Dr. Severin Schwan - CEO Daniel O'Day - CEO, Roche Pharmaceuticals Roland Diggelmann - CEO, Roche Diagnostics Alan Hippe - CFO

Matthew Weston - Credit Suisse Tim Anderson - Bernstein Luisa Hector - Exane Richard Vosser - J. P. Morgan Jain Sachin - Bank of America Vincent Meunier - Morgan Stanley Jack Scannell - UBS Andrew Baum - Citi Steve Scala - Cowen and Company Eric Le Berrigaud - Bryan Garnier

Ladies and gentlemen, good morning or good afternoon. Welcome to the Roche's First Quarter Sales 2017 Conference Call and Live Webcast. I am Sari, the Chorus Call operator. I would like to remind you that all participants will be 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 turn over to Dr. Severin Schwan, Chief Executive Officer. Please go ahead, sir. Dr. Severin Schwan: Thank you, and welcome to our Q1 briefing. We are off to a very good start. Let me turn right to page six. You can see pharma sales up by 3%, very much driven by our more recent launches, such as TECENTRIQ. Diagnostics up even 6%, again, clearly above the market and again continued strong growth in our immunodiagnostics. So overall, 4% up. And as you can see on slide seven continuous growth in the low to mid-single-digits. All the regions contributed to this growth, as you can see on slide eight, very much driven by the United States and the respective product launches there. Except, Japan, actually, where you see a decline of 2% for the pharma division, which is really a result of the price reduction we had for Avastin in the second quarter last year, so this decline is fully in line with our expectations. Turning to the portfolio. Again, page nine, we are leading the industry in terms of breakthrough therapy designations, the reflection of the innovation bring to patients. And it's been really a very good quarter, both in terms of major launches as well as major clinical trial read out. So if you look at the launches on page 10, Ocrevus of course, now launched in the United States end of March. Dan will certainly comment on that in more detail, but off to a very good start indeed. Lucentis now with the new indications, diabetic retinopathy. TECENTRIQ now also approved for first-line bladder cancer. And we had a number of important launches of new test and platforms in Diagnostics. So highlight here the Cobas e 801, our immunodiagnostics platform which has now also been approved in the United States and launch is imminent. Turning to the clinical trial readouts I mean, this was really an excellent quarter. Obviously, Aphinity, early breast cancer, we're looking forward to presenting results at ASCO in June. Emicizumab now having two also positive interim results for the pediatric patients. We will present detailed results in July in Berlin at ICH. Alecensa, getting the standard of care now, clearly, not only in later lines but also in the first-line treatments of ALK-positive lung cancer and we got a positive ODAC vote in the United States for subcu Rituxan. If we turn to Slide 13, as we all are aware, we are going through an important transition with some of our major brands facing up coming biosimilar erosion. And at the same time, we are happy to see literally an unprecedented number of important product launches on Slide 13. And combined with the important readouts we had seen in the first quarter, we are now very confident that we will compensate, or actually more than offset, the biosimilar erosion. Turning to Slide 14, we expect additional important news flow for the remainder of this year, TECENTRIQ, first-line lung cancer, of course, [indiscernible] in ophthalmology and having three studies still outstanding for the noninhibitor segment for emicizumab. And based on the strong start into 2017, we have confirmed our outlook for the full year with low- to mid-single-digit sales growth, core EPS growth to be in line with sales growth and our dividends, again, to increase for this year. And with this, I hand over to Dan for pharma. Daniel O'Day: So, good afternoon, good morning, everybody, from my side. Let's go right to Slide 18. Really a good sales start to the year, for sure. I mean, you see the U.S. at plus 6, really driven by the strategic products. TECENTRIQ, 109 million. Xolair, Lucentis and the HER2 franchise. Europe growing at plus 1%. Japan, minus 2%. International, also a plus 1%. Particularly in China, we have improved reimbursement and broader penetration of Herceptin, MabThera and Avastin. There is a bit of ordering patterns, I would say, in the international region, we had some significant orders coming in in April instead of March, so I would expect that international figure overall to continue to improve as we go throughout the year. But what I would say is the dynamics you see in the U.S. and Europe are as we would expect as we go throughout the year, because the new launches in the United States are only coming in Europe as we go into next year. So there will be this dynamic between U.S. and Europe this year. And of course, you're beginning to see some of the biosimilars this year as well. So you go to Slide 19, really strong sales performance across the new launches. You can really see increasing contribution from the recently launched products, oncology products, the fast-growing immunology franchise. For the first time, TECENTRIQ is at the top of our leader board, if you like. TECENTRIQ Perjeta, Xolair, Alecensa, new products driving that growth together contributed around CHF 230 million in the quarter. The immunology franchise, Xolair, Actemra Esbriet Rituxin contributed an additional 180 million additional sales. On this slide, I just want to cover a couple of points and products that I won't cover on later slides. Let me first address Lucentis. As you can see, a strong growth at 9% year-on-year. This was due in a large part to the launch of the prefilled syringe that we had in the beginning of this quarter with WebMD, a very strong start and different from the competition. But then at the same time, we have new approvals, some that are contributed to the first quarter, some that will contribute to growth in the coming quarters. And here I'm talking about MCMB and then the very recent news we got about the broad label in diabetic retinopathy. In general, dynamics for Lucentis, we're seeing stabilization in the shares in AMD and DME. I would say, overall, even though the first quarter is a bit stronger than we might expect for the full year, we do expect Lucentis to return to growth in 2017. And the other product that is certainly worth note is Activase, which is growing now at 13%, past the 1 billion mark last year and continues to be a favorite product in that market. On the neutral to negative side, I mean, I'll talk about Avastin later, but I think this is a good slide to see Avastin on, because there's basically four different stories for Avastin. I mean, you've got Japan with the price decrease, which was already pointed out. You have Europe relatively stable with the exception of France, which had a delisting of one of the indications of Avastin. You've got in the United States some erosion in the lung cancer study, and I'll get back to this. And then, alternatively, you have some of that being offset by the international markets, I already mentioned China, but other markets that are growing Avastin, we think we will continue to grow Avastin in the quarters to come as well. We see the expected I think dynamics in Tarceva and Pegasys, that remain impacted by competition as before. And maybe just to comment on Tamiflu, of course, you see the generic erosion in the United States, which is one of the two countries where we really have a seasonal influenza business. It's better in Japan. And of course, with the generic entry in the United States, you see that decline as expected, I would say. If we go to Slide 20, let me drill down a bit into the oncology franchise. The entire franchise grew 4%, and that was driven really by the HER2 franchise, the CD20 franchise and then the launches of TECENTRIQ and Alecensa. I'll touch on the HER2 and Avastin franchise in the following slides, so let me just drill down a little bit into the CD20 franchise here. It grew overall at 4%, MabThera and Rituxan in oncology grew at 3%. That growth was essentially driven by increased demand in the U.S., EU and international. I do want to point out that the MabThera subcutaneous sales contributed around half the sales growth. The subcutaneous formulation was launched in the first quarter in additional 18 countries in quarter one, bringing the total to 41 countries. And as I'll comment on a little bit more later, the FDA advisory committee unanimously recommended the approval of Rituxan subcu for hematologic cancers with a PDUFA date set for June 26. Gazyva grew at 48%, reached sales of 67 million in the quarter, driven by U.S. and EU. And this is really driven by now the uptake in the relapse refractory non-Hodgkin's lymphoma, and we're starting to gain uptake and gain share and that's indication. Equally, after the ASH plenary session for the first-line setting of the GALLIUM data, Gazyva has now been included in the NCCN guidelines and the launch preparations for the first-line setting are on track. TECENTRIQ reported sales of CHF109 million, driven by the uptake in second-line bladder cancer and second and third-line lung cancer, that's up from 78 million for the TECENTRIQ in quarter four, so you see a nice growth rate there. And as expect, I mean, the bladder cancer, having been launched earlier, is the majority of that, somewhere around roughly 70% of that. And continued growth in both bladder and lung. TECENTRIQ has established itself as a standard of care clearly in bladder cancer with steady uptake in both lines. And if you saw, TECENTRIQ got an accelerated approval in quarter one in first-line bladder cancer for the front-line setting for people with locally advanced or metastatic bladder cancer who are not elsewhere for sunitinib therapy. In second and third line lung, where we got approval, as you know, with a really strong all data set back in October, survival across different subsets, we continue to see a strong update. It's a little bit too early to talk about market share data, hope to have that as we progress throughout the year, but just the data sources are coming in after we reported here and talk about in the first quarter. Alecensa in the second-line lung cancer setting, non-small cell lung cancer grow 124% and achieved clear market leadership in the U.S. with 50% in that segment only after 12 months of launch. And we achieved the EU approval for the second-line setting in quarter one as well. And in the first-line setting, having received the second breakthrough therapy designation based upon the Japan or J-ALEX study, we announced positive results for the Phase III data from the Alex study and I'll cover this in a little bit more detail in the innovation section. And then finally, because I won't cover this later, I want to comment on Cotellic and Zelboraf, we saw further first-line market share gains for the combination in the U.S. in quarter one and in the EU. However, the decline that you see here is impacted predominantly because of the effect of the impact on a very strong quarter one '16 last year, which is when we first rolled out Cotellic and began to introduce it. So there is a bit of a quarter-on-quarter effect, which I think will obviously moderate as the year. One just comment since I'm on melanoma, I'm not going to talk about it later, just wanted to remind you that in the melanoma setting, we have achieved another milestone in quarter one. As you know, we started the Phase III triple combination study Inspire 150 which is Cotellic, Zelboraf and TECENTRIQ towards the end of last year. But we've also now achieved the first patient in our second Phase III study, which is the Inspire 170, which is TECENTRIQ, Cotellic this time in wild type patients. So we continue to advance our melanoma franchise with the breadth of medicines that we have in melanoma to combine and now ever-increasing the immunotherapy story in melanoma. So if we go to slide 21, HER2 franchise growth driven predominantly by Perjeta, 19% growth, strong demand in all regions, EU at 21%, U.S. 14%, international 47%. Of course, it's just getting going there, it's now approved 103 markets in the first-line metastatic breast cancer setting and 86 markets in the new adjuvant setting. Herceptin, still growing, 2%, predominantly due to longer treatment duration now in the EU because of the uptake of Perjeta. EU, 3%; U.S. 3%. And Kadcyla growing at 11%. That growth is split across the regions, U.S. at 11%, Europe at 5%, international at 49%. And then finally, of course, I'll get back to this and I'm sure in the Q&A as well, but Aphinity, we're very much looking forward to showing you the data at ASCO coming up. We are in global filing preparations that are on track. And I'm going to talk about this a little bit more. Just before I leave the HER2 franchise, I think it's clear to us now that particularly with the Aphinity data, that we'll continue to grow the HER2 franchise through the introduction of biosimilars. Moving to Slide 22, Avastin. International growth, as I said before, partly offset the performance in the developed markets. Told you the tale of the four regions. I would just comment here that the -- we continue to see good uptake in ovarian cancer. And I would just reaffirm the IMpower150 results in first-line lung cancer, which is the TECENTRIQ plus chemo with and without Avastin are expected in the second half of this year as well. Going to Slide 23 in the immunology franchise, going above CHF 7 billion annualized franchise now, further launches are now expected also in 2017. Comment on Xolair. Really strong growth, 22%, following a weaker Quarter 4, so there's a bit of a quarter-to-quarter effect there as well. But continued strong uptake in asthma, around an 8% growth in Quarter 1 in asthma. The CIU volumes grew at around 35%. Xolair, as you know, is the only biologic approved for children 6 to 11 years in moderate to severe asthma. I think that's also representing both growth opportunity itself and also an image of the medicine for the broader population. So I would expect overall for Xolair to grow a bit more in line with what we saw in 2016 for the year. But good strong growth. MabThera/Rituxan in the immunology indications, at plus 7% in Quarter 1, that continues to be driven by the vasculitis indications, GPA and MPA. Really pleased to announce that we've got an additional Breakthrough Therapy Designation for MabThera/Rituxan this quarter in pemphigus vulgaris, so we look forward to finding that additional indication and working to get that opportunity for patients. So going to Slide 24, another strong growth for Actemra, largely driven by the subcutaneous formulation in first line monotherapy. U.S. grew at 21%, good strong uptake of subcu. EU by 17%, driven by increasing monotherapy use, really great share, now up to 40% market leader in monotherapy in the EU5. And also in the first line setting, the EU market share is approaching 30%. On the international markets, we are growing at 7%. And overall subcutaneous sales now for Actemra represent around 40% of the total turnover and really are driving the growth. The outlook, I would say, for Actemra is continued growth. Despite increasing competition in RA, we think Actemra is expected to further increase its market shares in the EU and U.S. I would also really like to make a point of the positive Phase III GiACTA results in giant cell arteritis. As, Actemra got the second breakthrough therapy designation and priority review for the FDA. And in the meantime, the PDUFA date has been set for May 22 and we're certainly preparing for that launch, which is a market of some considerable size. So we move on to Esbriet. And really the story here is about a 13% growth for the quarter, following a 10% growth in quarter four, so a bit of an acceleration. We continue to have market leadership in the U.S. and EU with market shares above 60%. U.S. had a very good growth of 19% and yet that growth continues to be driven by the moderate to severe patient segments. Clearly, further entries into the mild patient segment were achieved, but the overall achievement rate there is only around 25%. So there's still -- that still represents the most significant opportunity for Esbriet going forward. And EU, relatively flat sales, maintaining overall market leadership, but obviously competition entering EU, where we were alone for some period of time. So 2017 outlook is clearly to continue to drive the mild to moderate segment through increasing education to healthcare personnel and patients, to increase really the confidence in diagnosis and treatment and especially, I would say, the benefits of early treatment. So that will be our focus as we move forward for Esbriet. So I'd like to turn my attention now on Slide 27, talk a little bit about what I thought was a really excellent quarter in terms of the both the approvals and the pipeline readouts, I'm going to touch on a few of them in more detail. Clearly, on Slide 27, I mean, I think, this is what we are all about, which is continuing to improve significantly upon the standard of care. And with the Aphinity trial, you see now that chart nicely filled out essentially with one medicine in combination it's been able to improve the standard of care systematically across metastatic neoadjuvant and now adjuvant. Aphinity met its primary endpoint of reducing the risk of recurrence of invasive disease or death compared to Herceptin and chemo alone. And this is really I think terrific news for patients because we're really talking about curative setting here with early breast cancer. We are really looking forward to presenting the results to you at ASCO. The presentation will be on Monday, June 5 at 9:45 a.m., the oral abstract session that is a centered around breast cancer and particular focus on HER2 breast cancer, which is the nature of the session. Our filing preparations, as I've said, are fully underway. And based on the Aphinity results, I mean, we can absolutely be confident to continue to grow this franchise through the introduction of biosimilars, which will start in Europe in the second half of this year. Turning to the next or one of the next big readouts for this year, Slide 28, Alecensa in non-small cell lung cancer ALK-positive. Two positive basically Phase III pipeline results for the first quarter. The first one is, of course, in the front-line setting, the ALEX study. It's a head-to-head study versus the current standard of care, crizotinib. Alecensa was superior in the J-ALEX study in the first-line patients, with patients living significantly longer than with their disease without it progressing and the ALEX data confirm that. Safety profile is consistent with the previous studies. And again, we will be presenting these results at ASCO on Tuesday, June 6 in an oral abstract session on Tuesday. So we've also submitted the filing to the FDA and the EMA to make Alecensa available in the first line treatment as soon as possible. And in United States Alecensa received break through therapy designation in the first-line setting last September. I would just note that in Japan, the Alecensa market shares in the first line have already exceeded 60% since it was launched some time ago. In the second-line setting, happy to say that just on March 31, we announced the global Phase III study results of Alur met its primary endpoint, significantly improving PFS compared to chemotherapy in the second-line setting in previously treated patients with crizotinib. This gives further evidence of the effect and the differentiation of Alecensa. It will be important for health authorities, it will also be important for HCA authorities in Europe. And based on the two previous Phase II studies, we also received the conditional Alecensa in monotherapy in the second-line setting in February of this year. I would just say also in the second-line setting in the U.S., we've already achieved market leadership with a 50% share after only 12 months. And of course, part of that is being generated by very good effect in CNS investments. Going to Slide 29, it was also another very good quarter for emecizumab following the pipeline news at the end of last year on the HAVEN1 study in adults. We announced just recently on April 17 the interim study results of the Phase III HAVEN2 study, which is evaluating emecizumab prophylaxis in children less than 12 years of age on the pediatric setting with hemophilia A and inhibitors to factor VIII. At the interim analysis, after a meeting 12 weeks of treatment, emecizumab prophylaxis showed a clinically meaningful reduction in the number of bleeds and the signings are consistent with the results we saw in HAVEN1 results and what emecizumab prophylaxis showed statistically significant and clinically meaningful reduction in the number of bleeds over time compared to no prophylaxis as well as compared to prior prophylaxis with agents. Let me just remind you, because of the nature of this study design and what we discussed with the regulatory authority, HAVEN2 is a single arm trial. So you can't claim statistical significance, but the reduction is certainly, in our opinion clinically meaningful to treaters and patients. We really look forward, I think, ISTH will be a very important meeting to give you the details on HAVEN1 and HAVEN2. Really pleased to say that we will host an Investor Conference on Monday, June 10. We'll be by joined by Professor Oldenburg who's presenting the HAVEN1 data at the conference himself. And with regard to filing and launch, we continue to have successful discussions with health care authorities. We remain on track, as previously planned, working with the FDA on rolling CMC submissions and clinical filings being completed toward the middle of this year. And I would just remind you that it has, in the United States, Breakthrough Therapy Designation for inhibitor patients. So we expect U.S. approval, based upon that filing time line, towards the end of this year and launch preparation certainly pulling on track. Slide 30, well, it's been a very good start to Ocrevus. Really, really pleased with the label and the launch. We achieved the FDA approval on March 28th. Just to remind you, the first FDA-approved medicine for relapsing forms of MS in its entirety, which includes RMS and PPMS. And just to remind you, there are no other approved forms of treatment for PPMS. So regarding the label, the broad label includes RMS and PPMS without any limitation such as monotherapy or other restrictions. The overall U.S. label covers around 90% of all MS patients, so it's 70% in RMS, it's about half of the FPMS patients, around 10%, and then around 10% of the patients are in PPMS as well. So a very broad label and there is no black box warning, which is different than other MS medicines. And no additional screening or monitoring besides the standard monitoring practices. We priced, now I can't comment on that, I had many questions about that in the past, Ocrevus at around US$65,000 per year, which we think is roughly in parity to the net prices of, if you like the other MS drugs on the market place. What's probably most encouraging is that based upon this clinical data, based upon the benefits to patients, based upon our access programs, the adoption of Ocrevus in health care plans is progressing very, very well. I'll just give you one example. United Health Care, which is the largest health plan in the U.S., as you may know, covering around 41 medical lives, published its coverage policy for Ocrevus being effective as of this year, January 1st. So really the access is going extremely well. In Europe, we expect approval later this year. We are continuing to proceed with the normal discussions with the regulatory authorities in Europe for the approval of Ocrevus, so continued progress there as well. We're just coming off this week, some of you may have seen this in Boston, AAN meeting on slide 31st, it was really a terrific opportunity to give some updates on Ocrevus. Obviously, for everybody to kind of digest the label and use. But also we provided some additional data there, and that's represented on this slide 31. I just want to cover a couple of this because I think they just continue to emphasize the differentiation of this medicine in multiple sclerosis. So there is an analysis of the relapse endpoints that was the pulled off for 1 and 2 data that really supported an early treatment with Ocrevus in RMS. In that analysis, and you can see these 2 curves separating on the left-hand side. And they separate early and then they continue to separate over time. This is Rebif compared to Ocrevus. But in the analysis, the Ocrevus treatment showed already after 8 weeks a significant reduction in relapse activity versus Rebif. And this is what's measured by annual relapse rate and the probability of relapse overtime. In addition, the strong sustained benefits of Ocrevus, as measured both by clinically and MRI in RMS were seen after three years than the open-label extension of OPERA I and OPERA II studies with no new safety findings identified. And then finally, on the right-hand side of this slide, you see that in the open label part of this OPERA I and OPERA II, you can see the switching in that last bar on the left-hand side of that graph, patient switching from Rebif to Ocrevus. Now I think the question has been supported now that patients who switched from interfirin to Ocrevus experienced the reduction rate in annual relapse rate, T1 lesions and new and enlarging T2 lesions that was consistent essentially with the outcomes of the patients who received Ocrevus right away. So after switching, they basically get the same effect that they started originally with Ocrevus in a very short time period. So a lot of enthusiasm and excitement about Ocrevus at AAN and it's off to a very, very good start. On Slide 32, on March 29, we had an FDA ODAC committee on the subcutaneous. It was 11-0 vote in favor of the benefit-risk of rituximab subcutaneous for all proposed blood cancer indications. If you remember, initially, our subcutaneous for MabThera was originally focused on an ex U.S. development. But we had since filed, now the PDUFA date is set for June 26. Just to remind you, I mean, the original decision not to launch the subcutaneous in the U.S. is based predominantly upon previews regulatory and market considerations and both of those have changed now. And in particular, on the market considerations side, there is a difference in administration fees for subcu versus IV, with IV being more generous in terms of the administration fees. However, no differences of decreased, and importantly, the capacity constraints that many practices have increased. So there are market research shows the practices realize the benefit of the subcu if they're capacity constrained and the benefit comes in terms of significant time savings. You can see it here, from 2.5 hours down to around 15 minutes or so. It's a significant dynamic change. So this is with some of this just in the market practice, this is why we're now pursuing subcutaneous program in the United States and hope to be launching that very shortly. Going to Slide 33, we also took some additional decisions on our Alzheimer's program that I want to update you all on. First of all, based upon the totality of available data both internally and externally, we decided to move both our anti-amyloid anticipate beta-amyloid antibodies into late-stage development. And you may say why. First and foremost, I think it's the science and the clinical data. So Crenezumab and gantenerumab are distinct from each other. They both affect beta-amyloid. However, they are effective in different ways. So the binding studies generally show the crenezumab predominantly blocks the algeimers in the brain, while gantenerumab primarily removes the plaque from the brain. So it's still unclear today whether all or only some of these beta-amyloid forms are predominantly responsible for the symptoms of Alzheimer's, but there's substantial evidence that both forms, both algeimers plaques are toxic. So this is a huge unmet medical need. Of course, it continues to be a program that carries high risk with it. But based upon the medical need that, based upon the fact that this is a relatively conserved part of our overall R&D spend, we made a decision to move forward with both. The Phase II results, I remind, you with crenezumab has demonstrated the effect, and we will be starting the second Phase III program or the second Phase III program just started actually, just last month. Gantenerumab will be starting 2 Phase III programs, and both of these are in prodromal and mild patients. We're waiting we are going to be preparing for the launch of those two studies which will be called GRADUATE I and II. And in the meantime, we're getting the final information that we need from the Phase II dose filing to begin those programs. I would say and importantly, we've designed these studies to include gating mechanisms that will allow us at interim read to inform our decision making and if and as necessary take appropriate steps at that time. So that concludes the innovation section. You'll notice it's the first time probably since I've ever spoken to you that there is a cancer immunotherapy slide in there. And the reason for that is that we have ASCO coming up. It's certainly not to suggest that everything on cancer immunotherapy is very much on track. We have now 20 medicines, 11 in the clinic. 7 of those new medicines we should get some data on as we go throughout the year. The combos continue with more than 50 clinical trials and more starting every day. I just had a review with the team last night, and I can tell you tremendous enthusiasm around the cancer immunotherapy program. And the MORPHEUS platform and program is a way to seek rapid decision making and ease in clinical trials is also very much progressing. So to close on Slide 35, and a couple of slides here, we still have some more very important data readouts this year, even though quarter one has been a very good quarter. And I just highlight that we'll have MURANO coming up, which is Venclexta relapsed refractory in CLL. We'll have the IMpower front-line lung cancer trial, which is TECENTRIQ and Avastin. We'll have emicizumab and hemophilia a patients in non-inhibitors, the HAVEN3. And we have lampalizumab both studies, Spectrum, CHROMA reading out towards the end of this year. On Slide 36, I think we'll have a very good ASCO this year. Look forward to seeing many of you there. Clearly, have already touched on Aphinity and on ALEX. We also have the IMmotion 150 data in renal cell carcinoma. And these are just the oral presentations. Of course, we have many other presentations that we'll highlight at the investor event at ASCO as well. But then I just want to specifically point out the ACEA A3 biospecific antibody, this is really novel. As, this is a 2-arm antibody, 1 that attaches to the cell surface, antigen CEA, that's expressed in many solid tumors. Other one, with the CD3 receptor that is attached to T-cells. And look forward to presenting the data. And extremely hard to treat cancer third line colorectal cancer patients and showing you the early stage data on that and our encouragement on that. On slide 37, just to wrap this up on the key late stage news flow. The chart that we have there. Obviously, we have Ocrevus, we've got Alecensa, we've got TECENTRIQ in the first line bladder as approvals. We have the readouts of Aphinity and Alex. But just underneath that, just wanted to highlight the other things that weren't in the table at the beginning of the year. So Lucentis, MabThera subcu and then emicizumab. Overall, a terrific quarter coming at the right time in terms of our ability and opportunity to rejuvenate our pipeline in the coming years with the introduction of biosimilars. So with that, thanks for your attention, and I turn it over to Roland for Diagnostics.

Thank you, Dan. I would say a good start as well on the Diagnostic side. As you can see on the Slide 39, the quarterly growth, 6% overall for the division, Centralized and Point of Care leading that growth in terms of size, with 9%. The clinical diagnostics franchise altogether, with centralised and point of care with molecular and tissue, growing at 7%, and Diabetes Care growing at 1%. As you can see negative growth in Molecular Diagnostics, and I will provide some more color on this in a later slide. But still overall, clinical diagnostics off to a good start and growing we believe above the market with 7%. Diabetes Care, plus 1% for the quarter. Solid performance in the U.S. I would just point out that this comes off a relatively weak base in quarter one and two 2016, in particular, in the U.S. So while this is encouraging, we'll also continue to see a very challenging environment in Diabetes Care. With that, I'm switching over to Page 40. This is a view over the quarters for the last couple of years, where you can see that we consistently have been able to outgrow the markets. And I think the basis here is of course, a very strong commercial presence and the largest number of installed base, installed instruments in the market place. And that combined with the broadest menu in the industry. So the largest number of tests and the ability to leverage those across our installed base. And that also shows on Page 41 where we can see the growth actually across all the regions, good growth. And I believe that we outgrew the markets in every of those regions. Continued how high growth, in particular. And as we expected and planned for in emerging markets, we saw here the E7 countries growing at 18%, and the ability again to capture opportunities when they arise in these settings. Of note, continued good growth in China with 19% for the first quarter. Another market with very strong growth actually over 50%, was Brazil in the first quarter. However, that was also impacted by a one-time large instrument sale to a very large customer but overall, very encouraging growth rate. That takes me to Page 42. A little bit more color on the different segments. So in Centralised and point of care, we continue to see the growth driven by integrated laboratory solutions, so that will redefine a CM work area, the combination of immunodiagnostics growing at 13% and clinical chemistry in complete and integrated laboratory solutions. Molecular Diagnostics, negative 2% in the quarter. A couple of comments here, in particular, in virology, we see a base effect. We have seen very strong HCV test or sales in quarter one '16, and that is actually consistent with the advent of the DAA, so the direct acting antivirals, in particular in countries like the U.S., Japan and some markets in Europe. So we see a base effect there. We've also seen a timing or phasing effect in some nongovernmental organization tender programs, this is in particular pertaining to Africa and southern sub-Saharan Africa. And then on the blood screening, you can see there, minus 4% for the quarter. We should see that number as well as the overall molecular diagnostics number come up. Here this is ordering pattern around some of the renewals of the blood screening tenders. And then the last line here on the page, Tissue Diagnostics, continues to do very, very well. In particular, advanced staining portfolio, primary staining being smaller, but result of a launch from last year. And then companion diagnostics, up by 40% and continuing to do very well. Page 43 and Severin mentioned that earlier, the highlight for the first quarter was the FDA approval for our Cobas e 801, which is part of the Cobas 8000 family deliver the high suited. Diagnostic instruments for core laboratories, the e 801 in particular for the largest franchise, which is immunodiagnostics. It certainly was an important milestone in 2016, the CE marking, and we're now moving on to the U.S. market. We are in full preparation of the commercialization, which should happen in this quarter, so in quarter two. The important here is a very good uptake initially in the market. We see more than 250 instruments already placed outside of the U.S. so very confident that we can repeat that in the U.S.. Double throughput, so double number of tests performed on the same footprint, which is really important for high volume laboratories, which are very high on efficiency and on integration and automation. And on the left side of the slide, what you can see is I will continue to add and expand the menu, so the number of assays, in particular, in immunodiagnostics, and leverage our installed instruments platform. A similar picture on over 44. From a different angle, this time looking at women's health, and in particular, the CE marking for high-throughput instrument in molecular, which is the Cobas 6800 and 8800. Currently, we have more than 70, 47, excuse me, assays in women's health. Sales in 2016 were actually above 1 billion in women's health testing. And this is also an important milestone to bring the HPV test onto the very large throughput platform. And that can also offer the opportunity for laboratories to consolidate CT/NG and HPV on one platform. And for HPV we continue to see good uptake. I would just remind you, we are the only, we have the only HPV approved test, FDA approved test for primary screening. And with the CINtec plus and the CINtec Histology, we really can provide comprehensive cervical cancer screening, triage and diagnosis. Moving over to page 45. The small instruments, and here, this is molecular point-of-care. So desktop analyzers, four molecular point-of-care, we have had good progress here, first of all, we build the manufacturing capability to support our globally. In the U.S., the focus has been and we continue to be on the respiratory panel, with in particular, for the flu season and with recording reimbursement. In countries, except in CE mark, the focus is on hospital-acquired infections. And here, in particular, was the launch of Cdiff assay, which is the first real-time PCR assay for Cdiff detection and actually in less than 20 minutes. So this will really help optimize outcome to patient's suspected of hospital-acquired infection. And then the next step will be to build that menu and add MRSA, which will be launched later this year. And then also infectious disease, the ongoing menu expansion over the next quarter. And that actually brings me to the last slide, which is the key launches for 2017. And you can see here as well, good pipeline progress across both instrument and the asset portfolio, the cobas 3 801, particularly being of course the most important and good area of programs with good progress, really launches in this year and with that, the ability to continue to grow our sales. Thank you very much for your attention. And with that, I'll hand over to Alan for finance.

Just some closing remarks on the finance side. Let's move to Slide 48. I think sales have been mentioned and outlined by my colleagues. You see we have good momentum. And guidance for the full year 2017, more formal remark here, is about the 2016 core EPS base, which is CHF 14.67. Just to avoid confusion here, that's the basis for the outlook 2017 at constant rates. If you're interested, we have on the slide 117, 118 of the appendix, a very transparent form how to calculate this. Currency, I will talk about in the second on a couple of slides. And my last point on that slide is about the capital markets update. We've done bond issuance in March 2017, CHF 1.5 billion in total, in a very favorable market and with very favorable outcome for Roche. This has been largest Swiss franc issuance since 2009. Final order book was highly oversubscribed. And the short tranche represents the lowest yielding corporate tranche ever. And when you look at it, the coupon mentioned was 0.0%. But in fact, we issued the bond at 100.755% and that maturity we get we have to pay back 100%. So in fact, we realized a negative yield of minus 0.5%. With that, on Slide 49, the next slide, it's really about the sales development in relative as well as in absolute terms. And you see the major absolute contributions to our sales growth in Q1 2017 came from U.S. pharma as well as from. And the currency impact has been rather small on sales, as you can see, and that leaves me to the bridge on Slide 50 between constant sales growth, in constant currencies, Q1 2017 versus Q1 2016, which you see on the left-hand side of the slide, plus 3.9%. On the right-hand side, you see the growth in Swiss francs, was 4.3% different plus 0.4 percentage points. And then you see the bridge. And you see in the green the currencies which have strengthened against the Swiss franc, the U.S. dollar, LatAm is certainly basically the Brazilian real. And then in red, you see the currencies which have been weakened against the Swiss franc in the same time frame. And you see the euro on one hand and then you see other Europe, which is dominated by the British pound. With that, let's go to Slide 51. The currency impact expected in 2017. And here on the right-hand side is our projection for the half year and the full year currency impacts based on the assumption that the currency rates as of March 31, 2017, remains stable until the end of 2017. When you look at tables on the left-hand side, I think the takeaway should be that the average currency development in U.S. as well as in U.S. dollars in 2016 was pretty stable. And as we assumed that the remainder of 2017 is stable as well, there's not much of an impact, as you can imagine. At least not much of a change. And that explains why the impact at half year are basically the similars ones as for full year. Good, with that, the last slide is the guidance Severin has talked about it. It's a very comfortable with the guidance. And with that, we're looking forward to answer your questions. Thanks.

We will now begin the question-and-answer session. [Operator Instructions] The first question is from Matthew Weston, Credit Suisse. Please go ahead.

Two questions if I can. One is with respect to Lucentis in or Lucentis globally I guess. Your partner in Europe is clearly developing a potential competitor molecule RTH258. Could you just confirm a couple of things to help us model the potential impact. What is the royalty rates that Novartis pays you for ex U.S. Lucentis? And do they have freedom to operate with a competitor molecule? Or do they have to return Lucentis to you? And I guess more importantly, overarching, how do you see the potential entrance or third entrance into the U.S. market impacting what's become a renewed growth driver for you? And then secondly, on CACD3, Dan, we are always looking for sometimes a replacement for the Avastin revenue stream as biosimilars enter towards the end of the decade. Do you see this as a new potential molecule that could drive significant conversion of that franchise or it's just much too early to say? Thank you. Dr. Severin Schwan: Your first question on Lucentis is probably best directed at predominantly at Novartis, if you allow me. I think that we're focused, so I wouldn't speak specifically to royalty rates or conditions within the contract. I think bottom line is that for our franchise with Lucentis, it continues to be really favorable product for us. I would just take this opportunity if you allow me to say a couple of additional things. We had more than 80% conversion rate on the prefilled syringes. It's really been quite a strong uptake there. I think these new indications will assist us and support us in this environment. And then finally, as we look down the line for Lucentis, we are obviously continuing to look at different modes of administering Lucentis, as well as given molecules, right. And just to highlight it, I mean, just you mentioned other companies may have some other medicines that will be reading out. We also have some updates on our [indiscernible] that's in the pipeline or readout in the Phase II a little bit later this year. But overall, I think continued growth in the Lucentis franchise for us and it looks good to the midterm. On the CAC3, thanks for pointing that out. I mean, couple of things, I would say on that. Yes, I think the Avastin franchise in general will be supported, if you like, by the entire immunotherapy program right. So first of all, as I mean TECENTRIQ is being studied in many of the same indications to Avastin is in today, with and without Avastin, so I think that's important to point out. But certainly, we have TECENTRIQ as the backbone of our therapy as we look at that. And if you like, that could be even a near term replacement, if you like, for Avastin revenue if you look at that in context. But having said that, I think as we've got 11 other medicines or -- excuse me, 10 others, besides TECENTRIQ now in clinical trial, all of which will be reading out at different times. We are highlighting CACD3 because of the timing and the fact that it's reading out because we are going to be presenting it at ASCO, but I don't want to necessarily suggest that there aren't other things in our pipeline that have potential readout positive. But maybe just a couple of other colors on how a molecule like CACD3 could support oncology business. It would really of course, because it's targeted at the CEA high, you would want to look for tumors that express CA in the high-fashion. And just to give you a rough idea where CA is expressed in cancers, the first cancer that we are going to release at ASCO, it's expressed around 90% of colorectal cancers, 70% of pancreatic cancers, 60% of gastric cancers and around 60% in adenocarcinomas of non-small cell lung cancers and breast cancer, around 30%. So it is if you like similar to TECENTRIQ, where PDL1 is a mechanism across different cancer types, CEA is also prevalent across different cancer types. So to the degree that you look at Avastin as a multiplayer in oncology, which is what we do, because that mechanism was successful now in seven different cancer types, I think TECENTRIQ, the biospecific antibody, of course, you have biospecific antibody specific to hematology as well and potentially other could be multitumor players. And I think that's really the answer to innovating beyond Avastin in cancer.

The next question is from Tim Anderson from Bernstein. Please go ahead.

Thank you. I know you don't want to say much on Aphinity ahead of ASCO, but I was hoping I could get your level of confidence on the robustness of the results in another way. Because as you know, there's lots of debate about the magnitude, the benefit and that sort of thing. So consensus currently models peak Perjeta sales around CHF 4.5 billion. There is a reference of course, Herceptin currently falls around CHF 7 billion a year. I'm hoping you can give us some indication whether you think those out-year numbers seem reachable or could they be too high or too low? And then a similar question on ACE 9 10 and the data at ISTH. And I know you've only when that data is presented in full, do you think there'll be nothing but oohs and aahs from audience and a lot of excitement controversy with this product too because of some of the prices officious and I'm trying today gauge whether controversy will be quashed come July. Dr. Severin Schwan: I like that question, thanks, Tim. Let me start with the one. I really do think there'll be a lot of oohs and aahs at ISTH. There's been a lot of oohs and aaahs around Roche and Genentech as we see the data. I mean really, to be serious, I think, this is an area of high unmet medical need for these patients. We are obviously starting with the inhibitor population, that's what we are going to suggest. And these patients have significant medical needs. And so the oohs and aahs come from yes, the strength of the data, the way we design our trials, but also the significant advance for these patients. I mean this is really a devastating disease where you need more options. And I think that's what we got excited about. So yes, Tim, I don't know if I'll be at ISTH. But if I am, I'd like to sit next to you during the session but I'd be surprised if you don't. Now back to Perjeta. So yes, you're right, I mean, obviously, for the sake of the cooperative group, for our sake, for the sake of ASCO, we have to really wait until ASCO to get into the details. But sufficed to say that we think this is the data file, what we think the data shows a reduction in risk recurrence in breast cancer. And we think the clinically meaningful. I think that's about as much as I am going to open the envelope on today and so you see the additional data. Now on the outlook, I just remind you that Perjeta today, that's around CHF2 billion to your financial analysis there. And I would also just remind you that as we enter into the adjuvant setting or anywhere we enter Perjeta, because of the ability, if you like, because of the significant advance brings to patients, there's an approximate 2x pricing to Perjeta than there is to Herceptin today. So just keep that in mind as you think about your models and how you might model the penetration of this into adjuvant setting, into neoadjuvant and into metastatic. So that's why we say, as we look forward to the HER2 franchise, and we consider that we're still going to compete on Herceptin, that doesn't go away, we've got Perjeta now showing significant increase in standard of care and all the indications added to its price. It doesn't take a lot of Phase 2 suggest and be convinced that we can grow this franchise through the biosimilar Roche. Particularly because remember the biosimilar Roche not happening in one year but it's happening over multiple years. And I mean, we all have our biosimilar Roche curves, but it enters first in Europe than it is in the U.S. And of course, how it enters in will allow us to make sure that we can have sufficient time to get the uptake on Perjeta around the globe. Does that help? I don't know.

The next question is from Luisa Hector from Exane.

Could you make any comments on the biosimilar environment in Europe for Rituxan? Are you seeing initial launch preparation? Are you being asked to offer any particularly discount to many early countries where that should be launching? And then just curious on your 340B impact, because I thought you guided that would still be adding some pressure in 2017. I just wondered if you were seeing that in Q1 because the U.S. [indiscernible] fairly strong? Thank you. Dr. Severin Schwan: Yes. So I am looking forward to talking more about biosimilars, but I'm afraid I might have to wait probably till the half year. I think bottom-line is that we just, there's just starting to come out right now with MabThera, right? So I mean, is preparing the launches in multiple markets, but we haven't really seen any impact yet. And then we expect Sandoz as you know from the positive opinion in Europe to come out a little bit later this year. So it's still too early. I can just say that we remain supportive of our core franchises, the data behind them and prepared in our markets to compete. So I would just stay tuned for that and we'll keep you updated as the quarters go on, but it will be an incremental effect this year quarter-to-quarter. On the 340B, I would also say that we haven't seen a major change since last year, certainly isn't accelerating, it's not really decelerating. We always have to be a little bit careful when we look quarter-to-quarter because sometimes there's some true-ups, if you like, in arrears with the accounts. So I don't have anything more to say other than same as usual, I would say, at this stage on the 340B.

The next question is from Richard Vosser, J. P. Morgan. Please go ahead.

Hi, thanks for taking my question. First question, a couple of your competitors have recently started trials looking at the chemo combination with either PD1 or PDL1. Just could you give us an idea of what we should be looking for in chemo combination updated Phase I data that you're going to show at ASCO? And perhaps venture your opinion on the changes being made by your competitors? And second question, on Slide 27 around the Aphinity results, you mentioned the platform of Perjeta and Herceptin, perhaps you can give us an idea of the time lines around that and what sort of data you might need to demonstrate noninferiority for the adjuvant setting to get used in the adjuvant setting? And then final question, just on Perjeta again. In the U.S., it's our belief that Perjeta is probably used for neoadjuvant patients at the moment. So do you expect Perjeta still to be used for neoadjuvant patients post Aphinity? And then the adjuvant regimen just added on in a sort of approach are do you think neoadjuvant do you think it'll just be used for adjuvant? Thanks very much. Dr. Severin Schwan: Richard, so okay, yes, on the chemo combo, PD-1, PDL1, I guess, obviously there's been quite of interest in this the regimen of therapy across the industry. I think that's why we, obviously, invested in the 7 large Phase III trials that we're in the process of executing on now, and the first of which to read out later this year. Relative to the data that we're going to show at ASCO, yes, I'll just remind you that we will show some additional data, we will show some additional survival benefits. I remind you, in our Phase I program, it was rather small at around 25 patients per arm, so you have to keep that in mind. It's also a differently designed trial than some of the other Phase I chemo combo just I just frame that because we are going to be at ASCO looking at different data sources. And it's a bit you have to be a bit careful not to compare apples to oranges. In ours in particular, we had patients starting at different times, plus we had all different types of cancers, we had squamous, non-squamous. And this is different from some other companies that had highly preselected populations or if you like higher patients as well. So bottom line is that we are absolutely encouraged by the extension data on the Phase I chemo combos that we have. It gives us confidence that we made the right moves to move ahead with the 7 large Phase III trials. There are clearly differences between different chemo backbones. But of course, those differences are only going to be articulated in large well-designed Phase III trials because of the small sample size. But you'll see it and you'll make your interpretations there as well. So stay tuned and a lot more discussion around that. On the adjuvant setting, oh, yes, specifically related to the subcutaneous coformulation Herceptin and Perjeta, so yes, this is really interesting. We initially thought that this is going to be more challenging from a technical development standpoint. We're certainly not out of the woods yet. But we've got a Phase I trial going on, we are looking at the dosing of this. Bottom line is that we think this could potentially, potentially be a convenience for patients that would be significant. So but I wouldn't I would say that it would be -- it would be applicable across the different regimen. So i think the question was specifically will this be used in the adjuvant setting? Sure, can be used in the adjuvant, can be used in metastatic, could be used in the neoadjuvant. So that is the way we are looking at it overall across the setting. And then finally, on the neoadjuvant, I think, exactly as you said, I don't think we expect a different in the neoadjuvant treatment patterns post Aphinity and post the adjuvant. If anything it strengthens the message around neoadjuvant. But I think from a treatment perspective, you're still going to see patients with good tumor sizes being treated with neoadjuvant. And then I think continued post surgically to the 12 months normally or treated after surgery for the full 12 months. So I mean that's our expectation. So no real change, if you like, to what we see today, with pure Herceptin in chemotherapy.

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

First on Aphinity just to challenge my arm. Dan, You referred to the data best-in-class. Does that statement imply to your entire cohort adjuvant patient? Did you think data will be to the subgroups? The reason why I'm asking the question, in an answer to and my prior question is also referenced the price point and growing the franchise that remains possible of Aphinity work adding the subgroup. Second question is around IMpower 150 in the first-line lung study. Particularly that group was recently updated and citing 5 co-primary endpoints. Each of those co-primaries have a combo and mono-testaments, so that to me looks like 10 statistical tests within the primary endpoint. So I wondered if you could give us any color on since the hierarchy within those 10 endpoints and how you're splitting the p-value amongst those, if I understood that correctly. And then the final question is on Ocrevus. Can you just give us some color on your marketing strategy here in terms of new patients versus switches and if you are pursuing switches around particular products you are targeting. Again the reason of my question is by this specific and the exciting pressure and Tysabri on their call a couple of days ago? Thank you. Dr. Severin Schwan: I really have to defer to ASCO for the subgroup data. I think it's going to be good to see there, I think. But at this stage in class, I mean we've said best in class because, frankly, I mean ITT population, we achieve statistical significance and that was the primary endpoint of the trial if you want. So I think that's a rational for if you like our best in class. I'll let you make your determination on that as you see the subgroups as well. So I'd leave it at that. I really want to respect very much, as you can appreciate the -- all the tremendous investigators that were involved in this and the patients I don’t think we need them let us have its complete exposure at ASCO. I would invite you to the investor event, as it's going to be on Monday evening after the presentation. So I really think we'll even expand on our perceptions there of Aphinity at that event. So on the IMpower150, yes, just, I think it's predominantly a communication issue Sachin I have to clarify because from a change in protocol standpoint, there really haven't been a change. As in ClinicalTrials.gov there's certain times where you can get more specific data published on ClinicalTrials.gov than there previously. The one change that occurred in the trial, but this is old news, was that we took it up a single primary endpoint to a co-primary endpoints and really all of our Phase I lung cancer trials. And that co-primary, as is OS and PFS. That's the way the trial is powered, right? It's powered to be I would say a co-primary, right, so it could hit on either one, it could hit first on PFS and OS can come later. But regardless, it would be a successful trial if it's hit on either one of those. And that's the way it's powered. So the other endpoints that you're seeing now, and we took a look at this today, are really secondary endpoints that you see there. And that's percentage of patients with objective response, duration response, time to respond, time to do rotation, et cetera. But those are not driving the power equation. What's driving the power equation are the primary endpoints. And then finally, in terms of Ocrevus, yes, I mean, I think, the reason I highlighted some of the AAN data was exactly to give you a little bit of color on the fact that I think we've got good evidence across a range of different MS patient types. I mean those that are new starts, those that are switches, those that have progressed. And again, at this stage, we've been in the market for 3 weeks, 3.5 weeks. I mean, it's a little hard to tell exactly how it's being used other than the demand is significant and the access limitations are really none at this stage. It's really hard to tell exactly how the patients are coming through. But my expectation is, we are going to have switches, of course. As you know, MS is a disease where there isn't a black and white zone where you say okay now this patient has progressed, we have to switch him. Sometimes patients are on therapy, but moderately controlled and not content with their therapy and in discussions with their physicians, they make a switch. So it's a range of different patients. I think the value equation here is what you see in the data. I mean the disease activity in RMS, it continues to be so strong over such a period of time, convenient dosing, acceptable safety profile. I mean these are the things that are going to drive the new patient switches. And obviously as we get a color to that data in the coming quarters, I'll do my best to articulate it for you.

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

The first one is a follow-up on TECENTRIQ. And I mean would you consider starting triple combination IO, IO, chemo in lung and as other companies are doing? And in that space, which kind of I/O would you try to combine to TECENTRIQ? And also in that space of triple combinations, what could be the positioning of Avastin? Another question on Aphinity and the guidance. So the guidance you gave at full year results as seems no contribution from Aphinity and neoadjuvant. So how should we read the reiteration of the guidance today? Does it mean that you just want to wait for the detailed presentation before potentially updating the guidance? Or does it mean that you don't expect materially impact this year? And the last question is on ACE 9 10. Can you a give a bit of color on the filing process for HAVEN1 and 2? And do you still believe that a launch is possible this year for ACE 9 10. Dr. Severin Schwan: This is a Severin, perhaps I can start with the outlook, the guidance for the full year. I mean, it's very true that we had a very good start into 2017, no doubt. And I should add also from a clinical news flow, it's been an excellent quarter actually, with everything basically being positive. So it's been a good start. But nevertheless, it's only three months into the year. And the guidance, of course, includes many assumptions on all our franchises. So we felt that at this stage we would like to speak for the guidance we gave at the beginning of the year. Daniel O'Day: I'll just come back to TECENTRIQ and Alecensa 10 question. So yes, I think, certainly, that's not be on the room of [indiscernible] to think about well, obviously, we have a lot of triple combinations, but also triple combinations with two immunotherapy agents. I mean, in fact, the one that you'll see at ASCO on the CC3 is combined with TECENTRIQ in colorectal cancer. So that's an example. And we'll continue to look at that where we see mechanisms are interesting that we want to jump on, we want to move with. So yes, I think that's something we have our eyes wide open to. On the ACE910 filing, yes, of course, I mean, you can never determine exactly how fast things will go, but I can just tell you that given the breakthrough designation, given the interest particularly in the U.S. in this area, we are hopeful for patients that this gets a fairly fast review. We've already communicated that with breakthrough therapy designation you are able to do a rolling filing, right? So we can begin the filing process and adds to the data as it comes in. Of course we can never determine and we won't ever pretend to determine how fast the agency would review it. Too early to tell for the priority review or not. But that's all things that were coming to play. So yes, we're still hopeful that it could be available to patients towards the end of this year or early next year. And we'll do everything we can to get this what we think is a breakthrough medicine to patients in the U.S. as soon as possible. That's our plan and we are committed to working on it.

The next question is from Jack Scannell from UBS. Please go ahead.

First going to come back to the [indiscernible] that you hope to hear at the ISTH meeting in Berlin. It strikes me that second question here, which is one could see very good efficacy data from HAVEN1 and HAVEN2. But actually that data in itself doesn't answer the potential question idiosyncratic interactions bypassing agents, which may have to be used on occasions during normal clinical practice. Are we likely to see any data either mechanistic or clinical on that second question, because that's usually a question that may interest the regulator? Or we simply going to have to wait until you see how the drug is approved in the label before we get a sense of other work that may have been done there? That's the first question. The second question is around multiple sclerosis oncologist is asked me before but a few technical problems. Some of the multiple sclerosis had a rather weak Q1. Clearly was in direct competition with Ocrevus. Do you think you may have essentially disrupt the way contracting has been working in multiple sclerosis so the other patient dropping performance coverage ahead of the launch of Ocrevus. Might that be an explanation? Thank you very much. Dr. Severin Schwan: Yes, absolute, I mean we'll be showing you the data on efficacy and safety at ISTH in HAVEN1, right? And as a component of that, you will see the data on the co-use of bypassing agents. You'll see the agents the data on those four patients that we already disclosed and mentioned, had reportable events, all which by the way have resolved now, two back on study medicine, all with one bypassing agent. So you'll see that data and be able to put that into context to just as regulator would, I think, as they look at it as well. And likewise, in HAVEN2, to the degree that there's a bypassing agent there as well, you wouldn't see as you know, there's also some patient data that you see with prophylaxis on agent versus prophylaxis on ACE910. So I think you'll see us in different ways. And happy to have a chat with you after you see if you have additional questions. On the MS, I don't know how to frame the weak quarter 1. I'm not sure I would articulate in the way that you did around payers. But as you know, I think, in general, whenever there is a new agent that comes to market, there are oftentimes patients that will wait for that new therapy, particularly because, as I said before, patients have a choice and physicians have a choice when to switch patients. So it could be that there was some buildup, if you like, of patients waiting for Ocrevus. But I have no idea whether that was in effect on quarter 1 or not. But certainly we're seeing the demand reflect that type of a buildup to a certain extent, but also just ongoing demand.

The next question is from Andrew Baum Citi.

Couple of questions, please. Firstly, on the 340B, I'll be interested, given the I understand 40% plus of out patients oncology care, how you anticipate they would react to deeply discounted within oncology? In our conversations with the PNG committees, we are surprised by the enthusiasm for biosimilar reduction, I wondered whether that runs contrary to your expectations? And then second, should we assume that Roche will initiate a large Phase III program with Cabe3 biospecific in colorectal and potentially other indication, assuming the GI adverse event and any antidrug antibodies are manageable? And then one very short one, I saw the Cotellic filing is pushed into 2019. It's curious it seems to be taking so long to file. Could you just update us on that given of the short survival times of these patients? Dr. Severin Schwan: Okay, okay, got you. So on the 340B, yes, I would just say the following. I think, still in the United States, we don't have a lot of great precedences on how biosimilars will be picked up in general in the market place let alone in 340B accounts, so it's a bit early to anticipate that. I personally don't see a real negative or a positive in the difference in 340B accounts versus general accounts as we approach our strategy in the United States for biosimilars and for originators. Our focus has to remain changing the standard of care. I think you've got a sense for that what we're doing in HER2. But also by the time we start to get entrants in the United States of biosimilars, we're going to have a stronger uptake of Gazyva, we're going to have TECENTRIQ rolling, Avastin coming later in the decade, we'll have the broader immunotherapy program moving. So I certainly wouldn't point to the 340B as a dynamic that is fundamental and critical to bio similar erosion in the United States. Secondly too on the large Phase III trial for CaQ3 I mean, I think, you've seen us do it before, right, with TECENTRIQ combos in lung cancer. So I think the answer to that is we'll file when we see a strong signal and let's wait until ASCO until you see the data. But when we see a strong signal, we won't hesitate to go into large Phase label enabling trials quickly to stay ahead of the competition, which I think is really important. And then the last one, I think that could be, so Cotellic. Daniel O'Day: It's the same work we always have. We have for most conservative time lines in the clinical trial.

It's on your slide deck. Daniel O'Day: We can confirm it's 2018.

Okay. Dr. Severin Schwan: Slide deck we saw ahead of the end of '18. Thanks Andrew.

The next question is from Steve Scala from Cowen. Please go ahead.

I have two questions. Given that no additional thromboembolic events have been announced for ACE910 beyond the initial four, which were prior to the mitigation procedures, should we assume there have been no additional cases? Of course, we are aware of the fifth case but that is quite different? And the second question is on IMpower150. Dan, in the past you left open the possibility that we will see PFS and OS read out simultaneously in the second half of '17. Do you still believe this is possible? And if yes, is the Phase I chemo combo data giving you confidence in that? Thank you. Dr. Severin Schwan: So yes, I can confirm, we haven't seen any other significant thromboembolic events other than the four and as you mentioned the fifth case was a complicated case. But the four, I think as we did a protocol amendment after that, particularly for to make sure that the thrombotic agents were used in the right fashion. And since then, at least in our experience and in our hands, we haven't seen anything new. And of course, we'll update you at ISTH on the that, so your assumption is correct. Secondly, on the IMpower150, I mean, I think all options are open, right? We can have a PFS readout, we can have a PFS OS readout, unlikely we'll have just no readout, but I think those options are open. I have no -- I wouldn't suggest that the Phase I extension data would give us a hint on that, but numbers are too small. I think you could just as easily make a wrong assumption from that and the right assumption. So -- but I would say, yes, I mean, I don't know how to put it into context, but I think it's not it would be unlikely that we would see an OS PFS endpoint of the same time. Certainly, we don't want to take that off the table. I don't want anybody to read from my previous example, I was using for another question that I thought for sure we would only see PFS. So we'll just have to wait and see.

As we come to the end of our session, can we have one more question, please?

The last question is from Eric Le Berrigaud, Bryan Garnier. Please go ahead.

Two questions, actually. First is on IO6 with one new compound coming soon and maybe another one later in the year, could you help us share your view about how this market should evolve in the coming year or couple of years? How do you see Actemra paying into it's in terms of risk, its market share lost obviously but also price pressures from payers versus any opportunity to expand to the class versus other classes? And the second question is maybe slightly different from the ones from Vincent about guidance. But anyway, as you started the year, probably you didn't fully expect Aphinity to be positive, you had even plan B probably in case it would be negative with some reorganization, and I believe some restructuring. And also, because it's not maybe the label you got. So can we be reassured that even maybe not in '17 but that most of this extra opportunity would go through the P&L? And for most of it to the core EPS and the earnings? Thank you.

Okay. Let me give it another try to give you some color on the outlook. I mean, you're absolutely right that when we gave our guidance at the beginning of the year, we had to consider different scenarios and the combination of different scenarios. That is absolutely correct, and looking back at the first quarter, I mean, to the degree we have now information on those scenarios, it was all on the positive side, there is no doubt about that. So from that perspective, it was a good start into the year and this has certainly derisked the outlook for the year. But then again, it is three months into the year. And whether to adopt the guidance or not is a step where you need enough data points to do it. And at this stage again, we concluded to keep the guidance where it is. But your underlying assumptions are of course, correct. So far, it has been all on the positive side. Dr. Severin Schwan: Thanks Eric, and on the IL-6, as you know, it's a crowded space today and Actemra continues to do well because of the data differentiation at monotherapy and subcu. I would just say, as we look ahead, a couple of dynamics happening. The first one is biosimilars outside of IL-6. But so far, those have been infliximab biosimilars erosion and really hasn't bled over, if you like, into the IL-6 category. We'll keep monitoring that, but at this stage, we haven't seen a wider market being built on that. As you know the baricitinib received a complete response letter, so that's going to be a bit further delayed. And then we have the expectation of product that is similar to Actemra, but doesn't seem to present with, from our view, a whole lot of additional benefits sarilumab, that will likely come later this year. And I just have to say we fully intend to keep our momentum up. I mean, I think we have tremendous amount of data behind it, and we'll continue to support Actemra in rheumatoid arthritis. Now beyond rheumatoid arthritis, I would just remind you that this giant cell arteritis is a significant unmet medical need. I mean it's basically nothing there today. The data is very, very compelling. And we look forward to expanding Actemra use in that market as well. So that's why we're for our outlook for Actemra, we see continued obviously good growth this year but also in the years to come. So I hope that helps you to give you a little color on that. Thank you very much for participating at our briefing, and I wish you all a good day. Thank you.

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