Good afternoon. Great to be back in London for our Full Year briefing. Let me get right into the numbers, which we shared with you already. This morning you have seen Group sales are up by 9%, in local currency is 8% at constant rates, core EPS growing at a stronger rate at 13%. Then on that basis, we propose to increase the dividend to CHF 9. On a divisional basis, a very strong result on the pharma side entirely driven by the newly launched medicines, I will come back to that in a moment. On the diagnostics side, a solid, more moderate growth at 3%. I'll get back to that in a moment as well. Now if you look here on the quarterly sales development, you see a 6% sales growth after very strong third quarter. And there are really two reasons why sales growth has come down in the fourth quarter. On the one hand, we do feel the impact of the biosimilars now in the U.S., so finally they have entered. And on the other hand, we took a decision to take down inventories in China actually for both divisions for diagnostics and for pharma even more so for diagnostics. And that also explains why you have seen negative growth rates in China in the fourth quarter. And that has also affected of course the results of diagnostics. If you look at the underlying development diagnostics continues to grow in the mid-single digit and also the demand in China from the end customer remains very strong. It's really on a high level to summary and the story about 2019, you see, on the one hand as expected, a significant impact from biosimilars in total, 1.5 billion, the majority in Europe, also Japan. And you see the first impact now in the United States with 300 million. And on the other hand, you see the strong as expected growth and demand for the new medicines with over 5 billion. And it's this balance which has been responsible for the growth last year. And Bill will comment on the various franchises in more detail. If you look at it from a regional perspective, of course, very strong growth in the U.S. What I'd like to point out is that we are back to growth in Europe. We have seen negative growth over the last two years. Now the new product start to overcompensate for the decline due to the entry of biosimilars international also very strong primarily driven by China. That's also reflected on the operating profit level. You see a slightly improving margins and actually a very strong free cash flow this year. If I just turn to the portfolio, one of the leading portfolios in the industry from a quantitative point of view, but at the end of the day, it's a lot about the quality of the portfolio. And one of the indicators here is the breakthrough therapy designation we get from the FDA where we have a leading position in the industry. And that of course speaks for the differentiation, but importantly also about the speed of the pool process reimbursement and how quickly we can bring those new medicines to patients. We've had quite some news flow, last year we brought two new medicine or Rozlytrek and Polivy to the market. We've seen important readouts also late stage readouts. And we've brought a number of new tests and platforms to the market on the diagnostic side. We keep looking for external innovation. We invest a lot in our internal research and development, but a lot of good things are happening outside of Roche. You see here a number of transactions in both divisions. Just to highlight Spark, which we finally closed towards the end of last year, it took actually longer than we would have thought. But now we are very happy that we could close the transaction and we have already started with the integration. So that provides us with a new platform an important platform initially for rare diseases longer term, potentially beyond their diseases. So they're very excited about this. Let me close with the outlook. First of all, really extraordinary strong clinical news flow in 2020. So this is really a year where we have a lot of readouts. Now we will see how many are positive. Not all will be positive, but there is a lot of optionality here. We know for sure that for sure, I mean, given the data, we are extremely confident that we will launch two new medicines in neurology risdiplam and satralizumab. We have some very interesting opportunities in autoimmune diseases in particular [inaudible] and also in ophthalmology and as a number of readouts in oncology. Just to highlight one. With Tecentriq in liver cancer, the growth last year was very much driven by the new indications where we have been first to the market, which was small cell and triple negative breast cancer. And with liver cancer, we have yet another opportunity to be the first on the market and many of you have probably seen the results which we recently presented. I mean, this is really a big step forward for those patients concerned, a very prevalent type of cancer in particular in emerging countries such as China and a type of cancer, but still enormous unmet medical needs. Good. With this, let me close, we expect low to mid single digit sales growth for the current year. We expect, again, to grow the earnings roughly in line with sales and on that basis we should be able to, again, increase the dividend next year. Thank you very much. And with this, I think Allen, no, Bill. And, and that makes me realize that this time for the first time we have Thomas Schinecker with us. I'm already so used to working together with him. He took over in August last year, but I believe it's the first time that you are in front of this audience. So welcome and for the time being over to your Bill.

Thanks Severin. Welcome everyone. It's very nice to be here and talk about the results we have. I think we have a duty to disclose our financial results, but the thing that we get really excited about is talking about our pipeline progress. And it continues to really amaze us to see, the power of science brought to patients with many really serious diseases. And I'm very excited to say that just in the month of January, we've approved eight new pivotal studies for three novel molecules. And I mean this is a pace of progress that every year we think it can't get any faster and there can't be any more breakthroughs at the pace that we have. And every year it seems to get faster. So I think you'll see that the people of Roche are going to be very busy in 2020. But that's going to pay off in rich rewards for patients in the years ahead. So back to the numbers. So we're very pleased to bring in a full year result above 10% and 11% growth. The U.S. obviously a really stellar result, again fueled by the new medicines. Europe with a return to growth which is encouraging considering that there was still a significant loss for MabThera. And then the bulk of the Herceptin losses in biosimilars happened in 2019. And so if you think about that, we can lose the majority of our Herceptin sales in one year and still grow in Europe with all the price pressures and everything else that I think quite a remarkable result. Japan with 9% growth. And again, Japanese pharmaceutical market is shrinking and so delivering 9% growth is no mean feat. And then, overall international with 15% growth driven by China. So quite an excellent result as well. This is what the P&L look like. I think the notable things here, royalties and other operating income substantially down due to the loss of Cabilly primarily. And so again, that's sort of a shock we weathered and managed to still deliver 11% sales growth and 12% core operating profit growth. So I think we felt quite good about that. Cost of sales up about 7% our COGS and period costs in manufacturing were up 3% while our volume went up 16%. So I think, this is further evidenced of the work we've been doing with the transformation and new ways of working in manufacturing that this is really the third year in a row we've had similar types of productivity gains, so really a substantial feet. But you might wonder, with 16% volume increase and all these productivity enhancements, are we missing anything? And I'm pleased to say we have the highest level of on time and in full deliveries, the highest percentage that we've recorded in a decade in 2019. So I think the transformation is delivering not only productivity, but it's also delivering quality. And that's part of the mindset is really building that quality in rather than inspecting it at the end. M&D has used up 10%, which is actually more than we originally intended to do. And essentially what happened as we got further into the year, we realized we had some good opportunities to invest in things that would continue to enhance the growth of some of our new products. And we thought that was an investment in patient access and in our future. So we took that. R&D you can see up to 6%, G&A 8%, but the core administrative cost is not such a big increase. This mostly reflects the incorporation of the flat G&A and full FMI G&A on a full year basis. So that was the sort of the overall P&L. This I think is a very nice chart because it exemplifies the growth and the strong and broad base of growth we have now with three molecules with over a billion dollars or over 1 billion francs, growth in a single year as well as Perjeta and Kadcyla with big contributions. And again, as you look down the list, a lot of new products on the list and a really strong base. I'll say a few things about some of the oncology products. I guess, I would just say overall again, some good features here. Like for example Alecensa with 38% growth, nearing a billion. So we should get there this year. Tecentriq 143% growth and nearing 2 billion, and then, I'll comment a little bit more on some of the other franchises as we move forward. HER2 franchise, take a look at Q4. I think this is particularly interesting because for those of us who've been working on new products in HER2 space for over a decade, I mean it's really encouraging. So Q4 was the first quarter where our sales of Kadcyla and Perjeta exceeded our sales of Herceptin globally. And I think that's a pretty big milestone and that's really driven by the uptake of Kadcyla and Perjeta in early breast cancer treatment around the world. So I think a great milestone. If you look forward and what else is coming in HER2 positive space. We announced the positive study of the Federica study, which is looking at the fixed dose combination of Herceptin plus Perjeta in a subcutaneous form. And we haven't had a tremendous uptake of SubQ Herceptin in part because the desired regimen, the preferred regimen for Herceptin now is with Perjeta, whether it's in metastatic disease or in early breast cancer. And so if you have a SubQ and an IV, that's not that helpful, if you're already going to have to give someone an IV. But with this, you have the opportunity, once someone's come, patients come through the chemo part of the therapy for the adjuvant continuation, they can come in and instead of having infusions lasting from, 2.5 to 7.5 hours, we're talking 20 to 40 minutes. So we think that's a pretty big advantage for patients and it could be an important factor for converting patients to the fixed dose combination. And so we're excited about it. We expect to launch in the U.S. in 2020. Switching over to the hematology franchise. I think, as you know, we don't include Venclexta sales. So while this sort of looks like it's going down, if you include our part of the Venclexta sales it's actually a positive trend and I think broadening base, you still see a large portion of MabThera, but growing parts for Gazyva, which is doing well in first line CLL, for Polivy which launched in the middle of the year in the U.S. and is launching in Europe. And then, I think, we're going to continue to see growth on both those products. So pretty good outlook in hematology. I'm going to switch over, talk about immunology for a moment. So we continue to serve a number of different types of diseases and patients ranging from rheumatoid arthritis, IPF to ophthalmology with Xolair. I mean, I'm sorry, Lucentis isn't in here right now, but with Xolair and I think we've held up well in the face of a lot of competition. And so, I think that's really the main message here is that we have some pretty robust brands. If you look at a product like Xolair has had numerous competitors coming into Xolair's key allergic asthma area and through areas like urticaria and other indications, Xolair is held in there really quite strong. Neuroscience, it's really about Ocrevus and continued growth. And, again, we really see no let up in this. The U.S, the share of new and switching patients has remained around 40%. And that's really held up over, I don't know, eight or nine quarters now. I think that's really remarkable if you consider, I think there's 16 therapies in MS now and Ocrevus gets 40% and the other 16 split the other 60%. So it's really proven through the twice a year infusion through the strong dosing profile with the unsurpassed efficacy on disability progression, whether you're in primary progressive disease or relapsing. It's a really good choice for patients. And we're seeing, again, increasing share in early patients, but really use across the whole spectrum. Again, more to come on that and we like what we see. I think we're excited to have two new molecules coming now. Medicines in SMA and Satralizumab, we announced just in January the positive results of FIREFISH part 2, which is the second part of the type one study. And so we're glad to see the first part results sort of reaffirmed, I think particularly because again, the FIREFISH patients tend to be significantly older than the patients on the other therapy studies. And so, we're really encouraged by the efficacy we see given the older setting. We filed now based on FIREFISH and SUNFISH and we're expecting approval in the first half of the year in the U.S., we will be filing later in Europe because the EMA wanted us to file with both FIREFISH and SUNFISH. So type 1 and type 2 and 3. They wanted us to wait until we had all the data available before we filed. But I think we have a strong package here and a compelling, I think both a compelling product profile, but a lot of patients who are not currently served, whether they're older and they have a weight kind of limitations or whether they have limitations due to the need for intrathecal injections. So I think Risdiplam is going to be a great addition to the arsenal against SMA. And then, Satralizumab in NMO which we filed and we're looking forward to launching later this year. All right, let me come back Tecentriq. So, again, excellent growth curve here. You can see we're well over the 2 billion run rate and this has really been driven again through 2019 primarily by the small cell lung cancer indication continue to use in non-small cell and first line growth there as well as the triple negative breast cancer. And we were very pleased to add the results from Tecentriq plus Avastin in liver cancer. Some of you may have seen these curves. This is what we presented at the ESMO Asia conference in Q4. And I think for those of you who are used to looking at oncology overall survival and PFS curves, you'd agree this is really a beautiful site and what it represents for progress for patients. And I think particularly what you see on the progressive free survival curves, often you see the curves coming together at the end and here you see, quite a large number of patients that seem to be getting a prolonged benefit. And then you see that also playing out in the overall survival curve where the standard of care Sorafenib was about 13 months overall survival median. And you see how we seem to be getting the tail, now what the final analysis will look like exactly. I couldn't say. But I think what's clear is, you get an early and prolonged benefit and this is in a chemo free regimen. This is going to bring new hope to a lot of patients, including about 900 a day who are diagnosed with metastatic liver cancer in China alone. So it's a tremendous unmet need. The regulatory authorities, when we provided this data, I mean they literally are ringing our phones saying, Hey, how can we make this available to liver cancer patients in our areas? So FDA put this in the real-time filing protocol, which allows us to continually submit data and we look forward to a very speedy approval in the U.S., but we're also working very closely with EMA and China on rapid approvals. And we hope to launch in the first half in the U.S., but hopefully in the second half we have a chance to launch both in Europe and China. So we'll be following that really closely. So, this is a Slide that just kind of demonstrates the breadth and the depth of our oncology pipeline, 45 studies ongoing. We've had a number of positive readouts, but there's a few things that are, I think are pretty interesting to highlight. So these ones that are highlighted in this sort of a yellow color are all adjuvant or neoadjuvant studies. And obviously, if we can make an impact in the curative setting, it's a tremendous benefit for patients. But it's also something that's very popular with payers and gives us a chance at a better reimbursement outlook. And so I think what's interesting, and you can see long adjuvant head, neck, renal. And so a number of important areas in addition to breast cancer where I think we're typically have been focused in the past. Another way to look at this is through new molecular entities, so these are studies that with novel agents and these are all late stage studies. So for example, in lung cancer, small cell lung cancer, there's a study with Tecentriq plus and anti-TIGIT molecule. We call [Terga] [ph] and plus chemo. And that study will be starting very soon, a phase 3 study. If you look over under breast cancer, there are novel studies with a number of agents including SERDi PI 3-kinase inhibitor. And let's see what else is in there and a ipatasertib, which is a phase 3 molecule with three studies reading out, three pivotal studies reading out this year. So that's one that we hope to be launching next year and so on. So I think it's exciting to see the number of new targets that we're pursuing and what that can mean for patients as well. Now, I'm just going to finish out a few comments on the hemophilia franchise. So this is basically Hemlibra. We're excited now that we have Spark, we have an opportunity to bring gene therapy. But today patients are increasingly benefiting from Hemlibra and essentially you see more and more patients making that choice. And we had tremendous growth throughout the course of 2019. We really don't see any sign of this slowing down in 2020. If anything, we see sort of a momentum effect where once patients have been on a while and they start to tell their friends in the hemophilia community that there's a growing confidence in what this medicine can mean to patients and their families. Okay. So in terms of the things to look forward to this year and this is a sampling because there were really too many to list, but I wanted to highlight a couple that are in ophthalmology because this is an area where we pioneered with anti-VEGF therapy with Lucentis back in 2006. And now we're really looking forward to two opportunities to go worldwide. The first is the Port Delivery System with Lucentis. And just as a reminder, we have several phase 3 studies going on. We're in wet AMD. We hope to have readouts there around the middle of the year. We also are in diabetic macular edema, which is a large unmet need and especially because you have younger patients. And so this idea of getting, frequent injections in the eye for 10, 20 years they really need a better solution. And so the opportunity to have a high sustained efficacy with twice a year refills of the device we think is really compelling. And we think this is a bit of a sleeper because it's not a new molecule, it's a device. And so it's something that maybe people have been sitting on the sidelines a little, but we're really looking forward to having the phase 3 data and go into regulators and bringing this to physicians around the world. And then finally for Faricimab which is a Ang2 and VEGF, so two targets. And the goal here really is to get higher efficacy levels than we've seen with an anti-VEGF alone. We had promising phase 2 data that we shared. We'll have the first phase 3 is reading out in Q4 in DME and in Q1 of next year in AMD. And so we're going to have really concrete answers on this. And I think you'll agree that if we're able to show a substantial benefit over an anti-VEGF, this could be a really important medicine for the future. So in summary, you can see a really excellent progress of the medicines that we've delivered in the past decade. I think we're really impressed to see 35% of sales in Q4 coming from the new medicines. That number will be over 40% by mid-year of this year. And three new molecules or three new launches with Satralizumab, risdiplam and the fixed dose combination of Perjeta and Herceptin on track for this year. This was the news flow in 2019. I think many of you have been following it as it came, but I think it's worth just looking back and seeing, the progress we made, how many new approvals and frankly, a lot of really important advances in pivotal studies. So a great chart. How's this year look, it's a long list. And I guess that's one of the disadvantages of following Roche, is you have to put up with long pipeline presentations. But we'll keep that problem hopefully for a long time. And so we've got a number of really important approvals that we're looking forward to. I think probably the one that's maybe the most symbolically important is that Tecentriq plus Avastin just in terms of its impact and the thousands and thousands of patients who are dying every year. And the opportunity to have really a prolonged sustained effect there is super exciting. But then in terms of phase 3 readouts, you'll notice this list is even longer than last years and there's some really important things in here, three ipatasertib pivotal readouts. Most of you may not be tracking ipatasertib. And so you might, you might want to take a deeper look into what we're doing there. I think the etrolizumab product, which is the second one from the bottom, we've had in phase 3 for a number of years, these are massive studies. We have phase 3 head-to-head studies with Humira, with Remicade, we have in Crohn's disease and ulcerative colitis. And those studies are all going to be reading out over about a 12-month period, beginning in the middle of the year. This could be a major important advance in IBD and we think also another molecule in the line of Ocrevus, Hemlibra, Tecentriq that could be a really large medicine for Roche. So anyway, a lot of exciting things, we're looking forward to it. But, there's no treatment without a diagnosis, right? Thomas and so I'm pleased to invite my friend and colleague, Thomas Schinecker up to cover diagnostics.

Thank you very much Bill. I'm very excited to be here today. As Severin already mentioned, I'm fairly new in the role, but not new to the company. I've been with the company for the last 17 years in different roles and different parts of the regions, both in commercial roles and also product development organizations. So really excited because I see the great potential that diagnostics has as Bill mentioned. Diagnostics plays an important role, the great opportunities to continue to develop our pipeline. Now if you look at the sales in 2019, we had a 3% growth as Severin mentioned. And this was impacted of course by the inventory reduction that we did also at the end of last year. Now if I look at the different business areas and I'll get into more detail on a later slide, growth has been strongly driven by the centralized and point of care business area and the molecular diagnostic business area. Now, if I look at the different regions, strongly, the growth is coming from the emerging markets so Latin America and also Asia Pacific. Now you may have seen that growth last year in China was only about 5%. So the growth is lower in Asia Pacific because of the China situation in all other markets, I have to say the growth was fantastic also in 2019. Now if we look at in market growth, in markets growth is still strong. So we see a much higher growth in market when it comes to the sales growth in China. EMEA, LATAM, so EMEA with 2% specifically on the diagnostic side, we had very strong growth with 4% in a very mature market where the market growth is actually very low. North America was 0% and I'll get to it. The growth has been impacted by low growth to tissue diagnostics and the coagulation monitoring business. Now as promised, I'm going to go a level deeper and looking into different business areas. So, Centralized and Point of Care business area, which is our biggest one. Growth, again, driven by the immunodiagnostics business. But this is exactly the area where we reduced inventories. So without that growth is still in a very good double-digit range. We have a decline in coagulation monitoring. This is predominantly driven by the new drugs that are available where there's no more testing needed. So this will continue to decline. In molecular diagnostics, we have a good growth with 6% strongly driven different by the blood screening business and molecular point of care business. Here we also report the sequencing business, which had a double-digit growth last year. Diabetes care in a more difficult market environment has kept the sales stable with 1% growth. As you know, here we have continuous glucose monitoring taking over the strip area. So here we managed to actually compete very well in a highly competitive market. But, of course, if you look at the all of diabetes care market, it's growing higher because of continuous glucose monitoring. The tissue diagnostics business, you see was 0%. But looking at the reagents, we have a solid growth and here we expect much higher growth going into 2020 with more system placements and system sales going forward. Now looking at the P&L and we were talking about the top-line with 3% and the bottom-line was 1%. Here, again, looking at the situation that we had with the inventory reduction our growth on top-line would be in the middle of single-digit range and the same in the operating profit line. And how did we do this? Well, if you look at M&D, R&D and G&A, we had very good cost control. So a lot of productivity measures were happening in last year. We did have a higher increase in cost of sales. And this was driven predominantly by two things. First of all, the high instrument placements that we had last year. And this is great news because this will drive future growth, I will have a slide on that very soon as well, on the next slide I believe. Now the second part was the IVD regulation and you may have heard about that. So with the IVD regulation that has, well, it's going to take effect in Europe. We have to reregister all of our products into that markets. So that of course drives some of the regulatory costs, which we book into cost of sales. Let me also point out the R&D line because we're spending 1.5 billion in R&D. We are a company that strongly believes in innovation and the innovation potential in the diagnostic space. So looking at that and looking at all of our competitors, we're significantly outspending in that area, which is an investment into the future. So where are we investing in? We're investing in developing new systems and here you can see a typically large lab with pre-analytics in the bottom left side. You see on the right side here, you see the molecular diagnostics area, immunochemistry, hematology, and here are the fridges. So sample after it's been worked on in a different systems, can then go back to the fridge, wait if there's another request can go back out. So there's no human intervention. This increases quality. And this also makes this more scalable because as the volumes go up significantly, the hospitals cannot afford to hire more and more people to do manual labor. The people can actually focus on what's needed and it's the patients, they can focus on the patients. And you can see the instrument placements. We're significantly increasing the instrument placements and this is driving the cost of sales. But this is an investment to the future. We have more than 100,000 of the large instruments placed in the world with more than 1.5 million point of care instruments placed in the world. So this is a very important for us because this is where our innovative reagents run on. This is the infrastructure. And we have a new system in the pipeline, both on the pure analytical side, which is the cobas prime, which can handle all kinds of sample types also for cervical cancer screening, but also in mass spectrometry, molecular diagnostics and the immunochemistry area, we have new products in the pipeline. Now what this running on those different systems. So today we already have the broadest menu in the industry. We have more than 500 assays available across the different platforms. And we have them available across many different disease areas from infectious disease, oncology, women's health, cardiology, critical care and so on. And the key is to have the broadest menu available on single platforms because the labs don't have space for multiple machines they need to consolidate everything on as few machines as possible. And this is exactly our strength. And this is the strength that we're building on also in the future because we're investing a lot of money into developing new assays that can really differentiate us going forward even more than today. And you can see some of the areas where we're doing research and one example is in oncology, we have a marker in the pipeline for early detection of hepatocellular carcinoma. So that's something that Bill was mentioning earlier. But also in other areas like in critical care, new markers to detect sepsis earlier, 50 million people die every year of sepsis. That means every 2.8 seconds, someone dies of sepsis. And sepsis disease, it's not a disease per se, but it's a situation that the patient is in that can be detected much, much earlier and so that the doctor can react. So we have a number of different assays in the pipeline that can really change the standard of care and differentiate our menu. Same in the neurology area. We got breakthrough designation for all time assays. We have assays in the pipeline for Parkinson's but also for skeletal muscular disease. So very key to drive that expansion. And let me give you a couple of examples of recent launches. One is the Elecsys HIV Duo launch in China. So this is a combination of antigen and antibody. And with that you can close the window significantly from the time that someone is infectious until the time that it's actually, you can detect in blood. So that's the medical value behind it. And none of the large players except us actually has this assay. And specifically we're launching this in China. China is in the future still going to contribute 40% of our absolute growth. So this is important for the Chinese market and there are no local players also that can offer that test. Furthermore, we've spent a lot in the blood screening area another area of infectious diseases. So you can see that we have launched in 2019 Zika. We've launched Babesia. We have launched cobas pro, so all systems and assays in that market that help differentiate us. We've won a number of tenders across different countries around the world. At the moment, we have about 80 million blood donations worldwide that get tested by our systems. With these winds, we have additionally 11 million donations that will be tested in 2020 and why are we winning these tenders? We're the only player that can combine serology and nucleic acid testing from one company and we can combine it with pre-analytics because no other company can connect the molecular system to a pre-analytics system. So really excited about this because with that we keep a blood safe in the world. And how else do we keep blood safe, Zika, I mentioned that, and you may have remembered a couple of years ago, this was a real crisis, with babies having really a difficult situation because their mothers were infected with this virus. And this infection came by a mosquito, but also it could come by a blood transfusion. And so, we have launched it in the U.S., so in the U.S. in blood screening centers, they are screening for Zika, but also now we've launched it in Europe. So we reacted very, very quickly and we reacted quickly, not only with Zika, we reacted quickly with MERS, we reacted quickly with Ebola and also SARS. And I think that's something that we're known for through equity. And this is also what we have done in this situation with the Corona virus. And this is of course all over the news at the moment. But, it's key that you can identify the patients quickly, that you can isolate the patients, so that they can be kept away from the healthy patients, so they don't infect more people. And we have a combination of assays that helped to this. Also in China, we are of course working very closely with everyone to support those efforts to make sure that everyone gets the support that's needed. Finally, we have also launched a digital solution in the diabetes care space. We have these different glucose meters and these glucose meters can then be used in combination with strips. But with these apps, with these apps that you can do have nowadays on your iPhone and with a camera, you can actually read the strips without using a meter. And this is specifically important for more emerging markets where the penetration of iPhones or smartphones, it's actually very high, but maybe not so much the rest of the infrastructure. So very excited that we have launched this at the end of the last year as well. So in 2019, we had a number of very key launches. I'm so very excited about that. Even more excited of course also about the launches that we have in 2020. Let me just give you one example in infectious disease with EBD. So we have received breakthrough designation for EBV and BKV, and this is for transplantation patients. And why? Because many of us carry these viruses in us. However, these viruses are harmless as long as we're not immuno-compromised. So it's very important that in such situations, like with transplantation patients, you actually measure those viruses if they're in the body. So you can avoid complications. But we have many other systems and assays that we're going to launch next year. That's just an excerpt. So I'm really excited about the possibility that we have both on our portfolio and pipeline in the systems, but also in our, biomarkers because we really can change the standard of care with diagnostics. With that, I hand over to Alan. Thank you.

Thanks, Thomas. Thank you. Welcome. Great to see you. It's really been a solid year here for Roche. Let me lead you through a couple of figures now. Let me start with the overview. And when you look at it, sales grows 9%. As said, we had an impact of 1.5 billion negatively from biosimilar competition, 1.3 billion in Japan and Europe and then roughly 300 million, sorry, 1.2 in Europe and Japan and 200 million in the U.S. and you know, we have given guidance basically on the impact in Europe and Japan and we came out really, really on spot. So we are very happy with that. The core operating profit up plus 11%. You know, really there was a major headwind on the royalty side from the loss of Cabilly patents, 708 million, 705 million constant rates, so I think we mastered that and overcompensate and I will come back to that. The core EPS growth at plus 13%. What really gave us an additional dynamic in the core EPS compared to the core operating profit taxes. We had two tax cases that we resolved, very old ones, 15 years old. And they gave us a little bit of a boost here. Dividend in Swiss francs. I think Severin mentioned that, we're very happy with the cash flow of 20.9 billion. I will show the development later on. Broad net debt to minus 2.5 billion, so 3.1 billion reduction in spite of doing the Spark transaction. And then, which I think is pretty outstanding compared to the previous years is that we brought gross debt down. Now from 18.8 billion to 14.4 billion, you might remember in the last years we were always hovering around 20 and then 18, but there was never a major step. I think this year we made a major step and I will come back to a point called bond redemption. And the net financial result, we'll explain that. Two elements on one hand, lower income from equity securities and we'll tell you the story about it. And then the early bond redemption, 202 million that we brought into the core results. The net income of 32% major impact is certainly the operations and how much we have improved there. The other piece is, low impairments, compared to last year. Here's the overview. I think 9%, I've mentioned my colleagues did a great deal, Thomas and Bill to explain that. Then the 11% core operating profit, I will go through the P&L. You'll see core net income has a higher dynamic that is basically taxes. Then you see the core EPS losing a little bit dynamic just going with 13%. That's sugar. Sugar, had a tremendous year that even more dynamic in their profits compared to the dynamics that we have and we have to take the 40% out, we own 60% on sugar, we take that out and that brings the dynamic in the core EPS a little bit down. Good, IFRS net income, I made a comment on that one. I would come to the question later on, look at the 20.9 billion, I'm pretty proud about that number and the free cash flow at 16.7 billion. Here's the bridge. And I think the bridge is quite important because it tells a little bit the story of the year and I will even give you the impacts, first half and second half. So we went from CHF 18.3 to CHF 20.64 at the end of 2019. The first point to make is the gains on the product disposals. And you might remember in the first half, we had a little bit of an uplift coming from that. We had 437 million in gains in the second half we had 62, so in total roughly 490 million, which is a little bit of a boost compared to last year. And you see where the impact here of plus 1.3 percentage points. Royalty and other operating income, that's certainly excluding the gains of the product disposals. This has been Cabilly. Cabilly is the major point here. And Cabilly is a bit of a reversal. We had an impact of minus 271 million in the first half and then lost more roughly 430 million in the second half. So, I think really -- you see we had an acceleration of that and that has caused us minus 2.8 percentage points dynamic. Then the gains of the equity securities, bit of a funny story. We have an minority in a company called Allakos and Allakos end of 2018 to end of 2019 has basically doubled the share price. But, it was a bit of volatile right, I think it came down in the first half and then came up again in the second half. There's a real difference maker here is the minus 0.6 percentage points ease of access and the company we held a minority in, then Novartis came and bought it and we had an nice gain and our numbers unfortunately in 2018 and not in 2019. So we are missing 100 million here, which explains the minus 0.6 percentage points. The bond redemption happened in the second half, 202 million gave us a minus 1.1 percentage point impact and then the resolution of the tax disputes, we had an impact in the first half. In the first half that was the very old case, 15 years old, impact plus 242 million and in the second half we had another impact from another tax case plus a 213. So these two together minus -- plus 454, they gave us a positive impact of plus 2.9 percentage points and the rest is operations. Good. Quickly through the P&L, a 9% is explained. Royalties, other operating income was a minus 375 that's Cabilly. That's Cabilly. Now you might ask yourself, okay, where's the positive impact coming from? This is on one hand, the product disposal that I've explained already and which was a larger than last year and 170 million more. And the other piece is really about Venclexta. Venclexta really gave us quite something and some of you even had in the papers. I think we had 176 million increase 18 to 19 from Venclexta alone in that line positively. Cost of sales, a billion up, 1.50 billion to be precise. It's tremendous how the volume has increased. Pharma had a volume increase of 16%. Diagnostics had an increase of 4%, I think really having a cost increase of 7%, I think really shows how well we have dealt with the costs in that line. M&D I think Bill made the point, you have seen, basically no increase in Thomas numbers. So that's driven by pharma where we really used the opportunity to invest into the pipeline and launching the new products. R&D up 633 million basically same here, driven by pharma and then G&A an increase of 151 million a little bit with some service costs from last year, we had a positive impact in 18, which we didn't have in 2019, but the vast majority is really coming from administration. It's really coming from the acquisitions that are in FMI, et cetera, that we have done, good. Leads me to the royalties and really that explains Cabilly. I've mentioned that already. You see royalty income and other out-licensing income pretty stable then other operating income, that is really the profit share with Venclexta, which is driving that for the U.S. And then, we have the gains and losses off the product disposal of 170 million that I've explained already. Good. Margins look pretty good. I think we had a slight increase in the group. We have a slight increase on the pharma division. I think if we didn't have done the reduction of inventories in China, I think Thomas would have had the same margin, than the year before. So I think we look pretty good here. When you then look really at the core net financial result 300 million deterioration, if you like. Well, the bond redemption, that's certainly something, which will help us in the future and I will come to that on my next slide. Equity securities, nothing else [indiscernible] that I've explained before. Net interest income is a nice anecdote, because as we've waited for the closure of the Spark transaction, certainly we held all these billions of U.S. dollars available and reinvested it in short-term assets -- assets with short-term returns and that gave us a plus 68 million. I admit it's not our core business, but we take it. So that's a positive here. A small impact from currency and some other points. So you see really the deterioration here a little bit by design. Good. The bond redemption itself don't want to dig too much into it. We bought back 2.9 billion, which is a very significant number, helped us to bring the gross debt down. I think it's fair to assume a steady state, certainly that we will have a reduction for interest expenses in 2020. So that will be another help in the year -- in this year. Good group tax rate, went from 19.7% to 16.3%. So really a significant reduction and certainly the two old tax cases that we have resolved, one 15 years old, we can argue, yes, whether this will come back again or not. I think, I don't expect that to happen in 2020. So I think really the 18.4%. This is really what we should have on our mind and I think really a tax rate around 18%. This is what I would guide for the future. Non-core and IFRS income. So let me lead you through that. The core operating profit up 2 billion as you can see to 22.5 billion. I think quite an impressive EBIT. When you look really at the global restructuring plans, they came up with roughly 300 million and these are really projects that are going really across the company. Now with a lot transformation efforts, so we are constantly working on our financial flexibility and that allows us to make all the investments that we're doing. So, but you see really -- I indicated to you, I think whenever the charge is around a billion, I feel pretty good with that. So I think we achieved this. Amortization of intangible assets went up 238 million. I think the major point here is really the revaluation of Esbriet. We brought Esbriet in the valuation a little bit up here as we brought the goodwill down last year of InterMune. So, I think that's a point here. Then impairment of intangible assets, a reduction of 1.6 billion, so in fact a positive impact in the comparison that's really InterMune, which accounted for 1.8 billion last year. M&A and Alliance transactions positive 43, you might be surprised. Why is that a positive? Well, this is the release of contingent considerations or provisions here for contingent considerations for companies and goodwills that [indiscernible]. So that comes in up positively. And then, we have legal and environmental with a minus 480, an increase of 300 million. I would call out one case here. That's the Meso case. I think it's page 89 in a finance report, old case about an ECL Technology. We went for that case for quite a long time. We lost the court case. We will appeal, but we made a provision of roughly 200 million. So all in, you can see an improvement of 800 million compared to last year and that brings the IFRS operating profit up by roughly 2.8 billion. Then you see the total financial result in taxes was an improvement of 464 million. Here we have even three tax topics in, the two that I've mentioned before, it was the plus 445 million. Then we have an additional one which we had half-year already other the change of the Swiss tax reform where we reevaluate it, our deferred tax assets, related to this. And it does not mean that we pay less taxes in Switzerland. It just means we have to look once again at our tax assets, deferred tax assets. And that gave us a positive here of 232 million. And then certainly, the bond redemption went against that. So we end up then with 464 and that means the IFRS net income goes up 3.2 billion, which is a 32% in constant rates. Good. Cash as said, I think a great year here, look at the 20.9 billion. Look at the 20.5 billion, coming from the pharma side. And then, you really see the diagnostics division. It looks like a little bit weaker with the 963 million, but they did two deals. The first one, the in-licensing deal will definitely help Thomas in the future. That's a good thing. And we will see that positively in P&L. And then, at Santa Clara, we bought a site in the U.S. I think if we didn't have done these two, I think well, we would be on the level of last year, so well explained. Good. I think when you look at the cash flow overall. I think what is exciting to me is how well we did on the networking capital side because what you could have expected with all the growth that we have had, we have very high inventories, that we can see go through the roof. I've seen that was not the case. I think on group level, the inventories went even down. So I think really we did good and we were pretty good structurally on inventory. So I think the supply chain did a great deal here. Accounts receivables went up as you would expect with the high sales growth, but at the same time accounts payable went up and compensated for that. So very happy with that. We had a little bit less investment in PPME, then you know, that's IFRS 15 that we know have to show, the lease liabilities paid. That was formerly in the core operating profit. And then, we have more investments in intangible assets. Yes, you might have seen that. We have roughly invested into intangible assets 1.5 billion, 1.6 billion, I think when you really look at the balance sheet, in the cash it's 1.5. So difference is what we have not paid yet. So, that's the right spot here to put our money, no doubt about this. But still, I think we end up with 20.9 billion in operating free cash flow. That's the track record, which, I really appreciate and that's determining our strategic flexibility moving forward. So I would say the stage is set. What happened to net debt? As I mentioned at the beginning, we went from minus 5.7 billion to minus 2.5 billion. So we are still, yes, we still have net debt. We're not net cash positive. Operating free cash explained. We paid taxes, 3.5 billion, a little bit of outfall certainly for interest expenses on the treasury side. And then the dividend, certainly the dividend for 2018 paid in '19, and then certainly Spark is in that number. Good. Balance sheet very quickly. On one end you see cash and marketable securities goes down from 13.1 billion to 11.9 billion. And certainly that's the monies that we have put into that bond transaction buying back bonds. And you see on the other side, when you look at the non-current liabilities, they go down and this is really why we have reduced our long-term debt. The non-current assets. That's a bit special because we close December 17, right in the range that we gave in our guidance. But what we did is, it was not enough time to really come up with a great purchase allocation. So basically what we have done, we put that whole thing into the non-current assets and now we have to look at it what are the intangible assets, whatever. And we expect to finalize the purchase accounting until half a year, 2020. Formally, we have to finalize it at the end of 2020. I think we can do it until half year. So the numbers will shift a little bit here. Equity went significantly up and the equity ratio is now at 43%. As I've said, the stage is set. Outlook, currency, we came from half year and it's quite interesting when you look at it. Here is the Swiss francs to the U.S. dollar ratio. Here's the Swiss francs to Euro ratio. And when you look at half year, so June, yes, plus 3% minus 3% impact zero. And then what happened is, yes, the U.S. dollar remained strong, but just a plus 2%. And then you see the minus 4% here and then you see the negative impact here, which came. So I think the U.S. dollar still going strong, but the Euro went even weaker. And that gave us the negative impact on sales, core operating, profit and core EPS. And our modeling, if we remain all currency stable at year end 2020, how would 2020 look like? It would be a minus three percentage points, FX impact on sales, core operating, profit and core EPS, a very unlikely case as we all know. Good. Let me set the stage for 2020 and for your predictions by giving you the adjusted number for -- as a core EPS 2019, so the core EPS as reported is CHF 20.16. And what we're taking out is the FX losses. You find the FX losses in the finance report on page 59. And page 59, you'll find the 205 and we have an 864 million shares. So you divide now before you do that, you first take the taxes away. That's a good thing. 18.4% I think, we agreed on that. When you take the 18.4% away, it's 37.7 million charge and you end up with 167 million. This is the number you divide. So it was 864 million shares and then you end up really with the adjustment of plus CHF 0.19 and that leads you to CHF 20.35 and that's the basis for your projections. Good. Here's the guy, let me make one point about the guidance right away. I think this guidance looks even more ambitious when you take into account that we expect a biosimilar impact in 2020 off roughly CHF 4 billion negatively. That's really the number that we have on mind. And I think really when you take that into account, I think that's really -- that's a great guidance to have and quite an opportunity and follow our company, but as said, the stage is set. Thanks. And now we're, I think expecting the questions correct. Very good. Thanks for your attention.

Shall we directly continue or do we want to make a break. Is it fine to continue? Okay. Good, excellent. So can I ask my colleagues come on to the table and can we take the first question here? Do we have a mic? Q - Richard Vosser: Thanks very much. Richard Vosser from JPMorgan. Two questions please. First question, thanks for the biosimilar impact, but thinking about, some of the international operations on some of the products, obviously weakness in China because of the destocking. So how should we think about the outlook of Perjeta, Herceptin, Avastin, Rituxan in the international operations. Specifically Perjeta on the end, Roche, shall we think of the bolus growth like Herceptin did? And then how should we think of the others, Herceptin, Avastin, Rituxan? Second question, just going back to or going to the net debt to total assets, it's now considerably below, I think the original target range, whether that was 10% or 15%. So how should we think about what you put into work, the capital to restore the balance? Thanks so much.

Yes. Sure. International, operations and you said Perjeta, Avastin, Herceptin. MabThera. Okay. And I'm going to add Alecensa because Alecensa and Perjeta were both added to the NRDL in Q4 and although the prevalence of positivity is not necessarily higher in China, there's a tremendous amount of lung cancer in China. And so the number of patients that can benefit is really quite large. So we think, we'll still have, we think we'll have some underlying growth, although most of the growth in MabThera and Avastin and Herceptin in China has probably already happened. But, Perjeta and Alecensa should be good growth drivers since they just received the listing and that does dramatically expand the number of patients who are eligible and can receive it. And then, otherwise in the rest of international, there's some gains and losses. There's some biosimilars are non-comparable biologics in some markets. And so we have some negative markets. And then we have other markets where it's really more of the effect of Perjeta and Kadcyla, getting into the adjuvant therapy. Also products like Alecensa and other products that we've launched in the last decade that are really just starting to penetrate some of those international markets. So, we think, it should be a reasonably good year in international, 15% is hard to replicate, but, we feel good about it overall.

We're now at 3%. So, justified point, well I think we have the discussions since I joined the company nine years ago. And every year, I think there was this concern. How we would become net cash positive. I think so far we've put our money to work and really found solid acquisitions, good acquisition, I would even say even in some cases, which gave us good returns and I think really in a period where we have a good growth, I think, where we will find opportunities to move forward here.

It's a good problem to have. And really across the bridge when we have to budget right.

Sachin Jain, Bank of America. Couple of questions please. Firstly on the 4 billion, just another part of it, what portion of that is the U.S. and what's your level of visibility on the erosion rate you've assumed there and level of confidence around that given there's not a lot of precedent as it sits. Second question, you've referenced a couple of launches through this year, risdiplam and satralizumab, Tecentriq in liver across all regions. To what extent are those launches reflected in guidance versus offering upside? Background to the question obviously is your prior launches of Tecentriq and Hemlibra, drive upgrades through the last couple of years? And then, the final question is on gene therapy. No mention of Sarepta. So wonder, if you could talk about that licensing deal towards the end of the year, your level of excitement and broader gene therapy intentions beyond that deal. Thanks.

I think the point is, we really nailed it in 2019. We said the impact would be about 1.3 billion and it was 1.3 billion. We're not always that good. And so, we think it's roughly 4 billion we think of which, I think as Alan said, we think the impact ex-U.S. will probably be similar this year as last year, which was about 1.2. So the rest is roughly the rest is the U.S. In terms of the visibility on that and how confident are we? I mean, I think there's a fairly decent range on it because, it's still early days, so keep in mind that there were two products launched, one biosimilar to Herceptin and one to Avastin in late July. They didn't really get momentums with contracts and all that sort of thing, really until the fourth quarter. And then there have been several other launches since that time, just in like, November, December, there's additional launches happening kind of in Q1. So it's still pretty early. I think what we would say is, it's consistent what we've said all along. We expect the impact in the U.S. to be similar to Europe, maybe a little better, maybe a little slower. I think it's really very -- that's still our outlook. And yes, so far that's been it. You asked about, whether the launches are in the guidance, is there potential upside? We always like to think there's upside. I think if you consider the launches we're talking about, risdiplam is likely late first half. I think we've said, May PDUFA date. So, if we launch in May, it's ability to drive a massive upside in the year given that it's not given up front. Ocrevus one of the effects we had there is that, that as soon as a patient's dose, they just got six months of therapy. Risdiplam is dose daily. So I think with risdiplam, with satralizumab coming later in the year with the HCC is a big indication, but the biggest demand for that will likely be outside of the U.S. because liver cancer is relatively less common in the U.S. And the first approval is likely to be in the U.S. So all that to say is, while there is a range around those launches, I don't think they're going to be a big variance driver in 2020. I think it's really more the underlying strength of the ongoing launches like Tecentriq, Ocrevus, Hemlibra, continuing. So, does that answer. Sarepta we're super excited about. I think the timing, that's going to depend a little bit on what the further development program looks like. There's been very promising data. I mean, remarkable, results and just a few patients. The kind of results that you just wouldn't expect to see in muscular dystrophy. That's what made us so excited about it. We remain incredibly excited about bringing that to patients around the world. But it's not a -- we don't think that's a 2020 phenomenon. And then finally, our intentions in gene therapy are, we have big intentions. In fact, I've spent a significant amount of time, several of us have with leadership at Spark already this year sort of helping plan, how do we use the resources -- the worldwide resources of Roche to help accelerate the programs they have ongoing, additional investment for Spark in Philadelphia to extend into new disease areas. And I think we expect big things about from Spark in the future. But again, these are more -- the majority of those things are new concepts that we're investing and they won't have impacts in 2020.

Thank you. It's Michael Lauchten from UBS. One question on the inventory reductions in China, timing and rationale both for diagnostics and pharma. And then Bill in your commentary around hematology, you didn't mention Polivy, the Polar X trial for 2020. Is that still a data point for this year or not?

Yes, sure. So, we decided in Q4 also to reduce inventories in China. We see a lot of pressures in China in terms of the two invoice policy. You may have heard about that. So basically, most of our business in China goes through distributors. The Chinese government has implemented this two invoice policy, which means that between us and the end customer, they can only be one distributor. This used to be very different in the past. So what we did, we did the prudent step and we said, okay, let's reduce inventories rather than get into negotiations with our distributors. I think that's the best thing for the future.

And in the pharma area, we went from I think 26 days to 16 days. And largely what created that was, our volumes increased substantially. I mean, we had a 38% sales growth. Our volumes were even significantly more than that. And we reevaluate how much safety stock we needed and the channel, because when you have higher volumes, you don't need as many days. So we basically, we thought about it and we said, we might as well take that as we come to the end of the year and go ahead and line it up in a place where we'd like to be. The Polivy study you mentioned. So this is the study of Polivy with hardship, which instead of hard chop, which is the standard of care in diffuse large B cell lymphoma, it's in the curative setting. It's a big deal if we can replace the vincristine with a Polivy and drive what we hope will be better tolerability and higher cure rate. And so, this is really the big study for Polivy. And the reason I didn't mention it is cause we'll only get the results and I think it's like end of the year, maybe Q1 of 2021. So, it's possible it'll happen in 2020, but maybe more likely we'll be talking about it around this time next year or shortly after. Thanks for the question.

Purcell from Morgan Stanley. Couple of questions, just in terms of firstly risdiplam, the opportunity and what we should think about from an uptake perspective. We understand that about 40% of patients diagnosed with SMA in the adult setting, don't like to take the drug because of the intrathecal delivery. I think, Bill you mentioned that. So is there a sort of big sort of unmet demand here? And how do you see diagnostics playing a role in growing that market? The second thing is, on Ocrevus. Obviously there's incoming competition, but you have plans to reduce the infusion times. You also have your own subcut program as well. So could you help us understand that the plans and timing behind defending and building the Ocrevus franchise? The third one is, on the biospecific, the CD20, CD3, you send a press release, there's a decision to be made soon, that 2 to 1 maybe a better fraction option, faster to market. The ones may be safer, better for earlier stage patients. So it's obviously a competitive environment. You're currently ahead, you may not stay ahead. So just what's going on there and how should we think about that opportunity. And the last one is just a quick one. Liver cancer Tecentriq in combination with Cabometyx the days come out in Q3, the COSMIC-312 trials. So how do you think about having Avastin and Cabometyx as partners on top of Tecentriq in this setting, whether the patients or countries or opportunities where one might be an advantage versus the other?

Great. That's quite a list. So let's start with risdiplam. Yes, I mean, it's fascinating a field like spinal muscular atrophy where essentially there were no products. What, four years ago there was no medicines. And now we're actually in the wonderful position that there's actually three choices or soon will be three choices and it couldn't have more different modalities with an intrathecal administration several times a year versus a gene therapy, which is one time, but has certain limitations in terms of age, in terms of viral antibody, positive, et cetera, and then, an oral daily. It seems like each of the medicines is very efficacious. So they have that in common. But there's very different patient populations. So type two patients often that, they don't present with symptoms until they're toddlers or older type three patients sometimes don't present until later yet. And then, there's also this complication around what benefit can you provide. In other words, if neurological damage has happened, can you repair that or are you really just preventing further damage? And so we and the other companies have been trying to figure out as much of this stuff as fast as possible in types one, two and three, all at the same time. So I would say that I think there's -- it's going to take another decade or two before all of this has worked out and like, which types of patients should get which medicines in which setting. But I think there's a large opportunity for risdiplam today because there are many patients who aren't going to be eligible for one of the other therapies. There's the fact that with an oral therapy, you have an opportunity from a payer standpoint, you've got an immediate ability to have a therapy. You don't have a big price tag up front. There's the fact that we will have data, we'll have more type two and type three data than the other therapies we've got patients out in, even including patients in their twenties, in the SUNFISH studies. So, I think overall, we're going to have a really good regulatory package and, and, uh, a great medicine to bring. And, I mean, I haven't been very good at predicting the uptake of -- I did know, I knew Ocrevus was going to be really big because I -- but I'd say Hemlibra has surpassed all the market research we did. Normally you do market research and then you adjust it down because market research is sort of a bias. You're asking about this thing and then they sort of -- but with Hemlibra, the actual uptake has as far surpassed the market research. On Risdiplam, I think it's a difficult one to call. And I'm glad we have a lot of really excellent analysts here who will help us with that. But, I think it's going to be -- it's going to be very meaningful. Ocrevus, we have a completed faster infusion study. We know it can be dosed about twice as fast with an IV infusion. Right now, it's usually three and a half to four hours can be more for first infusion and we think we'll be able to deliver that dose in two hours. So, if you think about it, the two hour infusion twice a year, which is about as often as an MS patient sees their physician, it's a pretty good way to deliver a very efficacious and well tolerated therapy. We're just going to be going -- we're not going to be competing per se. We're going to be going out and talking to people about the benefits of Ocrevus and what it's doing for primary progressive patients, relapsing patients. The impact it has on the long-term with disability progression with the well-characterized dosing. And we think that Ocrevus is going to continue to grow for a long time. CD20-CD3, I'm not going to say very much about it because it's still very much in the works. It's a very exciting field. We have two -- looks like two really excellent molecules and they have different sorts of attributes so far what we're seeing. But, I don't think we've maxed out yet on the efficacy of mosune and we haven't hit, we are continuing to work with the dosing profile of the two to one and continuing to get gains on tolerability. So it's hard to call and say, oh, mosune is going to be the frontline and the two to ones going to be refractory because those are that's a plausible hypothesis. But I think it would be pre-judging and we'll follow the science and we expect to maintain our lead though. And then liver cancer and you asked about Tecentriq plus Cabo. It's all going to be about the data. Let's see it. We welcome it. Tecentriq is an excellent cancer immunotherapy. Cabo is really compelling medicine with several applications and we can't wait to see the combo.

Yes. Richard Parkes from Deutsche Bank. Thanks for taking my questions. Firstly, obviously, thanks again for quantifying the biosimilar impact this year. I wonder if you could commit to whether you think this is definitively going to be the year of maximum pressure from biosimilars. I know you obviously got European Avastin biosimilars launched this year. I just wonder how you think about diverging and maybe you can give us a number of -- what that number would be in 2021 or maybe that's too cheeky? The second question is just on Tecentriq in adjuvant lung cancer. I think at the Pharma Day in September, you had those two trials potentially reading out this year, but they haven't been mentioned in the presentation. So could you just talk about where we are in terms of interim analysis there and where you think you are versus the competition in adjuvant lung. And then, final question on Hemlibra. You highlighted the strong initial uptake in the initial European markets and the non-inhibitors setting. But the sales at the moment look quite modest. So could you talk about the reception and compare and contrast the uptake and the reception from physicians to U.S. experience? Thanks.

Yes. So the first question on biosimilar impact, I mean, I think it's been evident in our modeling for some time that the year of maximum impact would likely be 20 or 21. Now I haven't answered anything because you sort of have that in your -- honestly, I mean -- I'm going to give you an answer that might seem sort of obvious, but it sort of depends on what the ultimate impact is in 20, whether 20 is the maximum, if it's bigger in 20, then it's going to be less than 21. And so, -- and the roughly I would heartily agree with, so let's wait and see. Maybe by mid-year we'll have a better idea of whether it's -- but in either case, I think what's most exciting is with the trajectories from the products we've already launched and the additional ones we're adding. I think, we get increased optimism that we can continue to grow through it. Tecentriq and adjuvant lung, yes, the trials are all on track. There's a potential depending on the level of efficacy that we could hit an early readout in 2020. And we've been anchoring on the base case, with a final analysis in 2021. But, it's possible and we think we're at least equal or ahead of competition. So, we look forward to the results there. These things are somewhat unpredictable, but we hope we'll have a good benefit there. Hemlibra EU uptake. Yes, in non-inhibitors because the unmet need is not as high obviously is the inhibitor patients, I think the Europe -- the system, the healthcare system in Europe has been a little slower to respond to it. We see all the same dynamic in Europe as the U.S. in terms of the attractiveness for patients. We don't see any fundamental reason why it won't do as well in Europe as the U.S. ultimately, but there's been just maybe a little slower start in some major markets. Germany is one. We think there's some, ways about how the factor is reimbursed that gives pretty big economic incentives to the hemophilia centers. But we think that the compelling profile of Hemlibra will ultimately prevail in that.

Sam Fazeli from Bloomberg Intelligence. Just three questions. One following on from Richard's Tecentriq in adjuvant, obviously we had the failure of the monotherapy in bladder cancer. Is there anything you want to comment on in terms of what that might mean for, obviously we all hope that the lung and renal, the monotherapy is going to read out positive, but obviously it will raise the question about whether the right term test is being conducted there? And other biosimilars, just for some of us who cover some of the other companies that do -- are launching the competitors. Could you give us a feel for what your expectation are between volume and price impact and not know specifics, but what if there is a split 50:50, what are you thinking in terms of the reduction? And then lastly, I saw a headline passed with the Risdiplam pricing. I'm not sure. I'm not going to attribute the word aggressive to anyone because I didn't actually hear it. What does that mean? But what does that, how does that mean -- we know what the prices of the current drugs are roughly per annum on their lifetime, et cetera. What does -- give us some color if you may, please.

Yes. And just to clarify, so when I was asked about that, I talked about what we've done in other medicine launches and somehow it ended up that we're going to be aggressive there. So, we really, we don't typically comment on the pricing of a medicine before we launch it. I think the only thing I would say is, that we will stay true to our values, which is we want to make sure that it's perceived as a good value, not just by us. It's always easy for, that's easier for us to perhaps perceive it. It's really important for us to talk with the patient families, the insurance companies and see what they believe is a value and we'll make a good decision on that. A biosimilar, the impact will be primarily on volume impact not price because we don't have major changes on our prices. And so the main impact is that we lose the business. So there are some countries where statutorily they force a price cut when a biosimilar launches or when the patent expires and so some of that has already happened. But then once the biosimilars enter, then it tends to be more of -- they come in with big discounts and yeah, we lose the volume. [indiscernible] Okay. And then you asked about the -- so the metastatic, sorry, the muscle invasive adjuvant study for bladder cancer with Tecentriq. We recently announced that we didn't hit the primary endpoint. And so of course we have that same question. What does this mean about the -- is this a good prognostic, an accurate prognostic for the opportunity to do good in other adjuvant forms? And we also asked that question beforehand because it's always important to get the answer before the results in. And basically we were told is, hey, wouldn't put too much weight on the bladder cancer study because bladder cancer even in the metastatic setting, there's a lot of patients who don't benefit. And so, I think that lung and melanoma those may be more of -- I guess the bellwethers for the impact of cancer immunotherapy and adjuvant. And that's why we're very anxious to get the lung result.

Okay. So perhaps we can take a question from the phone in between. Can you connect us?

The first question from the phone comes from Tim Anderson from Wolfe Research. Please go ahead.

Hi. Couple of questions. Just on Alzheimer's, [indiscernible] DIAN two trial. And I'm wondering if you can give us your perspective on that, is something that should be reading out very near term. Do you view that as a trial that's extraordinarily high risk, medium level of risk or what exactly? And then another question on efalizumab. Bill, I think I heard you draw parallels between that and some big recent launches like Hemlibra and Ocrevus. Does that signify that you're highly confident in the outcome of those results? Or is that simply just a reflection of what the theoretical market opportunity is for a product like that without necessarily meaning that you're highly confident in the outcome of the phase three trials.

Alzheimer's -- so this DIAN study is -- it's an independent third-party group that's running a study in familial Alzheimer's. It's a rare inherited form and it includes, a medicine from Eli Lilly as well as gantenerumab. And I think there's, I want to say 87 gantenerumab patients in the study. So I mean, by definition it's an exploratory study. In fact, most of these patients, they started on the low dose, which is about, I think one quarter of the current dose. And so I think based on a number of those factors, we think it's quite a high risk that it would read out with a positive result. It might yield something interesting. But to hit statistical significance with a small n would be, I think unusual. And as such, we haven't really factored it into our main plans. But we hope it'll offer some clues and some useful information. In terms of efalizumab, I think I'm -- we think it's very likely that the mechanism works because there's another program I think it's Intivio that has an anti integrin in IBD. That molecule I think is closing in on 4 billion in annual sales. And so I think Intivio addresses alpha 4 beta 7. And efalizumab hits alpha 4 beta 7 and another integrin called alpha 4 beta E. So we don't know yet what the significance of that dual mechanism is. In fact, the phase three is, we'll kind of answer that question. We had good phase two data and that makes it something that we think is very promising. We're pretty confident it's going to work. The question in ulcerative colitis and Crohn's disease is how well does it work? And these diseases have been really tough over the years, there've been a lot of good molecules that have gone in, had Phase II data and then missed on Phase III or disappointed on Phase III. So, I think -- we think it's going to be, I mean we hope that the clinical trials will be positive and strongly positive. We've done everything possible to make this a really important medicine. In terms of the formulation, we'll have a once month -- once a month SubQ with an auto injector. We're setting it up for success and now we've got to wait for the Phase III results. Thanks. Thanks Tim.

There was one question on Ocrevus from [indiscernible] and he was asking about the future of Ocrevus. Is that -- you reached 3.7 billion sales in 2019. Do you think this has reached now the peaks sales and how do you see the ongoing competition for [indiscernible] and any other kind of competitors going forward?

Sure. No. I mean we don't think it's reached peak sales. We think, yes, I mean in fact outside the U.S., Ocrevus is really just getting started in a number of places. I think there's still something close to a dozen countries in Europe that don't have full reimbursement for relapsing and primary progressive. So we think ex-U.S. there's a lot of growth continuing. Inside the U.S., we have 40% of new and switching patients and we only have 20% total market share. So, as we continue to get a large number of switchers and new patients, the market share will continue to grow. We really don't see any impact on Ocrevus from any of the recent launches. The 40% number has -- I think we varied between sort of 37 and 41 for seven or eight quarters. Obviously there's now -- will be competition probably sometime in 2020 from another B cell directed therapy. We think it's good for patients to have more choices and we think B cell therapy that we've pioneered is clearly a leading approach in MS. And so but we don't think that's going to stop the growth of Ocrevus.

Keyur Parekh from Goldman. Three questions please, two for you, Severin and one for you Bill. Severin for you. You've spoken for multiple years about the direction of travel, which is growing true biosimilars. Can you talk a bit about the momentum of travel, so on an underlying basis, what you're guiding to today, assuming around 4 billion in biosimilar hit is underlying growth of 8% to 9% in 2020. You've just done 9% in 2019. You're sitting on a satralizumab, Risdiplam, Tecentriq and adjuvant. So as we think beyond 2020, can you talk a bit about the momentum of that growth exiting 2020, that's first. Secondly, on this mythical bridge that you will get toward the end of this year on kind of 0% to 15% net debt to assets of course, but just philosophically, can you help us think about your preferences between returning money to your shareholders versus being into somebody else's shareholders. I'm not asking from modalities in which way you do it, but just help us think about one versus the other. And then Bill lastly for you, Herceptin Perjeta fixed dose combination, help us think about the ambition there, is it to protect what you've got there. Is it to recapture some of the volume share you've lost to the biosimilars? And in that context, how should we think about kind of broad picture pricing for that combination? Thank you.

So, let's start with your question on the longer term growth perspective. And as Bill as alluded to, we have another two years, '20 and '21 where we have significant impact now from the United States, right? We still have Avastin in Europe. But we have Herceptin and MabThera basically behind us. And our experience has shown with MabThera and Herceptin, and it takes about two years to wash it through, right. So that's our best estimate at this point. Considering a significant impact from the U.S. in the short-term. So on a very high level, I see '20 and '21 is the peak for the biosimilars, and then you'll have a tail of course. The other side of the equation of course is the new products. Really you have alluded to the continued growth of the medicines we have already launched. And then the big question of course is how many of the other medicines will actually make it to the market. And I would say that's the most uncertain component. We have really, I think that's, that's really special now also in 2020, we have a very, very rich news flow. And you can play through all the scenarios. You mentioned tocilizumab, [indiscernible] was discussed, PDS, tocilizumab I mean, you go on and on and on. All of those actually have a huge potential. So these are not small franchises if it works. But the question is, does it work? And you can play through this [indiscernible]. If I look at the success rate of our Phase III trials over the more recent past, it's about 66%, 67%. Now that would suggest that some of those will work out and some will fail. But you can have a scenario where everything fails. I've gone through that as well. I remember very well back in 2010, I will not forget this year we had lots of stuff coming through. Those of you who were around in metabolism and diabetes and I mean, one after another kind of failed. And all our growth expectations turned into actually a decline of sales. So you can have a scenario like that and then you can have times when kind of everything works. I've seen these phases as well. So that's the biggest piece of uncertainty. Now, of course, we always hope is that one of those big one makes it, tocilizumab would be a blockbuster. I mean, without any doubt imagine you have something in UC and Crohn's. All right? If you have something really differentiated in this field, your question gets obsolete, right? If indeed [indiscernible] that's a shift which kind of puts the growth on a completely pattern. But, I would put it like this, there's a lot of headwind still in '20 and '21, which is compensated for now with what we have already on the market. Now beyond that, I would hope for an acceleration of growth because the headwind goes away. And then there is this kind of nagging thought in the back of my mind where I say perhaps one or the other hits. And that could put us on a even different growth pattern. But I just don't know, you know, and you know better than me how binary it is. Look at, at the growth which we had in 2019. I mean, at the end of the day, it's basically three medicines which have made the difference, right? So just imagine all three of them would have failed. We'd have been in a very different space. And we can't get rid of this binary kind of situation in our industry. It remains high risk and high opportunity of course. I hope for the latter. I guess that's…

The worst year, the year you referred to, I mean, again, in hindsight we had, we sort of had a lot riding on three things. One was Avastin adjuvant. The second was some cardiovascular metabolism, mechanisms that I don't think we or anybody really understood very well. Now we understand that. But and the third was we had a whole bunch of antibody drug conjugates and so we had a relatively narrow base of things. So, it turns out Avastin adjuvant that didn't work. A lot of those antibody drug conjugates had toxicities and the cardiovascular mechanisms we were targeting all had, right? If I look at things like after etrolizumab, Lucentis PDS, I think these are areas we understand pretty well. And the question may be how powerful are those results? So, I don't think we -- I don't think we have the potential for an all red Xs slide. I think some of these are going to hit and some of them are going to be big. And it's just a question of how many.

Thanks for the encouragement. I feel much better now. On the capital allocation question, right? Yes. Just go back a bit in time. Remember when we gave this guidance of 0% to 15% net debt relative to assets that was actually at the time after the Tecentriq acquisition. And you gave this guidance for very different reasons. At that time, the bond holders were concerned that we were over leveraged, right? And they were interested that we reduce our debt and we gave the guidance where we want to land. And that was the whole point, 0% to 15% relative to assets. Now, of course, the situation has turned the other way around and now the people are worried that we have not enough leverage over time. Just to put that into perspective, I should also say that guys, no science around that. I mean, what we did at that time is we looked at the industry and as we said, what is reasonable. And what provides us with the necessary strategic flexibility. So it's also not like, if you get over these lines and suddenly the world looks very different. This is kind of a high level range, which we gave at the time, but it's still valid and we have to see how things develop. No doubt there are components. I mean, as far as dividends are concerned we have committed ourselves to an attractive dividend policy and certainly keep that going after. Now, what is it, 33 years of consecutive increases. So we want to -- I don't want to end up as the CEO who first kind of even reduced the dividend or okay. And what that tells you is, we look at it very long-term, right? So we want to increase the dividend, but we want to do it in a very sustainable base so that that will not change in essence. And the other question is around M&A, right? That's what you Alan alluded to. And that's of course, very opportunity driven. And, I don't see a fundamental shift here at this various stage. If you do see that late stage assets remain, there you price it as scarcity around those. And then in most of those transactions we actually step out for economic reasons. The focus continues to be on earlier stage deals. That's typically where we can bring in other capabilities and assets and an interesting partner for those companies because it's not only about price, it's a lot about bringing it to the next inflection point and generating value for the partner this way rather than just the plane exit. Then again, if there are opportunities, right we would seize them. And we would be very billing to take external innovation into the company. So that's opportunistic. And we'll see how it develops. And I don't see, however, a major change in the dynamics here. So really, what I'm going to tell you here is, it's really, we take it step by step. We don't have kind of scenarios what we do depending on those opportunities. Really it's what I said before and we crossed the bridge when we have to cross it and then we will cross it.

Yes. So the fixed dose combination and you asked about the pricing and I think first for starters, we've been actually pursuing a combination based pricing in a number of countries around the world for some time. In other words, we don't necessarily think if we have two molecules that the price, should be one plus one equals two. We'd like to bring better value than that. And so I think it's almost certain that we'll do that in the case of the fixed dose combination, but it'll differ by country. And, our goal really is to offer both convenience and I think the difference between hours and 20 to 40 minutes is going to be significant, but also to bring value to the healthcare systems. So yes, we'll be taking those matters very seriously.

Good. So let's move on a little bit to the back. If we can go to the next row and then we'll come forward again. We still have 15 minutes -- 10 minutes. Okay.

Simon Baker from Redburn. And three questions, if I can. Firstly, Bill, you mentioned that you've signed off eight new pivotals in January. I'm assuming that's not the run rate for the year, but perhaps you could give us some of the pushes and pulls on the R&D line for 2020. And then, moving on to gene therapy. Could you, I know its early stages post the Spark closure, but could you give us any thoughts on the requirements for manufacturing capacity investment within gene therapy? I'm guessing at the moment Spark is relatively limited capacities fine for ophthalmic indication, but if you move to more systemic administration, you're going to need more capacity there. And then finally for -- Thomas, given your relatively new in the job of diabetes the two classic old questions, firstly is diabetes care core to rush diagnostics. And also could you give us your rationale for why rush diagnostics is part of the rush group? Thank you.

So the eight pivotal studies, I hope it is indicative of the pace for the year because that would mean we have a lot of really important studies to run. And but, I don't know if I would take three weeks and multiply by what would that be, 17x -- probably not. But that would be a great problem to have. But I do expect the R&D line to grow disproportionately to sales and marketing, G&A, cost of goods. That's a major call to action for everyone in the company right now is, we just believe that more and more in the future, society's going to be demanding and need in breakthrough medicines, but also that we can deliver those at affordable cost. And so our, our vision for the future is very much that we're really maximizing our investment in R&D, improving R&D productivity also, but both the investment and the productivity, but then really emphasizing new ways of working to drive productivity across the organization. And I think it's really encouraging to see the gains we've made already and the fact that that's not been a result of cost cutting. We haven't put out any guidance to people say, hey, you got to go cut your costs. I think I've shared with most of you, we eliminated budgets in our commercial organization about two years ago in the U.S. and last year in international. We've seen tremendous gains in productivity in marketing and sales. Similarly in manufacturing, I think over the three year period, we're up about 45% on volume and our head count's down about 18% over the same period. And that's not based on cost cutting and it's really been based on, hey, how do we make everyone's job count for more and make sure that people have great jobs and that they're able to make a maximum impact. And so yes, and we're going to take the gains from that and largely put them into R&D. So I think that's really where we need to be as a company. And I frankly, I think that's where the life science industry needs to be for the future. [indiscernible]

What's really happening is, there is a relocation as that we really increase R&D on one end and then take it from other coastlines. I think that's the idea here. Just to put that very straight, this is not a contradiction to the guidance,

Partly also driven by the acquisitions. So we continued to invest into the digital space, for example, with the FMI and the flood RNA distribution and then we also have Spark now. So Spark is really an investment case at that time. So there is a need to find the money somewhere. And, it's a matter of reallocating resources accordingly, but I think those are good investments for the future.

And of course, when we're growing -- we're growing the top-line as well that's a big part of it. Gene therapy requirements, capital requirements for manufacturing. It depends a lot on the dose and in gene therapy, the dose is, you start talking about in logs. So the dose ranging can go from like one to a thousand. And then the manufacturing requirement has a lot to do with whether you end up at the high end or the low end. But I think on average, the manufacturing costs are going to be relatively low in gene therapy because you're still -- you're providing generally one dose. And so even if you end up at a higher viral load, it's going to be -- tend to be rather low. But, exactly -- so I think it's basically on a P&L, the size of ours, the gene therapy, manufacturing capital is not going to be a point of discussion.

I think we have CapEx in 2019 of 3.5 billion. I think came down 500 million as I've presented before from broth before. Honestly I don't expect that number majorly to change. And as Bill said, I think really this gene therapy piece is not really moving the needle so much.

So, let me start with diabetes care. So we are very committed to that business. I mean that area is extremely important because a) this is one of the areas with or the seasons with the highest disease burden worldwide. And also if you look at the diabetic, usually they don't have just one disease. So they have usually also cardiovascular diseases, neurological diseases, et cetera. So, we can combine our strength between diagnostics and diabetes care to really help the patients. So from that angle, I'm very much convinced. Also given that we've just launched a patch pump that's all a micro pump, we have new products, they're in the pipeline. We just saw another app. So especially also there we have a lot of digital capabilities also in the diabetes care area that we can leverage not only for diagnostics but actually across the whole group. I mean, we have so many software installations out there that are regulated. Yes. And we, think about some tools that we're looking at on the pharma side specifically for neurological diseases. Yes, on how you can monitor progress. I mean, we can do that in a regulated fashion and that that pharma doesn't have the history. And so that helps definitely. But let me give you other examples that's a key from my perspective. One is, I mean, we have a ton of joint development programs ongoing. In fact, we have a meeting set up in very near future. We're going to go through all of these. I mean, they had this meeting also with our head of pharma research and early development. We were both surprised by how many programs we actually have ongoing between the two groups. And let's not forget, when pharma launches a medicine, they would want that companion diagnostic to be available as broadly as possible across the world. And that's why it's powerful to work with the number one in the diagnostic industry because we have the largest installed base of platforms around. So, you want to make sure that the hospitals don't have to start installing different systems. They don't have space. They need to work with, with that organization, so from that perspective as well. Another key reason for me and when I was leading the research and development on the centralized area, it really became evident for me. I mean we're not only one of the largest, if not the largest antibody manufacturer in the world. On the pharma side, we also the same on the data side. So on the research and production side, we leverage a rise of technologies across the two divisions to be more effective, make better antibodies that are more specific so we can really leverage that. So I am very excited and I think, I want to even collaborate even more.

I'm excited too. And I think what you didn't even share, and we've talked about this a lot more and more healthcare systems when we come -- when we show up Roche Pharma or Roche Diagnostics, they want talk about the whole picture. I mean, how are you guys going to come together to help us manage oncology care in our country. And we actually have solutions we can bring and especially with the insights businesses like FMI and flat iron and dia. I mean, we can come in and talk about, how do we actually get patients having truly personalized care? And we have these shining tower examples we're running now in a number of countries. We've already announced several of them, including Croatia and South Korea where every patient diagnosed with metastatic cancer will get a full workup, including things like foundation medicine testing, the tissue testing from Roche Diagnostics. And every patient will get a targeted therapy and it might be one of our targeted therapies or someone else's. And that's fine because that's what leaders do in a field. We have a commanding lead in Diagnostics and Oncology and in Therapeutics and Oncology. And we can bring that together. So, and I think really the costs of us being together, I'm not sure what those are, in other words, when you ask the question like, well, why Diagnostics and Pharma together, it's not obvious to me. Why not? Because we do, I think, gain a lot of knowledge from each other about the other part of the patient journey. And it works. It works great. I think.

I mean, neuroscience, for example, we have about 15 markets that we've established with pharma, so they can do research in that area. So it's very key, also early research to be able to work with someone who can then develop these assays. So this research can be done on the pharma side.

Thank you. Its Andrew Baum, Citi. Couple of questions. Number one in reference to the administration's IPI proposal. I know Roche Genentech has historically great links with Washington, but this administration seems to have a way of forging its own path. So I'd be interested in your anticipation of timing, impact and the enactment and how of any IPI proposal as we indeed here is happening. And then second, in reference to your adjuvant bladder trial which failed to meet its primary endpoint. I'm less interested in bladder, but I am interested in the messages that we can take from that top indications despite the obvious differences in biology. So could you share with us, particularly when you're looking at the subgroups and the information on baseline PDL one status, baseline anti-drug antibodies to Tecentriq, were there any positive subgroups there which may have significance to how we think about future adjuvant trials where the current trials not to be positive.

I mean honestly some of the analysis you asked about we haven't even done yet and we won't be disclosing it till we bring it to a major medical meeting. I think it is important for the world to understand what we learned from that. But honestly, I don't even know the answer to the questions you're posing. I think they're very good questions. Regarding IPI and timing and all of that. Look, we are -- I think what we have in common with the policymakers and really everyone else involved in the U.S. healthcare system is, we think that patients deserve better. We think that patient out of pocket costs are too high. We think that there are reforms needed in the way that medicines are priced and sold. We've been driving for on the pharmacy benefits side, rebate reform, lower out-of-pockets, out of pocket costs should be kept for patients. It doesn't make sense that patients with serious diseases are paying a price for medicines that the insurance companies aren't paying. That these discounts happen or rebates happen without the patient benefiting. And so driving for that on the hospital acquired medicines and part B we've been in discussions with key policymakers on both sides of the aisle about market based pricing reforms. We think that's really the way forward. And I think something like IPI I think would be difficult to implement because it requires new channel partners that don't exist at this point. It would be very disruptive for the healthcare system. And we think that reference pricing is something that frankly it's a bad idea because the market based pricing approach has led to this revolution in biotechnology that is bringing all these new medicines and you've probably seen that The White House Council of Economic Advisors, so their internal group has said that foreign reference pricing in the form of HR3 would result in a hundred new innovative medicines and not being launched in the next decade. Something like IPI would have likely a similar effect. So yes, I mean we're working on better solutions and we remain optimistic that in the end better solutions will be found.

Okay. We have to come to an end. Thank you very much for your interest. And for those of you who are still around, we have the usual approval. However, I think you have to go to the U.S., you have to also go back to Switzerland. I will be around and most importantly, Karl will be around. So see you in a moment. Thank you very much.