Ladies and gentlemen, welcome to the Roche's third quarter 2019 audio webcast and conference call. I am Shari, the conference call operator. I would like to remind you that all participants will be listen only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions in writing via the relative field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Dr. Severin Schwan, CEO of Roche Group. Please go ahead.
Thank you, welcome everybody, and thank you for joining our Q3 briefing. If we turn right to slide six, we have seen strong results in Q3. We stand now at 12% growth in pharma. Very much driven by the newly launched medicines and 4% growth in diagnostics, actually accelerating in the third quarter, very much driven by immuno diagnostics. On a Roche Group level, year to date, 10% growth, 13% on a quarterly basis. If we look at it 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 digits. Actually also Europe, a good development where we returned to growth in the third quarter, and where we now start to overcompensate for the biosimilars which have already entered in Europe, as you know.
Turning to slide nine, 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 CHF 4 billion of sales for pharma with new products in the first nine months, by far offsetting the biosimilar impact of CHF 1 billion. 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 as we continue to achieve breakthrough therapy designations with our molecules. Good progress in the third quarter along our existing franchises, but very much so also in the new franchises, 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. We are now initiating phase III. Good progress in ophthalmology. Really a lot going on in cancer. You can see, a lot of trials, very late stage. You see on the top, Tecentriq in HCC, in liver cancer, where we expect data to read out soon. 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 digits to high single digits, and COGS growth in line with sales, but we are very confident to also grow beyond the current year. Thank you very much. With this, I hand over to Bill.
Thanks, Severin. As Severin mentioned, a very strong quarter in terms of performance for the pharma division. Overview, I think the starting point is we continue to generate breakthroughs for patients. That's what we're all about. We're excited that we're now up to 28 breakthrough designations, adding two more with Kesarda in lupus nephritis and Cotellic in a rare indication. 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. 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 one.
In the quarter in Q3, we were up 5% in Europe. 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 of new products. 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, growth continues to be dominated by the new products. Ocrevus, the strongest growth overall, but I think really significant contributions from Hemlibra, from Tecentriq, from Perjeta. Four of our big impact drugs. If you see down in the list, you have products like Kadcyla showing up higher on the list now, Alecensa making its way up. A good mix.
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, good, strong performance from the HER2 franchise. Again, a nice contribution from Herceptin, Perjeta, and Kadcyla. I think this points out the underlying strength in the HER2 space. Going on to that in a little more focus, we've got Perjeta up 33%, this is really the continued uptake around the world on the APHINITY regimen. It's proven a very good choice for patients and doctors that are trying to absolutely minimize the recurrence of metastatic disease, also Kadcyla with the uptake of the KATHERINE study. Again, this is another curative regimen, 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 Perjeta and Kadcyla in EBC. We'll be showing the APHINITY, the second OS interim analysis. It's a six-year update. We'll be showing that in December at the San Antonio Breast Cancer Symposium. Again, we think that's additional reasons for physicians and patients to choose the Perjeta regimen. We'll be showing the first results from the fixed-dose combination of Perjeta and Herceptin in a SubQ form. Another good choice for doctors and patients, both from a convenience and efficacy standpoint. Looking on to hematology. We had growth. Again, this is a return to growth because in the previous years, we had the losses on MabThera. This time, we more than offset those with growth on GAZYVA and Polivy.
GAZYVA is showing nice uptake in indolent lymphoma and increased share there, and then VENCLEXTA in the unfit AML population. It's also now the CLL 14 regimen is now preferred in the U.S. under NCCN in first-line CLL. Good progress in hematology as well. Tecentriq, it's a strong growth story there, 154% growth for Q3. 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. 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-line TNBC. This is with the biomarker on PD-L1. We're looking forward to more readouts to come. I'll say a little bit more about that on the next slide. As you can see, there's actually seven significant readouts for Tecentriq in the next about 18 months. This includes a number of pretty large market opportunities, including the next one up, which is the hepatocellular carcinoma liver cancer. We expect results very soon on that. This is a really exciting one because the standard of care leaves a lot to be desired. This is a very large cancer, particularly in Asia. On the next slide, you can see the results that we presented at ESMO.
On the left, what you note is with the Tecentriq plus Avastin. This is a chemo-free regimen, Tecentriq plus Avastin. You've got a lot of both responses and deep responses. 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. We knew that cancer immunotherapy worked in hepatocellular carcinoma, but what was less clear is what's the synergistic effect, if any, of Avastin? What you can see is actually a hazard ratio of 0.55 due to Avastin being added to Tecentriq, a really nice result. It's a well-tolerated regimen, we look forward to the phase III data, as I said, imminently. Other news on Tecentriq that was significant this quarter, we released the results from the IMpower110 study.
This is a study comparing Tecentriq monotherapy in a diagnostically selected population versus chemo. Again, a really strong result in the biomarker selected group. If doctors have a patient in this category, they are able to give them Tecentriq instead of chemo, so a well-tolerated drug, and in this case, we showed a seven-month OS benefit. A really strong result. I think probably most significantly, if there were questions out there as to whether PD-L1 or PD-1, is there a difference? Some people thinking that maybe PD-1 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. We are very excited to see this result and share it with the world. Alecensa, again, strong momentum here. We have a very high % of patient share.
For example, over 70% in the U.S., getting towards 70% in the EU. Japan is also very strong. We're looking forward to seeing a big impact here in China, where we've just launched. The other thing that I think is of note, really a groundbreaking study, the BFAST study was one that showed a combination of FMI's blood-based next gen sequencing and treatment with Alecensa showed a strong impact for patients. This is really important because in lung cancer, you have a lot of patients where obtaining tissue is difficult. Patients with only a blood test could be eligible in the future to receive Alecensa. 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. The immunology franchise continues to grow.
It's a broad base across Esbriet, ACTEMRA, and XOLAIR, and across many regions and countries. 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, as you can see, with 37% new and switching and 18% total, we're primed for continued growth with Ocrevus. At ECTRIMS, we shared some additional useful data. It was telling that patients six 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, 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. I think what's particularly notable, this is in type 1 patients, the most severe form.
Basically what I would highlight on this slide is that the majority of patients began treatment between age five months and seven months, which is actually rather late compared to some of the studies on other agents, where patients were treated either pre-symptomatically, literally newborns, or after just a month or two of age. 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. So we're looking forward to more data on this coming soon in both type 1 SMA as well as type 2 and 3. We continue to be on track for filing risdiplam in the U.S. in 2019. Also in the neuroscience franchise, we had good progress with satralizumab for NMO.
This is neuromyelitis optica. 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. 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. In satralizumab, we believe we have a very effective product, but that's also flexible, convenient, and well-tolerated. 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.
I think it's important to note that after two years, about 77% of patients were relapse-free, and we think that's a pretty impressive result for a product, again, that appears to have a very nice safety profile and is conveniently dosed. We're looking forward to bringing this to patients in the U.S. in 2020, and shortly thereafter in Europe and around the world. Again, we plan to file this in 2019. Moving on to hemophilia. Hemlibra continues to show very strong progress. No signs of let-up here. 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. In Europe, we're just getting reimbursement in Europe for the non-inhibitor patients. We look forward to actually an acceleration of growth for Hemlibra in the quarters ahead.
Overall, if you look across the pharma business and this question about the pipeline and how we're posed 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. 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. Then finally, just an update on what we have in terms of the data disclosures in the months ahead.
You can see hematology will have a busy time at ASH with new data on mosunetuzumab, which is one of our T-cell bispecific antibodies, as well as the CD20/CD3, GAZYVA, and Polivy. A 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. This is sort of a first for us, a major medical disclosure there. 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 IMpower110 study. In immunology, look out for the lupus nephritis data as well as some additional data on XOLAIR.
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. With that, I will turn it over to Thomas in diagnostics.
Thank you, Bill, good morning and good afternoon to everybody, and very happy to present the Diagnostics division of sales. With now roughly CHF 9.5 billion 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, where we overall grew 6%, specifically in the Hospital businesses. As you can see, the growth is driven mostly by the Centralized 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 Reagent business, doing very well with the 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 around the different geographies, we do continuously see very strong uptake of our technologies and new assays in the emerging markets, specifically Latin American 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 instrument delay and also by the coagulation monitoring, which is impacted through substitution by the new drugs for coagulation. If you go through the different businesses, you can see centralized and point of care making the biggest share. Here again, immune diagnostics business growing 10%, both in demand in emerging markets but also due to launches of new assays.
We're continuously expanding our portfolio there. I've mentioned decline in coagulation monitoring. Molecular diagnostics also doing well with 7%. That's meaning we're winning a lot of tenders, both in serology, in NAATs, in the 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, as you can see, the main impact on the shipment delays, the reagents growing mid-single digits. Recent launches that have been announced. One is key for us is the FDA clearance for cobas pro, which we just recently announced. cobas pro is the next generation system vector for the mid high volume segment. With this system, we have the broadest menu on the platform, and we continuously launch new assays. In order to expand our lead in having the most consolidated assays on one platform.
This system has a number of new features. As continuous loading in both chemistry, immunochemistry, but also with very little hands-on time. Really with that, we plan to extend our lead in the serum work area business. Our business is very much a razor blade model. We have a lot of systems in the market. We have publicly disclosed the numbers in the past, overall more than 80,000 systems of the large systems. You can see that we're really expanding our platforms in the market. 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.
Two very important launches, EBV and BKV, both have received breakthrough therapy designation from the FDA because these assays are not. There are no assays on the market FDA approved. All of the assays in the market to date are LDTs. In combination with our CMV assay, we have a very comprehensive transplant panel, which helps at the end to make sure that patients are identified that may have a severe effect after transplantation due to these viruses. This is a very important panel. With that, we also have another launch on our molecular platform for the blood screening area, which is Babesia. The Babesia test is the first whole blood test we have in our portfolio. Babesia is a parasite that enters the red blood cells and that was not detectable in blood plasma.
With it, we also launched a new blood collection tube, which simplifies the collection. Again, here with that, we have a very comprehensive portfolio in the blood screening area, which continuously helps us to generate more market share in that area. Here you see the recent launches and also the portfolio in terms of assays on our molecular diagnostics platform, cobas 6800 and cobas 8800. I'm very happy to see the progress here. In general, I'm extremely excited about our medical 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 broadest portfolio in terms of assays on our different platforms. We've also expanded our global 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. A 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 do well towards the end of the year, and we look forward to giving you an update then as well. Thank you very much.
Good. Yeah, with that, happy to take over. Thomas, I think that was your first appearance yesterday with us. Welcome to the team. Great to have you. Let me make a couple of quick comments 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 Schwan clarified that right at the beginning, the biosimilar impact in 2019. I think we are still on that track here to get to the losses in Europe and including Japan of CHF 1.3 billion to CHF 1.4 billion. I think that is really within the expectations that we have raised before. On currencies, I have a couple of slides. On the bond repayments, we had two bond repayments, one $500 million, another one $1.5 billion.
That means the outstanding gross debt is now at CHF 17.4 billion, which basically means it came down by roughly CHF 2 billion. Since half year, we've been at CHF 19.6 billion. We didn't issue any further bonds. With that, let's look on slide 49. Here you see really the sales increase by region. Look at the favorable development that we have taken really in Europe and where we 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 a minus CHF 219 million between the constant rates. The CHF and where they're coming from is explained in the next slide 50. Here you see the impacts from the different currencies. On the left-hand side, you see the sales growth in constant rates.
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. What is it triggered by? On one hand, I think a further strengthening of the US dollar and the Japanese yen, accounting of a plus 1.4 percentage point increase. 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 two currencies that I've mentioned at the beginning. What does that all mean? Let's go to the next slide. You see really we expect overall a low currency impact in 2019, which I think is a very consistent development for the whole year.
When you look at the currency impact on sales, and that's on the right-hand side there in that table, the first line, you see that the impact went from +1 percentage point in Q1 to -1 percentage point at year-to-date September. 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 US dollar as mentioned. Also when it comes really to the average year-to-date 2019 versus average year-to-date 2018 of +2%, a small number that you see the +2. It's now overcompensated by the weaker euro, where the average year-to-date 2019 to 2018 accounted for -4%. Certainly the other weaker currencies that I've highlighted on the last slide.
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 rates at September 30th remain stable until year-end, our model yields a slightly negative impact of minus one percentage point for sales, core 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. Certainly I think that is not just on the sales line, I think it will also reflect on the profit line. With that, we're happy to take your questions.
Anyone who wishes to ask a question may press star and one on their touch tone telephone. Webcast viewers may submit their questions in writing via the relative field. Anyone who has a question may press star and one at this time. The first question comes from the line of Steve Scala from Cowen & Co. . Please go ahead. Mr. Scala, your line is open. Maybe you muted your line.
Can we 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. We've obviously seen the first quarter 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 impact of biosimilar competition in the U.S. Maybe you could just clarify whether you should still expect further biosimilars to Avastin and Herceptin this year. That's the first one. The second question is on your growth in China. You obviously have been seeing strong uptake of the legacy oncology products in China. Just wondered if you could 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 see most potential in China. I'll leave it there. Thanks.
Okay. Let's see. Maybe I'll go in reverse order. In terms of the launches coming up in China, I think for sure, the lung cancer 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. You also asked about biosimilar launches in China. There will be some biosimilars in China, but it'll be a limited number, and I think there may be some questions about the quality of some of those early biosimilars. 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 Hemlibra added to the National Reimbursement Drug List.
Again, I think China's been a really strong area of growth for us this year, but it'll 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. They've only been available for a limited number of weeks and the tactics that are used, contracts and things like that, those take some time to negotiate. I suspect that you wouldn't really want to extrapolate much from these first 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, and we've been expecting it.
In terms of when other products would launch, we think a first biosimilar to Rituxan would come sometime in Q4. In the next six months, we would expect to see at least a couple more biosimilars to Herceptin. 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. Emmanuel Papadakis from Barclays. I can just take a slightly more granular follow-up on the biosimilar question. Thinking about the mechanics in terms of buy and bill update, have you seen any payers beyond United attempt to force or prioritize the utilization of biosimilars to date? In terms of that United move, since it went into effect on the 1st of October, have you actually seen that in specific accounts? Have any had much impact since going into place? A couple on Tecentriq. You had a delay in the IMpower132 filing by a few months to December. Any color on that would be helpful. It looks like you've withdrawn plans to file the squamous IMpower131 data. If you could just confirm that would be the case.
Adjuvant, I noted you list IMpower010 as one forthcoming Tecentriq 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 as coming later? If it is still the case, perhaps you could just refresh us in terms of your expectations for what you could do somewhat better adjuvant lung data than you imagine in metastatic setting, and how disruptive that could potentially be to the treatment paradigm. Many thanks.
Okay. Let's see. In terms of biosimilars, you asked about what we've seen from other payers. I think we're not typically commenting on the negotiations with individual payers. 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. It's October 16th today. Really, there's no ability to observe anything in that period of time. On Tecentriq, you asked about the adjuvant lung study. Yeah, we think we have a chance to be first, but it's hard to know exactly. Our study's 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 lung study, and we're looking forward to seeing that in 2020. Oh, you asked about Tecentriq in squamous cell.
No. Not this one. Still don't.
No. I think as we announced.
File.
Yeah, we won't be filing in squamous cell, because the study didn't support a filing. You had another question, but somehow the sound quality wasn't good, and I didn't understand what you were asking, maybe you could re-ask. There was something else about Tecentriq.
Yeah, I apologize. It was IMpower132, the PDUFA was delayed by three 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 for your first-line metastatic to date in the chemotherapy combination setting would also be helpful. Thank you.
Okay. I'm not sure I have a comment on a delay.
Nothing.
Yeah.
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. I mean, 130 is probably not one of our highest impact studies, so I'm not sure there's a significant impact of a 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 Ocrevus. 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. 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.
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. On Ocrevus, 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. If I look back over time, over previous quarters, it was 35, 39, 40, 39, 37. Basically, this is a measure that has a margin of error that's greater than the variance we're seeing. Also, the other forms of data we have on this is we have things like new patient requests, start requests. Those are rock steady. 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, they're not affecting Ocrevus at all from what we can see. I would say in terms of the dynamic or mix, what we see is that we've maxed out in some of the later line patients. In first line we've been steadily increasing. Our first-line share, the last four quarters I'm looking at, it was 3%, 5%, 9%, and in the most recent quarter, we were at 11% on new patient share. This is new patient share in relapsing MS. I guess I would say maybe the general phenomenon is we've done a little more of the penetrating in the later lines, and now we're starting to see a slightly increased penetration in first line, which is, I guess, somewhat to be expected. Overall, a very strong continued trajectory.
On Huntington's disease. This one is a fascinating area because this is a new disease area and I think we're really pioneering for the first phase III study dynamic area. For your background, the sample size of the pivotal study, we increased it from 660 patients to 800 patients or 801, so that we would have 267 participants in each of the 3 cohorts. 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 re-look at the 4-month. We decided we wanted to uncouple those so that we would have an equal chance of showing an effect with either dose.
This decision was informed by an updated evaluation of the open label study that we just completed. Anyway, that evaluation, it continues to support the doses that we're now studying in Phase III, the every 2 month and every 4 month. In addition, as we look at this, 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. The data continues to support both the 2 and the 4-month. 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.
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 III. Those were patients that were on the 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. Hope that answers your questions.
Many thanks indeed, Bill.
Thanks.
Next question comes from the line of Sachin Jain, Bank of America. Please go ahead.
Hi, thanks for taking my questions. Just two, if I may. One is a follow-up to the last one. Given the delay to the earlier file decision, do you still expect to present the 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 four-month dosing? My second question was on the Tecentriq liver opportunity. I think you've listed previously roughly 300,000 patients globally. I wonder if you have any further color on the U.S. versus ex-U.S. split. I guess what I'm getting at, you've referenced that 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. Yeah, in terms of presentation of the open label data, it will be delayed, I'm sure, because we're going to want to have the more complete data set. 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 and 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 to our first launch of Tecentriq in China will be in this quarter, Q4 of 2019. Having it available in the market will allow us to move rapidly with HCC when we have the HCC data. 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.
It may be somewhat delayed versus the U.S. We're going to be trying to make that timeline as tight as possible. 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 Mike Leuchten from UBS. Two questions, please. Bill, on U.S. Herceptin, it was down 8% in Q2, down 6% in Q3. Is there any chance you could break out the volume versus price? I presume volume is basically volume lost to Kyprolis. Any color would be helpful. Then, apologies if I missed it, but could you 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, we don't usually give out the price volume on an individual product basis. The impact of Kadcyla has been the main impact there. Basically, this is the KATHERINE study. Now patients can get Kadcyla in place of either Herceptin, well, actually, it probably would've been Herceptin that they would've received. 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. I think it's a good trend there. Oh, yeah, you asked about the market share, I think for Perjeta in adjuvant in the U.S. 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. Other patients, if they failed H+P in neoadjuvant and didn't get a pCR, they probably won't get Perjeta in adjuvant. I guess the full answer is in EBC, it's 85% in neoadjuvant, 33% share in adjuvant.
Thank you.
The next question comes from the line of Keyur Parekh, Goldman Sachs. Please go ahead.
Good afternoon. Thank you for taking my questions please. Two, if I may. Bill, as it relates to risdiplam, can you help us think about what is the initial market that you will be targeting on launch? Do you expect this to be a six-month review or a proper 12-month review? 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? Do you think it is solely a function of the data that you generate that you haven't seen as yet?
Okay. Yeah. Let's see, risdiplam. The initial market, we think it'll be used rather broadly because we believe we'll have a label in types 1, 2, and 3. We have a convenient oral dose. 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 three months up through toddlers. We have patients that are teenagers, even into their 20s. We think it'll be an attractive option for a lot of patients. 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. We think we should have a strong launch because we'll have excellent data in the children, as well as the newborns.
You asked, I think, about whether we would get an expedited review, and we hope we will. We won't know until we file. We have breakthrough Or 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 or an accelerated approval, and how confident we are in that. I think, 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 it when we see it, the regulators will know it when they see it.
Keep in mind, we don't even have the natural history data yet. We have a small set on open label extension, but we don't even have the natural history data yet. It's really hard to speculate on what we'll see when we get those things. We will certainly be ready, and if the data supports it, we'll be accelerating it. Otherwise, we've got the phase III timeline that remains on track. Thanks for the questions.
Next question comes from the line of Sam Fazeli, Bloomberg Intelligence. Please go ahead.
Thank you very much for taking my questions. A very quick broad one with regards to 2020 performance. You've obviously repeated the expectation of continuing to grow in 2020, clearly the base from a 2019 is getting tougher as erosion is slower and the growth drivers are doing really well. Do you want to 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? There's that one there, my favorite question of Tecentriq splits, if you could just give us the percentages between non-small and small cell, if that's possible.
Lastly, Perjeta, 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. 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 Perjeta growth and obviously seeing the uptick in Kadcyla accelerate? Thank you.
In terms of 2020 growth, I guess I would say the products that will be driving growth is a lot of the same products as 2019, plus we're adding some. Obviously Ocrevus, Entyvio, Tecentriq, Perjeta, Kadcyla, Lucentis. Now we'll be adding to that risdiplam and SMA. We have products like satralizumab and Polivy that will continue to add growth. I think overall it's a strong outlook on that. Right. XOFLUZA is one to watch that'll depend on whether we have a significant flu season. Last year was not much of a flu season. Last year when we launched XOFLUZA, we basically had a very simple label. We had no extensive advertising because of the six-month moratorium on advertising to consumers for new products. This year we have some additional data in the label.
We have the high-risk patients, studies that have read out. If there's a significant flu year, we could see some significant uptake on XOFLUZA. You asked about the percent of business on Tecentriq. Right now the latest data we have on that, it's about 47% from non-small cell lung cancer, first and second line, 28% from small cell lung cancer, 17% bladder, and 6% from triple negative breast cancer. On the last one, triple negative breast cancer, that's a relatively small indication because triple negative breast cancer is around 15%-18% of breast cancer patients. Now we're talking about metastatic disease, which is a smaller yet proportion. Then it's diagnostically selected. There's only about 15,000 patients in that category. Let's see, finally, you asked about Perjeta and Kadcyla and this question about slowing Perjeta growth and how does the math work.
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 of 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 Kadcyla and Perjeta would be more simultaneously. 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. That implies almost CHF 3 billion more in revenues versus where you started the year. Earnings guidance language has remained the same, earnings to grow roughly in line with sales. Despite that incremental, maybe CHF 3 billion in absolute sales, no real leverage to the bottom line, which you normally see in a pharma business model. I'm wondering why we're not seeing earnings growth kind of start to track ahead of sales. 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?
Second question is on Tecentriq and neoadjuvant in triple negative breast and lung. You have a nice slide 23. It lays out the size of the commercial market by indication for different products. For these two, 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 two tumor types?
Yeah.
I guess if we look at the recent Merck neoadjuvant data in triple-negative breast, it wasn't a slam dunk.
Alan, you want to take the first question on EPS growth?
Yeah. I think, let me emphasize first, I think today we have shown an earnings call and a sales call, so I think that I'm a little bit limited with information here. I think on the other hand, as you can see, I think our guidance on EPS growth is really related to our guidance on sales growth. Well, don't forget, I think we have to compensate for Cabilly and losing the Cabilly patent, which is, we have said on the operating profit line is minus CHF 700, so that's something that we have to overcompensate. The other piece to mention to that is, I think 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.
Yep. The question about Tecentriq and triple-negative breast cancer and the opportunity size. 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. I think that question is going to be answered in the years ahead. I don't think we have a definitive answer on that yet. In terms of the market opportunity, the neoadjuvant market opportunity is smaller because it's a shorter duration of therapy than adjuvant. Again, it's not necessarily established as the route of treatment yet. Now the study we have is a neoadjuvant and adjuvant study.
We'll have the neoadjuvant result in 2020, and then we'll subsequently get adjuvant results on it. We look forward to that as well. For the purposes of the slide, we just showed the first readout, which is the neoadjuvant.
Thank you.
Next question comes from the line of Richard Vosser, JPMorgan. Please go ahead.
Hi. Thanks for taking my questions. First one, just to 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 biosimilars to Rituxan and Herceptin? Another question just on Ocrevus, 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 Ocrevus.
Would you think about doing follow-up studies here to dose by weight to improve the disability outcome for patients? 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. Even though our legacy franchises with some of the key oncology medicines have enjoyed a very good gross margin, we see a good gross margin, comparable gross margins with our newly launched medicines. There shouldn't be any structural change on gross 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. Obviously, we will give you, as usual, the guidance at the beginning of next year when we present the annual results.
Right. You asked about European biosimilars and what we're seeing there. Yes, the impact of biosimilars is tailing off. Again, we had Herceptin launch about two years ago, biosimilars, and biosimilars to Humira last year. You've seen those sort of run most of the course. I'm not sure I would say 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. 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 two products with one product and two IV infusions with one SubQ. We're looking forward to maintaining some business for many years to come of those products.
Let's see, you asked about Ocrevus and 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 sort of some earlier hypotheses that have been sort of mooted for both Rituxan and other anti-CD20 therapies, that actually having that IV, having the Ocrevus molecule and having a high IV dose right up front seems to make a difference. 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 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 Hemlibra, 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 uptake curve is very strong, very solid. We don't see any sign of a slowdown there. 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 profile's held up very well. 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 two. Firstly, on China, I wonder if you could just outline the potential timelines for getting some of the new drugs on the National Reimbursement Drug List. I think you said Alecensa, you expect it soon. I guess, what about Tecentriq, and also potentially Perjeta and some of the other new medicines? Also, perhaps related to that, in China on diagnostics. I wonder if perhaps Thomas could comment on the trend he's seeing in China there. There's been some comment, I think, from some competitors about some disruption. I guess, is your Chinese business growth seeing any sort of impact? Perhaps you could comment on the trend you're seeing there. Just quickly on Polivy, very little mention of it.
I wonder if you could update us in terms of the launch profile of Polivy and how you're getting on with that in the U.S. market, obviously after the pretty big ramp-up during the 3Q. Thank you.
Okay. Let me comment on the diagnostics business in China. As you probably have seen, there are certain regulatory changes in China, for example, the two-invoice policy, which means that basically between us and the end customer, there can be a maximum one distributor. You also probably know the Sunshine Procurement Act in China. We do see those things. In general, the amount of distributors that we are now working with in China has significantly reduced. 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. There is a squeeze when it comes to distributors in China. That's definitely the case.
Great. In terms of the China, the NRDL opportunity, the National Reimbursement List. We think Alecensa and Perjeta are sort of 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. Those are probably the ones that we have the most optimism about for next. 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, our first sales, CHF 24 million in relapsed refractory DLBCL.
It's being widely used in settings in terms of both academic centers, community, and including a number of CAR T centers. A lot of CAR T centers have started to use Polivy. Sometimes they use it as a bridging agent. In other words, they have a patient, they might be eligible for CAR T, but they won't know until they've actually sent the cells out. While they're waiting, they put them on Polivy, and they might stay on Polivy. They might be using that to bridge to CAR T. Overall, we think we've treated about 383 patients since launch in May. If you think about that, if you compare that, for example, to the rate of uptake of CAR T, I think it compares quite favorably.
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 III 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. We think we've got an opportunity to go straight into first-line with Polivy. 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. Looking forward to more progress with novel therapeutics in hematology.
If I could just make a remark because of timing. Maybe we can take one from the line here.
Okay.
Maybe we could take two additional questions from the call. There is unfortunately, Stefan, for you, there is another question on Spark.
Okay.
I think you're already trained this morning from the media call. The question is outlook for this year, confidence in closing. The question came from Charles Pitman 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. 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 Mark Purcell, Morgan Stanley. Please go ahead.
Yeah. 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? What kind of NRDL renegotiation there 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. 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 I'd be interested in that. 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, you asked about penetration of Avastin, Herceptin, and MabThera in China. We haven't published the penetration rates there. Those data can be difficult to come by. We think we have significant volume growth ahead. You asked about potential for price renegotiations. We think we will have price renegotiations with or without biosimilars, just because that's part of the ongoing process in the National List. We do believe we can continue to grow despite upcoming price negotiations. In terms of anti-CD20s, the T-cell bispecifics, we think 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. It'll depend on both the efficacy that we see as well as safety.
I think you should expect to see some important updates on our anti-CD20s at ASH, including combo data, and I think that data will start to make the path forward more clear.
Alan, on the restructuring.
Absolutely. If I remember it well, I think the absence of data is more there for me. I think last year we had roughly CHF 900 million restructuring charges, if I remember it well. When I look at 2019, I think we have a lot of activities ongoing as you know, and I think we constantly work on our productivity. Honestly, I think that I expect the 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. Benefiting from that in 2019 as well. I don't see a slowing in momentum here.
Good. Given our time is progressing, perhaps if we can take one more question, please.
Next question comes from the line of Ronny Gal from Bernstein.
Can you ask about last?
The CD3, CD20 bispecific, you got two of them, either one.
Yep. Okay. Maybe I'll take that one first because yeah, that's the one I was mentioning that we'll have data in ASH. We do expect to have first patient in for phase III in an anti-CD20 bispecific in 2020. 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 two agents. We've got a lot of data, but we're also still working on the dose optimization because these are 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. 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.
Again, I look forward to a significant update at ASH on that. About Lucentis and looking forward with a new competitor in the market. We see that Lucentis has demonstrated its powerful effect in a number of retinal diseases, wet AMD, and others over the last 13 years. We expect to have continued strong demand for Lucentis. I'm sure there'll be some effect from a new product, but we think that that effect will be moderate. In terms of biosimilar competition, honestly, we're not really going to comment on our competitive approach because that's sort of competitively sensitive information. You can expect that we'll be competing for sure.
Again, we recognize that biosimilars are a healthy part of the sort of pharmaceutical ecosystem and so we'll be selling our products and offering the innovator products, but we do expect to see a 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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