Severin Schwan - Chief Executive Officer Daniel O’Day - Chief Operating Officer, Pharmaceuticals Roland Diggelmann - Chief Operating Officer, Diagnostics Alan Hippe - Chief Financial and IT Officer

Timothy Anderson - Sanford C. Bernstein & Co., Inc. Sachin Jain - Bank of America Merrill Lynch Tim Race - Deutsche Bank Andrew Baum - Citigroup Inc. Michael Leuchten - Barclays Capital Jessica Weldon - Credit Suisse Luisa Hector - Exane BNP Paribas Richard Vosser - JPMorgan Chase & Co. Steven Kotler - Cowen and Company Jeffrey Holford - Jefferies LLC Eleanor Fung - Goldman Sachs Vincent Meunier - Morgan Stanley Stefan Schneider - Bank Vontobel AG

Ladies and gentlemen, good afternoon, welcome to the Roche’s First Quarter Sales 2016 Conference Call and Live Webcast. I am Shayi, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. After the presentation there will be a Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it’s my pleasure to hand over to Dr. Severin Schwan, Chief Executive Officer. Please go ahead, sir.

Good morning, good afternoon. Welcome to our quarter one briefing. We had a good start to the year. As you have seen sales up by 4% in local currency and we made very good progress in our pipeline. We got accelerated approval for atezolizumab for both bladder and lung cancer. And we successfully launched Alecensa and Cotellic in the United States. And we are very much on track for filing this quarter for ocrelizumab. If we turn to Page 6, Pharmaceuticals up 4%, very much driven by our key oncology products as well as immunology; Diagnostics up 5%, very strong performance in particular in immunodiagnostics. And you see we have now the slightly positive impact by currencies so 5% as reported in Swiss francs on a group level. If we turn to Page 8, you can see a solid sales growth across all regions, positive growth across the world. U.S., somehow impacted by lower Tamiflu sales due to a weaker flu season, so if you would correct for that, actually a growth of 4% in Pharma U.S. Turning to Page 9, again, we add to our list of breakthrough therapy designations, we had another three in the first quarter 2016, which should also help us with focus in our portfolio and bringing those new molecules to patients as soon as possible. On Page 10, an overview regarding the significant readouts for the shorter-term future, we now launched Venclexta in the first indication; again, Cotellic and Zelboraf combination launched in the U.S. as well as Alecensa; and on track for atezolizumab and ocrelizumab specifically. So to conclude, on Page 11, we confirm our outlook of low-to mid-single-digit sales growth; core EPS ahead of sales; and based on this strong start into 2016, we also expect to further increase the dividend in Swiss francs. And with this, I hand over to Dan for Pharma. Daniel O’Day: So, good afternoon, good morning, everybody, from my side as well. Picking up on Severin’s comments, it was a strong quarter for Pharma overall, both in terms of sales, but as I’ll get into, also in terms of portfolio progression, launches and, in particular, some regulatory designations for several of our products which I’ll talk a bit about. So going right to Slide 14, you can see the sales breakdown by region. Overall, in constant currency 4% growth. U.S. 3% was driven by Esbriet’s, the oncology portfolio, immunology portfolio. If you could exclude the year-on-year effect for Tamiflu for the United States, we would have a 4% growth. And it’s a point, to point out here, because a few of our oncology products in the first quarter in United States had some influence on buying patterns that doesn’t affect significantly the overall demand for those products. And I think you’ll see those buying patterns ease out as we get into the half-year and later in the year. In Europe, a strong 5% growth as well, driven by Perjeta, MabThera; in particular, good growth in Germany and France. In Japan, really solid growth throughout the portfolio, oncology and immunology. And in International, we see the growth driven by China, particularly due to recent approvals and reimbursements for our key products; Herceptin, MabThera, Avastin; in some of the new provinces. I would point out here that the volume growth for Pharma was around 5%. So as in past quarters, we have about an overall minus 1% effect on pricing. And the currency, of course, the impact turned positive this year as well. So that’s also a change from previous years, of course. Now, moving to Slide 15, we have the overall view of the portfolio, oncology and immunology driving the portfolio. Most of these products I’ll touch on in detail in some of the upcoming slides. Let me just make a couple of comments here. First of all, Activase in U.S. for ischemic stroke, 21% growth, continues to be responsive to sales promotion and good third-party studies investigating the device and that drove the Activase demand. The growth offsetting some negative declines, I’ve already talked about Tamiflu, Lucentis as expected continuing to decline a bit in share, but really beginning to lessen decline. And I would just point out that we have publication on the Protocol T two-year follow-up in DME, which essentially showed no statistical difference in visual outcomes of the two-year mark between Lucentis and Eylea. Off to Slide 16, Oncology, key message here is in addition to the established portfolio, the launches are off to a good start. And I’ll speak a bit about them. First of all, I’ll touch on HER2 and Avastin in separate slides. So let me start with the CD20 franchise here. Really, positive to the franchise longer term is, we got our first approval with Venclexta in the CLL p17 deleted population. And this product has the potential to really become another cornerstone for our hematologic franchise in a variety of indications as we’ll speak about. The CD20 franchise overall grew 3%. U.S. growth was really driven by demand, growth in international market. I would make a point, on the subcutaneous conversion rate continues to improve with MabThera. Recently, we launched in countries like France and Italy, so some of the larger countries in Europe. Gazyva grew by 67% in quarter one, driven by the U.S. and Europe. And the U.S. approval in rituxan refractory indolent non-Hodgkin lymphoma in February is beginning to help drive that growth. That’s the result of the GADOLIN trial and we also expect that to be approved as an indication later this year in Europe. So, obviously, we await the GOYA trial as well in the front-line NHL setting later this year. Just to point on Tarceva, I mean, there is continued decline with some of the in-class competition. I would point out that we have now filed in the EU, Avastin and Tarceva, so we expect approval in the second-half of this year. And that could be a supportive indication obviously for both of those products. Zelboraf and Cotellic, now back to growth, plus 18% after the U.S./EU approvals of the combo in quarter four. Good mid-single-digit new patient share gains we’re seeing in the U.S. in the first-line and second-line combination setting for BRAF positive metastatic melanoma. And we expect that picture to continue to improve in 2016. Obviously, the competitive landscape in melanoma continues to change with the immunotherapy coming into the space. But the role for mutant-positive patients with a very effective combination continues to be a very important therapeutic option for patients moving forward. For Alecensa, really off to a good start in the United States, ALK-positive crizotinib failure, non-small cell lung cancer. CHF10 million sales from the first quarter, about 15% new patient share after a very strong start. And, of course, we’ve got Japan in the lead here. I mean, launched previously with the broad label, plus 66% in the first quarter, and the EU approval is pending. I would point your attentions to the J-ALEX data. This is the Japanese data that stopped early because of the success in the front line out positive setting. We expect that to be presented at ASCO. So moving on to Slide 17, with the HER2 franchise, quarter one sales in the overall HER2 franchise plus 9%. U.S. continued strong volume growth with Herceptin, continues to grow from the longer treatment times with first-line metastatic breast cancer in combination with Perjeta. In the EU, overall solid volume growth for Herceptin as well, also continued switching to Herceptin subcu. The Herceptin subcu sales now account for more than 40% of the total Herceptin sales in the countries where it’s launched, which is predominantly in Europe. And in International, nice growth with Herceptin plus 7%, growth continues to be driven by APAC mainly in this quarter due to China, the ongoing reimbursement in a variety of provisions. Perjeta, good first quarter, plus 33%. EU at 65% growth, obviously a little bit behind the penetration and launch of the U.S. which grew to 15%, and International just really starting to get going at 65% growth. But Perjeta growth was really driven by continued new share in the first-line metastatic breast cancer setting and also in the neoadjuvant setting. We are now up to neoadjuvant shares in the U.S. in excess of 90%. And really just beginning the penetration in Europe, we are just above 10% in neoadjuvant penetration in Europe. But our first-line metastatic breast cancer shares are reaching around 70% in the U.S. and around 60% in Europe. So you can see the penetration continued to do well with Perjeta, but also reaching a very high point in the U.S. For Kadcyla, plus 11%, EU has 13% growth, really strong uptake. And now the countries that are also getting reimbursement going, Italy, France, Spain; our second-line metastatic breast cancer share is above 60% now with Kadcyla in EU and U.S. Japan, strong 27% growth, continuing to penetrate in the second-line setting. And International, we are really just beginning the reimbursement negotiations and this will continue to contribute growth in the coming quarters. So probably a good time to again comment on the APHINITY trial in the adjuvant setting for Perjeta-Herceptin combination. The events continue to attract. Really nothing has changed since the last update. We expect the trial to readout towards the end of 2016. As you know, we will only unblind the study once the targeted number of advances has been achieved. And I can just say, with the current run rate of advances in line with what we consider from a modeling standpoint, just so you know as well. So moving to Slide 18 with Avastin, good growth in the first quarter with 4%, I would point you that 4% was also even after we have been impacted 10.9% prices of Avastin before Japan was so called huge selling price decrease that went to effect for a few products in Japan. And Avastin was the product that was affected in our portfolio. And despite that we continue to grow 4%. As I mentioned before, particularly in the United States, we saw some buying pattern effects in the U.S., but good solid underlying growth across the U.S. and other regions from a volume standpoint. In the EU, the growth targets remain ovarian cancer and cervical cancer. In International, the growth this quarter was driven by Latin America and Asia Pacific, specifically the first-line non-small cell lung cancer in China is beginning to gain traction. And in Japan, the growth was driven predominantly by breast cancer and by lung cancer. Moving to Slide 19, the immunology portfolio now is over CHF7 billion. On an annualized basis run rate, we had a plus 16% growth in the first quarter. Xolair growing to 22%. We continue to see good growth in the allergic asthma setting as well as the CIU setting. In absolute terms, that grow is split roughly 50-50 between those two indications. The outlook for 2016 remains positive, the pediatric launch is expected in the second half of 2016. And we don’t expect any major impact from other entrants into that market relative to the ongoing momentum of Xolair sales in 2016. In Actemra, 14% growth, in line with expectations, it’s now the eighth year of double-digit growth. The subcutaneous sales are now approximately 35% of the total sales and really the major growth driver in the U.S. and EU. And we continue to strengthen our leadership position in monotherapy in the U.S. and in Europe. We just mentioned, for Actemra, results from the Phase III in giant-cell arthritis study are expected still in 2016. And our Phase III systemic sclerosis trial is currently enrolling ahead of plan at this stage. As you know, that’s an indication that’s also been designated as a breakthrough. So for MabThera/Rituxan we have in this immunology setting around 15% growth driven by rheumatoid arthritis still and vasculitis, and Pulmozyme good growth with 7% in cystic fibrosis. Continuing on to Slide 20 with Esbriet. The Esbriet sales are really well on track, global sales of CHF178 million in the quarter one, 96% year-on-year. I would say, I get this question asked a lot, we worked through the bolus of patients that were initially in our program and getting on to medicine and getting reimbursed. So I can expect - we can expect moving forward a more steady consistent growth, as we has established a market leadership position in the U.S. and the EU markets. U.S., good strong underlying growth with the run rate of new patients being on track. And in Europe, continued differentiation relative to labeling versus the competition. In 2016, the real objective now is to expand more and more into the mild and moderate patients, now that physicians and patients are more comfortable in the severe setting. We have more work to do in the severe setting still. We are certainly not fully penetrated there. But there is an even bigger population in mild and moderate patients with severe setting accounting for around 30% of patients, moderate around 40% and mild around 50%. And to date only around 50% of patients in the severe and moderate section get any treatments and in mild it’s only 30% that receive a treatment today. Because you can see the potential for this devastating disease that earlier use can make an impact on patients’ lives and that’s something we’re obviously working on. So moving to the innovation sections and quick updates on recent launches like 22 with Venclexta, as I said, 17p deletion, accelerated approval achieved just recently. And now we are getting ready into launch-mode in combination with our partners with AbbVie in the United States. Just remind to you, we’ve got two additional breakthrough therapy designations for Venclexta in AML and in combination with rituxan, relapsed/refractory CLL. We have 20 trials running now, that are testing Venclexta either as a monotherapy or on a CD20 backbone, either rituxan or Gazyva, or in triple combinations. And we started a couple of new trials in quarter one. There is a triplet-combination of Venclexta plus Gazyva, plus polatuzumab in non-Hodgkin lymphoma. And there is a combination of Venclexta plus Cotellic, and Venclexta plus idasanutlin in AML. So those combinations - three trials have started now in the first quarter of this year. There will be additional readouts for Venclexta in 2016 at ASCO and ASH. And those are pointed out in some of my later slides. And just to remind you, I mean, this is a 50-50 profit share arrangement with AbbVie globally and a co-promoter in the United States with AbbVie booking sales. Moving to Slide 23, Ocrelizumab, in fact this week, so I can’t be a spoiler on this. We got the data being presented at the AAN, April 15 to 21, on the NEDA endpoint, no evidence of disease, disability progression in the MRI data. And I remind you again that the breakthrough therapy designations has been granted in PPMS and we’re on track for the filing of these exciting filings for both indications, RMS and PPMS, in the first-half of this year. So that is where we have to - with Ocrelizumab, but obviously preparing for the launch accordingly. Slide 24 on Emicizumab, continuing to - the program continues to do well. No major changes in our previous update to you on the trials. But let me just go over them quickly. The Inhibitor study, enrollment is progressing very well. We expect the final readout for this trial latest in 2017, it’s six months from the last patient into the trial. I know there was some confusion due to some timeline changes appearing on ClinicalTrials.gov. That should have been corrected by now. That was not in any way a fundamental change to the trial. It’s actually an additional analysis that was captured in ClinicalTrials.gov in a way that it could have been confusing in terms of the readout of the inhibitor trial. But I assure you there’s no change to the readout of the inhibitor trials what we had previously communicated and things are well on track. On the non-interventional study, the inhibitor patients have been fully recruited. We have more than 90 patients on the non-interventional study that are inhibitor patients and we have now extended that non-interventional study to enroll non-inhibitor patients and pediatric patients. Both of those studies will be - pivotal studies will begin later this year. And they will expect us to open enrollment towards the middle of the year and the final readouts in 2018. And we also expect later this year to start our once-a-month dosing PK bridging study as well. So, all is on track for Emicizumab. On Slide 25, returning to cancer immunotherapy, just a reminder on Slide 25, as of today we have 9 in-house cancer immunotherapy assets in the clinic. And this slide as usual shows where they are in immunotherapy trial, a cycle I should say. And in quarter-one, we have two additional compounds that are being tested in combination with atezolizumab with external collaborations. We have a variety of external collaborations. Now, they complement our very broad internal portfolio. And we have the announcement on the collaboration with Janssen and with Kite in the first quarter this year, continue to round our atezolizumab trial program. We have now more than 50 trials ongoing in cancer immunotherapy. On Slide 26, we’ve added some additional trials on this slide as well. We just go over a couple of additional trials we’ve added in the first quarter. The first one is a Phase I triple combination of atezolizumab plus daratumumab plus lenalidomide in relapsed/refractory malignant melanoma, that’s or - multiple melanoma, I’m sorry. That’s Janssen deal. Phase I combination of OX40 plus vanucizumab in relapsed/refractory non-Hodgkin lymphoma, a Phase I combo of atezo plus Avastin in hepatocellular cancer, a Phase I combo of atezo plus Avastin plus chemo in gastric cancers, and Phase I of atezo and chemo and pancreatic cancer. So the activity continues and we have obviously significant investment here. I would just point out that the red squares around the blue boxes here are what we expect to readout this year. And some of this we’ll see at ASCO. Of course, these endpoints are in many cases event-driven. So there could be some variability in the readout, but that’s what we expect for this year at this stage. So turning to Slide 27 in the outlook, on Slide 28, with everything we have going on, we keep focused, we keep our teams focused on making sure we maximize the recent launches, that’s Venclexta, that’s Alecensa, that’s Cotellic and Zelboraf, that’s Gazyva in the relapsed/refractory indolent setting. And then, obviously we’re doing an awful lot to prepare for the upcoming launches to we expect, ocrelizumab in MS, Atezolizumab in bladder and lung cancer, and then, of course, the important line extensions with Gazyva and with Perjeta. On Slide 29, a couple of points here, continues to be a very robust pipeline over the next couple of - few years, keeping us busy at exactly the right time relative to the potential introduction of biosimilars in 2017. I would just make a point. We have the readout now, the lebrikizumab program. I kept it on the slide here. But as you know, we got two trials that have read out, that we’re now digging into the data on one trial, met its primary endpoint, one trial did not. And we’re looking into the asthma program at this stage. I would just say that it’s - given the difference in the readouts on the asthma programs, although I kept it on the slide, it’s highly unlikely that we would be filing this year for that. And we’ll continue to look at the readouts in the other indications for lebrikizumab as they come in over the course of this year. The quarter-one progress has been overall good on this slide. When I look at the Venclexta approval, the Gazyva approval, the breakthrough therapy designation for ocrelizumab and the priority review for atezo in bladder and in lungs. Now, if you go to Slide 30, just to point your attention to the dataflow for this year, obviously, won’t go over all the presentations at ASCO. But I do think that we’re now starting to see other IO/IO combinations. And, of course, the OX40 as a monotherapy was presented at AACR this week or will be presented, I guess, today. And the combination between atezolizumab and OX40 will be presented at ASCO. In addition, as I mentioned, the Alecensa trial, the J-ALEX I would point out, the ongoing update to the POPLAR trial and then the variety of Venclexta indications at ASCO as well. On Slide 31, I mean, given the nature of disease, these many readouts are coming in at different times of the year. We’ve got to leverage all the conferences this year. For the timing of the readouts and getting the data out to all of you, so I already spoke about AACR. In addition to the OX40 monotherapy, we’ve got the triple combination in the atezolizumab, Avastin and FOLFOX, the update on the Phase I in colorectal cancer. At ESMO, we expect an update on the atezolizumab plus abraxane Phase I in triple-negative breast cancer. We expect the combination with atezolizumab plus IDO, the Phase I. And we expect, as a follow up to the end of last year’s dermatology conference, where we saw the double-combination. We expect to show you the triple-combination with atezolizumab plus Zelboraf plus Cotellic in the Phase I BRAF positive metastatic melanoma. And then, the OAK trial, we would expect, depending on the timing of that readout, to come in either for ESMO or for the lung meeting in Vienna. It will depend on really when that data comes in. And then, I would just point out that at ASH, a couple of points. One is obviously the GOYA trial that will be the first place we’d see the detail from the GOYA trial. Of course, we’ll report to you on the top line results. And another T cell bispecific antibody, the AD CD20, AD CD3 is likely to readout in a variety of solid tumors there as well. So with that, I would just close quickly on Slide 32 and say that we’re still evaluating the lebrikizumab results. We’ve got Gazyva plus Venclexta out the door and looking forward to the other readouts as we continue to progress through the year. So with that, I would turn it over to Roland Diggelmann for the diagnostic portion.

Thank you, Dan. Good morning, good afternoon also from my side. A good start of the year also for Diagnostics. When you look at a very strong sales growth in laboratory businesses with the combination of Professional Diagnostics, Molecular Diagnostics and Tissue Diagnostics actually growing at 9% rate, which is a good momentum, good acceptance of new products that have been launched. And we expect that momentum to carry forward as well. Diabetes Care, a challenging market environment, particularly in North America. As a consequence of the reimbursement cuts, we still continue to see the spill-over effects from the public sector into the private sector. We have seen a couple of contracts, which have not been extended or renewed at a lower price. And we’ve also seen the reimbursement cut in Canada in the province of Ontario, so overall, North America with some challenges, and also on the heels of a relatively strong first quarter in the 2015. When we do look at the volumes for testing and the demand for testing, we see these in line with our targets. So we do think that the second, third quarter will be better, and second-half will also be better than the first quarter. Turning over to Page 35 and the geographic distribution of our sales for the first quarter, as you can see, strong growth driven by specific in Latin America; and Asia Pacific growing at 16% overall, and in particular, China, which continues to grow well, 24% for the first quarter. And Latin America was at 21% growth and then a continued good growth opportunities for - in particular, the emerging markets. I would just want to point out North America, which you can see here at flat growth for the first quarter. If we do exclude Diabetes Care results, the growth in the laboratory businesses at 70%, so good growth there as well. On Page 36, some of the highlights in terms of the drivers, you can see at the very top Professional Diagnostics continues to be driven by immunodiagnostics growth, 12% here. We continue to expand our install base. That is the number of instruments in the markets. And we also continue to broaden our assay menu, so this is the highest number of assays that can actually be performed on the instrument. That shows in immunodiagnostics line. On Molecular Diagnostics, in particular, virology, we see continued good trend in testing for virology, especially the large panels, so HIV, HPV, HCV. And we continue to gain market share in the U.S. with our HPV molecular test, which is the only approved for primary screening in cervical cancer. Tissue Diagnostics, our core Tissue Diagnostics performs well, 10% growth in advanced staining. And then, with the introduction of our new instrument in primary staining, the Ventana HE 600 we see now in good acceptance, good momentum here and the primary staining growing at 24% for the first quarter. Page 37, a key element of our lab growth strategy is actually to provide integrated laboratory solutions, to allow our customers to operate their laboratory in the most efficient way of the highest quality in detection standards. And this is one really important example here. We’re the only company that is capable of providing a full solution to hepatitis testing, which means a comprehensive menu in both serology and molecular or nucleic acid testing; and actually, connected to one single system, which means that the laboratory results can be performed with one single blood sample, one single tube that will actually then run through the system. So for the laboratory, increase in efficiencies; complete solutions for us; the opportunity to grow, and continue to grow in this key area of infectious disease. Page 38, just an actual topic, which is the Zika virus outbreak, and our ability and our approval that we have received for the Zika virus assay under an IND label, so an Investigational New Drug Application label from the FDA. This is the first test for Zika virus testing. It is running on our large molecular platform, the cobas 6800 and 8800, which is also specifically developed for blood screening. So it can be used - so the Zika test can be used in conjunction with all other blood screening assays. We have - starting the testing in Puerto Rico, we expect that to be expanded to Southern U.S. centers as well. And, of course, with that this reduces the reliance on imported blood, reinstates blood sourcing in Puerto Rico specifically, but also ensures that we can continue provide safe blood. And with that also assist in health crisis such as the latest outbreak of the Zika virus. Then turning over to the last page, 39, which is the list of the key launches for 2016. We made good progress in the pipeline development, both on instruments and assays. And I would just want to point out the most important launch for this year, which is at the top of the page. The e 801 module as part of the cobas 8000 same work-area family, which is the new model, which will allow us to double the throughput on the same footprint for our largest franchise, which is immunology and for the very high throughput instruments, which is the cobas 8000, so good progress there. And with that, I’m happy to turn it over to Alan Hippe for finances. Thank you.

Yes, thanks, Ron. I’ll talk about couple of brief comments of finance, and what I’m going to talk about is outlined on 41. You see, on one hand, I will break down a little bit currency effect on the sales side. We’ll talk about the guidance for 2016 and especially the basis for the guidance, so the basis in 2015. Couple of points on capital markets, first, we had a bond maturity of a euro bond, €2.1 billion, coupon of 5.625%. This will definitely help us with the interest expenses in 2016, so quite a saving here. And then, we had a bond tender. We called US$0.6 billion back maturity in 2019. And we did that in fact in 2015. So you might have seen it in the core results in 2015. So no additional burden in 2016, but certainly we get the savings. The impact in 2015 was a minus CHF72 million. And then, we had two bond issuances, one euro bond, so €0.65 billion, maturity in 2023, so a seven year bond, coupon at 0.5%. And this is the lowest coupon ever for a corporate bond with the maturity beyond five years in Europe. So really for us the lowest fixed coupon ever. And the second is really - the second bond we have issued is a U.S. dollar bond, $1 billion, maturity in 2026, so 10 years, coupon of 2.625%. And this is the lowest coupon ever for a 10-year U.S. bond for Roche. Good. With that, let’s go to Page 42. And the split here, I think my colleagues talked about the sales already. Severin pointed out, when you look really at constant rate sales growth has been 4% in the first quarter. When you look at the reported number in Swiss francs, growth has been plus 5%. And on the next page in Slide 43 I will explain why that happened. Basically, what you’re seeing is the major positive impacts were coming from the U.S. dollar, the yen and the euro, so all strengthening against the Swiss franc from an average point of view. And the negative impact is driven by the currencies in Latin America, and here worth to mention, Brazil and Argentina, which had the effect here predominantly. Next page is about, what does it mean beyond sales? And you know the exercise we’re going through here on that slide on 44. Because what you’re basically doing and you’ll see that on the right hand side of that slide, we are assuming that the currency rates, at March 31, 2016, remain stable until the end of 2016. And then, you’ll see the respective impact to sales, core operating profit and core EPS. And let me here focus on the full year, you see for sales it’s neutral, core operating profit, slight impact of minus 1 percentage points and on core EPS neutral again. So you see really that the major shift compared to last year is coming from the U.S. dollar especially in the core EPS we have quite a significant leverage through the U.S. dollar as roughly 80% of our financing is done in U.S. dollar. Good. With that, let’s go to Page 45. And on 45, I just want to talk about the basis for the guidance 2016. And when you look at it you might remember, the reported core EPS for 2015 full year has been CHF13.49. So if you want to get to the right basis for 2016, first thing you have to do is, you have to adjust for the currency losses in Venezuela and Argentina. And before taxes the impact has been from Venezuela at minus CHF254 million, and for Argentina at minus CHF105 million, which is outlined on Page 28 of the finance report. To get to the effect, I think what you’re doing is, you take that effect basically and you look at it after tax. The after tax effect is CHF308 million negatively. You divide that by 862 million shares. And this is the number for the diluted shares, which is outlined on Page 98 of the finance report. So you add CHF0.36 and you get to the right hand side number of that slide, so CHF13.85 for core EPS as a basis for the full-year 2016 at constant currencies. And this is where the basis then for my last slide, 46, where once again the guidance is outlined in the 2016 outlook, so low-to mid-single-digit when it comes to sales. Ahead of sales growth when it comes to core EPS growth. And as said, the basis is the number that I have explained on Slide 45, and then the dividend outlook for the increase of the dividend in Swiss francs. And with that, we are happy to take your questions. Thanks a lot for your attention.

We will now begin the question-and-answer session. [Operator Instructions] The first question is from Tim Anderson, Sanford C. Bernstein. Please go ahead.

Thank you. A few questions if I can. You talked about pricing globally being down 1%. What was pricing globally, if you exclude Japan? And can you talk about what pricing was in the U.S.? Second question is a broader one on biosimilars in the past. You talked about likely timing of entry; you’ve given other qualitative data points. So I’m wondering if you can kind of update us on your assumptions for the earlier, so we’ll see a big biosimilar - biosimilar, one of your big brands. And today relative to, let’s say, two or three years ago, how you are thinking about potential rates of erosion based on various inferential data points we have from other countries? And then last question is IMpower 130, your chemo-combo trial, it looks like the timing of readout may have slipped a little bit, can you give us kind of a clear idea of when we’ll see the first results that trial? Daniel O’Day: So sorry, Tim. The last one, timing of readout for what product? I just didn’t…

This is the chemo-combo trial with atezolizumab? Daniel O’Day: Okay, yes, sure. Good, so thank you very much. On the pricing, I don’t want to overemphasize. And it has been basically in line what we had in the past. There was generally an offset between some price pressure in Europe and some price leverage in the U.S. And in Japan, the pricing discount really went into effect very late in the quarter. So I don’t - that doesn’t really have a major impact on the evolution of pricing, but again, nothing really new there. I think our products continue to do very well globally relative to pricing headwinds around the world. On the biosimilar timing and erosions, I mean, there isn’t in a whole lot of new data. I mean, we expect still the first biosimilar entering in the second-half of 2017 in Europe with possibly biosimilars coming there. That’s our expectation with MabThera and Herceptin. It’s later in the decade in the United States. And in terms of evolution and erosion, there haven’t been a whole lot of good precedents out there that have developed over the past quarter. We’ll have to continue to monitor, but in the therapeutic areas where we’re seeing biosimilars. Again, we are not at all convinced that there are going to be parallels, or exact parallels to what we’ll see in oncology either metastatic or curative setting. So I would refer you again back to our Pharma Day in London, where we had quite of detail in the biosimilar. I think all those, as they are available online as well, all those assumptions apply. And then, the timing of the chemo-combos, it was atezolizumab, again, continuing to accrue the trials. First readouts would be in 2017 for the chemo combos and we’ll certainly keep you up-to-date as those recruitments occur.

I’m sorry. Could I just ask on U.S. pricing, what pricing was in the U.S.? And then, on the chemo-combo, it looks like they’re on clinical trials. It has slipped at least the timeline listed on the website. So I am wondering, if that would be a later 2017 readout versus or earlier 2017? Daniel O’Day: No, there shouldn’t be anything different. I think ClinicalTrials.gov readout is significant for the chemo-combos on ClinicalTrials.gov. And on the U.S. effect, again, we generally have a couple of few percent increase in the U.S., and then a couple of few percent decrease in Europe. That’s the way it kind of works. It’s not a wide continent in general.

Thank you.

The next question is from Sachin Jain, Bank of America Merrill Lynch. Please go ahead.

Hi, thanks for taking my questions. I just kind of have three around IO. So first you’ve highlighted Phase I data for atezo with OX40 in IDO this year. Would that Phase I data be sufficient for a decision on Phase III progression? And could we expect where this Phase III starts at least be decided on this year? Secondly, just a follow-one on the chemo-combo Phase III, the slides in the results that still lists PFS as a primary endpoint. I think there have been discussions in moving OS to a co-primary. Could you confirm whether that’s happened? What drove the decision and how much later we’d expect OS versus PFS in those studies? And then the final question also on chemo-combo, but this time on the Phase I study ongoing; obviously, not listed in your slide deck as a data presentation this year. Could you confirm whether you have early PFS data from Phase I from the combination in-house as yet, given the study is being ongoing for well north of 15 months? Thank you. Daniel O’Day: Thanks, Sachin. For all that you laid out, those are good questions. First one, in the Phase I OX40, I think it would be pre-mature to - I don’t want to get ahead of the data readout. So to answer your question about Phase III starts would be a bit pre-mature. I would say, again, just remind you, we’ve got at AACR the presentation going on. I think it’s today, yes, it’s today in New Orleans. the OX40 data monotherapy are interesting, good safety, some early efficacy, but early. So I would put the caution around that. But the next step is really to look at the atezo OX40 combo at ASCO. And I certainly don’t want to get a hold of those data. I think what you can be assured of is when we see good robust signals like we saw in the atezo chemo combo front-line lung setting, that we will move quickly to a label-enabling trial. That data I can assure you. But at ASCO, I don’t want to indicate when that will happen with OX40, and so we continue to see the data. On the chemo combo and the endpoint question, I mean, a couple of things that need to be considered here. I think what we are seeing, by the way, not just us, but I think the field is seeing there is a growing depreciation for overall survival as an endpoint, so maybe a better representation of the clinical benefit of cancer immunotherapy. And at PFS may and certainly in some indication be underestimating the benefit. We have converted our endpoints already. And this is not new to us. In renal cell and triple-negative breast cancer to the PFS/OS co-primary endpoint and adjusted those trials accordingly and you’re up to speed on that. In terms of your specific question on the front-line lung chemo combos, I just want to give you a couple of assurances. One is that, anytime we develop a clinical program, we incorporate mechanisms that allow us to enable the trial modification as we learn more from the emerging data. And, again, you’ll see some additional data at POPLAR, at ASCO, which may provide you some additional input into this question. We’re evaluating that data as it matures, another trials like POPLAR. And then, we will make adjustments to the clinical trial protocol as we see fit. I would just give you some assurances on the chemo combo front-line setting that we have powered those trials and initially looked at those trials to account for the possibility of OS data being a potential endpoint. So I don’t think we would have significant alterations to those trials. And as soon as we - if we make a decision on any change to an endpoint we’ll certainly let you know. But I think the trials are positioned appropriately to convert to that endpoint if we see that that’s the right thing to do with the ongoing trials. And then, finally, chemo combo Phase I, we are - what I would say is we continue to have data cuts in house on that. We continue to be encouraged by that data. As you know, all of our peers have also started chemo combos. And bottom line is that, we find the data particularly as it relates to different chemo arms to be competitively sensitive. So at this time, we do not plan to continue to publically disclose those at conferences as we go throughout the year. We’ll continue to monitor that and decide what we’re going to publically disclose. But I want you to know, the reason we’re not publically disclosing that is not to that we don’t have the data in-house, but we find it to be competitively sensitive.

So just a follow up, do you have PFS data in-house? Daniel O’Day: On the Phase I chemo combo, we do have some in-house that is continuing to mature.

Thank you very much.

The next question is from Tim Race, Deutsche Bank. Please go ahead.

All right, gents, thanks for taking my questions. First, just a question on IO, first, in the Imotion-150 [ph] renal data, just a little bit of inconsistencies between slides when they state it’s going to be readout and when we may see this. Can you confirm that we won’t see this at ESMO this year and any reason for that? Then just moving forward onto just currency actually, the currency guidance, at the full year, obviously, we had 0% outlook in terms of change on sales and then minus 5 on core EPS and now it’s zero on sales and 0% on core EPS. Can you just confirm that’s all related to the debt in dollars or is there anything else underlined here? And then, just finally, maybe just a question on your thoughts on your diagnostic driven strategy outside of oncology, lebrikizumab obviously hasn’t produced the result you expected. You look at many endpoints, and then, quite often there go-forward products have - and perhaps is a question of whether you’re data-mining etcetera. What have you learned from lebrikizumab so far? And would you change anything?

Yes, Sev.

Yeah, go ahead.

Yes, with the currencies, Tim, look, I think, yes, I can confirm that. And to make it very brief, I can confirm that there’s nothing else baked into that projection. But let me remind you on how we do that modeling, it is we keep every currency rates, yes, which we have the average, yes. At the end of March we keep stable until the end of the year, which is just one assumption. And things will surely change on the way. But I think what you’re seeing, and I totally agree with that, is the sensitivity of the U.S. dollar, yes, especially when it comes from core operating profit as well, especially I can even say on the EPS growth. And you’re right, you mentioned our projection that we gave at year end. And that differs now and I completely agree with that. But as said, once again there’s nothing else baked into that than the change of the currency rates. Daniel O’Day: Yes. Thanks, Tim. And on the questions on the tests on renal, thanks for bringing that up which is I think it is good to be - make everybody aware of the change in the new flowchart. So on the renal Phase II, timeline is that we should have the data in-house in 2016. But you rightly pointed out that the reason we took it off is we think it’s not likely to make ESMO. And if it’s not likely to make ESMO there isn’t really another natural conference for disclosure of that data this year. So we move it probably into 2017. And we don’t obviously list the conferences in 2017 we represent at. So that’s the only reason it was taken out. Not that there is a delay, not that we won’t have the data in-house, but just a suitable ability to present externally may not be possible. I would point out essentially and that our peers have also now added Avastin to the backbone on renal, so just to point on that. On lebrikizumab, and obviously we’re digging into the data now. It’d be premature for me to suggest lessons learned. But certainly we’ll be coming back to you with that as we do more analysis, updating you more at half-year on that, both in terms of the asthma program. But as you know, we have one, possibly, two other Phase II readouts and lebrikizumab reading out between now and a half year on Phase II basis, so lot of better feeling to the program and also the role of the biomarker in that stage. And we’re a learning organization. We continue to learn in biomarkers, both within oncology and outside of oncology. We continue to have a firm belief that, set many patient populations for the highest benefit is absolutely the way to go.

The next question is from Andrew Baum from Citi. Please go ahead.

Hi, three questions, please. So, firstly, could you talk us through what you believe to be the likely timing and impact of CMII payment model both on the ophthalmology and oncology business? Obviously, there is significant lobbying to stop this thing taking off. I just like to get your sense of how we’re going to stay healthy for it to arrive. And then for just solely the first part of the post-model, what impact would be? Second question, could you just talk us through your ongoing commitment to respiratory, given lebrikizumab’s fallen by the wayside? Obviously, you have Esbriet, you have Xolair. How does that inform your BD appetite within that segment? And then, finally, picking up and following on for the last question, the failure of lebrikizumab and the biomarker strategy comes on the heels of onartuzumab, the c-Met. Are there commonalities between the two, is it bad antibodies, bad biomarkers, bad cut-offs, or just bad luck? If you could help us on that, that would be helpful. Daniel O’Day: And the first question is around the part B payment in the U.S., is that what you are asking about?

The CMII payment model proposal, which used to be the fixed payment and then I’m just going to put the second part aside. It seems unlikely they’ll ever be implemented, but there’s a reasonable chance the first part will be. So I’m interested in how you think it impacts your business outlook? Daniel O’Day: Well, I think a couple of things on there. I mean, first of all, it is a proposal out for consideration by a variety of different stakeholders. And I’m sure you like we have read what some of the stakeholder input is including physicians and oncology physicians and how they feel about this, the specialty physicians I should say, not just oncology physicians. But as you will know, I mean, the proposal. And it’s just that at the stage is that a called pilot start in the autumn of this year, where it’s about 25% of the volume on that in part B and certain reasons and that have run for a period of time. And then determine how that’s working and where that’s working. I would just say that for our business, we continue to work with CMS on a variety of different possibilities for our portfolio, looking at ways to - looking at different pricing models that might be possible, reimbursement models in the U.S. So we’re in a very collaborative approach here. And I think we’re part of - there are many aspects of that proposal that actually I think work in the favor of our innovative portfolio, our ability to look at more individualized payment models in the U.S. So I think overall we see positives and we see some detractors for a variety of different stakeholders in the system. And we’re going to provide our input like everybody else and be a part of the process. In terms of the respiratory portfolio, I mean, you made some pretty dramatic statements. I would say that, first of all, we’re still evaluating the feedback from lebrikizumab. And we have a variety of ongoing trial still going with lebrikizumab in different asthma subtests and other indications. We still believe in the IO13 pathway, just how it manifests itself. So I don’t think it’s appropriate for me to comment further at this stage, because I want the science to talk and the science is going to talk by digging into the details more, which is exactly what we are doing. I think we’ll be able to come back to later in the year with some more details on that program.

And then onartuzumab and the learnings from two failed biomarker-driven strategies in terms of pinpointing whether it’s cutoffs biomarkers or monoclonals or like? Daniel O’Day: Sorry, I just don’t understand, you’re talking about atezolizumab now?

No, no. I’m talking about onartuzumab, the c-Met inhibitor, which failed probably about 18 months ago I guess? Daniel O’Day: Yeah. I’m sorry, what’s your question?

So the question was, you have had two large Phase III programs driven by biomarkers onartuzumab, and now, lebrikizumab, both of which didn’t read the results we wanted to see. So I’m wondering whether in terms of postmortems, this is a biomarker failure, a cutoff failure, a trial design failure or a monoclonal failure. And are there any commonalities between the two as we think forward? Daniel O’Day: Well, as I said, it would be premature for me to discuss commonalities, because we are still investing lebrikizumab. I don’t think in any way to suggest that biomarker strategies are the reason for the failure. If anything, we continue to learn about the science of biomarkers and develop the trials appropriately. So, I really - it would be premature to try to compare those two programs and contrast those two programs. I think they are very, very different circumstances and very different disease stage. And, I mean, the business we are in continues to be - there is always risk in a Phase III trial. And I would put that on top of any one of our trial programs. We do our best to de-risk that. We’ll continue to do our best to de-risk that, not just through biomarkers, but through understanding the science and through good robust trial design. But I certainly wouldn’t - it’d be premature to comment on the comparison between those two programs.

Thank you, Dan.

The next question is from Michael Leuchten from Barclays. Please go ahead.

Thank you. One question for Dan - first Roland, one for Dan and one for Alan, please. One of the headwinds at the moment in the U.S. for the existing or the commercial players in the immuno-oncology field is really trying to get physicians to perform the PDL1 testing. So now that you have acceptance of the dossiers both for bladder and lung. Are there any measures you can actually put into place to try to facilitate that ahead of market entry for you own product, both from Diagnostics and from Pharma side if at all? Then a follow-up question for Esbriet, please. I get what you were saying about the bolus of patients being sort of exhausted. Now we are going to run rate, so if I look at the Q1 over Q4 U.S. Esbriet number, it’s really the Q1 number that’s the underlying trend numbers, is that the way to read your comments, just to clarify? And a question for Alan, just on the bond tender, you tendered for the $0.6 billion bond, 2019 bond, but you left $0.86 billion I think outstanding with a pretty high coupon, so just your thinking around why would you only tender for part of it and not the full amount? Thank you.

Michael, sorry, but it was not understandable. The last question was completely - acoustically not understandable. The connection, I guess.

Okay. So, I try again. The bond tender…

It’s not getting better…

Operator, can you help us on the connection line?

Perhaps, we start with the first two questions…

Can you hear us, Michael?

…for the time being and then we follow-up on the third one again.

Okay.

Start with the first two. Daniel O’Day: Yes, okay. So first of all on the immunology oncology testing area, I think there is a number of things we’re obviously doing between our Pharma and diagnostics groups to prepare for a variety of different scenarios. I think one of things that we pride ourselves is the cooperation in terms of making sure that we have a broadly available test. And certainly with the initial prospect of PDL1, that the test, I mean, Ventana has a - and Roland can certainly emphasize this. Ventana has a very, very broad space of instrumentation out there. And it’s present in pathology labs around the world. And we work with our teams and countries between dia and pharma to make sure that we are preparing for this launch accordingly and have been in a pre-launch mode for a while. I would just say that, in terms of the eventual labels for bladder and lung, second-line lung, the first indications, it would be premature to determine exactly how those labels will come out. We are in discussions with the FDA right now about the nature of the diagnostic aspects of those labels. But we are prepared I think for all the eventual outcomes depending on how that progresses to make the test widely available. On the bolus, yes, I think you captured right on the bolus for quarter one. That really is the underlying trend that you see in quarter one. And I would just say that - emphasize again, but now we’ll be going into the mild and moderate markets in much more earnest to continue to drive that trend in the future for Esbriet.

Mike, so we give it another try for your third question. Are you still on line?

I will try, if it’s better.

Now, it’s better, yes.

Okay, thank you. So it is a quick one for Alan. The bond tender for the 2019 bond the $0.6 billion, as per your slide you left $0.86 billion outstanding, even though the coupon is 6%. So just your thinking around why you would tender for part of it and not the whole amount.

Michael, I am sorry. The line is completely broken, we don’t understand a word. Perhaps, we can follow-up after the meeting with [Karl or Ellen] [ph] on this…

The next question is from Joe Weldon, Credit Suisse. Please go ahead.

Hello, Joe Weldon from Credit Suisse. I think I can actually ask Michael Leuchten’s question, if my line is better. He was asking about why the, why you would only tender to redeem part of your 6% coupon, when you can replace it with - sorry, low coupon and so why you still got some of the older high coupon bond outstanding? My questions were slightly different. I wonder if you could tell us a little bit more in Diagnostics about the problems with the diabetes side of things where you are continuing to talk about the spillover from U.S. government pricing into commercial side. Is that a sign of things to come that could continue to get worse? Is there any sign of any innovation which you or competitors could introduce that would turn this situation around? Or should we think of this as a continuing drag against diabetes really for the longer term going forward? And…

Sorry, Ms. Weldon, to interrupt you. We lost the connection with moderators. Please hold the line we are calling them back. Thank you.

Okay. [Audio Gap]

Ladies and gentlemen, please hold the line. The conference will continue shortly. Thank you. [Audio Gap] Daniel O’Day: Hello, can you hear us now.

Yes. We can hear you.

So can we ask for the next question, please? Sorry for the interruption.

The next question is from Joe Weldon from Credit Suisse. Please go ahead.

Firstly, I think I can ask Michael’s question, because we could hear it, even though you couldn’t hear it. Which was I believe why you have only redeemed part of your higher coupon bonds, replaced it with your new very low coupon bonds, but why you left some of that larger high coupon bonds outstanding? My questions were different. In the diabetes… [Technical Difficulty] Hello, can you hear me?

Ladies and gentlemen, please hold the line, the connection with the moderators has been lost. The conference will continue shortly. Thank you. [Audio Gap] Ladies and gentlemen, please hold the line. The conference will continue shortly. Thank you. [Audio Gap] Ladies and gentlemen, please hold the line. The conference will continue shortly. Thank you. [Audio Gap]

Mrs. Weldon, please go ahead.

Hello. I’m going to start by asking Michael’s question, at least I think I understood it. You’ve only tendered for part to repay part of your high coupon bond, and you’ve issued nice new low coupon bonds, but you’ve left some of the high coupon bond outstanding. Why did you choose to only take back part of the bond? My questions on the diabetes testing side, you continue to know to spillover from the U.S. government programs into the commercial side. Do you think there is a risk this could spillover further then just in diabetes. Is there any innovation from yourself or competitors that could turn this around, or will this be a continuing headwind in your diabetes - in your diagnostics franchise going forward? And secondly on testing, but in the IO setting, if we look at the sales of the lung cancer drugs that are out there, there seems to be a very strong preference by doctors for using the product, which doesn’t require testing perhaps they’ve made the decision by definitely want to use this. And they definitely don’t want to find a negative result. I wonder if this clear favoritism by doctors to not do testing is influencing your trial designs going forward, whether we’ll see more all-comers types of studies. Many thanks.

Hi, Joe. It’s Alan speaking. Thanks for transmitting the question from Michael. Well, I think we do that, I think that’s a clear market point here, because I think when you go out for a bond, first of all, I think what you do is, you try to create some appetite the market with a couple of basis points, in fact that you pay on top. What cannot happen and should not happen, is that you realize at the end a negative NPV, is that buyback. And this is a relatively thin line, when you do this bond tenders out there. So in fact I think you can never assume in such a transaction that you buy everything back, and if you give too many basis points in the offer. Okay, you get everything back, but unfortunately your NPV turns negatively. So here clear point is well, I think we did what we could do, keeping the NPV that this case even significantly positive, and that’s always our agent, here we don’t want to realize anything, which is near to an NPV of zero. So I think it’s cannot be the goal that you get everything back.

Yes, Joe, thanks for the question on diabetes. Let me try to frame that, I think the first part of your question we refer to the pricing in the spillover potentially outside of the U.S. When we look at the pricing differentials between the U.S. and outside the U.S. it used to be large, it is now when they are relatively similar range. So we don’t see a major risk in the pricing. We do see some markets, which are doing performing well at the lower price level actually. In terms of innovation, we have and it’s also lined out in the last page, we have a universal strip gold guide, which will be launched with the second half of the year, which will allow us to have one, even more accurate measuring and one strip for all the meters going forward. So that’s in the classical blood glucose monitoring sector or segment. And then in the sector of, or in the segment of continuous glucose monitoring, we also have the sensors coming towards the end of this year. And new sensor and then we are also working, which is the pumps or the so called insulin delivery systems with new pump in 2017. So while we do manage the cost aggressively, while we work on efficiencies on the other end, we are also investing in innovation and in the next generation. Daniel O’Day: Hi, Joe. I think we read the current market environment the same way you do, which is in the second-line lung setting it appears that the all-comers is obviously the preference of physicians and patients at the stage. I think that is driven by data that’s currently available to us, we’ll see how the data matures over that period of time. But I think it might be a little bit simplistic than translate that to all other IO potential areas. Of course it’s still remains to be seeing exactly how segmenting the patients will play out, and first-line setting and beyond, but I think it could very well play a different role in different disease states. So I would just point out that the story I think is just beginning, when we talk about PDL1 expression. As you know, we talked a lot about the correlation between mutational load and responses in some of the retrospective analysis of our POPLAR data. We’ve looked at thing like interferon gamma signatures for CD8 T cells and how those predict. And then, finally as you know we are working on a kind of a comprehensive immuno panel with depamide that can look at different RNA signatures such as the presence of macrophage and others. Now today those may not be actionable, but as we have different potential IO/IO combinations like anti-CSF-1R and Atezolizumab and others. I think we are going to get more and more clarity on how to get those long duration of responses, and it is many patients as possible. So the story I think at the chapter one if you like of where it progressing, but I would certainly agree with you on the way to second-line lung is laying out, and clearly all these learning including the once beyond the PDL1 expression, we are taking into account when we design our protocols for many, many indication.

Thank you.

Next question, please.

The next question is from Luisa Hector, Exane BNP Paribas Please go ahead.

Hello, can you hear me?

Very well. Daniel O’Day: Yes. Clearly.

Excellent. So I have a few questions. Looking at the pharma sales regionally, was there anything in international, in terms of tenders which benefitted Q1. And then on the U.S. side, you talked about the buying patterns. Was this simply a destock and could you somehow quantify it, maybe give the underlying growth if you strip that effect out. I mean, I guess Avastin is one I would be most interested into see if that actually growing rather than declining if you allowed to be wholesale of patterns? And then, Venclexta, can you commented that at the book sales, is this globally or just the U.S. And maybe some comments and how you will coordinate the promotions of that drug. And what is the next pivotal data that we would be looking for Venclexta potentially pivotal data? And the final question for Alan, thank you again for clarifying the basis of the earnings guidance. I just wanted what is the reason that you include the FX loses in the core definition, but that exclude them for the guidance? Thank you. Daniel O’Day: Thanks, Luisa, for the questions. A couple of things, on the pharma regional sales, yes, international, we did have a couple of tender effects as we’ll have from quarter-to-quarter. In particular the sales in Brazil, we’re quite down in the first quarter and that was really result of some tendering of some of our key products and how they will end. But I can assure you they are already coming into the second quarter, so it’s not going to be an annual year, you just see a little bit of lumpiness when you get into both our EMEA regions, so Middle East and also in Latin America predominately. In terms of the U.S. buying patterns, what I can assure you is that the demand is continuing on Avastin and Rituxan and Herceptin, all three of those the demand side, so I think maybe that’s kind of the answer to your question, and I think you will see the pattern better reflected at the half year of course, but demand is continuing all three of those products. What I would say as you know from a U.S. perspective we’re getting to very high penetration rates with Rituxan obviously and oncology, and particularly in the United States. So year-on-year growth may not be as high as 15%, but we’ll continue to grow Herceptin likewise was driven to a large degree last year by the Prejeta penetration we’ll continue to see growth in Herceptin this year in the U.S., but it could slow down a little bit prior to the APHINITY readout in the next journey in adjuvant, and the same with Avastin, but the demand continues to grow on that side. And then finally with Venclexta, yes, just to clarify, AbbVie will book sales globally on that. And we co-promote in the United States and that’s you carefully coordinate between two teams, I think we are very aligned to go out to our customer base on that and then of course we were working together on the global development of the product as well. The next readout for Venclexta will be the so called Burena [ph] study that Phase III and relapsed/refractory CLL that’s the Venclexta plus Rituxan, this is the breakthrough therapy designation coordination. And then also the Phase III CLL14 study, which is the untreated CLL patients with coexisting medical condition. So that’s the Venclexta and combination with Gazyva and CLL. And we’re going to see some of those readouts as well as ASCO, you will see those on Slide 30 of the deck. Hope that helps you.

That’s great. Thank you.

Hi, Luisa, it’s Alan speaking, about the guidance concept here and you know we gave the guidance based on constant rates, I think that’s the first point to say. Now the point comes okay, what is this constant rate concept all about and what we have done that’s a bit of convention, whenever we have these devaluations like we had in Venezuela and in Argentina in fact we adjusted for it, that is really part of our constant rate concept. And we do it for the last 10 years, and evidently I think you gave, how should I say, it was noted by the market a little bit more because of the magnitude of the impacts that we have had in 2015. But in fact I think we have always followed that concept and it’s part of the concept of constant rates.

Okay.

Next question, please.

The next question is from Richard Vosser, JPMorgan. Please go ahead.

Hi, thanks for taking my questions. Just a question on Actemra, the growth seem to slow that this quarter, so just if anything is going on there that we should be aware about, and then a couple of questions on atezolizumab, noted of course the breast cancer chemo combo data will have update to date at ASCO, I think the last date we still had a cutoff of June 2015. So should we be expecting both more patients and more follow-ups, so beyond 12 months, so that we might see some PFS, OS data in that setting. And then a follow-up to Sachin’s question. It seem to be on the chemo combo in lung, it seem to be there may be and I think we’re seeing this across the board that PFS is not the answer, which I think you’re saying. So of course the first data in Phase III is PFS, so to Sachin’s point when can we see the OS data. And secondly, how should we’ll be thinking about the PFS on that Phase III data from what you’re seeing should we be thinking about a benefit for accelerated approval or do we need to wait for that OS data? Thanks very much. Daniel O’Day: Excellent. Thanks a lot, Richard, for those questions. The first one on Actemra, I think we are getting highly penetrated in the monotherapy segments in some countries. So I think we’ll continue to see good growth, good double digit growth now for eight years, but you are right to point out that quarter one had a slightly lower growth rate than we saw last year. And I think we’ll have to see how the other quarters play out this year, but certainly both in the U.S. outside the U.S. with the launch of subcu, we continue to see very, very robust growth with Actemra not guiding specifically on the growth rates there. On atezolizumab, yes, you can expect to see more patients the longer period of time on the breast cancer chemo combo and ASCO in June, I don’t want to tip my hat any further than that, because we are putting the publications into account now and but yes, you’re going to see longer data and more data. Yeah, one more time on the endpoint discussion, I think it’s an important one to have it’s something I think we’re all learning both as an industry and within our own data sets here. Let me again try to clarify, because I think what we’re seeing is particularly to get the nice robust responses in the tail, that OS continues to be a really good way to measure that as what we’re seeing. And yes, PFS is also a very good early indicator of how things are progressing in the trial. So I’m not going to go into all the detail now because we’re still looking at the data and making decisions. But maybe I’ll say one thing obviously the challenge you have just technically and just talking about this generally in a trial is the PFS will generally read out before the OS, as you rightly pointed out. And what the PFS reads out, you are obviously then - you get crossover often in the trial and that crossover can confound the eventual OS readout. So what’s important is as you anticipate that crossover, in the trial design and that is something that we are very carefully looking at. So and in fact when we originally design the trials and the size of the trials, we had a certain expectation for that. So what I would say is that as we mull a bit further over the first-line lung cancer endpoint question. We will certainly take into account your points, which is if you go for a dual endpoint there we will make sure that we have powered the trial sufficiently to of course show PFS endpoints, but also have sufficient power, sufficient number of patients to anticipate the crossover so we can eventually show the OS endpoints. I think it would be too premature to determine exactly what would be the discussion with the regulatory authorities. That always depends on the results of sales and as we know you can have good discussions with the agency on both endpoints, both PFS and OS, and it’s really data driven. So let’s see how that goes and I will continue to update you either at ASCO or at the half year on how we’re progressing with the first-line lung. But I can tell you, I mean bottom line is that the enrollment continues to progress well with our chemo combo studies in the front line setting and that’s really what we’re focused on as we look to these trial modifications.

Thanks very much.

The next question is from Steve Kotler, Cowen and Co, please go ahead.

Thank you. I had three questions. First, should we assume that atezolizumab’s label in lung won’t have an OS superiority claim to dose atezo, since presumably the label will be based on BIRCH and not POPLAR. Secondly Dan, would you clarify did you say that Avastin biosimilars are expected in 2017 and if yes, in what geography that seems a bit sooner than what has been indicated in the past? And then lastly in what medical meeting is AFFINITY most likely to be presented? Thank you. Daniel O’Day: Thanks, Steve. Let me start with your first question on atezo lung and exactly what the label might or could be. Obviously, it’s a bit premature to discuss that we’re having discussions with the agency on our second-line lung filing, you know it received priority review, which means we are having very good ongoing discussions. The question has come up about what data exactly could be included and labeled in the beginning or as it progresses including BIRCH supplementary data from POPLAR and possibly OAK as it comes in and I think as we discussed all three of those data sets could be important data sets for the eventual label for second-line lung. I’m not going to say lot more on that both because the discussions are moving and also because I think there is a decent amount of competitive sensitivity there. No I did not say Avastin biosimilars we’re coming to that in 2017, so I apologize if that came true it’s MabThera and Herceptin only that we expect. First entrants outside the United States second half of 2017, Avastin is rather later in the decade at this stage. And for APHINITY, I mean, again it’s - we’re trying to determine when the results will come in. So it’s really difficult to pick the congress. But it is event driven, so we are still planning for it to come in towards the end of this year. As we get more information on the number of events and how they’re progressing, as I said, they’re growing relative to the model. But as we get more information into the degree that could look at any adjustments of the timeline we’ll let you know. But right now everything is on track for the end of 2016 for that. And if that comes in then we’ll obviously immediately tell you the top line results. And then look for the best medical congress to present them at. But it’s a bit premature until we get the data in-house.

Thank you.

The next question is from Jeffrey Holford from Jefferies. Please go ahead.

Hi, thanks for taking my questions. Just two fairly quick ones, I hope. So on Venclexta, could you talk to us a little bit about how to expect the shape of this launch to take place relative to a normal launch in CLL, just because the administration of this product is a little bit more complicated? And then secondly, on ACE910 obviously you made some gating decisions there, which you talked about. I’m wondering if you could just talk to us a little bit about the on-trial safety of this product so far. Have you seen anything remarkable, which you might like to comment on? Thanks very much. Daniel O’Day: Yes. Thanks, Jeffrey. So on Venclexta, I’d just remind you, the patient population that it is labeled in right now, which is in the p17 deleted relapsed/refractory CLL population. Now, in that setting, I think - look, this is a relatively small start, right, in terms of number of patients just to be clear. So it’s around 50% - 30% to 50% of the relapsed/refractory CLL setting. And so, I think we can expect physicians getting experienced with the product, but obviously in terms of seeing the product grow it will be in other settings that will see that in. And in terms of administration, for these patients, I mean, I think the administration on the Venclexta routine will be very tolerable. We saw that in the clinical trial. We don’t expect that to be a limitation at all for these patients, particularly at this stage in the course of their disease. I mean, when you get earlier into the disease, I think different administration options become more favorable. But at this stage of the disease, this is - we don’t see this as being a barrier. On ACE910, no, there is nothing new on the safety profiling for ACE910. We continue to have the Phase I extension data come in. We are recruiting very well into the non-interventional studies. There are no additional new or alarming safety events at all with ACE910 at this stage, again, where we will continue to get more patients into the trial. Nothing new to report on that front, same as the last time we spoke.

Thank you. Next question, please.

The next question is from Eleanor Fung, Goldman Sachs. Please go ahead.

Hi, thanks for taking my question, just one for Dan, please. As you mentioned you’re preparing for the Ocrevus launch, just wondering if you can comment on how you’re thinking about the pricing strategy and secondly positioning in the R/R-MS [ph] indication? Thank you. Daniel O’Day: Thanks very much, Eleanor. So, obviously, we are in full gear to prepare for the launch. I mean, we are very well positioned I think in the U.S. in terms of personnel, in terms of strategies and beginning discussions. It is too soon to talk about pricing. I have to disappoint you on that front. I mean, we’ll certainly let you know as we get closer to - well, we’ll let you know after approval and when we get ready to launch the product. But, again, I would just point out the efficacy and safety differentiation of this medicine. You will see a bit more at AAN this week, which will continue I think to reinforce the positive top line messages that we provided last fall. And in terms of positioning, I think as we’ve heard for many of the key thought-leaders and we continue to believe, in the field of MS there is a gap. There is a need for highly efficacious medicines with good tolerability and safety profiles. And the fact that we compared to read this in this setting a medicine that has continued to be quite safe and for these patient-sets and saw the type of safety data that we saw here, in addition to the really significant benefit in efficacy. We think we are in a very good position to position this product to the MS segment. So - and I think that was reflected also in the agency’s decision to award us the breakthrough designation for PPMS. We look forward to getting that file in and then getting to the discussions on the review of that file.

Thank you.

Thank you. Next question, please.

The next question is from Vincent Meunier, Morgan Stanley. Please go ahead.

Thank you for taking my question. The first one is follow-up on the chemo combo first-line lung for atezo. That regimen is not appearing on the Page 10, on the Page 29 of the slideshow with other significant launches. Is it because you think the Avastin combo is likely to be better than the simple chemo combo? And how would you compare atezo plus chemo versus atezo plus Avastin plus chemo at this point in time? Also on ACE910, one competitor made comments about relevant IP, which could give them potentially some rights in some European countries. Could you please update us on the IP protection of ACE910, and especially, the risks faced in IP dispute and maybe potentially to pay royalties? And also on that ACE910, would you consider acquiring a platform in hemophilia to support the launch? Daniel O’Day: Thanks, Vincent, so a lot of questions there. You have to keep me on just to make sure I’ve written them all down. But let me start with the first one. You referred to Slide 10, I am just trying to get my hands on, Vincent, you - first-line lung is not on here. The reason that first-line lung is not on here, because on this slide, we only put the new - the first indication for the new molecular entity. But please don’t take that as suggesting that that doesn’t mean we could have an approval in this - is that right or - I’m only trying to understand the question, sorry.

I think the question was for the second - for the first-line… Daniel O’Day: I think, I…

These are the launch dates if we have the readout. Daniel O’Day: No, no, no. I think what you’re asking, Vincent, if could say is you see on Slide 10, you only see the atezo plus Avastin plus chemo. You don’t see atezo plus chemo only.

Yes, yes. Daniel O’Day: Wondering if we’re favoring the Avastin combo.

Yes. Daniel O’Day: No, we’re not - that’s just - that’s a format - that’s an ease to try to not have - that box is intended to counter the first-line non-small cell lung cancer setting at the most extreme option, the triple combination. But that doesn’t imply in any way that the dual combination would be favored or not favored. So I think clearly we continue to see potential, I would just put it that way in both the regimens - the combination regimes in front-line setting that contain Avastin and those that don’t contain Avastin. So I think there is no favoring, we wouldn’t tip our hat in that direction. And I think all are on the table. And frankly we’ll just have to see how the Phase III readouts come on these very robust trials to see which one might be best. Obviously, the Avastin combo and other indications like renal cell, there we have a stronger opinion on favoring the Avastin combo, but not in the front-line lung setting. I hope that answers your first question. Yes, I just want to say, there has been some - we don’t comment on any patent issues that are going on within the organization that you made here. What I would say with ACE910 is that we continue to confident, that we have a path forward. And that we’re firmly focused on the clinical programs and bringing that product to market. That’s what I would say on that. And I certainly wouldn’t comment on any other specific M&A of any sort. So on ACE910 continue the program as expected and things are on track and on time.

Thank you. Next question, please.

The last question is from Stefan Schneider, Bank Vontobel. Please go ahead.

Yes. Thanks for taking my questions. Just please remind me on the ocrelizumab filing, is it coming during the second quarter? Is that one filing for both indications as a package and we expect approvals also combined or how do I have to look at that? Daniel O’Day: Yes. Thanks, Stefan. So the filing will be in the second quarter. Now, obviously, we’re in the quarter - we’re still in the first-half of the year, so that is clear. And it will be for both indications, the filing. Now, the approval, and that is something we’ll be working with regulatory authorities around the world on to see how they will handle the approval of each indication. So I don’t want to get ahead of myself there. But the filing itself will be comprehensive of both indications.

Thank you.

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