients. The Phase I results were published in the New England Journal of Medicine about a week ago. And those Phase I results again, I think you would have to just come understanding the ability to reduce by 90% serum angiotensinogen for up to 6 months with the single dose is just really incredible in providing that consistent control both during the day and during the night. Again, I think this is a drug that, as Thomas mentioned earlier, has the potential to be absolutely transformative for a significant number of patients. As Thomas mentioned, we have 2 Phase II studies that are currently already ongoing, with zilebesiran, KARDIA-1, a monotherapy study in mild and moderate hypertension and KARDIA-2, which adds on to standard of care. We expect data from KARDIA-1 sometime in the next quarter and in early 2024 for KARDIA-2. So definitely a partnership that we're extremely excited about. We think that the partnership with Alnylam is really destined to be a really fruitful one, and we are excited for the opportunity to bring zilebesiran to patients in the future. And then finally, let me just quickly just touch on some major updates since Q2. So we talked about our regulatory approval with Columvi. We mentioned the Phase III pivotal trial readout for TIMELESS. Thomas did that right upfront. We have a couple of studies that have now shifted into 2024. SKYSCRAPER-01, the GEPARDOUZE study, which is Tecentriq in TNBC; STARGLO study; and Lunsumio and Polivy in second-line DLBCL. We have a couple of remaining readouts in H2. We talked about Tecentriq and adjuvant small cells -- sorry, in adjuvant head and neck, the ALINA trial, which is Alecensa in adjuvant ALK-positive patients, again, something that we think is going to be potentially really impactful. And then venclexta will read out 2 additional studies in multiple myeloma and MDS 2 studies that I think we've been excited and waiting for, for quite some time. And so with that, I will pass it over to Matt.

Thanks, Teresa. So it's my pleasure to present the half year 2023 Diagnostics Division sales and P&L results. With that and with sales of CHF 7.1 billion, the Diagnostics division declined by 23% or CHF 2.3 billion at constant exchange rate. And this decline is entirely driven by the decrease in COVID-19 testing sales by minus CHF 2.7 billion at constant exchange rate, and offset by good base business growth of plus 6%. So you saw this slide earlier in Thomas' presentation. And here, you see the performance of the Diagnostics business over the last 6 quarters. I'd like to start by focusing on the orange line, this represents our base business performance, and you'll see in Q2 of 2023, an 8% growth. Now in Q2 -- or excuse me, this includes a tailwind effect from the lockdowns in China in Q2 of 2022. But this was offset by the headwinds of our COVID-related business impact, such as custom biotech, where we make testing components for other companies involved in COVID-19 testing, which has declined along with COVID-19 sales. So when these 2 effects are taken together, the strong plus 8% base business growth reflects the underlying performance and growth in our base business. So now I'd like to turn your attention to the blue line. This is the total diagnostic sales, which includes COVID-19. Here, the impact of COVID-19 is less in the second quarter with total sales declining by minus 17%. And this trend confirms that the COVID-19 business is starting to washout our overall diagnostic sales. So for the second half of 2023, we're expecting mid- to high single-digit growth of our base business, while COVID-19 testing sales will continue to decline. And now I'd like to take you through the sales results by product category, really starting with our main driver, which is the core lab. Here, the business increased by plus 10% with very strong momentum, driven by immunodiagnostics and clinical chemistry. Additionally, the base sales, excluding COVID-19, such as custom biotech, increased by plus 12%. Molecular lab, as you see, had a decline of minus 40% due to lower COVID-19 PCR lab-based testing sales. As the COVID-19 pandemic has ebbed, clearly, this has had an impact on the sales in molecular. However, excluding the COVID-19 related business, our core base business growth was plus 6%. And this is due to strong growth in cervical cancer testing, plus 24%; our blood screening business, plus 13%; and our core virology-based business, which also grew at plus 5%. Next, you'll see our Diabetes Care business, which had a 5% decline. Now this decline is driven by the shift from traditional blood glucose monitoring to continuous glucose monitoring, and we expect this to continue as this market trend continues. Sales in the pathology lab grew strongly at plus 12%, and this is mainly driven by advanced staining, immunohistochemistry reagent growth and companion diagnostics. Our Point of Care business had a decline of minus 74%. And this is, again, entirely driven by lower COVID-19 rapid antigen and COVID-19 molecular point-of-care sales. Our base business grew plus 4%. And this is really driven by the Q1 sales of our point-of-care molecular lab business, which was supported by the strong respiratory season in the Northern Hemisphere in the earlier part of the year. And so with that, if we look across the different regions, what you'll see is the impact of the lower COVID-19 testing sales across every region in which we operate. But excluding this COVID-19 effect, we see really strong growth of our base business. So in North America, the divisional base business, excluding COVID-19-related business grew by plus 5%. In EMEA, the base business excluding COVID-19-related business also grew by plus 5%. In Asia Pacific, our base business grew by plus 13%, excluding COVID-19-related business. And in Latin America, sales grew by plus 20%, excluding all COVID-19-related business. So really great performance across all the regions. Now I'll walk you through the restated P&L in its new format. And what you see here is core operating profit declined by 36%. And again, this was driven by the strong decline of COVID-19 sales, but partially offset by improved margin and a decline in SG&A. Our cost of sales declined at 26% faster than sales, and this is due to lower sales of COVID-19 rapid antigen tests as well as productivity gains. R&D increased by plus 2%, and this is driven by higher investments in the area of innovative instrument developments and as well mass spec and digital solutions -- excuse me, including mass spec as well as our digital solutions. SG&A decreased by minus 2%, and this is thanks to lower distribution costs associated with rapid antigen, but also good cost discipline across all our SG&A lines. And so now I'd like to turn to the topic of some of our innovative developments, particularly instrumentation; and specifically, our new ankle mass spec instrument. So at EuroMedLab, we exhibited this highly anticipated cobas i601, the first fully automated analytical mass spec unit, which will revolutionize mass spec testing in the clinical lab. So today, mass spec is the gold standard in applications where the highest level of sensitivity and specificity is required. And until now, mass spec testing has been run in a separate area of the laboratory due to its very highly specialized manual workflow, and its current use is limited by the manual and time-consuming procedure of running a test. The i601 will be fully integrated to our existing serum area workflow, which means, it will be combined together with our Clin Chem in immunoassay, and can be put on a line containing those other systems. It will be fully automated, random access and capable of delivering up to 100 samples per hour with more than 40 key parameters, such as vitamin D, therapeutic drug monitoring, immunosuppressives and steroids available at launch. The instrument will be launched at the end of 2024 in countries accepting the CE Mark, and we would plan to launch in the U.S. the following year. We expect a second wave of menu additions with 20-plus assays in development, which would include drugs we've used testing following shortly thereafter. And the customer feedback on this system has been very positive, and we're really looking forward to the launch. So now turning to another key focus for diagnostics, which is access. And really highlight the positive progress we're making to provide access to clinical diagnostics in low and middle-income countries, specifically the X800 molecular HPV test where we received WHO prequalification in May of 2023. Cervical cancer, as many of you know, is slow growing and very treatable, if caught early. But today, the global health disparity is large with 9 in 10 cervical cancer deaths worldwide occurring in low and middle-income countries. 91% of women in low and middle-income countries have never been screened for cervical cancer as opposed to 16% in high-income countries. Now in 2020, the WHO launched the Cervical Cancer Elimination agenda and issued guidelines recommending HPV DNA primary screening for all women. Receiving the WHO prequalification is a good step to increase access because many countries require this as the regulatory standard, and it opens access to tenders and further establishes Roche diagnostics as a global leader in this space. I'd like to call out the currently 36 of the countries that rely on the WHO prequalification already have X800 instruments, and we can move quickly respond to national tenders for cervical cancer screening. We will also continue to shape the local environments to ensure cervical cancer screening is a health priority in these countries. So now I'd like to turn to another key part of our Roche strategy, which is precision medicine and in particular, oncology. We've recently launched 2 important diagnostics in the brain cancer space, IDH1 and ATRX immunohistochemistry screening. Glioma constitutes today around 340,000 cases per year and 75% of those are malignant disease. These 2 tests allow laboratories and physicians to quickly, accurately and cost-effectively identify mutations in 2 very important genes for patients affected with gliomas, the most prevalent type of brain cancer, and identifying a patient's mutation status in these genes, more precisely subtypes, the glioma patient diagnosis. And as you can see in the WHO algorithm on the left, this subtyping is important as these biomarkers are both prognostic and predictive, allowing a glioma patient and their clinicians to better understand the most optimal care decision. So the IDH1 and ATRX launch brings our portfolio of neuropathology biomarkers to 29. These assays run on our BenchMark series of instruments, the ULTRA and the ULTRA PLUS, thus making them currently available to laboratories in the U.S. and beginning in 2024 available worldwide. And now I'd like to just briefly cover the launches in the first half of the year. So in the first half of the year, we launched 3 of our key launches for 2023. The other ones are on track, and I very much look forward to updating you in subsequent meetings. So thanks very much for the attention, and now I'll turn it to Alan.

Thanks, Matt. It's my pleasure now to lead you through the finance figures. I hope everybody is well and safe and healthy. When you look really at the highlights, I would touch on all of them. Let me just say, I think, great progress for Roche in the half year. you will see the underlying sales growth, and you've heard about it already, which has done really, really well. It gives us certainly a great perspective. The pipeline has improved, and I would argue the overall results are pretty solid. I think as Teresa and Matt said, we have made some changes in our P&L. So the new income statement presentation is effective now of January 2023. And at full year 2022, we have shown you the impact already. But nevertheless, let me lead you through what we have changed. First of all, we have merged M&D and G&A to SG&A. Simple reason, we want to be really comparable to our peers. And I think that makes it easier. The second bullet point, I think this is something which came in from IFRS. It's a move here. So we really came in now with the line other revenues. You will find here basically the royalties and the royalty income. And we have introduced to the line other operating income and expenses, and that's where you normally will find the disposal gains. And then in total, we have simplified our allocations. We have quite an extensive allocation structure that we have followed. We simplified that really radically and that has an effect on the divisional results. Consequence of all what we have done is, well, when you look at it, I think the key metrics, our sales grew, operating profit and EPS are unaffected. So really comparable to the past. We have not changed the core reporting concept, so that's the same. The changes to allocations will reduce the allocated cost to divisions and increase the divisional margins by around 4 to 5 percentage points. With that, let's get into the numbers. When you look at the group performance and here is really the overview. You see the sales decline on the right-hand side in constant rates by minus 2%. You see, by the way, the impact when you look at Swiss franc from currency, and I will come up with a statement later on and will talk about currency. So when we look at the minus 2%, I think the underlying growth is great, Dia plus 6%, pharma plus 8%, overall plus 8%. And then I see we have lost CHF 2.7 billion COVID sales that leads us to the minus 2%. You see the core operating profit down minus 6%. Normally, we would always have the aspirations that should be in line with sales, at least halfway in line with sales. Here, the argumentation is Ultomiris, a patent settlement income of the first half 2022. If you were adjusting for it, I think that accounts for 5.3 percentage points of the minus 6%, you would be basically flat. So I would argue a pretty solid. Core net income was a minus 7%. Here, interest charges play a role, which have increased. You see core EPS is minus 5%. So you ask yourself, okay, core operating profit down 6%, core net income down 7%. Why is the core EPS just down by minus 5%. And that's really also Ultomiris, because Ultomiris comes from Chugai, and we own 60% of Chugai. So that's a minorities effect, which comes in here. IFRS net income was the minus 9%, certainly a result of the operating results as well as the higher interest charges. And then you see the cash flow still solid with CHF 8 billion, nevertheless a minus 8%. Minus 8% is basically the Ultomiris impact, which plays a role here, and you see the minus 18% is currency as well. But as I said, I will talk about it. Free cash flow just down by minus 2%. Here is an effect from tax payments, which we have moved into the second half of the year. With that, let's move to a bridge slide that Thomas has talked about already. I don't want to stress it again too much. I think here you see very well outlined the Diagnostics, what we have lost, the CHF 2.7 billion, you see the base business in Diagnostics, which has grown so well. You see the Pharma base business with CHF 2.4 billion, which is really impressive. You see there was basically no impact from Ronapreve. And you see certainly the erosion coming from AHR and the significant currency impact. When I started here, and that's the right-hand side, in 2011, we had 3 blockbusters. Today, we have 16 blockbusters. So I think quite well diversified and quite some significant growth of the company over time. With that, let's go to the P&L. And let me start on the right-hand side because these are the numbers which are familiar to you, with the minus 2% on sales and minus 6% on core operating profit. And now you'll see where it comes from. So let me move now into the middle column, with the absolute CER numbers. You see sales down CHF 540 million. Other revenue down by CHF 685 million. Ultomiris once again with the CHF 668 million. Then the cost of sales, a positive of CHF 1.1 billion. I think you've heard from Matt, Dia down 26%. Their volume came down by 23%, and they even overcompensated it by the cost decline. Pharma, plus 3%, with a volume growth of 14%. You see R&D, it was a minus CHF 486 million. That's driven by pharma, basically solely driven by pharma, computation biology, oncology, neuroscience, that all played a role, have initiated quite some Phase III trials. You see SG&A up CHF 392 million. I would argue one half of it is really M&D on the pharma side. So really, we supported our launches and our current products. And the other piece is coming from G&A, that's informatics, with roughly CHF 100 million. We have applied really new things in the company due to business needs and then a little bit coming from other areas. And then you see other operating income and expenses. And as said, I think these are basically the gains from disposals, and they are CHF 305 million higher compared to previous year, which leads us to a core operating profit decline of CHF 704 million. With that, once again, this other revenue topic, I don't want to stress it too much, but it's quite significant. What role Ultomiris played here, so from CHF 1.6 billion down to CHF 837 million on the right-hand side. And then you see that a huge red bar in the middle was a minus CHF 691 million, and CHF 668 million of this is coming from Ultomiris. And then you see the royalty income, which is down, which is driven by Lucentis, and that's quite a natural development with successful Vabysmo. Core operating profit and margins. We have the mantra to defend the margin. And I would argue that has happened because when you look at Roche Group, yes, there is a decline of 1.6 percentage points. But when you exclude Ultomiris, I think you get to a plus 0.5%. So I think mission accomplished at half year. When you look really at the Pharma division and you exclude Ultomiris' quite significant increase, and then you see Diagnostics where we have lost CHF 2.7 billion in sales, and then it's pretty clear that you also take hit on the margin. Let's go to the core net financial result, with a moderate decrease in the reported numbers of CHF 24 million. When you look really in constant currencies, it's CHF 75 million. You see where it comes from, the equity securities have done rather well. So the Roche venture fund, I think, illustrates where the market has gone and that valuations in the market have gone up. You see the net interest income. Well, we get some interest net now for our liquidity, first time for a long time. You see really currency. It's a base effect from last year, and some currency gains last year. And then the interest expenses, which moved up by CHF 147 million reported, which is clear with the rising interest rates. With that, let's go to the tax rate. And when you look at the tax rate, I think very clearly on the left-hand side, you see we had last year a release of a tax provision of roughly CHF 300 million. That certainly brought the tax rate significantly down to 16.1%. Half year 2023, we ended up with 16.9%. And now you ask yourself, okay, how can that go? If there is no special effect in here. And once again, it's Ultomiris. Because Ultomiris, as said, stems from Chugai. Chugai has a higher tax rate in Japan compared to the group tax rate. So when we now miss it in the first half of 2023, certainly that has a negative effect on the group tax rate overall, so we ended up at 16.9%. Core EPS development, the bridge, so a little bit of a summary here. And you see it, half year 2002 with CHF 11.77, and you see half year 2023 with CHF 11.23, so a decline. You see with the operations, which is basically the residual here of the minus 5% here, minus 4.6% decline. You see Ultomiris had an impact of minus 3 percentage points. You see the gains and losses on equity securities. You have seen the CHF 151 million positive. That's certainly a positive impact. I explained the tax rate change and then a small impact from other. Noncore items, equally important because it illustrates how we get from the core operating profit to the IFRS operating profit and then to the IFRS net income. First, when you look at the right-hand side, you see there is not much of a difference. You go from the core operating profit minus 6% to the IFRS operating profit with minus 7%. And when you really look into the absolute numbers, not much of a movement overall. I go to the details in a second. When you see the minus 7% to the minus 9% for IFRS net income, that's driven by higher interest charges. So let's look a little bit into the specifics. You see the global restructuring plans with a minus CHF 678 million, increase of CHF 400 million. But nevertheless, I would argue still in line with historical measures here, but nevertheless, certainly we're driving improvements in the company and want to do this that results in future benefits that help us. Amortization of intangible assets. We've done a couple of write-offs in the last years. I think that helped to bring that number a little bit down. You see CHF 110 million improvement. The impairment of the intangible assets, they come when they come and when we have study results, so CHF 260 million at half year 2023, CHF 163 million better than last year. M&A and alliance transactions very small. And then legal and environmental, we had a release here of a rather significant provision for a trial, so quite successful of roughly CHF 130 million, and that drove that number to a positive CHF 150 million here. So as I said, IFRS operating profit down minus 7% in constant rates, that leads to the IFRS net income down by minus 9%. Let's look at cash and the balance a little bit. And when we look at cash, as said, there is a reduction from CHF 9.8 billion to CHF 8 billion. The major part really is Ultomiris. The rest is currency, I can say, but I will come to this. You see the Pharma division quite successful in half year 2023. And then you see the decline on Diagnostics, which certainly is driven by the lower volume and the lower sales driven by COVID. Let's look into the group operating free cash flow, so from CHF 9.8 billion to CHF 8 billion as mentioned. And you see the operating profit net of cash adjustments came down by CHF 946 million, very clear lower sales, significantly lower sales, therefore lower operating profit and certainly no Ultomiris. So that's the explanation here. All the rest balances out pretty well. When you look at net working capital, which contributed positively. Investments in PP&E and investments in intangible assets pretty balanced, and then the foreign exchange impact of a minus CHF 978 million leads us to the solid CHF 8 billion. When you look at the group net debt development, first, let me start on the right-hand side, with the net debt of CHF 17.9 billion at half year 2023. When you compare it to the status last year at this time, we had minus CHF 20.9 billion. So we reduced that in a 1-year time frame by roughly CHF 3 billion. So I think that's a nice achievement. When you really look at the left-hand side, that is the net debt position beginning of the year, the minus CHF 15.6 billion. We have increased a little bit, and that's certainly, you know that that's always the same reason. We pay the dividend in the first half and the dividend is CHF 7.8 billion. And then the rest of the year, if you like, we work against that with the free cash flow. So I think it's fair to assume that we can improve our debt position further until the end of the year in the absence of significant M&A. Then let's move to the balance sheet. When you look at the balance sheet, certainly, I can make here a lot of comments, if needed. But I think when you look in constant rates, not a lot has happened here. I think it's pretty stable. The only outlier is cash and marketable securities was minus 16%, and that is really driven by the payment of the dividend. As mentioned already, all the rest is pretty stable. You see equity ratio is 36%, net debt to total assets at 21% and a lot forget that we have CHF 25.6 billion of gross debt on the balance sheet. With that, let's go to the outlook, and let me start with currency. And I know that's a topic. And let's focus first on the left-hand side. And you see really the Swiss franc to U.S. dollar development. And you see really in Q2, the U.S. dollar has weakened significantly against the Swiss franc. You see the impact in Q1 was 0. And then in Q2 and half year, then it was minus 3 percentage points. So really, really significant here. When you look at the Swiss franc to Euro, you see basically the situation remains with a minus 4 percentage points and a minus 4 percentage points. And now I come to the right-hand side, where you see once again the half year impact with minus 6 percentage points for sales, minus 8 percentage points for core operating profit and a minus 9 percentage points for core EPS. And now we're going to assume, as always, that the exchange rates of the end of June remain stable until end of 2023, which is not very likely to say, but from a modeling point of view and from an assumptions point of view, that would leave us in September year-to-date with a minus 6 percentage points on sales and on full year with a minus 7 percentage points on sales, minus 9 percentage points on core operating profit and minus 10 percentage points on core EPS. Let me make here a comment about how concerned should we be about this. Because, well, at the very end, it's really about cash and cash impact. And you've seen there is a cash impact, at least from an accounting point of view. You know that we have a pretty good natural hedge globally. That means the markets where we have high sales, we normally also have a very high cost position in. Predominantly, that's the U.S. and you can come up with euro. So really in the euro currency, but also China. In all of these regions, we have full value chains. And that means a pretty good hedging between these things. So that's more of an accounting impact, so not too concerning from today's point of view. And the Fed has increased the rates yesterday when I remember it well. So I think there is some hope that the U.S. dollar will strengthen in a certain time frame. With that, once again, we confirm the guidance, as Thomas has said already. I don't want to dig more into this because, well, we would like to answer your questions. And with that, I hand over to Bruno.

Thanks a lot, Alan. I think we have 11 analysts here in the row raising their hand. I think we just agreed that we will do 40 minutes of Q&A to give all of you the opportunity to ask 2 questions, please. And I would also like to ask the speakers to be crisp in their responses. So first one would be Sachin Jain from Bank of America.

Bruno, I'll stick to the 2 questions. So just 2 big picture ones, if I may. So firstly, for Thomas, should we view recent BD deals, folks at Phase I/II as a sign of where your greatest focus is in the stage of doing BD or could you comment on potentially doing later stage assets, Phase III launch-ready? Just wanted to know we're 6 months into the group's year, what's your assessment of need to bolster the late-stage pipeline or add further growth drivers short term? And then the second question is for Alan. Just to get a sense of sustainability of this growth into '24. So second half growth is looking mid-high single digits. Could you just talk at a very high level of the sustainability of that into '24, initial perspectives on pushes and pulls? As we see it, the key drag to next year will be ACTERMA biosimilars and COVID. Anything else we should be aware of and any new positive drivers that you'd like to flag?

Sachin, happy to take the first question. First, let me highlight the on-market portfolio. We have 20 new medicines launched since the end of 2015, and these medicines will continue to drive growth. Second, and I think Teresa did a great job of highlighting a number of very interesting assets that are in our late-stage pipeline. Third, when we look at M&A or licensing deals, we look at all stages of development. And we every year look at hundreds of companies and we look at the science, we look at the financials. And if they makes sense, then we'll go ahead with that. With that, it could be Phase I, it could be Phase II, but it could also be a Phase III-ready assets. So we are open to all kinds of assets as long as they make sense financially and scientifically. Over to you, Alan.

Well, Sachin, I think we know each other for a long time, and I cannot give any guidance on 2024. That's pretty clear. But having said this, I think the underlying growth is quite impressive. I think that's pretty clear when you look at the pharma side. And it's coming really broadly from a lot of products. You make a good point about a couple of them. I think some might be a little bit weaker, but others will be a little bit stronger. Let's see how it plays out. For me, it's important, 2023, we shouldn't forget about the Ronapreve impact in Q4 that we don't forget about this, yes. But I think really looks promising for 2024. And as you know I'm enthusiastic about Matt and Diagnostics. I think that looks good. I think he always explains his underlying numbers, and they look great as well. And he has even more technologies to come. They might not play the major role in 2024, but certainly for the distant future. So I think really that looks fine.

Very good. And with that, we will move on. The next 2 questions come from Matthew Weston, Crédit Suisse or now with UBS, I have to say.

So 2 product questions for me, please. The first is on HEMLIBRA. So U.S. growth momentum, in particular, slowed, and we're obviously seeing ALTUVIIIO launch and add a new treatment option in the category. Sanofi management has made some statements that they are seeing patient switches of HEMLIBRA. I'd love your perspective as to the market dynamics and how you expect that to play out going into the second half and in '24? And the second is around Vabysmo. And what is clearly a spectacular launch and Teresa used the word momentum. But if you actually look at quarterly incremental absolute dollars, then 2Q actually was less of an incremental add over 1Q versus the same quarter previously. And that seems quite odd this early in the launch. Japan looks relatively stagnant with Q2 pretty much flat over Q1 and Q4. So I just wondered whether there was anything unusual about Q2, and whether we should expect some acceleration going into the second half of the year? I realize I am being picky, so I want to make that clear that getting Vabysmo right is clearly quite critical.

Well, Matthew, I appreciate you acknowledging your pickiness, but I think both of your questions are super valid. A question about the sales in both -- sort of the sales cadence, if you will, for both HEMLIBRA and Vabysmo comes a little bit down to buying pattern. Q2 is always a little bit funky when it comes to buying pattern, and I think that's a reason that you may see the difference that you see in the HEMLIBRA in Vabysmo shares -- their sales there. Again, I think when we look at market shares, the U.S. market share is growing quite significantly. We're at 50% now in A&D, 9% in DME. We have greater than 1 year of real-world data, more than 1 million doses in market. I mean, I think we've just got tremendous, again, momentum here. But I think, as always, when you have products that are, and I'm speaking specifically to Vabysmo here now that have contracts associated with them, you always can sometimes see a little bit of quarterly fluctuation. When it comes to ALTUVIIIO, I mean, honestly, right now, we're not hearing about switches. There's really no reason for a patient on HEMLIBRA to switch. They're very well controlled from a disease perspective. They're highly satisfied. They are in many cases and 2/3 of the cases already on it every other week or a monthly dose. So there's very little incentive for a patient on HEMLIBRA who is well controlled to switch. So I mean, it's not something we're hearing a ton about actually in the market, to be honest.

Next one would be Mark Purcell from Morgan Stanley.

So 2 questions. Firstly, on Polivy. The uptake seems to have been stronger than you anticipated. And obviously, competitors are now going to use Polivy in the first-line trial. So is there upside to the $2 billion peak sales target you gave on this product? And can you help us, just at this stage, think about sales aspirations for Columvi and for Lunsumio as well? Obviously, there's combinations of Polivy and Lunsumio, so it's quite difficult for us to model. Secondly, in terms of Ocrevus subcut. Could you sort of help us understand what's going on here as well because BRIUMVI uptake has been pretty strong based on obviously shorter infusion time. So when you think about Ocrevus in the syringe pump followed by Ocrevus in a patch pump, can you help us understand the administration times of both? The ease of at-home usage with both, presumably patch pump is a lot easier. And then can you confirm whether the patch pump will be a Part D medicine as opposed to just Part B?

Okay. So in terms of Polivy, I think we are seeing great uptake. I'm not sure I would say that it's stronger than we anticipated because I think -- I can sort of remember being back on this stage a number of years ago, when the data first came out and us thinking this will be the standard of care. I mean that incremental fit over a highly effective standard of care, in our mind, I think was a game-changer in first-line DLBCL, which we know when patients relapse their outcomes are much worse. So upside to $2 billion, I would say I'm still feeling pretty good about the $2 billion. I mean I feel like we need to get there. But based on the fact that we're seeing uptake in all IPI statuses, and we are seeing rapid adoption, it's possible that there may be upside here. And again, I think we we're seeing quite a bit of -- we're seeing quite a bit of really exciting uptake with Polivy. When it comes to Columvi and Lunsumio, I mean, I think it's important to remember that both of them right now are in relatively small patient populations. So both third-line plus DLBCL for Columvi, and third-line plus follicular lymphoma for Lunsumio. These are relatively small patient populations. But as we move into bigger and bigger patient populations, I think these both have quite significant potential and may, in fact, be a little bit undervalued by the market. So again, maybe something to take a look at, particularly when you look at the profile of these drugs. Sorry, Bruno, I know I'm not being crisp in my answer. But For Columvi, that fast, deep, durable response rate in a fixed dose therapy with your visits to the clinic, that's an incredibly attractive profile. And then when you think about Lunsumio, it has a profile that is sort of perfectly designed for the chronic populations in which it's looking at. So more to come there. In terms of Ocrevus subcut, I mean, we're talking about going from an hour's infusion to a twice a year, 10-minute subcut. I mean that's pretty good. And I would suspect that this will be quite competitive in the market. To be honest with you, I know we've heard this, BRIUMVI is having a great launch. Honestly, we don't see it. We just don't see it or hear it in the market in the same way that we hear reflected back at us. I think in a lot of instances, the numbers that are being cited frankly are coming from survey data. And survey data is never as accurate as actually sales data. So the way we kind of look at the MS market at the moment is exactly what we had hoped would happen is happening. The high efficacy anti-CD20 market is expanding. It's now over 60%. This is of the MS patient population. This is what MS patients deserve, the best possible chance to control their disease. And we still see Ocrevus having the lion's share of that, and we think that we have an opportunity to actually continue to expand our lead with the advent of subcut.

And the expansion into Part D. Could you help us understand that, Teresa?

So I think the Part D or Part B, I think it's a little hard to say at the moment because it could either be in the office or at home. And so I think more to come on that, more details closer to launch.

Thanks, Teresa, for your crisp answers. I think also if my counting was right, it was actually 3 questions. So I would ask the next one here in the room. Michael Leuchten from UBS.

Bruno, I'll stick to 2. So 2 questions, I think, for Teresa. Just your comment about Polivy and first-line DLBCL trials now requiring a Polivy option in it. How does Roche deal with that? Do you facilitate that? Or is that effectively a locking option you have to not allow others to maybe run these trials and not run as quickly as otherwise it could? And a clarification on Ocrevus subcu. Does it require nurse resources with it? And does it require a sort of an infusion chair? Or is it completely removed from the infrastructure we would normally see with Ocrevus IV?

Great question. So on the first one, we would never do that. We would never do that. So if someone wanted to use Polivy for a competitive trial, there are -- that's very common in the industry. We make our drugs available for competitive trials all the time. It is worth noting, however, that first-line DLBCL trials are long, and they're relatively large. And so we believe we have a 4- to 5-year lead time for anybody that would potentially want to come in to the first-line DLBCL space. So we think we've got a really good place for sort of Polivy to really entrench itself. In terms of Ocrevus subcut, with the initial syringe pump that is either in the clinic or in the office that does require a health care professional at first. So it would require a nurse, a physician, a pharmacist, a GP, a health care professional is required and an IV chair, but that is something that will be -- hopefully in the second generation with patch pump will be something that will no longer be required.

Maybe Teresa, there's one question coming in by e-mail. It's from Edison and it's about Ocrevus as well. Could you elaborate on your commercial strategy for the subcu Ocrevus? Are you thinking this will expand the market from our perspective through competition with competitors subcutaneous products or other IV CD20. So how do we see the market developing since the launch?

I think for sure, we will see some patients who are on Ocrevus switch to the different formulation. I think we will see patients who are currently on other anti-CD20 subcus switched to this one. I think we will see naive patients switch to Ocrevus subcut. And I honestly sincerely hope that more MS patients will get on a high-efficacy therapy over time. This is the best possible option that we have for MS patients right now to control progression to control relapses. And so I believe that Ocrevus subcut, given the breadth of the efficacy data, the breadth of the safety data, the convenience that we already supply with an every 6-month infusion, now moving to every 10 -- every 6-month 10-minute injection, I sincerely hope that more patients of all types will go on this therapy because it is their best possible chance to live their fullest life.

So next 2 questions would come from Richard Vosser.

Two questions, please. First one on Tecentriq. Just thinking about the outlook going forward really, could you give us an idea of the penetration in liver and non-small cell lung cancer? And how the rollout is going in adjuvant lung? And on the basis of that, how do you see the outlook going forward to the product? And then a follow-up on Vabysmo. Obviously, high-dose EYLEA has been delayed. What incremental warehouse patients do you think you could capture because of that delay?

Great questions. So Tecentriq has done a great job of penetrating the indications in which it has -- which has differential efficacy. So indications like small cell, we are largely penetrated. When we look at HCC, I think there are parts of the world in which we are getting relatively fully penetrated, but there are actually other countries that we have not even yet launched or are still awaiting reimbursement. And so we would still expect growth in HCC. Currently, in adjuvant non-small cell, we still have about 40% or 50% share. This is enough for market leadership. This is a relatively new market. We would expect that we will continue to retain share here. We have the compelling data, particularly in the PD-L1-high patients, where we see and hear very positive feedback from the physicians who use it. But I think we do have to acknowledge that there's competition in this space. So I think this year, we would continue to expect Tecentriq to deliver double-digit growth. And we do continue to believe that it has the ability to continue to grow. I wouldn't underestimate the impact of something like Tecentriq subcut. Again, the ability to do what we saw with Phesgo, particularly in more resource-constrained health care systems. It has the opportunity again from a 30- to 60-minute infusion to a 7-minute injection. Really has the opportunity, I think, to capture some more market in that way. So certainly wouldn't count Tecentriq out by any stretch. In terms of the Vabysmo, so I think there hasn't been this question of where people warehousing patients waiting for high-dose Eylea. Our impression in talking to retinal specialists is that may have been happening in some pockets, but certainly not in any sort of massive way. We are hearing those physicians saying, well, there's really no reason to why would I wait when I have a great option right now with Vabysmo. And I think it just gives us the opportunity to continue to make sure that as many retinal specialists as possible are getting experience with Vabysmo, that they're getting patients on it, that they're seeing the benefits and that they're having the opportunity to expand it in their practice. And I think that -- we will take the advantage of every opportunity to make that happen because we believe it's in the best interest of patients.

Next one would be Richard Parkes from BNP Paribas.

Just 2 questions. Firstly, the partnership with Alnylam in hypertension obviously represents a departure in terms of therapeutic focus. So I just wondered if you could walk us through your thinking there and criteria required for new programs that would warrant an expansion in terms of commercial presence. And maybe from a business development perspective, what are the new areas might you consider as potential opportunities? Then the second question was on Brain Shuttle, gantenerumab. I think you mentioned data at CTAD. I just wonder, is that -- should we see that as just a proof of concept for the platform? Or do you think that's an asset that you could think about taking forward? I've had the impression in the past you might prefer to maybe focus on other amyloid-targeting antibodies, if you chose to progress in Alzheimer's?

Thank you very much, Richard, for the questions, and I'll take those 2 questions. First, if you look at Ocrevus, we were not in multiple sclerosis before we launched Ocrevus. And we defined the standard of care. If you look at Evrysdi, we were not in spinal muscular atrophy before we launched Evrysdi. We redefined the standard of care. If you look at HEMLIBRA, we were not in hemophilia before. We launched it and we defined the standard of care. I think what's important for us and that's our key focus, we want to find first-in-class, best-in-disease transformational medicines. And when you have an opportunity to deliver a transformational medicine, I think that's the opportunities that we are looking for. And clearly, with this medicine, that is the case. It's a very proven pathway. You've seen from Teresa the data with more than 90% decrease of this protein, angiotensinogen, and a sustained response for 6 months. When you know there are 1.2 billion people in the world, and 80% of them not being controlled, you can see that there is a big opportunity with the transformational medicine. So we are looking for these opportunities that are interesting, that are also big opportunities, really opportunities where we can change the standard of care, and we think this is one of them. And so we're looking at that in different areas. Regarding gantenerumab, we have data. So this is basically a Brain Shuttle -- version of an antibody connected to Brain Shuttle. And we all have this blood-brain barrier. And the reason why we have a blood-brain barrier is because our brain is important, and our body tries protected. And with that, it's very hard to bring antibodies into the brain. Now we have seen data where we can see that it's much better, much faster at a much higher dose, although you submit a much smaller dose, it's much easier to get into the brain in a much homogeneous way. So we see that as a big opportunity, and we'll be going very fast with this molecule. And so we will share more data at CTAD. But yes, it's very exciting for us.

And we will move on to questions from Peter Welford from Jefferies.

I'll have two. Firstly, for Alan, I think, just on the margin, consciously coming defending the margin. But I guess if we take out the Ultomiris, as you said, actually, in the first half of the year, you delivered an underlying margin expansion. I guess if we think about the second half and think about the phasing there, but then if we think about the reiterated outlook for EPS, what are the sort of headwinds we should be thinking in the second half of the year for the margin that result in some mitigation perhaps and the conservatism as to why you still see EPS growth to be broadly in line with sales for this year? Alan, if you could just sort of talk us through that. And then secondly, on diagnostics, I guess sort of strategy to some extent. Just looking at the various elements of diagnostics, particularly diabetes, where I think you made the comment, it was decreasing and that decrease is likely to continue for the foreseeable future. Curious, are there elements within diagnostics such as that, that could be considered noncore? And is this an area Roche really needs to be in? Perhaps you could talk a little bit about other areas within diagnostics that perhaps are potentially not part and don't have synergy with the pharma business.

I think, look, I could come up now with a lot of things and certainly headwinds that we could face. But feel good we're well positioned. I think cost discipline, that's the major point that we have to apply in the second half, but the organization is aware. I think our plan stands. And I think if we follow that plan, I think we will come in within the guidance that we have in mind, that we have placed in the market. So it's not like that I see specific headwinds are coming up in the second half. Okay, we can always mention inflation whatever, but as said, I think that's something we deal with and that we will manage. You know we feel good about the guidance once again for the full year.

And I'll maybe touch on the diagnostics portion. So yes, we see this decrease in diabetes care. But what I'd say is similar to what I said in the Q1 call is, we are also continuing to look into continuous glucose monitoring. And diabetes care is a key part of our overall strategy. Diabetes is a major health burn worldwide, and it represents attractive market for us to be in, and we will continue to be there, first part. Second part, to the comment about other areas within our portfolio that are not delivering value, I mean we are constantly looking at our portfolio, and I think we're really happy with our overall market leadership and the strong portfolio we have. So no, there aren't any areas that we're currently looking on exiting.

Very good. Next 2 questions would come from Simon Baker from Redburn.

Two, if I may, please, both on two of the newer products. So firstly, on zilebesiran. The appeal of a superior product dosed far less frequently than a cheap, but ineffective oral tablet is clearly very appealing. But as your neighbors have found from a commercial point of view, certainly in cholesterol management, it can be challenging. So I'm just wondering if you could talk us through, not the clinical risks on zilebesiran, but the commercial risks going forward? I know it's early, but I thought I would ask it nonetheless? And then moving on to KSQ-4279. I just wondered what your -- if you have rights to an interest in non-oncology indications because USP1 has been implicated in a number of cardio metabolic indications. Is that something that you're interested in? And do you have the ability to exploit that?

Can I start with the first one and do that?

I can take it. So first of all, I want to congratulate you on the pronunciation. It's not that easy. So one of the things that is very different to the other medicine that you mentioned, which actually targets the same target as the medicines that are available, this actually targets a very different mechanism. It's really targeting at the start of the cascade. And with that, you don't have these compensating mechanisms, but you really hit at the very top of the pathway. And you hit it specifically in the liver where you need to hit it versus the other medicines, they basically all over your body. So we see definitely a very different mechanism of action. And with that, we do believe that there is a significant opportunity to really change also the effectiveness of these medicines. On top of that, if you have to take it via subcu only 2 times a year, so every 6 months, the point is that you cannot take the tablets during the night. So you have really sustained lowering of the blood pressure. And with that, we think we have the right impact. Regarding KSQ and USP1, so we license it in because of the oncology indications. But thanks for the heads up. So we will have a discussion on that. But that's not what we had planned, to be direct. Do you want to add anything?

So I think the only other maybe thing to add on zilebesiran is that, one of the, I think, big differences is that we do sort of expect that we will need cardiovascular outcomes at launch. And that, that is an important thing that we will need to come to the market with in order to have sort of the ability to effect the most number of patients possible. So I think that's very much on our mind, Simon.

Next one would be Andrew Baum from Citi.