Severin Schwan - Chief Executive Officer Dan O’Day - Chief Executive Officer, Roche Pharmaceuticals Michael Heuer - Chief Executive Officer, Roche Diagnostics Alan Hippe - Chief Financial Officer

Richard Vosser - JPMorgan Luisa Hector - Exane Sachin Jain - Bank of America Matthew Weston - Credit Suisse Jack Scannell - UBS Tim Race - Deutsche Bank Sam Fazeli - Bloomberg Intelligence Andrew Baum - Citi Keyur Parekh - Goldman Sachs Naresh Chouhan - New Street Research Emmanuel Papadakis - Barclays Steve Scala - Cohen

Ladies and gentlemen, thank you for standing by. Welcome to the Roche’s Third Quarter 2018 Audio Webcast and Conference Call. I am Irwina, the Chorus Call operator. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it’s my pleasure to hand over to Severin Schwan, CEO of Roche Group. Please go ahead, sir.

Good morning. Good afternoon. Welcome to our quarter three sales call. So you have seen a very strong quarter again, sales now up by 7% both for pharma and diagnostics, you see continuous growth in the mid single-digits. And turning to Slide 7, if we look at sales development from a regional perspective very much as expected a decline in Europe due to the entry of biosimilars and on the other hand the continued strong growth in the United States and actually also in the international region very much driven by China. So, in addition to the successful product launches, also the pipeline is ramping up nicely. And as you can see on Slide 8, it’s not only a matter of quantity of new molecules, but also very much a matter of quality, so we had five breakthrough therapy designations this year on the pharma side and actually four breakthrough device designations on the diagnostic side. If we turn to Slide 9, again, you can see it’s clearly about the new launches which are driving the growth, so they account now for over 20% new products, account now for over 20% of pharma sales, it’s over 2 billion for the first 9 months by far offsetting the biosimilar expulsion. If we turn to Slide 10 and obviously the highlight this year is Ocrevus, I mean, it continues to grow very strongly stronger than we would actually have thought at the beginning of the year and this strong growth has continued into the third quarter and we expect the growth to continue as we hold it out beyond the United States, but it’s not only about Ocrevus, there is a number of new medicines coming through beyond oncology also in other disease areas as you know good start with Hemlibra and also good prospects with neuroscience with a number of exciting projects now in late stage development. So, to close on Slide 11 and 12 given the successful launch of our new medicines, given the strong portfolio with now 15 new molecular entities in late stage, I am very confident not only to meet our guidance for this year, but to continue to grow as we go into 2019. Thank you very much. And with this, I am happy to hand over to Dan. Dan O’Day: Great. Thank you. Good afternoon, good morning from my side as well. We will go right to Slide 15, looking at the sales in the pharmaceutical division as you can see up 7% in constant currencies and the geographical trends in quarter three remains really very similar to quarter two, so strong growth in the United States driven by the launch of the new products, Ocrevus, Perjeta, Alecensa, Hemlibra, as well as a good strong performance of Lucentis. In EU as expected, we have a decline of around 8% year-to-date. The launch products are just beginning to get traction now, with very good performance with Ocrevus, Tecentriq, Perjeta, Alecensa, Gazyva, Hemlibra able to offset some of the erosion from the biosimilars of MabThera and the initial biosimilar erosion of Herceptin. Japan, very strong launches, particularly of Tecentriq and Hemlibra. We are able to offset some of the mandatory price cuts there in the first entrants of biosimilars. And in international we saw an acceleration of growth from quarter two to grow quarter three plus 6% to plus 14%. This accelerated growth was largely driven by China, but also good contributions from Brazil and Russia. So the volume growth year-to-date accelerated to around 12%. And I would just say that the underlying pricing trends if you exclude the price erosion due to biosimilars in the U.S. and the Europe basically stable and in line with previous years. So turning to the next slide looking at the overall portfolio, the recently launched products are really driving the growth. As you can see in fact the new products alone contributed more than 2.3 billion in additional reported sales in addition to some of the established products such as Actemra, Xolair and Lucentis contributed another close to 400 million. I will touch on the other products in the coming slide, but I don’t have a slide on Lucentis, so let me make a point on it here which is the sales grew 11% year-to-date driven by strong volume growth, the successful launch of the pre-filled syringe and also some share gains. While we expect continued growth in Lucentis and I don’t touch on it, but continued to be encouraged by the port delivery in the bispecific antibody as potential follow-on to Lucentis in the coming years we spoke about those at the half year. So turning to the next slide digging into the oncology portfolio a little bit, where sales grew 2% driven by the newly launched products. I will cover the HER2 and the hematology franchises on the next page, let me make a couple of comments on Avastin here, Avastin sales were up 2% driven by the international region, really strong volume growth in China following the national reimbursement there. Sales in Europe declined around 2% largely driven by price impact in France. I would say that in the U.S. and Europe the first line colorectal cancer patient shares reached new heights. And as expected the first line lung cancer shares continued to soften a bit with the CIT competition. Also in the U.S. we saw a good uptake for women with advanced ovarian cancer following initial surgery that was the indication was approved in quarter two of this year. Tecentriq increased momentum, so 49% now in the quarter versus the half year at 37% was driven largely by Europe and international growth in the second line and third line lung cancer setting and also the first and second line bladder cancer setting. U.S. sales were essentially stable and are waiting new indications which I will cover later in the presentation, several to come to drive growth and be first in a variety of indication. In quarter three just to remind you we presented the positive results from the small cell lung cancer setting at the World Lung Cancer at ESMO. And we look forward coming up – sorry at World Lung. At ESMO we look forward to presenting triple negative breast cancer as well as Tecentriq in the nab-paclitaxel setting, the first line setting and some additional data on hepatocellular. Alecensa sales were up 79%, strong demand in all regions, very strong market share and maybe a point for future, in quarter three we also achieved the first line approval in China, which was only 8 months to 9 months after EMA, FDA approval, which shows the I think directly the regulatory reform that’s occurring to highly innovative medicines now in China. Tarceva as expected, we have some continued in-class competition and Cotellic and Zelboraf, the story really has transitioned now to looking in 2019 when we show the results of our Phase 3 programs in combination with immunotherapy. Shifting to our HER2 franchise which was up 7% in the quarter Perjeta continued strong volume growth driven by the U.S. with good strong demand in early breast cancer, in the EU the beginnings of early breast cancer as well as continued strong growth in both neoadjuvant in the first line metastatic setting. Herceptin was up for the quarter driven by the U.S., longer duration, some pricing effect. In the EU we had the decline as expected both in terms of regular price cuts and then the first two biosimilars having an impact on the launch, which led to a 21% decline in Europe in the quarter accelerating as expected from quarter two, which was minus 7%. So, we continue – we’ll continue to see an erosion as expected of Herceptin and an increasing erosion in the quarters to come. In International, accelerated growth driven by again the China reimbursement for Herceptin as well. Kadcyla also up 8% in the quarter, driven by really all of the geographic areas U.S., EU, and International, good strong growth in the second-line metastatic breast cancer. When I think about between now and the end of 2018 in terms of the outlook for HER2, we’ll continue to see strong Perjeta uptake, International, we’ll continue to see Herceptin volume momentum. And at the San Antonio Breast Cancer Conference, we look forward to presenting the Phase III results from the KATHERINE study, which as you know is the adjuvant breast cancer study that we just announced this week achieved significance, and we’re highly encouraged by the data, look forward to regulatory discussions and the impact this can have on patients in the curative setting. Moving to the hematology portfolio, the graph shows as expected that our portfolio is in a state of transition, a rejuvenation phase, of course, with the biosimilars now affecting MabThera and Rituxan, but good growth for Gazyva, good growth for Venclexta, the Venclexta sales are not shown on the slide, just to remind you because they're booked by our partner and only will be reported out in early November, but we see very good momentum with Venclexta as well. So, we’ll also be presenting towards the end of the year data on our bispecific antibodies at ASH and some additional data on Venclexta there as well. So just to put the MabThera/Rituxan sales and oncology decline into perspective, on a global basis it’s minus 9% for the quarter versus a minus 12% in quarter two. And then specifically on EU, the oncology sales decline slowed down a bit to minus 49% year-on-year. Again, as expected now that we’re comparing to last year’s base, which also included a reduction, so we expect the curve to soften out now a bit after our first full-year biosimilars in Europe, and Gazyva is growing now at 51% in the quarter, up from 38% in the second quarter, driven by the first-line follicular approval now just starting to get going. Venclexta as I said good uptake particularly in the relapsed/refractory CLL data following the MURANO approval. In addition, in quarter three, the FDA accepted the early filing for Venclexta and first-line AML. The PDUFA date now is set for December 25. So, thinking about the hematology portfolio between now and the end of the year, we look forward to actually reporting out on the CLL14 results, which is the front-line CLL with Gazyva and Venclexta. We also expect to have EU approval for – Venclexta plus Rituxan in the relapsed/refractory CLL still this year. And we have initiated an accelerated filing for polatuzumab in the relapsed/refractory DLBCL setting, updated OS data from that will also be presented at ASH. Turning the attention to the immunology portfolio, where we have now annualized sales of greater than CHF8 billion. It was a very good quarter. Quarter three sales for the immunology franchise up to 7%. Pleased to see that Esbriet now for the quarter grew at 21% versus around 14%, 15% in the first and second quarter, that reflects a couple of things, accelerated growth momentum and an increasing penetration into the mild to moderate segment. Of course, we also introduced the new formulation recently, which allows greater patient convenience, and Esbriet continues to maintain overall leadership in both the U.S. and EU. Xolair with a good quarter plus 9%, continues to be driven by the pediatric asthma indication, allergic asthma and CIU. And as you know we launched the pre-filled syringe in the third quarter, which will be a significant patient convenience. New indications to come with Xolair including nasal polyps food allergies in the future. Actemra up 9% in the quarter, continues to be the leader in the overall RA market in monotherapy position and growth is also being driven now by the ongoing giant cell arteritis launch, which is approved in all major markets. So again between now and the end of the year for the immunology franchise, we continue to see good growth for Esbriet, Xolair and Actemra and of course the continued erosion although that softening in Europe on the MabThera biosimilars. So turning the attention to Ocrevus, I mean, just really outstanding launch globally, I think the numbers speak for themselves, but the quarter reached CHF633 million, that was up from CHF560 million in the second quarter, really without a doubt, one of the best launches in the MS space, now achieving 12% U.S. market share for five quarters and about 1 out of every 3 new patients are switch patients is going on, it’s going on Ocrevus. So, in the U.S., we will continue to see good growth. We are up now to 70,000 patients, have been infused, that was up from just 40,000 at the end of March. This is important, because this continues to establish the safety database and safety profile of Ocrevus, which is again critical to the earlier use of this product and we are continuing to see that drive up in the earlier use as we have good share now in third and fourth line setting, which will continue to grow in greater and greater share on the earlier lines. You saw some of the 5-year data just recently at ECTRIMS, continued strong durability and we are also seeing extremely strong growth and good launches in our European market, which are really mimicking the uptake that we saw in the United States. So, we will continue to see for the rest of this year of course good growth and going into next year for Ocrevus and beyond. For Hemlibra, we had sales in the quarter reached CHF57 million, up from CHF34 million, just a short period of time on the market now. We are already out around the 30% to 40% market share in the inhibitor indication. Just to remind you, that’s obviously a very important part of medical need, but only around 5% of the total hemophilia market and we are now launched in 13 countries and see a similar trend in Europe as we saw in the United States relative to uptick in the inhibitor market. The exciting news for the quarter just recently was the U.S. approval on the non-inhibitor indication. This is based upon of course the HAVEN 3 and HAVEN 4 studies and in particular the studies that demonstrate the intra-patient comparison with Hemlibra significantly reducing treater bleeds compared to prior Factor VIII prophylaxis. It’s the first medicine that can be administered once a week, once every 2 weeks, or once every 4 weeks. So, the Hemlibra sales will accelerate in quarter four due to the U.S. launch of non-inhibitors and further ex-U.S. launches, we expect also the CHMP opinion before the end of the year for the non-inhibitor indication in Europe. So, on the next slide, you can see that we are now at a stage where there are 10 new products that we have launched since 2012, have generated in quarter 3 on an annualized basis around CHF10 billion, already 23% of the pharma division sales. I think it’s extremely important to note that these medicines will have many important line extensions in the near future, Venclexta, Tecentriq and others the future is really ahead of them in terms of not line extensions. And also I would point out that we have a variety of NMEs in our late stage portfolio that are expected to launch in the near-term. We have baloxavir, the cap endonuclease that has a PDUFA date set for December 24 and in 2019, we have additional NMEs, including polatuzumab, entrectinib and possibly an earlier progress with SMA as well. So moving to the innovation section, I would just quickly remind you of the data that was presented at World Lung for small cell lung cancer. Also remind you that this is around 15% of all first line lung cancers. You can see the data repeated on this line would show the OS improvements first-in-class CIT that demonstrate this improvement, essentially a new standard of care now in the first line lung cancer setting. And as you know, we have filed this and are in the process now of discussions with regulators to get this medicine to patients as quickly as possible. The next one is entrectinib, the data that was presented also at World Lung on the ROS1 inhibition we will be showing additional data of entrectinib in the entrectinib patient population coming up at ESMO. I think the data are very compelling to speak for themselves in terms of the overall responses in this patient population with tremendous medical needs and includes the ability to show a difference in patients whose cancers are metastasized to the CNS. Moving to the risdiplam and SMA, we showed some updated data recently at the World Muscle Society. This has updated Phase 2 results from the FIREFISH data which of course is the Type 1 SMA and the data suggests really a potentially best-in-class oral SMN2 splicing modifier that’s systemically distributed throughout the body, because of its oral nature. To-date, the medicine has been very well-tolerated. And importantly, 95% of the babies are alive without the need for ventilation at 10.5 months compared to 50% of babies at the same age in the national history study as we look forward to continuing to follow the progress of this study and are in active dialogue with regulators to look for the path forward as we get the totality of data. We also have of course a comprehensive program around risdiplam, including types 1, 2 and 3 SMA and a newly initiated study in pre-symptomatic patients with so-called RAINBOWFISH study that will have patients entering in by the end of 2018. Turning the attention to baloxavir in Influenza A & B, we presented some data recently of the IDWeek. And this is the second trial to read out the so-called CAPSTONE-2, which is in people at high risk of complications of influenza. Baloxavir, as you know is a first-in-class small molecule inhibitor of viral RNA and a single dose regimen we already presented the CAPSTONE-1 data, which is the substance of our filing right now with the PDUFA date at the end of the year and uncomplicated influenza. And now with this trial, the first really antiviral to show in effect in people with high risk complications, this is now the second trial to show a significant antiviral activity and potentially reduced transmission rates. So, note in this table and the fact that the efficacy in type B is significantly better compared to Tamiflu and reduced time to viral shedding was almost half compared to Tamiflu as well as reduced use of systematic antibodies and influenza related complications. So, very consistent with CAPSTONE-1 and where it become more and more convinced that this is a medicine that will improve on almost all aspects of Tamiflu going forward. On Slide 20, just a reminder of some really important events coming up for the rest of the year starting with this coming weekend at Munich and to remind you that we will have a virtual pipeline events on the Monday of that data, it’s skewed to join to get an update on a variety of medicines there. We will have an important presentation at San Antonio now with the KATHERINE data and a very full ASH in San Diego, where we will also be having another pipeline events. To close out, I think and it said something I believe about our confidence as we continue to look at the future on our growth through biosimilars as well as our confidence for having the strong end of ‘18 and ‘19 is that in addition to what you see on the slide, what’s below the slide was additional 2018 news flow that came in earlier than expected or more positively than we expected. So I just point out a couple of those, because in the table we have talked about most of those, of course Actemra in connection with CAR T, the early filing of polatuzumab in relapsed refractory DLBCL, entrectinib in both ROS1 and entrect SMA with Type 1 in particular accelerating, Baloxavir and influenza and then most recently Kadcyla and KATHERINE, so a really strong portfolio. With that, I thank you for your attention and I return it over to Michael to cover diagnostics.

Thank you, Dan. Good morning, good afternoon everybody. I am happy to present the diagnostics division here. With sales of roughly CHF9.4 billion, we have again a strong growth of 6% driven mainly by Centralized and Point of Care Solutions growing at 7%, Diabetes Care stabilizing at 1%, Molecular Diagnostic up 5% and tissue diagnostics growing at 9%. Looking at our regional sales growth, growth is driven by Asia Pacific and North America with 13% and 6%. Also EMEA, Latin America and Japan contributed divisional growth with 2%, 3% and respectively 8%. Without diabetes care EMEA grew with 4%. The emerging markets we call them seven countries grew 13% with the largest contributor China growing at 14%. Looking at the growth drivers in our business areas strong growth was driven by Centralized and Point of Care Solutions with 7%, strongly supported by 10% growth in immunodiagnostics, continuing the double digit growth journey for more than 20 years. Molecular Diagnostics experienced further growth of 5%, driven by the successful adoption of Global Access program approaching 30 million viral load tests in 2018. Further more, HPV is growing 17% based on the continuous rollout of primary screening programs across the world and the successful launch of our molecular point-of-care system, cobas Liat or lab in a tube. Looking at the strategy and news flow of Q3, we continued to expand our core lab portfolio and meanwhile we have reached 1,500 cobas e 801 placements in routine use of our immunodiagnostics flagship. After the approval of the Chinese FDA, we have started cobas e 801 launch in China in September. The next highlight will be the launch of the first member of a new generation of serum work area analyzer, cobas pro for the medium to lower throughput segment where we are in the midst of the global multicenter evaluation and we scheduled the launch for December this year. Looking at our activities in China, I am happy to announce the opening of our best in class manufacturing sites with an R&D center in Suzhou. With our workforce of more than 400 employees, we will ensure a sustainable supply of clinical chemistries and immunoassays for the Asia Pacific market. In the next slide as you can see, fighting HIV is really very close to our hearts. The public-private partnership between Roche and Kenya Medical Research Institute represents another milestone towards achieving the UNAIDS 90-90-90 initiatives in Kenya. Through the Roche Global Access program, Roche installed our flagship cobas 8800 system in the new KEMRI lab helping to improve infrastructure for scaling up HIV diagnostic testing in Kenya. And now moving to our sequencing business to complement our AVENIO ctDNA kits three AVENIO tumor tissue analysis kits for research use only were launched in Q3 2018. We have AVENIO tumor tissue targeted kit, the expanded kit and the surveillance kit. Our tumor tissue analysis kits will enable customers to test tissue samples and to analyze concordance between match tissue and plasma, expanding clinical research opportunities. Next slide, we are well on track to achieve our 2018 product launches and expect to take off the remaining launches till year end. I am happy to announce our Diagnostics Investors Day at Rotkreuz in Switzerland on November 20 and look forward to meeting you there. And now I will hand over to Alan for the financials.

Thanks, Michael. So hello to everybody. Thanks for joining our call. Let met emphasize right at the beginning on Slide 43 that we provide really growth through the period of biosimilar impact and I think Dan and Severin have talked about as you see really in the strong underlying group sales force has been providing the 7%, very much driven by the U.S. and international. And on the M&A side, just a remainder when you do your modeling on the cash flow side that we have the cash outflow for the foundation medicine transaction in Q3 and the cash outflow has been CHF2.3 million accordingly to the numbers that we have established in the first half or at the half year reporting already. And the currency impact, I will have a slide of this very much driven by the U.S. dollar balancing out to a major extent and then the bond repayments and issuances in Q3 2018, we had some repayments of roughly CHF1 billion, CHF600 million with a 1% coupon at 6.5 years and CHF400 million with 1.5 years and the 0% percent coupon, very sad to see that go. We had to replace that with newer bond issuances of CHF2.3 billion and we did that and we see that on the slide, which is basically in line with our interest cost that we have in average. With that, let me go to the next slide and I think my colleagues talked already about the sales growth. Yes, let me emphasize on that slide at the right hand side, where you see the currency impact, which is really, really small and you see here that the growth in constant rate is at 7% for the group as is Swiss francs. So, with that let me go to the next page and explain that a little bit more in detail what has happen on the currency side. And in fact that I think a pretty simple story you see on the left hand side, the growth year-to-date in constant rates on the right hand side in Swiss francs, and basically you are seeing that the euro got stronger year-to-date, whereby the U.S. dollar weakened at some of the currencies in Latin America. I think the positive news here is basically balanced out. With that, let’s go to the next page, which is a standard slide, as you know, this is really about how the currencies have developed and a little bit of a very much assumption driven projection and for the year. And in Q3, you have seen that the negative impact of the U.S. dollar reduced to basically minus 1% when you compare that half year estimate of minus 3%. And as you see that the positive impact still of the euro of 6%, which came a little bit up from the 9% that you have seen at half year. So, assuming that all the currency rates at year-to-date September stay really where they are. You will see really that the impact for sales as well as core EPS and core operating profit, a rather small, but really minus 1 percentage point for all the 3 categories that I have mentioned and I can say really these are rounded figures. They are really, really small. It’s really small impact here, which certainly is a nice situation to be in and at 7%, I think we are confident that we are delivering the outlook, which you will find on Slide 47. And now, we are happy to take your questions.

Can we have the first question please?

The first question from the phone comes from the line of Richard Vosser with JPMorgan. Please go ahead sir.

Hi, thanks for taking my questions. First question just looking at the sales growth, which is again mid to high single-digits, the 7% local currency growth for the 9 months, you are still guiding for 5% to a mid single-digit growth for the full year, so which sort of implies no growth in the fourth quarter or very limited growth. So how should we think about the fourth quarter, what hits that we are not thinking about that UR and how should we think about that guidance? Second question just go to 2019 and you talked about the growth in ‘19 you seem more confident on this, so just what’s driving that confidence and also do you continue to expect margins to be flat in 2019? And then final question for me just thinking about the Herceptin biosimilar rollout in Europe, should we still be thinking about the erosion the same as Rituxan in the coming quarters, could you talk a little bit about how the subcutaneous form of Herceptin is holding up and maybe also about the price volume mix of the erosion you have seen thus far? Thanks very much.

Thank you very much. This is Severin. Let me take the first two questions on the outlook for the fourth quarter and then importantly the outlook for 2019 and then perhaps, Dan, you can take the biosimilar question. So to be very clear, I mean we remain very bullish and we expect further growth in the fourth quarter as well. There is probably some softening as we see Herceptin biosimilar impact increasing in Europe. Also remind you that we had a strong Tamiflu fourth quarter last year, so there is some base effect expected. But overall, due to the really continued increase of the recently launched medicines such as Ocrevus, Perjeta, Alecensa, Hemlibra now, we are very confident to see continuous growth in the fourth quarter, and all of that should clearly enable us to achieve sales growth in the mid-single-digit. Now, if we look forward into 2019, again, we are very confident to keep growth into 2019 and quarter-by-quarter I should say this confidence goes up and why does it go up? On the one hand of course, we see that the new products are delivering more than we had originally expected, that’s also why we brought up the guidance actually over the last two quarters. And secondly on top of that, we have seen some pipeline progress Dan has actually alluded to. So, we will as you know present next week data for triple negative breast cancer with Tecentriq. We had good interim data for Huntington’s as you have seen, you have seen the SMA data, which we are very good. And very importantly I should also say Kadcyla data, which we are looking forward to present to you following the KATHERINE trial, where we have the data already in house. Put on top, polatuzumab, where we accelerated filing. I mean, all of that of course contributes to the confidence as we go into 2019. So again, on a good track and as I was certainly more careful at the beginning of this year, today we are sure actually that we can outgrow the impact of the biosimilars. And with this Dan to the – Dan O’Day: Yes, thanks, Severin. Certainly, share Severin’s confidence and the evolving nature of the portfolio and the ability to offset specifically Richard around the Herceptin biosimilar, happy to give a little more color to that. So, as I mentioned in the quarter, we had about a 21% decline, and not all of that is biosimilar erosion, of course, we – in previous quarters we have around a 7%, this is in Europe, around 7% price decline, because I’ll be discounting that occurs with Herceptin particularly with the Herceptin/Perjeta combination. But you do start to see the beginnings of the biosimilar erosion in quarter three. You asked about the price volume, I mean, early days, but we’re seeing around 60% price, 40% volume on the Herceptin side. The subcu is holding up and I think that’s the difference in the dynamic to MabThera. As you know we’ve talked about this in the past that the underlying dynamics are slightly different because there's more competitors with Herceptin. On the one hand, which is a downward effect, on the other hand, our subcutaneous share in Europe is much higher than MabThera and that's a upward effect. And I think on the balance, those two things have led us to be modeling internally and overall erosion rate in Europe that is not dissimilar than MabThera. And I think we can expect as we go into quarter four we’ll see a greater erosion and we’d expect to be somewhat along the curve that we saw with MabThera if we go back three or four quarters as well. So, I hope that helps give a little color to Herceptin biosimilar in Europe.

Perfect. Thank you. Dan O’Day: Thank you.

There is one question from the web, if I can just throw that in from Lawrence Simon from Capital Re. He asked about the disclosure, have you disclosed the profit split between – for Venclexta with AbbVie? Dan O’Day: Yes, I think we talked about that, I think it’s a 50:50 in the U.S., and it’s a royalty rate and I would say really a benchmark royalty rate, a market benchmark rate. We say normally between 2% and 3% when it comes to that outside of the U.S.

Thank you.

Can we have the next question, please?

The next question from the phone comes from Luisa Hector with Exane. Please go ahead, madam.

Hello. Thanks for taking my questions. I wonder if we could go back to the strength in the international markets, particularly driven by China, obviously you have got the volume benefits from the reinvestment, how sustainable do you think that double-digit type growth will be and what is your expectation for biosimilars of the legacy brands coming into that market? And then on the pipeline, I noticed that a couple of studies, the emactuzumab, the anti-CSF, it looks like you have dropped that, so just to confirm that it’s dropped completely and maybe why? And then the Venclexta plus the fulvestrant breast cancer study, just any comment on the rationale for running that study in the breast cancer? Thank you.

Yes. Thanks, Luisa. So, couple of comments on your questions, thank you for them. China, what we are seeing and I think you particularly saw between quarter two and quarter three is an overall revenue growth that jumped up a bit and that’s because we now have flushed out essentially some of the price discounting that occurred for the broad reimbursement and you are starting to get year-on-year comparisons to what we have when we got the reimbursement around quarter three of last year. So, we think that there is continued good growth in China for these medicines certainly for 2019 and beyond. In terms of biosimilars, we don’t expect a major change trajectory in China within the next year. And in general, I would just say for the international markets, we have had for many years, so-called non-comparable biologics competing with us in those marketplaces. And so I think we continue to see the international region overall continued to be a growth driver for us in the near-term with China being probably leading the pack. I can just confirm that yes we did terminate the anti-CSF1R. At this stage when we looked at the additional trial results on that, they indicated the combination was not meaningfully better than Tecentriq alone in this patient population. So, we have discontinued this development and I remind you that we still have around 20 medicines in cancer immunotherapy, around 10 in the clinic that we continue to pursue, so there will be targets that will fallout, there will be targets that will strengthen one of the targets that we think has strengthened is the bispecific antibodies amongst others, but those are the ones that are probably most progressed that you are going to see at ASH. And then I am sorry, Luisa, I was taking notes U.S. about the Venclexta plus what combination?

Fulvestrant in the breast cancer, was that listed as a Phase 2?

Yes, okay. So this is just started – sorry, what’s the question about that, we are about…

Yes, the rationale, so I presume you have some Phase 1 data that…

Yes, that’s correct. And we saw some effect in the Phase 1 disease recurrence and progression and that’s why we took it into Phase 2 at this stage and the first patient is answering that trial right now in quarter three or did in quarter three.

Thank you.

Thank you.

The next question from the phone comes from Sachin Jain with Bank of America. Please go ahead.

Hi, Sachin Jain from Bank of America. Few questions please. First, just a clarification on the first question in ‘19, I think I interpreted your comments, Severin and Dan, as sales growth, there was a limited question pharma EBIT growth for next year, I understand the Cabilly, but any sort of change in mood music around growing pharma EBIT next year? And then my two questions, firstly on U.S. biosimilar erosion rates, most U.S. biosimilar erosion rate precedent is that erosion has been better than Europe, yesterday J&J showed guidance for continued limited decline in Remicade. You continue to point I think the market to U.S. biosimilar erosion to be similar to Europe. Could you provide some color as to why oncology biosimilars will be different to precedence? And then second question is on the Perjeta, APHINITY, and Gazyva Gallium launches, you are well in over 6 months into those launches, so I wonder, Dan, if you have any penetration numbers for those indications for what the hurdles are to faster adoption? Thank you. Dan O’Day: Thank you, Sachin. Perhaps just on the outlook, in terms of maybe calls for 2019, it’s usual of course we will give our guidance at the beginning of next year and this year rightly pointed out what we flagged to the market is that we have this type effects with the Cabilly patterns. And you also said that we won’t work against that, so that we makeup for that increase in operational expenses. Now, given the positive dynamics, the positive momentum we have seen quarter-over-quarter and that of course will continue into 2019. Of course I am also increasingly confident that we can makeup for the effect of Cabilly, but again I would refer you to the former guidance than beginning of next year.

Yes, thanks Sachin. So just to add in, I want to make sure that we haven’t created any confusion around our expectation of biosimilar erosion in the U.S. Let me just make sure we put a couple of facts on the table. I mean, we expect the first entrants of biosimilars to the U.S. in the first half of next year with MabThera, the second half of next year with Herceptin and with Avastin. And what I would say is that even though at our pipeline events a couple of weeks ago we kind of painted a worst case scenario to belie our confidence even in a worst case scenario being able to grow through that and with the ability to offset around CHF10 billion in turnover between now and 2022 and with the success of the new launches it showed that we could more than offset that. Having said that that would assume 60% to 70% biosimilar erosion over that time period in the U.S., which will be similar to Europe. Now, it’s actually not our expectations, but it’s rather more an extreme scenario to demonstrate that even in an extreme scenario we can grow through. So I would say that maybe just a couple of things on the U.S. biosimilar erosion rates you have already mentioned some of the precedents that should be looked at here. But I wouldn’t say that when we look at Europe that there isn’t one biosimilar erosion rate there and we have a variety of different erosion rates depending on the country. And some are very severe and some are less and it’s generally related to the heterogeneity of the healthcare system and the decision making. So I would put the U.S. in a highly heterogeneous system and therefore we – our base case assumes that we would actually – although we expect, let’s be clear we expect significant entrant of biosimilar, we don’t expect the erosion rate to be similar to Europe at this stage even with some potential additional activities with the administration in the U.S. government. So I think you are right to make sure that we clarify that we see a difference between the erosion rates between U.S. and Europe. And then finally in terms of the progress with the affinity really strong, I mean quarter-on-quarter continued growth I mean our most experienced market with the adjuvant indication with Perjeta, the U.S. is roughly a 40% share so far in that adjuvant setting, so still significant order growth to go within the context of the high risk patients. And in Europe, it’s even less and of course in Europe we have growth opportunities still on neoadjuvants and in the metastatic setting with Perjeta. With Kadcyla, still really the early days to articulate the share approval, I think we are just getting going now really in the front line follicular setting. So I think that’s something we can give you in the quarters to come. But given the nature of that disease, the slower develop in nature of that disease the take up from that disease that’s taking a little bit longer.

Thank you.

Thank you.

Yes, Chris I will make a comment. It’s Alan speaking. I had talked about arrangement that we have with AbbVie on Venclexta and what is disclosed is sort of the 50-50 probably split in the U.S. Outside of the U.S., we get paid royalty and I would say it’s a solid double-digit number that we gave you, but we have not disclosed really the details yet.

Thanks for the clarification and can we have the next question please.

The next question from the phone comes from Matthew Weston with Credit Suisse. Your line is now open. Please go ahead.

Thank you very much. A couple of questions if I can. Firstly, I noted on Slide 17 when you are discussing Rituxan you highlighted an expectation for U.S. biosimilars in the first half of 2019, can you let us know whether that’s just a guesstimate from your perspective based on the competitive environment or actually reflects some legal settlement that you have made with a number of the biosimilar policies that means that we should have a more concrete expectation of biosimilar entry then? And then secondly as we go into ESMO, we’ve obviously seen the Tecentriq triple negative breast cancer data in the Presidential Session, which is clearly exciting. But looking back at your pipeline event slide from just a couple of weeks ago, I was surprised to see that you classified the opportunity has only CHF500 million to CHF1 billion of peak sales opportunity, and given that we know how many patients there are, I wonder if you could explain why that is, is that some kind of reflection of what we’re going to see around duration of therapy or is there another reason why you think it's just a very modest opportunity relative to the patient size of the total breast cancer market? Dan O’Day: Yes, thanks a lot, Matthew. So, let me go back to MabThera U.S., it is based upon an estimate exactly to your point. So, I mean we are aware of competitive intelligence around where people stand in terms of their approvals and also when they may be able to launch, so, I think that’s our best estimate. Of course, that’s – that has some imprecision to it, it could drift into a little later in the year, a little bit earlier in the year, but that’s our best estimate at this stage, whereas with Herceptin and Avastin, I think we’re quite confident those fall into the second half of the year. I don’t want to be more precise on that right now, but I think that should give you some guidance on what is anticipated. With Tecentriq, yes, I’m also looking back on the slides from the pipeline event, we’re very excited about the results of triple negative breast cancer and Tecentriq, and you rightly point out the Presidential Session, obviously we’ll have a chance, you’ll have a chance to see it then and we’ll have the investor event shortly after that to give some color to it with our – with some of our key clinicians. I would just point out that the important results are apparent in the PDL1+ portion of that triple negative breast cancer setting. I don’t want in anyway capitate the potential and those potentials were anyway tended to be ranges. But I guess the only other color that I would add to into your assessment so far Matthew is its PDL1+. So, let’s have a look at it even in more detail once the data is on the page and we can readdress also the potential. But I want you to know we feel enthusiastic about the opportunity for this to make a difference for patients and the first time we see an immunotherapy showing a difference in breast cancer.

Many thanks, indeed. Dan O’Day: Yes.

The next question comes from Jack Scannell with UBS. Please go ahead.

Hi, thank you very much. There are three questions. The first one again relates to U.S. biosimilar entry. It’s clear that you have an agreement on one of the Herceptin biosimilars, but with the others as far as I can tell you’re actually – you’re litigating in patent dispute with the entrants. So, the question there is that, would it be reasonable to assume that Herceptin is likely to remain a duopoly with EU and one biosimilar for some time in the U.S.? And then the second question is sort of the same question you’ve been asked about Herceptin in Europe – you’ve been asked about Rituxan and you’ve been asked this in prior quarters, but I’ll ask it again. If we look at the reduction in Rituxan sales in Europe, again, could you give me the kind of price volume breakdown that you’re currently seeing? Dan O’Day: Yes, thanks, Jack. So, as you could imagine, I mean, we’re not going to comment extensively on our protection if you like of our patent landscape in the United States, so I don’t want to comment specifically about that. What I would say is that we are aware that we have different pieces of our patent defense that we are certainly defending as a originator appropriately I think in the U.S. So, I won’t speculate any further on this concept of duopoly or more entrants into Herceptin and then what timeframe at this stage, I think that would not be something I comment further on. I would just leave it at the fact that we expect at least the first entrant of Herceptin in the second half of the year at this stage. Obviously, as we have more information and as we can update you just as we did in Europe, where we had a variety of changing timelines, we will do the same for you as we go into next year and as we get more clarity both on the competitive environment and what we made during to defend our patent landscape. Finally, on the reduction, yes, in Rituxan, so just to compare the price volume then on MabThera, it’s roughly around 25% and around 75% of volume. And I think that indicates as far as I am concerned the difference of course in the subcutaneous share, because subcutaneous has been very defensible position, because healthcare systems have switched and changed their processes. And so however, in MabThera, it was a much smaller percentage in terms of the subcutaneous penetration versus Herceptin. So I think that’s why you see first of all only a couple of entrants of biosimilars for MabThera and on lower subcutaneous volume versus Herceptin having more competitors entering into the same time in a higher subcutaneous volume. So you see the more aggressive action on the pricing side on Herceptin than you do with MabThera, which was very much in line with what we expected in our expectations.

Thank you very much.

The next question from the phone comes from Tim Race with Deutsche Bank. Please go ahead.

Hi, there. Thanks. Couple of questions please. First off, on the KATHERINE data for Kadcyla, can you just help us understand exactly how Perjeta in the neoadjuvant and any following on longer duration treatment sort of how this Kadcyla data is going to keep up and what the overall value to Roche is from these two sort of usages of therapies in similar areas and how we should sort of conceptualize that? Next, sorry to bang on about the biosimilar side of things, but could you just help us understand a little bit more in terms of from your knowledge of the litigation that’s ongoing, without any summary judgments on U.S. biosimilars, would they have to launch risk in 2019 unless you agreed any of the settlements or is there something that we are not understanding yet? Thank you.

Great, thanks. And maybe the second one first, I mean, I wouldn’t comment any further on litigation or the moves of the competitors, I think those are better questions for them accordingly. So I would just continue to reemphasize that we will defend our patent landscape appropriately and make sure that we change the standard of care as quickly as possible in the areas that we intend to be doing that. So, back to your KATHERINE data, very good question, so I think it’s important to note that the KATHERINE data adds yet another important tool in the toolbox to give patients a better chance for a cure. And so clearly we have got patients that will go directly to adjuvants and those that go directly to adjuvants will be on the standard of care Perjeta plus Herceptin in the APHINITY data. So, we are really talking about the trio patients that go on the neoadjuvant first and those patients will either receive Herceptin or more importantly these days be receiving Herceptin plus Perjeta. And then at the time of surgery of course is when they evaluate whether or not there is a pathological complete response or not and our data suggests that roughly it could be a little bit more, little bit less around 20% of patients at that period of time that have had proper neoadjuvant treating with Herceptin plus Perjeta would not have a complete pathological response. So that is where Kadcyla would come in with the way in the design of KATHERINE data and allow for another option. We have always known that physicians are treated with Herceptin and Perjeta prior to surgery and didn’t get a complete response, had some question about how that therapy would continue to evolve post surgically now they have another option. And I think we are certainly looking forward to sharing the strength of that data with you when we are together at San Antonio. So, if I had to describe kind of the market opportunities for KATHERINE, I think this could encourage greater neoadjuvant use in general and particularly in Europe we don’t have as higher neoadjuvant share as we do in the United States, just because physicians will know they have another option for those that don’t evolve that, that can lead to better penetration, particularly in the EU. There is higher price on Kadcyla versus Perjeta and eventually because you would treat the KATHERINE protocol as you are treating a full 12 cycles after the neoadjuvants you could have more cycles involved with the overall therapy in curative statement of patients. So, hopefully that gives a little bit of understanding of how we see the opportunity, definitely very complementary to what we have seen with Kadcyla, both in the metastatic setting and Perjeta metastatic setting and now adding to Kadcyla to the earlier stage setting to really further complete the picture to increase the number of patients that could have a chance for cure. As we have seen when we are talking to curative setting, this generally has a very strong interest in detection amongst patients and physicians and healthcare systems and guidelines, so more to come. Was that okay, Tim?

Yes, that’s right. Thank you.

Okay, thanks.

The next question from the phone comes from Sam Fazeli with Bloomberg Intelligence. Please go ahead.

Thank you very much for taking my question. Just I have three. First one is back on the Herceptin biosimilar, I may have missed it, but can you just again reiterate for us what the price volume action was in this what I am assuming to be the first full quarter of for want of a better phrase attack compared to what the equivalent quarter was for MabThera, so that we can get that indication of how the dynamics are working at? And also with MabThera, are you suggesting that we are pretty much close to the bone with regards to the IV infusion version and now the erosion rate will slow down with in Europe as biosimilars try to get into the subcutaneous version? So that’s question one. Question two is we are expecting the TNBC data at ESMO to be probably the strongest dataset that you have had with Tecentriq. If it ends up being as you have suggested mostly PDL1 positive, what read through should I have on what it means for the neoadjuvant and the adjuvant setting, where the opportunities that much larger and will potentially then eat into the metastatic TNBC setting? And the last one is have you thought about or looked at PD1 anti-PAU or Tecentriq in pulmonary fibrosis at all, is there any activity there? That’s it. Thank you.

Thanks, Sam. So just again to just to repeat the price volume differences for Herceptin and MabThera, so for Herceptin, it’s 60% priced, 40% volume early data one quarter a few countries and for MabThera, it’s 25% priced, 75% volume, so those dynamics I think are explained again by the nature of the number of competitors and also the strength of the subcutaneous penetration. So, I think again we think that even though those are two different price volume equations, we think that given the market dynamics that actually the erosion rates will be quite similar. Again, this is Europe of course. Europe with MabThera, the only thing I am suggesting this as the erosion rate is starting to slowdown a little bit. It doesn’t in anyway imply that there won’t be further erosion right there is more erosion to be had on the IV side, it’s just the steepness of the curve if you like as we expected after a certain period of time is starting to flatten out. The subcutaneous continues to be very durable with MabThera. So, we actually don’t yet see a replacement, it’s a biosimilar MabThera IV with subcutaneous MabThera at this stage. Tripling in breast, I can’t take my favorite child, I think it’s a very good dataset, but I equally think that the data that we have in something like small cell that is the first respectively by the way, not comparatively, but to see the first data on OS about chemotherapy obviously 20 years in small cell, I think the data that we have in mutated forms in 150, I think the developing data on hepatocellular. But I would just say just taking a step back from that and happy to maybe address your adjuvant, your neoadjuvant questions with the experts when we are together on Monday if you wouldn’t mind dialing into that event, because I think it’s a bit premature to think too far ahead about the metastatic setting, but certainly we can get the experts view on that at ESMO. But I would just say stepping back from all of this we have had Tecentriq with a certain share position in second line lung and with bladder both in the U.S. and now in Europe. And we are getting ready now to go into a variety of different areas. So, the IMpower150 PDUFA date as you know at the end of the year, we believe we have strong data with Avastin in what is to be around 20% or so of the frontline lung cancer market that has EFGR, ALK or liver mutation. We’ve got the small cell data that we filed and will expect some information next year, which is another 15% of the lung cancer data, and then the triple negative breast that we filed and expect next year to play out with Tecentriq. So, certainly we have areas where we were complementing data that other competitors have already introduced and then we have datas where we are first and ahead. And I think those things will come to light over the next 12 to 18 months. Yes, and then the last question on… Dan O’Day: The last one, yes, I can make a…

Go ahead, yes. Dan O’Day: No activities in the…

Okay, thank you.

Thank you.

Yes, thank you.

The next question comes from Andrew Baum with Citi. Please go ahead, sir.

Good afternoon. Three questions, please. Firstly, I know that Hemlibra has only been recently approved in the non-inhibitors segment in the U.S., but as we think about the initial uptake over the next three quarters or so, could you just talk us through given the high patients’ awareness, your expectations where they’d be positioned aside from those patients who are obviously transitioning from having been within the trials? Second on satralizumab, could you outline your and Chugai’s plans for filing and timelines obviously thinking about the data set versus the Alexion data? And then finally, could you share with us again I know it’s early days, but from a competitive reason as well, I’m interested in the market share you’ve attained with Avastin within the ovarian indication? Many thanks.

Yes, thanks, Andrew. So, a couple of comments just to put the non-inhibitor opportunity in perspective, first of all, I think we’ve got very good reception from the communities since the approval that we’ve received lot of enthusiasm around the breadth of the label covering large patient population in the inhibitor setting – in the non-inhibitor setting. Essentially, as you know we've got of the entirety of the hemophilia market around 5% is the inhibitor, which we’ve been playing in so far, around 20% is where we won’t be playing, which is the mild segment. So that leaves an additional 75% if you like of the market in the non-inhibitor space. And that includes non-inhibitors with bleeds, non-inhibitors without bleeds and pediatric population. So, the label clearly can accommodate all of those and I think we will lead particularly the strength of the data around the interpatient comparability around well-controlled factor VIII will enable us to make sure that we represent all the characteristics of Hemlibra well. So, we expect a good launch, look forward to updating you as we go into the coming quarters. Relative to the Chugai compound in NMO, we’re encouraged by the first set of data that we’ve seen and I know that we present it shortly with the colleagues of Chugai. We have another trial that comes in towards the end of this year, it will – that will fill out if you like the entirety of the data package for selling and then we’ll be able to give you more specific details about our path forward there. So, I would just say that clearly, I can give you some more data at the year-end on the path forward for that. And then finally on Avastin, unfortunately, we don’t have the chart on sort of things that we can give you market share on that as well, but the feedback has been good I would say from the margin overall. Can we have the next question, please?

The next question from the phone comes from Keyur Parekh with Goldman Sachs. Your line is now open.

Good afternoon. Three questions, please. Dan, two for you from a clarificatory perspective, and one for Severin. The first for you, Dan, can you confirm that you’ve not seen any impact of biosimilars on the subcutaneous versions either for Herceptin or for rituximab in Europe? The second one is, can you confirm what proportion of the front-line triple negative breast cancer patients do you expect to be PDL1+? And then for you Severin, you’ve kind of mentioned increased confidence in the growth outlook kind of not just for the fourth quarter, but also longer term both on the top line and the bottom line, how should we think of that being reflected in the dividend payout for 2018? Thank you.

Right. So thank you for the two questions. To clarify, no we are not seeing an impact on MabThera subcutaneous so far after more than 1 year of launch. And of course with Herceptin we are just getting going, but currently the early launch markets like Germany does not have a high uptake of subcutaneous and Herceptin. I should just point out other markets in Europe have a much higher uptake of subcutaneous. So the answer is no and no. We haven’t seen an uptake of biosimilars in the subcutaneous market so far with either one of those products. And your second question, our epidemiology suggests somewhere around 40% to 50% of triple negative breast cancer patients are PDL1 positive.

Okay. On the dividend question I would just like to confirm that we are committed to an attractive dividend policy. It’s clearly too early to comment on the dividend for 2018. This will only be decided by the Board beginning of next year, but we never made a secret out of the intention to increase dividend not only for this year but for the long-term. Can we have the next question please?

The next question comes from Naresh Chouhan from New Street Research. Please go ahead.

Hi there. Thanks for taking my questions. Just quickly check on Hemlibra what are we stocking there in the quarter? In the international regions, Herceptin and Rituxan continued to grow very strongly, is there any risk to – or what is the risk from biosimilars there and in which regions that will be helpful to get some clarity on that? And then you won a number of patent cases recently in the U.S. and if you continued to win them in biosimilar, is it delayed, is there any reasons why margins can’t improve next year and potentially beyond that until those biosimilars launch? Thank you.

Thanks for the question. So no, there is no stocking in Hemlibra, it’s not the nature of that product or the distribution channel, so no what the results you see are, true demand. In terms of the second question around international region in Herceptin and MabThera and biosimilars, again I think we are still at the early stages of supplying and satisfying if you like the medical need in China and we went from really only having provincial reimbursement in a couple of provinces to all provinces now having reimbursement as of around quarter three of last year. So we can expect to continue to have I think good uptake of all of those products and China also has a regulatory system that has a highly regulated pathway for biosimilars. And as I said before I don’t see any major biosimilar entrants in the next year or so. Now outside of China in the international region I would just mentioned in many countries around the world there has been a less strong regulatory threshold for biosimilars and so there have been these so-called non-comparable biologics medicines that don’t meet the standard of international biosimilar guidelines have been available. And even with those available, we have been successful at getting for instance like in Brazil our innovative medicines reimbursed in the public sector. So we don’t expect where those markets haven’t had competition for many years with low price biosimilars to have a drastic change moving forward. And then finally the last question was…

Margins from the biosimilars…

I mean, I think look either way as we have said before we don’t have a structural problem on our cost of goods. The new products are at attractive margins when we look at the mix. So really what we are looking to do is replace the biosimilars with good strong margin products efficiently we continued to work on efficiencies. And frankly regardless of the biosimilar impact we are going to be working on efficiencies and working on maintaining our margins and improving them over time. Dan O’Day: Yes. There was one question from the web from Ms. Cablo from [indiscernible], where the issue was, wondering about the development program for polatuzumab, first, so we had announced before that polatuzumab is going to be filed in – with the Phase 1/2, so this is ongoing, the filing is actually accepted and then the development program for rituximab going forward.

Right. Yes, exactly. So, as you know we’ve – we have some really stunning data in the relapsed/refractory setting, which is the subject of our first filing, and what we are working right now is with getting that approved. As I said in the past, one of the things that we had to solve to get that filing in because many people have asked since that data was presented at ASH last year, why we’re only completing the filing now, the good news is we’ve started the filing, it’s a rolling filing, but because of the unexpected really good data we’ve also had to make sure that our CMC programs can catch up with this, I can report good news that they have caught up and that we’re prepared to complete the file on the relapsed/refractory setting before the end of this year. Now we also have Phase III trial ongoing in the front-line DLBCL segment, and the first patient went into that in the fourth quarter of 2017, so that trial is rolling and rolling well and we’ll look forward to reporting out on that in earlier line settings as we can. Thank you. Next question from the line.

The next question from the phone comes from Emmanuel Papadakis with Barclays. Please go ahead.

Yes, it’s Emmanuel, Barclays. Thank you for taking the questions. Just a couple of product ones left, Xolair, you haven’t talked too much about the polyps opportunity, you mentioned during the call earlier. If you could give us some indication of what you expect from that data which I think is you’ve relatively seen in light of some of the competitive data we saw earlier this week, and perhaps also remind us your assumptions around the durability of the franchise from an IT perspective, that would be helpful? And then one was on Kadcyla, the – I mean, the majority I believe of the current sales during the second-line metastatic setting, we’ve recently saw Daiichi initiate a head-to-head study with the trastuzumab asset, which has had pretty impressive data so far. So any thoughts you could share there on the competitive risk would be helpful? And then maybe final one for Michael, congratulations on the Diagnostics role, I look forward to hearing more of your thoughts next month, but perhaps you could give us some preliminary indication of what if anything you think could be improved or done differently of Roche Diagnostics since you’ve assumed the helm? Thank you very much.

Thanks a lot for the questions. Let me start with Xolair, yes, I mean, obviously, we’re continuing to invest in line extensions in Xolair I would say the prefilled syringe has really been a welcome addition to our offering with Xolair and then taking up at least the initial reaction is quite positive in the market. And it’s extremely important in that market where we have competitors coming in that we continue to differentiate, discriminate our offering. I mean, the two more significant line extensions coming up are the nasal polyps and the food allergies, the food allergies quite early, but we’re heading into that now and the polyps we expect data to your point around mid-2019 just to give you a rough feeling for that. Kadcyla, you know I think we still feel very good about our data in the second-line metastatic setting. I don’t have a particular comparison to the other data that you mentioned at this stage, but we don’t see the strength of the entirety of the data set around Kadcyla being threatened by that at this stage. We’ll look forward now obviously to bringing Kadcyla into the earlier stages of disease with KATHERINE. Michael, will you….

Okay, Emmanuel, thanks for asking and then looking forward to welcome you in Roche [indiscernible] in a couple of weeks and I’ll then share with you some of my ideas and how to bring the Diagnostics division forward, that we’ll see, I think you will be excited. Thank you.

Thank you.

We still have one last question on the line. Operator?

The next question comes from Steve Scala with Cohen. Please go ahead.

Yes, thank you so much, I have three questions. First on risdiplam, there was evidence in Phase 1 and 2 of five sitters at World Muscle, that was the original goal in Phase 3, will this count towards FDA filing in the U.S. and the EU and if yes might a filing be imminent or perhaps already underway. So that’s the first question. Secondly, I am wondering if you could help us think about Hemlibra Q4 sales, everything we can tell the non-inhibitor demand is off the charts, I assume you have some read based on sales thus far in October. I would think Q4 could be 3 or 4 times greater than Q3 CHF150 million, CHF200 million, any thoughts? And then lastly on crenezumab, when in 2019 is the Phase 3 interim look for instance is it early in the year, late in the year or somewhere in between? Thank you. Dan O’Day: Thanks Steve. Always appreciate your question. So, let’s go to risdiplam, yes what I think we need to focus in on for risdiplam right now is the FIREFISH study and the Type 1 SMA. So I understand that you are referring to a larger dataset, but within this patient population, we have some 6 out of 14 instance, where the data we have so far 6 out of 14 infants were able to sit with support, three who achieved unassisted stable setting so far after 8 months of treatment. So right now, we are at so-called three relative to the unassisted setting. The trial continued to monitor and evaluate patients and are in close contact with the regulatory authorities relative to what they may want to see in order for us to activate a filing as well. I would just remind you the broader data also on CHOP-INTEND, which is another score where more than 4 points are meaningful and we have seen a significant difference there that shows that risdiplam is around 93% from 86% earlier on. So, that’s quite a significant difference obviously more than 4. And in relation to other therapies at this same stage in development also a significant difference overall. So, we continue to be encouraged by risdiplam, but also need to make sure we see the entirety of the dataset we move forward. Gosh, I am glad that you are hearing good things about Hemlibra and the non-inhibitor demand, I mean, I am too from a qualitative perspective, it’s far too early to understand the demand I am going to have to update you towards the end of this year, but clearly, there has been pent-up demand and we will see how that flows out over the quarter for sales. I can’t give you anymore insight at this stage. Crenezumab, as you know, we will have a look at the data next year just to make sure we are on track and I just want to put that into context. So, that’s really a look to make sure that the 2020 expected read-out is on track, we don’t expect significant milestone event in that nor do we disclose exactly what time of the year that will come, but obviously it gives us a chance to make sure that we are trending well towards the final readout, which is really what we are focused on in 2020 right now for crenezumab.

So thanks for the questions, Steve.

Thank you. With this, we are coming to the end of our call. Thank you for your interest in Roche and see you next time.

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