roche in japan – a challenging and rewarding …...1993 - cefyl tablets introduced, an oral...

Roche in Japan – A Challenging and Rewarding Experience of a Major Swiss Pharmaceutical Company

Dr. Eduard E. HoldenerChief Medical OfficerF. Hoffmann – La Roche AG

23 October 2007

Roche and Japan – Brief historical review: 1899 to 2001

Roche – Global player in pharmaceutical industry

Growing challenges in pharmaceutical industry

The Chugai-Roche response: Meeting high medical needs in Japan

Outlook

Agenda

Roche in Japan - 1A rich history of successful collaboration

1899: Roche establishes network of sales representatives in Japan as first western pharmaceutical company

1904 Karl Rhode Company distributesRoche products in Japan

1912 Dr. E.C. Barell visits Japan; first Medical Representative system

in Japan1924 Roche opens its own company inJapan on July 7 under name of Roche Gomeikaisha

1932 Nippon Roche K.K. founded

Dr Alice KellerTalented and determined

Dr. Alice Keller, Head of Roche in Japan from 1924 to 1939

“I liked it in Japan from the beginning. The people were friendly, the country I found beautiful…”

“I arrived in Kobe on August first in 1926 after a journey of 35 days”


1950 First import licences for Roche products regained, e.g. for Saridon

1967 Kamakura factory completed

1972 Research center opened in Kamakura

1986 Rocaltrol in osteoporosis

1987 Furtulon anticancer drug

1992 Roferon-A alpha interferon as first treatment for HCV in Japan

1993 - Cefyl tablets introduced, an oral antibiotic

- Bactramin injection introduced, acarini pneumonia drug

1995 Vesanoid for acute promyelocyticleukemia

1996- Four new drugs for HIV/AIDS, e.g. HIVID,2000 Saquinivir

1999 CellCept for rejection reactions in patients with organ transplants

2001 - Promotion of Kytril for anti-nausea - Tamiflu for A-Type/B-Type influenza - Herceptin, a monoclonal antibody in metastatic breast cancer

- Mabthera/Rituxan, a monoclonal antibody, in B-cell non-Hodgkin's lymphoma

2002 Roche acquires 50.1% of Chugai and merges its Japanese business with Chugai


Global Reach of Pharma DevelopmentBenefiting from top-class expertise from around world

United Kingdom(Welwyn)

Chugai (Japan)

Genentech (USA)

USA(NJ)

Switzerland(Basel)USA

(CA)

China (Shanghai)

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Roche PD Staff Total: ~3,500, excluding contractors, Genentech and Chugai

Delivering Clinically Differentiated MedicinesSucceeding across all 3 strategic objectives

Avastin in cancer

Fuzeon in HIV

Invirase in HIV

Herceptin in BC

Mabthera in NHL

First-in-Class Best-in-Class

Pegasys in HCV and HBV

Xeloda in cancer

Boniva in osteoporosis

Tarceva in cancer

CERA in anemia

Mabthera

Xeloda

Avastin

Tarceva

Herceptin

Pegasys

Boniva

Lifecycle Development

Completed In Phase III Additional indicationsin Phase III

Actemra in RA

Mabthera in RA

Ocreclizumab in RA

Roche Group’s Successful Track RecordMajor progress in key disease areas

From 2002Number 2 in oncologyNumber 2 in renal anemia*Number 2 in transplantationNumber 5 in hepatitisNumber 1 in obesityNumber 4 in influenzaNumber 5 in HIV/Aids

• We have achieved the Winning for the Future financial target of doublingTotal Shareholder Return (TSR) value of Roche from 2002–2007

• We are market leaders in disease areas where we want to play:

To 2007Number 1 in oncologyNumber 1 in renal anemia*Number 1 in transplantationNumber 1 in hepatitisNumber 1 in obesityNumber 1 in influenzaNumber 5 in HIV/Aids

Source: Extended Wood Mackenzie's Pharmaview, Jan 2007 * NeoRecormon territories

1. Pfizer2. GlaxoSmithKline3. Sanofi-Aventis4. Novartis5. Roche6. AstraZeneca7. Johnson & Johnson8. Merck & Co.9. Wyeth10. Eli Lilly

Pharmaceutical Industry Ranking in 2006Roche moves up to #5 from #8

Source: Extended Wood Mackenzie's Pharmaview, August 2007





Outlook

Agenda

• Global pharmaceutical market will more than double to $1.3 trillion by 2020

• Drugmakers‘ R&D spending in the US reached $55.2 billion in 2006

• FDA approved about half as many new treatments that year as a decade earlier

• Up to 45 percent of late-stage drugs currently fail

• Industry‘s core problem is lack of innovation in making effective new therapies for the world‘s unmet medical needs while R&D costs as well as marketing costs are increasing

by Daniel Beaulieu

2007 Pharma Business Model “Unsustainable”PWC report – June 13, 2007

„Industry‘s current business model is botheconomically

unsustainable and operationally incapable of actingquickly

enough to produce the types of innovative treatmentsthat will be

d d d b l b l k t “

40

60

80

100

120

140

160

180

200

220

240

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004*Year

Inde

xed

to 1

994

R&D expenditure Development times NME output Sales

Source: CMR International & IMS Health

Innovation ChallengeA gap in R&D productivity

The Gap

Cost Challenge of Developing New DrugsSignificant increase in investment needed

$138

$318

$802

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

1975 1987 2000

Expe

nditu

res

per R

x D

rug

(M

illion

s of

200

0 D

olla

rs)

Source: J. A. DiMasi, R. W. Hansen, and H. G. Grabowski, “The Price of Innovation: New Estimates of Drug Development Costs,”Journal of Health Economics 22 (2003):151-185.

R&D Productivity ChallengeDecreasing in USA

020406080100120140160180200

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

Ann

ual N

ME

appr

oval

s

0

5

10

15

20

25

30

35

40

Indu

stry

R&

D E

xpen

ses

($B

illio

ns)

R&D InvestmentNME Approvals

Source: BioExecutive International April 2007

Japan - Market ChallengePositive and negative factors impacting the market

Factors Negatively Impacting Market Factors Positively Impacting Market

• April 2007 NHI Price revisions • Aging population driving growth in • -6.7% on annual basis geriatric related therapies • -4.9% impact Q2-Q4 2007 • including Alzheimer’s, Parkinson’s

and dementia • Slowed volume growth

• +3.2% in 2006 vs +6.2% in 2005 • Continued growth in oncology• +11.7% volume growth

• Influenza season back to normal • est. 28% of all deaths • -7.4% change in related Rx

• Expanding diabetes market • Less severe pollinosis / allergy season • +8.9% volume increase

• -10.1% change in related Rx • MHLW est. 5.8% of population having and 6.9% at high risk

• Increased use of generics • including Cephalosporins, Statins, • Growth in cardiovascular franchiseAntifungals, and Oral Antidiabetics

Japan Market Review 2006 – Chasing Growth in a Challenging Market , IMS

• +8.4% volume increase

Japan: Availability of Recently Launched NCEs25% of top 100 global products and 75% of NCEs not available in Japan

Of 142 NCEs launched globally Of top 100 products by global between 2002 and 2006 sales in 2006, 73 are available

only 32 launched in Japan in Japan

Not launched

Launched in Japan

in Japan

Source: IMS Health, IMS World Review 2005 and IMSMIDAS Quantum

IMS Japan Market Review 2006 – Chasing Growth in a Challenging Market

32

110

Available in Japan

73

Not available in Japan

27

Japan: Launch Lag between First Country of Launch and Japan Launch Approval times hover around 17-18 months

1st Japan Months Product Corp Average Approval Time in Japan

Launch Launch Lag Blopress TAK 10/1997 6/1999 20 33.5 months for the 58 products Aricept EIS 1/1997 11/1999 34 approved in 1999 Diovan NVR 7/1996 11/2000 52 28.3 months for the 67 products Lipitor PFZ 1/1997 5/2000 40 approved in 2000

Zithromac PFZ 9/1991 6/2000 105 Tamiflu CHG 10/1999 2/2001 16 Glivec NVR 5/2001 12/2001 7 16.8 months for the 39 products

Zyprexa LLY 10/1996 6/2001 56 approved in 2001 Fosamac BAN 11/1993 8/2001 93 Micardis B.I 11/1998 12/2002 49 17.7 months for the 43 products Iressa AZN 7/2002 7/2002 0 approved in 2002 Claritin SHC 2/1988 9/2002 175 Maxalt EIS 6/1998 9/2003 63 19.1 months for the 29 products

Pegasys CHU 9/2001 12/2003 27 approved in 2003 Lantus S.A. 6/2000 12/2003 42 Evista CHG 1/1998 5/2004 76 17.9 months for the 31 products

Bi Sifrol B.I 7/1997 1/2004 78 approved in 2004 Spiriva B.I 6/2002 12/2004 30 Enbrel WYE 11/1998 3/2005 76 Crestor AZN 2/2003 4/2005 26 Propecia BAN 6/1992 12/2005 162 Abilify OTS 11/2002 6/2006 43

Vesicare AST 9/2004 6/2006 21 Zoloft PFZ 12/1990 7/2006 187

Source: IMS Health, IMS MIDAS Quantum IMS JAPAN MARKET REVIEW 2006 - CHASING GROWTH IN A CHALLENGING MARKET 43





Outlook

Agenda

December, 2001: Signing of Basic Agreement October, 2002: Completion of merger with Nippon Roche and full--fledged start of the Alliancefledged start of the Alliance

8

Chugai-Roche Strategic AllianceHigh-visibility partnership benefits both companies

Chugai-Roche “Unique” AllianceWin-win opportunity for both partners

• Roche acquired 50.1% of Chugai shares • Chugai and Nippon Roche merged • Chugai maintained autonomous management

Win for Chugai Win for Roche • Secures foundation for drug • Acquires local management that

discovery technology related to bio- understands the Japanese business pharmaceuticals environment

• Acquires more chances to produce • Strengthens its presence in Japan -innovative products through R&D the world’s second largest market synergies • Increases opportunities to acquire

• Strengthens total resources, including Japan-originated innovative drugs product/pipeline portfolios • Establishes a “Global Management

• Gains an option to the global market Network” infrastructure (Hub & through Roche’s infrastructure Spokes) 9

Copyright 2007 IMS Health or its affiliates. All rights reserve

2000 Rank 2006 Rank Estimated RankSankyo Pfizer Daiichi-SankyoTakeda Takeda PfizerDaiichi Chugai Takeda

Yamanouchi Astellas Mitsubishi-TanabeEisai Novartis ChugaiPfizer Eisai Astellas

Shionogi Daiichi NovartisBanyu Sankyo EisaiOtsuka GSK GSK

Novartis Dainippon Sumitomo Dainippon SumitomoChugai Otsuka OtsukaTanabe Mitsubishi AstraZeneca

Ono AZ BanyuFujisawa Banyu Shionogi

Sumitomo Shionogi OnoGlaxo Wellcome Tanabe Bayer-Schering

Aventis Ono Nippon BoehringerWelfide Nippon Boehringer sanofi-aventis

Kyowa Hakko Sanofi-Aventis TaihoBayer Taiho Kyowa Hakko

< Co's Outside Top 20 >

Source: IMS Japan K.K., Japan Pharmaceutical Market (JPM)

Japan: Ongoing M&A Shakes Up Top 10 in JapanDaiichi - Sankyo set to be new #1

Copyright 2007 IMS Health or its affiliates. All rights reserve

Franchise 2006 Growth (%) and 2001-2005 CAGR (%)

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12CAGR　2001-2005 % (Total Market = 3.2%)

2006 G

row

th %

(Tota

l M

arke

t =

-0.6

%)

Gastro / Metabolism

Respiratory

Anti-Infectives & Anti-Virals

Cardiovascular

Arthritis & Pain

CNS

Diabetes

Oncology

Source: IMS Japan K.K., Japan Pharmaceutical Market

Growth Performance across Franchises in JapanOncology continues strong growth in 2006

Areas of Focus and Products in Japan MarketStrong Chugai and Roche partnership

Others ¥326 billion in 2006 Rohypnol (consolidated net sales) AmobanUlcerlmin Cancer Euglucon

FurtulonOthers Infection/ Transp Xeloda9.3% NeutroginImmunology

Cancer KytrilTamiflu Immunology RituxanPegasys 28.2%

Copegus* & Infection HerceptinRocephin Avastin* 16.4% Cardio/Cerebro

Vascular CV SigmartRythmodan Renal 9.9% Preran

Renal EpoginBone 23.4% OxarolBone/Joint 12.8% RenagelAlfarol

RocaltrolSuvenylEvista * Copegus and Avastin were launched in 2007 12

Actemra

Roche R&D Pipeline TodayA promising flow of new medicines, also available to JapanPhase I

(30 NMEs + 1 Al)Phase II

(20 NMEs + 15 Als)Phase III

(3 NMEs + 34 Als)

Status as of September 7, 2007

Registration(2 NMEs + 8 Als)

NMEAdditional Indication

DBA OncologyDBA InflammationDBA VirologyDBA MetabolicDBA CNSOthers

R-No Roche managedGEN Genentech managedCHU Chugai managedARQ ArQule opt-inMEM Memory opt-inISO Isotechnika opt-in

Avastin NSCLC 1stlineR435

Avastin mCRC 1st combooxalipatinR435

Antevas subarach haemorrCHU

Sigmart acute heartfailCHU

Mircera renal anemiaR744

Avastin mBC combo Taxol1stR435

Epogin chemo inducedanaemiaCHU

Xeloda mCRC combo 1stR340Xeloda mCRC combo 2ndR340

Avastin NSCLC squamousR435

Avastin adj BC HER2-R435Avastin NSCLC mCNS treatR435solid tumorsR1507

malignant melanomaR7204

solid tumorsR¥547

RAR7277

solid tumorsR1645solid tumorsR1530

Apo2L/TRAIL - cancerGEN

DM1 - mBCGENPARP inh - malignant melanomaGEN

CRCCHUCD40 Ab - NHL/MM/rel large B-CLGEN

Apomab - cancerGENhedgehog ant - cancerGEN

HCVR7025

schizophreniaR1678

autoimmune diseasesR3477

type 2 diabetesR1511

HCVR7128HCVR7227

IFN-alpha Ab - SLEGEN

Avastin RCCR435Avastin ovarian cancer 1st lineR435

Avastin adj CCR435Avastin pancreatic cancerR435Avastin prostate caR435

Avastin mBC combo Taxotere 1stR435Avastin BC combo nonTaxanes 1stR435Avastin mBC combo Herceptin 1stR435

Xeloda adj CC combo oxaliplatinR340

MabThera CLL 1st lineR105

Tarceva+Avastin NSCLC 2nd lineR1415+R435

MabThera CLL relapseR105

Tarceva NSCLC maint 1stR1415

Tarceva+Avastin NSCLC 1st line maintR1415+R435

MabThera iNHL maint 1st lineR105

Tarceva adj NSCLCR1415

Herceptin gastric caR597

Avastin GIST recurrGENAvastin adj rectal cancerGENAvastin mBC 2nd lineGEN

ocrelizumab RAR1594

MabThera RA DMARD IRR105

Actemra RAR1569Actemra sJIAR1569

Xolair pediatric asthmaGEN

MabThera SLEGEN

MabThera PPMSGEN

MabThera ANCA ass vasculGENMabThera lupus nephritisGEN

Xeloda adj BCR340Xeloda adj CC combo AvastinR340

TNKase catherter clearanceGEN

Valcyte CMV extensionR127

ED-71 osteoporosisCHU

pamapimod - RAR1503

HCV pol - HCVR1626

RAR gamma - emphysemaR667

pertuzumab ovarian cancerR1273

solid tumorsARQ

renal transplantISO

pertuzumab mBCR1273

Avastin ovarian cancer 2nd lineGEN

CD40 Ab – diff large B-Cell lymphGEN

PNP inh - AI / transplantR3421

Avastin glioblastoma recurrGENAvastin malignant melanomaGEN

Avastin adj NSCLC* R435

MabThera+Avastin NHL aggr* R105

painR1646

HPV16 - cervical neoplasiaR3484

GLP-1 - type 2 diabetesR1583CETP inh - dyslipidemiaR1658

gastroparesis/IBSCHUpost-hepatectomy/cirrhosisCHU

topical VEGF - diabetic foot ulcersGEN

aleglitazar - type 2 diabetesR1439

Lucentis diabetic macular edemaGEN

ocrelizumabRRMSR1594

ALTU-238 - growth hormone defGEN

Alzheimer's/schizophreniaMEMCERA cancer anemiaR744

Alzheimer‘sR1450depressionR1647

Alzheimer‘sR4996

anticoagulantR1663

schizophreniaR7118

MSR1295

CellCept lupus nephritisR99CellCept pemphigus vulgarisR99

anti-CD20 3rd gen – hem maligGENIAP antag – cancer therapyGEN

MEK inh – cancer therapyGENABT-263 – sol tumors & hem maligGEN

ABT-869 – sol tumorsGEN

Apomab - sarcomaGEN

Avastin extensive SCLCGEN

Avastin 1st line BC+sunitinibGENAvastin 1st line mNSCLC+sunitinibGENAvastin relapse MMGEN

type 2 diabetesR1579



Roche and Chugai – Bold strategic move toward a leadership position

in Japan

The Roche/Chugai response to high medical needs in Japan – Astrong portfolio

Outlook

Agenda

Unless stated otherwise, submissions will occur in US and EU

pertuzumab (R1273)solid tumors (EU)

MabTheraCLL (EU)

Xeloda+Avastinadj. CC (EU)

CERA (R744 ) cancer anaemia

Avastinprostate Ca (EU)

ocrelizumab (R1594 )RA (EU)

AvastinNSCLC squamous (EU)

Major Roche-Managed Projected SubmissionsPortfolio variety expands over coming years

Tarcevaadj. NSCLC (EU)

GLP-1 (R1583)type II diabetes

Avastin+HerceptinmBC 1st line (EU)

Status as of September 30, 2007

MabTheraiNHL maint 1st line (EU)

RAR gamma (R667)emphysema

Phas

e 3

MabThera+Avastinaggressive NHL (EU)

Avastinadj. NSCLC (EU)

HCV pol.inhib. (R1626)HCV

HPV 16 (R3484)cervical neoplasia

2007 2008 2009 2010 post 2010

Avastinovarian Ca (EU)

PNP inhibitor (R3421)AI/transplant

Phas

e 2

ActemraRA

TarcevaNSCLC 1st line maint (EU)

MabTheraRA DMARD IR (EU)

Tarceva+AvastinNSCLC 2nd line (EU)

AvastinmBC + Taxotere (EU)

Avastinpancreatic Ca (EU)

Herceptingastric Ca (EU)

Xeloda adj. CC combo oxaliplatin

Xelodaadj. BC

CETP inhibitor (R1658)dyslipidemia

aleglitazar (R1439)type II diabetes

AvastinHER2- adj. BC (EU)

AvastinRCC (EU)

√XelodamCRC 1st & 2nd line combo

AvastinmCRC 1st line combo

oxaliplatin (EU)

Avastinadj. CC (EU)

AvastinmBC + standard chem (EU)

Avastingastric Ca metastatic(EU)

DPP-IV (3) (R1579)type II diabetes

Tarceva+AvastinNSCLC 1st line (EU)DBA Oncology

DBA InflammationDBA VirologyDBA MetabolicDBA CNSOthers

Tarceva + AvastinNSCLC 1st line maint (EU)

• File for approval of NMEs and additional indications every year • Secure safety and proper market introduction of new drugs

AVASTINAVASTINBC CRC Launched

in 2007 COPEGUS HERCEPTIN MIRCERA* HCV GC CIA

TARCEVA* AVASTINEPOGIN XELODA PC Adj.CCCIA Adj.CC

MIRCERA* PEG/COPE EPOGIN HERCEPTIN AVASTINRenal Anemia Liver Cirrhosis Renal Anemia Adj.BC NSCLC

ACTEMRA TARCEVA* ACTEMRA XELODA ED-71 BONVIVA* RA, sJIA NSCLC RA/Overseas CRC Osteoporosis Osteoporosis

～2006 2007 2008 2009 2010～2012 * overseas product name New Molecular Additional In-licensed Entity Indication etc. from Roche

20

Future Regulatory Submissions in Japan Filings reflect increasing global harmonization

Thank you

roche in japan – a challenging and rewarding …...1993 - cefyl tablets introduced, an oral...

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