Ladies and gentlemen, welcome to the Russia's Third Quarter 2019 Audio Webcast and Conference Call. I am Shari, Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by Q and A session. The conference must not be recorded for publication or broadcast.
At this time, it's my pleasure to hand over to Doctor. Savir Zhwan, CEO of Roche Group. Please go ahead.
Thank you and welcome everybody for and thank you for joining our Q3 briefing. If we turn right to Slide 6, we have seen strong results in Q3 with then now a 12% growth in pharma, very much driven by the newly launched medicines and 4% growth in diagnostics, actually accelerating in the Q3, very much driven by immuno diagnostics. So on a Roche Group level, year to date 10% growth, 13% on a quarterly basis. And if you look at it into regional from a regional perspective, really all regions contributing to this result. Very much pharma of course, as in previous quarters international very strong, including the growth in China, Japan, double digit.
And actually also Europe, a good development where we returned to growth in the Q3 and where we now start to overcompensate for the biosimilars which have already entered in Europe as you know. Turning to Slide 9, really good to see the progress in the rejuvenation of the portfolio. Now Almost 30% of our pharma portfolio consists of new products. And we have added €4,000,000,000 of sales for pharma with new products in the 1st 9 months by far offsetting the biosimilar impact of €1,000,000,000 Now turning to the development pipeline, it's not only about the quantity of compounds we have in our portfolio, but very much the level of differentiation and breakthrough therapy designations is a good indicator for the quality of our portfolio. We continue to achieve breakthrough therapy designations with our molecules.
Good progress in the Q3 along our existing franchises, but very much so also in the new franchise, multiple sclerosis, hemophilia and increasingly CNS. We turn to the late stage pipeline on Slide 13. It's really developing very well. CNS, we expect risdiplam and satralizumab to launch next year. It was really satisfying to see the signal in lupus nephritis with Gazyva in the Phase II studies.
So we are now initiating Phase III. Good progress in ophthalmology, a lot, really a lot going on in cancer. As you can see, a lot of trials, very late stage. And you see on the top TECENTRIQ in HCC liver cancer where we expect data to read out soon. So given the excellent demand for our newly launched medicines given the good progress in our late stage pipeline.
We have not only raised the outlook for this year from mid to high single digit to high single digit and Coipi has brought in line with sales, but we are very confident to also grow beyond the current year.
Thank you
very much. And with this I hand over to Bill.
Thanks, Severin. So as Severin mentioned a very strong quarter in terms of performance for the Pharma division. So overview I think the starting point is we continue to generate breakthroughs for patients. That's what we're all about. So we're excited that we're now up to 28 breakthrough designations adding 2 more with Kezyla and lupus nephritis and Capella in a rare indication.
So again good progress on the innovation front. From a sales result front, we delivered 12% growth in the quarter. Again, really a strong performance for the overall business. And I think what I would point out in particular in addition to continued strong performance in the U. S.
And international led by China. We also returned to growth in Q3 in Europe. What you can see on the slide is the year to date figure of minus 1. But in the quarter in Q3 we were up 5% in Europe. So this really reflects the diminished impact of biosimilar losses in Herceptin and MabThera where most of the impact has already been felt and more than offset by the launches in new products.
So really encouraged to see that return to growth in Europe and I think it's a good harbinger of things to come. Looking at the portfolio level and growth continues to be dominated by the new products. So OCREVUS is the strongest growth overall, but I think really significant contributions from Libra, from Tecentriq, from PERJETA. So 4 of our big impact drugs. And then if you see down in the list, you have products like KEDCYLA showing up higher on the list now.
ALECENTA making its way up. So a good mix. And also I would point out geographically we've got a good mix across the major regions. In terms of oncology, I won't go into detail on this slide because I have more information on some of the other ones, but good strong performance from the HER2 franchise and again a nice contribution from Herceptin, PERJETA and Kadcyla and I think this points out the underlying strength in the HER2 space. Going on to that and a little more focus, we've got for JET up 33% and this is really the continued uptake around the world on the APHINITY regimen.
It's very it's a bill that's proven a very good choice for patients and doctors that are trying to absolutely minimize the recurrence of metastatic disease, but also Kadcyla with the uptake of the CATHERINE study. Again this is another curative regimen and we believe we'll continue to see strong growth there for some time to come. I would point out down in terms of the outlook, we believe there will be additional growth from Perchetta and Kadcyla and EBC, but also we'll be showing the affinity, the second OS interim analysis. It's a 6 year update. We'll be showing that in December at the San Antonio Breast Cancer Congress.
And again we think that's additional reasons for physicians and patients to choose the PERJETA regimen. And then also we'll be showing the first results from the combination, the fixed dose combination of PERJETA and Herceptin in a subcu form. So another good choice for doctors and patients both from a convenience and efficacy standpoint. Moving on to hematology, we had growth and again this is a return to growth because in the previous years we had losses on MabThera and this time we more than offset those with growth on Gazyva and PULOVI. Gazyva is showing nice uptake in indolent lymphoma and increased share there and then VENCLEXTA in the unfit AML population and it's also now the CLL14 regimen is now preferred in the U.
S. Under NCCN in first line CLL. So good progress in hematology as well. TECENTRIQ, it's a strong growth story there, 154% growth for Q3. And again this is primarily driven by lung cancer We're the only cancer immunotherapy approved for small cell lung cancer.
We also are used a lot in first line non small cell lung cancer, particularly in patients with liver metastases, the Avastin combination is a popular choice. In Europe, we're now up to 25% market share in second line non small cell lung cancer and we're just now starting the launches in first line non small cell as well as first line small cell lung cancer and Japan is also doing well in lung cancer. Otherwise the GU franchise bladder cancer is stable. The breast franchise we have continued growth from the uptake in first TNBC. This is with the biomarker on PD L1 and we're looking forward to more readouts to come.
I'll say a little bit more about that on the next slide. So as you can see there's actually 7 significant readouts for TECENTRIQ in the next about 18 months and this includes a number of pretty large market opportunities including the next one up which is the hepatocellular carcinoma of liver cancer. We expect results very soon on that. And this is a really exciting one because the standard of care at least a lot to be desired and this is a very large cancer particularly in Asia. And on the next slide, you can see the results that we presented at ESMO.
And on the left, what you note is with the TECENTRIQ plus Avastin. So this is a chemo free regimen TECENTRIQ plus Avastin. You've got a lot of both responses and deep responses. And on the right side is a slide that I think we found very interesting scientifically as well as medically because what it shows is the added benefit of Avastin to this combination. So we knew that cancer immunotherapy worked in hepatocellular carcinoma.
But what was less clear is what's the synergistic effect if any of Avastin. And what you can see is actually a hazard ratio of 0.55 due to Avastin being added to TECENTRIQ and so a really nice result. It's a well tolerated regimen and we look forward to the Phase 3 data as I said imminently. Other news on TECENTRIQ that was significant this quarter, we released the results from the IMpower 110 study. So this is a study comparing to centric monotherapy in a diagnostically selected population versus chemo and get a really strong result in the biomarker selected group.
If doctors have a patient in this category, they're able to give them TECENTRIQ instead of chemo, so well tolerated drug. And in this case, we showed a 7 month OS benefit, so a really strong result. And I think probably most significantly if there were questions out there as to whether PD L1 or PD-one is there a difference or some people thinking that maybe PD-one is better than PD L1. I think this is a very strong vote of confidence in the PD L1 mechanism and in TECENTRIQ in particular. And so we're very excited to see this result and share it with the world.
AlloCensa, again strong momentum here. We have very high percent of patient share, for example, over 70% in the U. S. Getting towards 70% in the EU. Japan is also very strong and we're looking forward to seeing a big impact here in China where we've just launched.
So the other thing that I think is of note really a groundbreaking study, the BPHAST study was one that showed a combination of FMI's blood based next gen sequencing and treatment with ALECENZA showed a strong impact for patients. And this is really important because in lung cancer you have a lot of patients where obtaining tissue is difficult. And so with patients with only a blood test could be eligible in the future to receive ALECENZA. And I think this is just a first for many. So hopefully we'll see similar results in blood based biomarkers for a number of other targeted therapies in the future.
Immunology franchise continues to grow. It's a broad base across Esbriet, Actemra and Xolair and across many regions and countries. And again, we're looking forward to sharing the data very shortly on Gazyva and lupus nephritis and hope to add Gazyva to the immunology slide very soon. In neuroscience, we had another strong quarter for OCREVUS. We're up to 18% total market share in the U.
S. Now. This is really driven by growth in earlier lines, significant uptake in the first line setting and strong demand from returning patients. We have a total of 37% of new and switching patients share which is essentially stable, but as you can see with 37% new and switching and 18% total were primed for continued growth with OCREVUS. At Ekrem's we shared some additional useful data.
It was telling that patients 6 years later continue to maintain a benefit. Those patients that were treated earlier with OCREVUS were less likely to have disability progression, less likely to need a wheelchair. We've now treated over 130,000 patients, over 500,000 infusions of OCREVUS. And again, we look forward to continued strong momentum from OCREVUS in the U. S.
And around the world. Risdiplam is another very exciting product in development. It's a medicine for spinal muscular atrophy. We continue to bring updated data. This is data we shared in Copenhagen earlier this month.
And I think what's particularly notable, this is in Type 1 patients, the most severe form. And basically what I would highlight on this slide is that the majority of patients began treatment between age 5 months 7 months which is actually rather late compared to some of the studies on other agents where patients were treated either pre symptomatically with literally newborns or after just a month or 2 of age. And what this data shows is that even these patients who had already accrued significant neurological disability when commenced on risdiplam were able to have large improvements in CHOP INTEND scores. And so we're looking forward to more data on this coming soon in both Type 1 SMA as well as Type 2 and 3 and we continue to be on track for filing risdiplam in U. S.
In 2019. Also in the neuroscience franchise, we had good progress with satralizumab for NMO. This is neuromyelitis optica and it's a disease of the central nervous system that causes blindness, severe motor function loss, as well as a number of other debilitating symptoms. It relapses but then disability tends to stick and it's a disease that's less common in the West than multiple sclerosis for example, but it's actually prevalent around the world and it's a significant global opportunity. And in satralizumab, we believe we have a very effective product, but that's also flexible, convenient and well tolerated.
And I would just highlight on this slide, say on the right for example, you can see the difference in relapses between patients treated with satralizumab versus placebo. And I think it's important to note that after 2 years about 77% of patients were relapse free and we think that's a pretty impressive result for a product again that has appears to have very nice safety profile and is conveniently dosed. So we're looking forward to bringing this to patients in the U. S. In 2020 and shortly thereafter in Europe and around the world.
And again we plan to file this in 2019. Moving on to hemophilia, HEMLIBRA continues to show very strong progress. No signs have led up here and basically we're now in a very strong uptake mode in the U. S. In non inhibitors as well as Japan in non inhibitors and inhibitors.
And then in Europe, we're just getting reimbursement in Europe for the non inhibitor patients. So we look forward to actually an acceleration of growth for HEMLIBRA in the quarters ahead. So overall, if you look across the pharma business and this question about the pipeline and how it will pose for the future, I think it's a strong picture. In Q3 we're now up to 31% of our pharma sales are from the newer products. This is up from 29% in Q2 of 2019 and up from 23% last year.
And again you can see the list on the right of 14 new products launched. We've got a couple more that are on deck in satralizumab and risdiplam and I think we're quite positive about our ability to continue growth despite the presence of biosimilars. And then finally just an update on what we have in terms of the data disclosures in the months ahead. So you can see in hematology we'll have a busy time at ASH with new data on MOSUN which is one of our T cell bispecific antibodies as well as a CD20, CD3, Gazyva and Polivi. So strong outlook in hematology.
In the breast franchise as I mentioned the OS update as well as the fixed dose combination, the HCC data which we expect soon will be actually debuted at ESMO in Asia in Singapore. So this is sort of a first for us, a major medical disclosure there. And we chose that because of the timing, but also because HCC is a very common cancer type in Asia and we wanted to make those results available first there. In the lung franchise we'll have additional biomarker analysis on the IMpower010 study and then in immunology look out for the lupus nephritis data as well as some additional data on XOLAR. And then looking ahead, you see the additional news flow.
I won't go through the details on this, but I think it's a really strong lineup and we're well poised to continue the growth of the pipeline and continue to make progress for patients. So with that, I will turn it over to Thomas in Diagnostics.
Thank you, Bill and good morning and good afternoon to everybody. I'm very happy to present the Diagnostics divisional sales. With now roughly 9,500,000,000 in sales, we now have a growth of 4% year to date, which as Severin mentioned in the beginning is a strong increase in growth in Q3, but we overall grew 6% specifically in the hospital businesses. As you can see the growth is driven mostly by the specialized and point of care and molecular business. We do have only 0% growth in tissue business.
As mentioned in earlier calls, this is due to the shipment delays we had on the instrument side. In general, if we just look at the Asian business doing very well with mid single digit growth. The Diabetes Care business with minus 2% is impacted by substituting technologies such as continuous glucose monitoring. If we look to the next page, I learned the different geographies. We do continuously see very strong uptake of our technologies and new assays in emerging markets specifically Latin America and Asia Pacific.
We also do see very good growth in Japan and EMEA, specifically also if we take out diabetes care, EMEA is growing in the mid single digit range. North America is declining 1% specifically impacted due to the tissue diagnostic sales where we have very high market share in the U. S. Due to the instruments delays and also by the coagulation monitoring which is impacted through substitution by the new drugs for coagulation. Now if you go through the different businesses, you can see centralized component of care making the biggest share and here again immunodiagnostics business growing 10% both in demand in emerging markets but also due to launch of new assays.
So we're continuously expanding our portfolio there. As mentioned, the client in coagulation monitoring. Molecular Diagnostics also doing well with 7%, blood screening we're winning a lot of tenders both in serology in nuts in different markets. Point of care molecular diagnostics and virology is doing well as well. Diabetes Care as mentioned specifically blood glucose monitoring and the tissue diagnostics you can say that the main impact was on the shipment delays, the reagents growing in single digits.
Recent launches that have been announced, one is key for us is the FDA clearance for COBOS Pro which was just recently announced. COBOS Pro is next generation in the market for mid to high volume segment. With this system we have the broadest menu on the platform and we continuously launch new assays. So in order to expand our lead in having the most consulted assays on one platform. This system has a number of new features as continuous loading in both clinical chemistry and immunochemistry, but also with very little hands on time really with that we tend to extend our lead in the semiconductor business.
Our business is very much a razorblade model. We have a lot of systems in the market. We have probably disclosed the numbers in the past overall more than 80,000 systems of the large systems and you can see that we are really expanding our platforms in the market. So while sometimes you may see some fluctuations in sales, I think looking at this and how we're expanding our platforms in the market, this is a great precursor in terms of future growth. Launching new assays is of course bread and butter and key not only to help patients, but to make sure that we continue to drive sales.
Here 2 very important launches EBV and BKB both have received breakthrough designation from the FDA because these assays are not there are no assays on the market that are FDA approved. All of the assays in the market to date are LDTs and in combination with our CMB assay we have a very comprehensive transplant panel which helps at the end to make sure that patients identified that may have severe effect after transplantation due to these viruses. So this is a very important panel. And with that, we also have another launch on our molecular platform for the blood screening area which is Babesia and the Babesia test is the 1st whole blood test we have in our portfolio and Babesia is a parasite that enters the red blood cells and that was not detectable in blood plasma. With this we also launched a new blood collection tube which simplifies that collection.
And again here with that we have a very comprehensive portfolio in the blood screening area which continuously helped us to generate more market share in that area. Here you see the recent launches and also the portfolio in terms of essays on our molecular diagnostics platform 6,800. I'm very happy to see the progress here. In general, I'm extremely excited about our Medic Value pipeline in terms of new assays across our entire portfolio because I believe this is a key differentiation for us to continue to have the most medically relevant and also the broader portfolio in terms of assays on our different platforms. We've also expanded our total access program beyond HIV.
You may have seen a press release on that also just recently. We've worked with the GAP program and we're now expanding it on to tuberculosis also hepatitis and cervical cancer. Great need to help patients in these different markets across the world, like sub Saharan Africa. We're doing well on key launches as you can see on this slide and we will continue to dwell towards the end of the year. We look forward to giving you an update then as well.
Thank you very much.
Good. Yes with that happy to take over. And Thomas I think was at your first appearance today with us. So welcome to the team.
Great to
have you. Great to have you.
But let me make a quick couple of
quick comments here on the financials and we go straight to 48. I think my colleagues did a great deal on explaining the sales. What I would like to emphasize is Severin clarified that right at the beginning the biosimilar impact in 2019. I think we're still on that track to get to the losses in Europe and including Japan of 1,300,000,000 to 1,400,000,000. So I think that's really within the expectations that we have raised before.
On currencies, I have a couple of slides. On the bond repayments, we had
2 bond repayments,
US1500 million dollars another US1.5 billion dollars that means the outstanding gross debt is now at US17.4 billion which basically means it came down by roughly SEK2 billion since half year. At half year we've been at SEK19.6 billion. So we didn't issue any further bonds. With that let's look on Slide 49 and here you see really the sales increase by region. Look at the favorable development that we have taken really in Europe and where we really start to really overcompensate now the biosimilar impact.
What you're seeing is on the right hand side the currency impact on sales roughly 1 percentage point equaling minus CHF 219,000,000 between the constant rates. And the Swiss francs and where that's coming from is explained in the next slide, Slide 50. And here you see the impacts from the different currencies. On the left hand side you see the sales growth in concentrates, on the right hand side you see the increase in Swiss francs. You see it's quite a small deviation that we have over here.
And what is it triggered by on one hand I think a further strengthening of the U. S. Dollar and the Japanese yen accounting of a +1.4 percentage point increase. And then basically all other currencies including the euro got either neutral or weaker over that period and have eaten up basically the positive impact from the 2 currencies that I've mentioned at the beginning. But what does it all mean?
Let's go to the next slide and you see really we expected overall a low currency impact in 2019 which I think is a very consistent development for the whole year. So when you look at the currency impact on sales and that's on the right hand side in that table, the first line, then you see that the impact went from plus 1 percentage point in Q1 to minus 1 percentage point at year to date September. So it's a pretty moderate change that we have seen here. I think when you look at the left hand side, you see a positive impact from the stronger U. S.
Dollar as mentioned, but also when it comes to the average year to date 2019 versus average year to date 2018 of plus 2%, a small number that you see the plus 2%. And it's now overcompensated by the weaker euro where the average and year to date 2019 to 2019 it accounted for minus 4%. And certainly the other weaker currencies that I've highlighted on the last slide. So when you look now at the prediction
for the full year on
the right hand side, you see really and you know how our model works based on the year to date 2019 average currency rate and assuming that the currency rate at September 30th remains stable until year end. And our model yields a slightly negative impact of -one percentage point for sales, corporate profit and core EPS which is well in line of what we have communicated in the quarters before. With that let's go to the outlook. I think it's raised, Severin mentioned that. So we have narrowed the guidance to the upper end and certainly I think that is not just on the sales line,
I think will also reflect
on the profit line. And with that, we're happy to take
The first question comes from the line of Steve Scala from Cowen and Co. Please go ahead. Mr. Scala, your line is open. Maybe you muted your line.
Maybe take the next question please. If that is not open.
The next question comes from the line of Richard Parkes, Deutsche Bank. Please go ahead.
Hi, thanks for taking my questions. First question just on biosimilar impact. You've seen the Q1 of U. S. Biosimilar availability with very limited impact today.
I just wondered if you could talk about how we should or shouldn't extrapolate that experience to future launches and the trajectory of impacted by similar competition in the U. S. And maybe you could just clarify whether you still expect further biosimilars to Avastin and Herceptin this year? So that's the first one. The second question is on your growth in China.
You've actually been seeing strong uptake of the legacy oncology products in China. Just wondered if you can talk about the durability of that growth when you might start to see biosimilar competition in those regions and maybe talk about which of your newer pipeline or newer drugs you most see most potential in China? I'll leave it there. Thanks.
Okay. Let's see, maybe I'll go in reverse order. So in terms of the launches coming up in China, I think for sure the lung cancer products, products like ALECENSA, TECENTRIQ have a big potential ability to serve patients there in China. I think also HEMLIBRA launch in China, PERJETA in terms of continuing to expand the impact of PERJETA. And so you also asked about biosimilar launches in China.
There will be some biosimilars in China, but it will be a limited number. And I think there may be some questions about the quality of some of those early biosimilars. So I think we see ourselves as able to compete with the biosimilars. In fact, one of the ways that we'll be competing in China overall is getting drugs like PERJETA and and HEMLIBRA added to the national drug reimbursement list. So again, I think China has been a really strong area of growth for us this year, but it will continue to be a strong growth area in the future.
In terms of the biosimilar impact in Q3 in the U. S. And what that has to say about what we see in the future. I'm not sure I would extrapolate much from it. It's really they've only been available for a limited number of weeks and the kind of yes, the tactics that are used contracts and things like that, those take some time to negotiate.
So I suspect that you wouldn't really want to extrapolate much from these 1st few weeks. And we do expect there to be significant impact of biosimilars in the U. S. Both because there'll be biosimilars to all three of our legacy oncology products, but also because there's
a need
for additional competition we've been expecting it. In terms of when other products would launch, we think the first biosimilar to Rituxan would come sometime in Q4. In the next 6 months we would expect to see at least a couple more biosimilars to Herceptin and on Avastin there will probably be at least one more biosimilar around the year end or early 2020.
Thank you.
Next question comes from the line of Emmanuel Papadakis from Barclays. Please go ahead.
Thanks for taking the questions. Manuel Papadakis from Barclays. Maybe I can just take a slightly more granular follow-up on the biosimilar question. Just thinking about the mechanics in terms of buy and bill uptake, have you seen any payers beyond United attempt to force or prioritize the utilization of biosimilars to date? And in terms of that United move, since it went into effect on the 1st October, have you actually seen that in specific accounts have much impact since going into place?
And then maybe a couple on Centric. You had a delay in the MPOW 132 filing by a few months to December. Any color on that would be helpful. It looks like you've withdrawn plans to file squamous MPOWER131 data, if you could just confirm that would be the case? And then adjuvant, I noted you did list EMPOW-ten as one forthcoming Centric readouts on Slide 23.
You had previously said we were expecting that in 2020, which I think would make you the first to read out in a large adjuvant lung study. Is that still the case? Or should we now think of that study coming later? And if it is still the case, perhaps you could just show up in terms of your expectations for what you could do somewhat better in adjuvant lung data than you imagine metastatic sets date and how disruptive that could potentially be to this treatment paradigm, many things?
Okay. Let's see. In terms of biosimilars, you asked about what we've seen from other payers. And I think we're not typically commenting on the negotiations with individual payers. So I don't really have anything else to say on that one right now.
In terms of the impact, have we seen an impact from the United contracts? As you correctly mentioned those went into place on October 1st and it's October 16th today. So really there's no ability to observe anything in that period of time. On TECENTRIQ you asked about the adjuvant lung study and yes we think we have a chance to be first, but it's hard to know exactly our studies event based, other studies are running, they're event based. We think we have as good a chance as anyone to have a first readout in a major adjuvant one study and we're looking forward to seeing that in 2020.
And then you asked about TECENTRIQ in squamous cell. Not this long, still long. No, no. And so I think as we announced, we won't be filing in squamous cell because the study didn't support a filing. And then you had another question, but you were somehow your sound quality wasn't good and I didn't re ask.
There was something else about TECENTRIQ.
Yes, I apologize. It was INPAR-one hundred and thirty two that the PDUFA was delayed by 3 months to December. Any color on why? And indeed, any guidance as to whether you expect that to change what seems to have been pretty limited uptake in first line metastatic date in the chemotherapy combination setting would also be helpful? Thank you.
Okay. Yes, I'm not sure I have a comment on a delay. Yes, nothing. I think we think basically the TECENTRIQ lung program is on track and the competitive dynamic is I'd say somewhat understood and things are going reasonably well. So but I mean 130 is probably not one of our highest impact studies.
So I'm not sure there's a significant impact of the timeline change.
Can we have the next question please?
The next question comes from the line of Matthew Weston, Credit Suisse. Please go ahead.
Thank you. Two questions, if I can. The first on Creevis, clearly another quarter of very strong growth, but also a time when in the market we're seeing a number of other competitors launch. I'm thinking of Mavenclad and Mayzent in particular. I wonder if you could just set out the dynamics as to whether or not you're seeing any change in the patient mix as a number of new drugs enter or whether from your perspective it's very much a continuation of previous trends?
And then secondly on Huntington's, I note that over the last couple of days, you've changed the enrollment size for the Phase III study. I think in the release to the patients, you set out your reasons as to why. But I'd very much love to understand how that might impact any early filing timelines that you had previously referred to now that it seems that you're very much focused on both doses in that study rather than or both dosing regimens I should say in that study? Many thanks indeed.
Great. Yes. On OCREVUS, so yes, again continued strong growth there. I think the most significant leading indicator is the new to brand share basically naive patients or switching patients which is at 37% is the latest data point. And if I look back over time, over previous quarters it was 35%, 39, 40, 39, 37.
And basically this is a measure that has a margin of error that's greater than the variance we're seeing. So also the other forms of data we have on this is we have things like new patient requests, start requests. Those are rock steady. And so overall OCREVUS is holding up very well. In terms of the new products, it seems like there have been a couple of new products launched into the market.
They seem to be taking share from the older products and they're not affecting OCREVUS at all from what we can see. And then I would say in terms of the dynamic or mix, what we see is that we've sort of maxed out in some of the later line patients. And then in first line we've been steadily increasing. So our first line share the last 4 quarters I'm looking at it was 3%, 5%, 9% and in the most recent quarter we were at 11% on new patient share. So this is new patient share in relapsing MS.
So I guess I would say maybe the general phenomenon is we've done a little more of the penetrating in the later lines now we're starting to see a slightly increased penetration in first line which is I guess somewhat to be expected. But overall a very strong continued trajectory. And then on Huntington's disease, so this one is yes, it's a fascinating area because this is a new disease area and I think we're really pioneering with the 1st Phase 3 study dynamic area. So for your background, the sample size of the pivotal study, we increased it from 6 60 patients to 800 patients or 801, so that we would have 2 67 participants in each of the 3 cohorts. And this is really about increasing the statistical power of the study to equally evaluate the benefit risk profile both the 2 month and 4 month dosing regimens.
Before that we had a hierarchical testing on the 2 month before you could look at the 4 month and we decided we wanted to uncouple those so that we would have an equal chance of showing an effect with either dose. And this decision was informed by an updated evaluation of the open label study that we just completed. And anyway that evaluation it continues to support the doses that we're now studying in Phase 3 every 2 months and every 4 months. And so in addition, we as we look at this,
the look
at the OLE study it seemed to indicate that patients on once monthly dosing did worse on certain clinical parameters than patients that were on the 2 month dosing. And the data continues to support both the 2 and the 4 month. But again, we wanted to make sure that we get this right. It's a huge thing for the Huntington's community and it's really important to us that we give the maximum opportunity to see a positive benefit in whichever dose group is the appropriate one. So now we have this open label study which now consists of the old open label plus 100 of the patients that were converted over from the Phase 3.
Those were patients that were on the old product next year. We think it's more likely end of next year to early 2021 if we had an opportunity to do an accelerated filing. So hope that answers your questions.
Many thanks, Adi, Bill.
Thanks.
Next question comes from the line of Sachin Jain, Bank of America. Please go ahead.
Hi. Thanks for taking my questions. Just 2, if I may. 1 is a follow-up to last one. So given the delay to the earlier file decision, do you still expect to present OLE and natural history study in the first half of next year as previously planned?
Or is that data presentation now also delayed to the back half of the year to allow you further time to provide data on the 4 month dosing? And then my second question was on the Tecentriq liver opportunity. I think you've listed previously roughly 300,000 patients globally. I wonder if you had any further color on the U. S.
Versus ex U. S. Split. And I guess what I'm getting at, you've referenced a lot of that opportunity is in Asia. How long do you think it would take to access that opportunity versus a very rapid launch we've seen for TNBC and small cell in the U.
S? Thank you.
Okay. Yes, in terms of presentation the open label data, it will be delayed I'm sure because we're going to want to have the more complete data set And I don't think we have a specific timeline for it yet, but we'll update that when we have it. In terms of China in HCC, I think about half of the HCC patients in the world are in China and the other half are distributed around other countries. We think that our opportunity took our first launch of TECENTRIQ in China will be in this quarter Q4 of 2019. So having it available in the market will allow us to move rapidly with HCC when we have the HCC data.
And I will say that the Chinese regulatory authorities have shown a lot of innovation and a lot of willingness to move faster and are targeting acceleration. So it may be somewhat delayed versus the U. S. But we're going to be trying to make that timeline as tight as possible and we're optimistic that this won't be delayed by years, but a much shorter time period than what we've seen historically.
Okay. Thank you.
Next question comes from the line of Michael Leuchten, UBS. Please go ahead.
Thank you very much. This is Michael Leuchten from UBS. Two questions, please. Bill, on U. S.
Herceptin, it was down 8 percent in Q2, down 6% in Q3. Is there any chance you could break out the volume versus price? And I presume volume is basically volume loss to Coetzila. Any color would be helpful. And then, if I missed it, but do you could give us the Perjeta share in early breast cancer in Europe and in the U.
S. That would be helpful? Thank you.
Sure. In terms of Herceptin, I don't think we don't usually give out the price volume on an individual product basis. But the impact of KADCYLA has been the main impact there. And so basically this is the CATHERINE study. So now patients can get Kadcyla in place of either Herceptin, well actually probably would have been Herceptin that they would have received.
And so it's actually it's better for patients and it's overall better for us because Kadcyla is not threatened with biosimilars and it's one of our newer innovative drugs. So I think it's a good trend there.
Oh yes, you asked about
the market share I think for Perjeta in adjuvant in the U. S. Well, so it's a little bit of a complicated picture because most patients are actually getting neoadjuvant therapy and we have 85% market share with PERJETA in neoadjuvant therapy. For the patients that get adjuvant it's lower because some of those patients get Kadcyla instead and other patients if they failed H plus P and neoadjuvant and didn't get a PCR they probably won't get PERJETA in adjuvant. So I guess the full answer is in EBC it's 85% in neoadjuvant, 33% share in adjuvant.
Next question comes from the line of Parekh Kiyo, Goldman Sachs. Please go ahead.
Good afternoon and thank you for taking my questions please. 2 if I may. Bill, as it relates to RISD plan, can you help us think about what is the initial market that you will be targeting on launch? And do you expect this to be a 6 month review or a proper kind of 12 month review? And then secondly, going back to Huntington's, if we think about the potential for the accelerated filing in the back half of next year or 2021, How confident are you of being able to go down that road?
Or do you think it is solely a function of kind of the data that you generate that you haven't seen as yet?
Okay. Yes. Let's see risdiplam. So the initial market we think it'll be used rather broadly because we're going to have we believe we'll have a label in types 1, 2 and 3. We have convenient oral dose.
So it's really applicable to anyone and we'll probably have the broadest coverage in the sense that we're studying babies. We now have an ongoing study in newborns, but we have babies in the trial program from 3 months up through toddlers. We have patients that are teenagers even into their 20s. So we think it'll be an attractive option for a lot of patients. And so also if you look at the prevalence of patients, there's actually a lot more patients that are toddlers or young kids than there are newborns.
And so we think we'll have a we should have a strong launch because we'll have excellent data in the children as well as the newborns. And you asked I think about whether we get an expedited review and we hope we will. We won't know until we file but we have breakthrough sorry not breakthrough designation but we think we'll have a rapid review because of the high unmet need and the clinical data we have on risdiplam. In terms of Huntington's, we're still very confident in the overall approach to Huntington's. You asked about the timing for an accelerated review and whether or not or an accelerated approval and whether or not how confident we're on that.
And I think that's what we've always said on that it's going to depend on the data. Until we have the data both from the OLE as well as the natural history study, it'll be very hard to know. I think we'll know when we see it. The regulators will know when they see it. And keep in mind, we don't even have the natural history data yet.
We have a look at a small set on open label extension, but we don't even have the natural history data yet. And so it's really hard to speculate on what we'll see when we get those things. But we will certainly be ready. And if the data supports it, we'll be accelerating it. And otherwise, we've got the Phase 3 timeline remains on track.
Thanks for the questions.
Next question comes from the line of Sam Faziri, Bloomberg Intelligence. Please go ahead.
Thank you very much for taking my questions. Just a very quick broad one with regards to 2020 performance. You obviously repeated the expectation of continuing to grow in 2020. But clearly, the base from a 2019 is getting tougher as erosion slower and the growth drivers are doing really well. So do you want to just perhaps take us through what drugs you think are the key ones that we should be focused on for delivering that growth despite the pressure from biosimilars that's expected?
So there's that one there. And then my favorite question of Tecentriq splits, if you could just give us the percentages between non small, small sale, if that's possible. And lastly, Projeta with regards to the impact of Kadcyla coming through, it's obviously not immediately obvious in the numbers and I wonder whether that's what everyone's question was in terms of trying to understand that. But in terms of the expectation that you would get a slowing of Perjeta, that obviously we didn't see that in 3Q. But can you just tell us when you think the meaningful impact is likely to come through in terms of slowing the progester growth and obviously seeing the uptick in cat silos accelerate?
Thank you.
Okay. So in terms of 2020 growth, it's I guess I would say it's the products that will be driving growth is a lot of the same products as 2019 plus we're adding some. So obviously, Ofribus, Hemlibra, Tecentriq, PERJETA, Kansyla, Elocensa, but now we'll be adding to that risdiplam and SMA. We have products like satralizumab and polavi that will continue to add growth. And so I think overall it's a strong outlook on that.
Right. And Zompluza is one to watch. That will depend on whether we have a significant flu season. Last year it was not much of a flu season. This year well, last year when we launched Zofluza, we basically had a very simple label.
We had no extensive advertising because of the 6 month moratorium on advertising to consumers from new products. This year we have some additional data in the label. We have the high risk patients that studies that have read out. And so if there's a significant flu here, we could see some significant uptake on Zofluzsa. You asked about the percent of business on TECENTRIQ and right now the latest data we have on that is about 47% from non small cell lung cancer first and second line, 28% from small cell lung cancer, 17% flatter and 6% from triple negative breast cancer.
On the last one triple negative breast cancer it's just that's a relatively small indication because triple negative breast cancer is around 15% to 18% of breast cancer patients. But this is now we're talking about metastatic disease which is a smaller yet proportion and then it's diagnostically selected. So there's only about 15,000 patients in that category. And then let's see finally you asked about PERJETA and KADCYLA and this question about slowing PERJETA growth and how does the math work. And I think it's a dynamic question because there's actually several things happening.
You have countries like the U. S. Where Perjeta is rather more penetrated and there you see the impact on KADCYLA on PERJETA more clearly. In many other countries in the world where PERJETA is still growing rapidly, you won't really see a reduction in PERJETA. You just see maybe a slowing of growth or in some cases if it's just starting to penetrate then you might not even see the slowing of growth because the Kedsilon and Perjeta would be more simultaneously.
So hopefully that answers your question.
Thank you.
Next question comes from the line of Tim Anderson, Wolfe Research. Please go ahead.
Thank you. A couple of questions, please. Sales growth for Roche has been impressive throughout the course of the year. The guidance has gone from low to mid single digits now to high single digits. So that implies almost $3,000,000,000 more in revenues versus where you started the year.
Earnings guidance language has remained the same, earnings to grow roughly in line with sales. So despite that incremental maybe $3,000,000,000 in absolute sales, no real leverage to the bottom line, which you normally see in the pharma business model. And I'm wondering why we're not seeing earnings growth kind of start to track ahead of sales. And it just kind of begs the question as you move into 2020 and we see a sales growth presumably slow, are you still confident where margins can come in either flat or maybe even improve? And then second question is on TECENTRIQ and neoadjuvant and triple negative breast and lung.
So you have a nice slide 23, it lays out the size of the commercial market by indication for different products. For these 2, you described them kind of on the low end commercially. And my question is, does this imply you think neoadjuvant data won't translate into a broader adjuvant indication for those 2 tumor types? I guess if we look at the recent Merck neoadjuvant data in triple breast, it wasn't a slam dunk.
Alan, you want to take the first question on EPS growth?
Yes. I think let me emphasize first, I think today we have certainly an earnings call and a sales call. So I think that's a little bit limited with information. But I think on the other hand, I think we as you can see, I think our guidance on EPS growth is really related to our guidance on sales growth. And well, don't forget, I think we have to compensate for Cabilly and losing the Cabilly patent, which is we've set on the core operating profit line is a minus 700.
So that's something that we have to overcompensate. And the other piece to mention to that is I think broadly, well, if you like, it's broadly and certainly gives a certain span upwards as well as downwards. And I think we will see where we come out for the full year.
Bill?
Yes. So the question about TECENTRIQ and triple negative breast cancer and the opportunity size. So I would say let me back up a little bit. There's neoadjuvant, which is the study and then there's a question of neoadjuvant approval and part of that hinges on whether or not the patients who have a pathologic complete response in neoadjuvant then go on to have a better result in terms of relapse of disease or recurrence of disease. So I think that question is is going to be answered in the years ahead.
But I don't think we have a definitive answer on that yet. In terms of the market opportunity, the neo adjuvant market opportunity is smaller because it's a shorter duration of therapy than adjuvant. And again, it's not necessarily established as the route of treatment yet. So now the study we have is a neoadjuvant and the adjuvant study. So we'll have the neoadjuvant result in 2020 and then we'll subsequently get sort of adjuvant results on it.
So we look forward to that as well. But for the purposes of the slide, we just showed the first readout which is in neoadjuvant.
Next question comes from the line of Richard Foster, JPMorgan. Please go ahead.
Hi, thanks for taking my questions. First one, just a follow-up to Tim. I think Tim was asking about the 2020 margins. I think you've shown confidence in the top line growth. Should we think of confidence in the bottom line growth in the same ballpark as the top line growth just to cover that off?
Second question, just going back to the biosimilars, but in Europe, it does look like the impact is starting to tail off. Are you starting to see some sort of business that is a residual business and that is now stable for the products facing biosimilar, rituxan and Herceptin. Another question just on Crevasse. And just looking back to the data that was presented a while ago at AAN, there was some element that some weight based dosing might be possible to get a higher effective efficacy with a crevasse. Would you think about doing follow-up studies here to dose by weight to improve the disability outcome for patients?
And then just finally on HEMLIBRA, could you just maybe give us a little bit more detail in terms of the demand picture in the U. S? Is there any sort of slowing of that uptake? Are there any safety issues popping up given that you now have relatively wide adoption in the non inhibitors? Thanks very much.
This is Severin. If I may take the first question on the 2020 outlook and margins for 2020. What I would say is that we do not see any structural change in our gross profit margins with the transition of the portfolio. So even though our legacy franchise is in with some of the key oncology medicines have enjoyed very good cost margin. We see good cost margin, comparable cost margins with our newly launched medicines.
So there shouldn't be any structural change on cost profit margins and combined with the control of our operating costs. I'm overall confident that we can keep the cost structure as we have it today. But obviously, we will give you, as usual the guidance at the beginning of next year when we present the young results.
Great. You asked about European biosimilars and what we're seeing in that. And yes, the impact of biosimilars is tailing off. Again, we had Herceptin launched about 2 years ago biosimilars and biosimilars to MabThera last year. And so you've seen those sort of run most of the course.
I'm not sure I would say that the whole business does continue to decline in each case but there are parts of the business that are more stable. For example the subcutaneous dose remains quite popular. It's a good convenience advantage for patients. And then we also have the fixed dose subcutaneous combination to come. That's the Herceptin plus PERJETA.
Again that's an excellent opportunity because you basically replace 2 products with 1 product and 2 IV infusions with 1 subcu. So we're looking forward to maintaining some business for many years to come of those products. Let's see, you asked about OCREVUS, the weight based dosing data that we showed at AAN. I think the real takeaways from that is it confirms that the dose does matter. And contrary to some earlier hypotheses that have been sort of muted for both Rituxan and other anti CD20 therapies that actually having that IV, having the OCREVUS molecule and having a high IV dose right upfront seems to make a difference.
And that experimenting with lower doses is something that might show promise in things like MRI scans or relapses. But on the measure that matters the most to patients which is disability progression that it's really important to have that the more complete depletion of the B cells and that's what we saw. We do continue to evaluate other potential studies of different types or potential doses. But we have a great and I would say increasing confidence in the approved dose of OCREVUS. On HENLIBRA, you asked about I think the U.
S. What do we see now that we've been there for some time. I think first off the curve, the uptake curve is very strong, very solid. We don't see any sign of a slowdown there. And in terms of safety and the emerging safety picture, we've now treated over 5,000 patients with HEMLIBRA in both clinical and commercial settings and the profiles held up very well.
So again, I think a very strong outlook for HEMLIBRA.
Perfect. Thank you very much.
The next question comes from the line of Peter Welford from Jefferies. Please go ahead. Hi.
Yes, thanks for taking my questions.
I'll be brief. I got 2. Firstly, on China. I wonder if you could just outline the potential timelines for getting some of the new drugs on the national reimbursed drug list? I think you said, ALECENZA, you expect it soon.
But I guess, what about Tecentriq and also potentially PERJETA and some of the other new medicines? And also, perhaps related to that in China on diagnostics, I wonder if perhaps Thomas could comment on the trend you're seeing in China there. There's been some comments, I think, from some competitors about some disruption. I guess, is your Chinese business growth seeing any sort of impact or perhaps comment on the trend you're seeing there? And then just quickly on Polivi, very little mention of that.
I wonder if you could update us in terms of the launch profile of Polivi and how you're getting on with that in the U. S. Market, obviously, after the pretty big ramp up during 3Q? Thank you.
Okay. So let me comment on the diagnostic status in China. As you probably have seen, there are certain regulatory changes in China. For example, the 2 invoice policy, which means that basically between us and the end customer, they can be at maximum 1 distributor. You also probably know the Sunshine Procurement Act in China.
So we do see those things. In general, the amount of distributors that we are now working with in China has significantly reduced. And if you look at Q1 data, we did have some impact there in China, but we have recovered towards Q3 now back to double digit growth. But there is a squeeze when it comes to distributors in China that's definitely the case.
Great. And then in terms of the China, the NRDL opportunity that the national reimbursement list. So we think ALECENSA and PERJETA are sort of the next up. Those are the ones with the most effort underway. It's a significant effort because China has a large and complex healthcare system and getting coverage on the whole of the nation is something that definitely requires some work.
But those are probably the ones that we have the most optimism about for NEX. And then in terms of TECENTRIQ, we're just launching TECENTRIQ this quarter. So it'll be some time before we would have NRDL and we think it'll be helped by the presence of additional indications things like the hepatocellular carcinoma. In terms of polivy, so the our first sales $24,000,000 in relapsedrefractory DLBCL it's been widely used in settings in terms of both academic key academic centers community and including a number of CAR T centers. A lot of CAR T centers have started to use polo v.
Sometimes they use it as a bridging agent. In other words they have a patient that might be eligible for CAR T, but they won't know until they've actually sent the cells out. And so while they're waiting, they put them on bolivy and they might stay on bolivy or they might be using that to bridge CAR T. And overall we think we've treated about 383 patients since launch in May. So if you think about that, that's well if you compare that for example to the rate of uptake of CAR T, I think compares quite favorably.
And that's why we've continued to say we have a lot of confidence in agents like polivy. We're studying polivy now in a large Phase 3 study in first line DLBCL that will replace part of the chemo regimen and the goal there would be to have a better tolerated regimen than R CHOP which is the gold standard, better tolerated and higher efficacy. So we think we've got an opportunity to go straight into first line with polavi and then we're also as you know we're developing some T cell bispecific antibodies that we think will be very competitive with CAR T efficacy both in later lines but also with potential in early lines. So looking forward to more progress with novel therapeutics in hemophilia sorry, in hematology.
If I could just make the remark because of timing, maybe we can take one from the line here. Maybe we could take 2 additional questions from the call. It's unfortunately, so in for you, there is another question. I think you already trained this morning from the media call. So the question is outlook for this year, confidence in closing.
The question came from Charles Pittman from Redburn. Okay. I can keep that short. I'm not able to make any specific comments regarding the ongoing review by the regulatory authorities. But bottom line is we are confident to close the transaction by the end of this year.
Can we have the next question please?
The next question comes from the line of Marc Purcell, Morgan Stanley. Please go ahead.
Yes. Thank you very much for taking my questions. Just going back to Richard's on China. Could you help us understand where we are in terms of market penetration rates in China, maybe comparing to Europe and the U. S.
For Avastin, rituxan and Herceptin? And what kind of NDRL renegotiation that could be on price when the biosimilars turn up, understanding there might not be a big impact on volumes, but there may be impact on price. Bill, just going back to the CD20 bispecifics, obviously, waiting for data at ASH. But when could we start to see filings from this portfolio? It's not clear what the route to market strategy is yet, but obviously you're following a lot of patients in your clinical programs and so be interested in that.
And then lastly for Alan, could you help us understand where we are in terms of your restructuring programs and the paybacks from these, what lessons you've learned and where you see areas for potential focus across the business going forward as a continuation of these programs?
Okay. Let's see. In terms of yes about penetration of Avastin, Herceptin and MabThera in China and we haven't published the penetration rates there and those measures can be difficult to come by. But we think we have significant volume growth ahead. You asked about potential for price renegotiations and we think we will have price renegotiations with or without biosimilars just because that's part of the ongoing process in the national list.
And but we do believe we can continue to grow despite upcoming price negotiations. In terms of NICD20s and the sorry the T cell bispecifics, we think that yes filing timelines are rather difficult to predict because it's going to depend on what we see especially in the late line studies. This is areas of high unmet need and it will depend on both the efficacy that we see as well as safety. But I think you should expect to see some important updates on our NICE20s at ASH including combo data. And I think that data will start to make the path forward more clear.
Yes,
absolutely. Well, when I remember it well, I think the essence of data is more clear for me. I think I think we have roughly €900,000,000 restructuring charges when I remember it well. When I look at 2019, I think we have a lot of activities going at it now. And I think we're constantly working out for activity.
Honestly, I think that I expect a charge around that. I think that we won't have a major deviation from that in 2019, which I think underlines all the activities that we're having. Certainly, these savings that we're generating from this contribute to the bottom line and also to the core EPS growth. So benefiting from that in 2019 as well. I don't see a slowing momentum here.
Good. Given how time is progressing, perhaps if we can take one more question please.
Next question comes from the line of Ron Gal from Bernstein.
The CD3, CD20 bispecific, you've got 2 of them, either
one. Yes, yes. Okay. So maybe I'll take that one first because that's what I was mentioning that we'll have data in ASH. We do expect to have first patient in for Phase 3 an NICD-twenty bispecific in 2020.
But again I think at ASH you're going to see a lot more. We have more than 700 patients already in our trials of those 2 agents. So we've got a lot of data, but we're also still working on the dose optimization because these are very, very potent molecules and it's really important to get not only the dose level but the dose sort of algorithm how you commence dosing to avoid cytokine release syndrome and that sort of thing. So we have a lot of clinical data and I think we're poised to move much faster when we get through the sort of dose ranging, dose finding phase. And again, I look forward to a significant update at ASH on that.
Yes, about Lucentis and looking forward with a new competitor in the market. I think we see that LUCENTIS has demonstrated its powerful effect in a number of retinal diseases wet AMD and others over the last 13 years. And we expect to have continued strong demand for LUCENTIS. There will I'm sure there'll be some effect from a new product, but we think that that effect will be moderate. And then in terms of biosimilar competition, honestly we're not really going to comment on our competitive approach because it's yes, that's sort of competitively sensitive information.
But I think you can expect that we'll be competing for sure. But again we recognize that biosimilars are a healthy part of the sort of pharmaceutical ecosystem. And so we'll be out to yes, we'll be selling our products and offering the innovator products, but we do expect to see significant biosimilar impact in the years ahead.
Thank you very much. Thank you for your interest. Thank you for joining our briefing and have a good day.
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