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7 000 917
F. Hoffmann-La Roche Ltd4070 Basel, Switzerland
© 2012
All trademarks are legally protected.
www.roche.com
E
Ro
che
| Annual R
eport 2011
Annual Report
00_00_Roche_AR11_Front Cover_ENG.indd 1 27.01.2012 10:07:43
was a landmark year for Roche Personalised Healthcare. This
annual report highlights the progress we made in advancing a strategic
priority shared by the entire Roche Group. We successfully launched
new tests and medicines tailored to the needs of specific patient popu-
lations and made good progress in developing others that also promise
to make treatment safer and more effective. At Roche we believe that
medically differentiated products benefit all healthcare stakeholders, from
patients and physicians to regulators and payers.
00_01_Roche_AR11_Our_business_Topic2011_ENG.indd 2 27.01.2012 10:13:51
626 x 297 210 210 19511
was a landmark year for Roche Personalised Healthcare. This
annual report highlights the progress we made in advancing a strategic
priority shared by the entire Roche Group. We successfully launched
new tests and medicines tailored to the needs of specific patient popu-
lations and made good progress in developing others that also promise
to make treatment safer and more effective. At Roche we believe that
medically differentiated products benefit all healthcare stakeholders, from
patients and physicians to regulators and payers.
Our business
From precise diagnosis to targeted therapy.
Together, a potent new drug and a blood test to guide its use can be a life changer for patients. Roche is a global leader in both sectors: the world’s biggest biopharmaceuticals company, the leading supplier of in vitro diagnostics and an innovator across major disease areas from cancer to virology. Our business is science-driven. We are using our exceptional research and development capabilities to develop drugs, diagnostics and drug/diagnostic combinations to address some of medicine’s most pressing challenges.
Sales
42,53147,473
49,051
mCHF Free cash flow
3,9044,699
8,893
2011
2010
2009
mCHF
Research and development 2
8,0739,050
9,509
mCHF
Operating profit 2
16,591
16,272
mCHF
15,149Number of employees
80,12980,653
81,507
2011
2010
2009
Income taxes 2
2,8953,135
3,287
mCHF
Net income
9,5448,891
8,510
mCHF
Core Earnings per Share
12.3012.78
12.34
CHF
100
150
200
250
2010 20112009
Roche non-voting equity security Swiss Market Index (rebased)
Eco-efficiency rate 5
0.5390.414
0.460
2011
2010
2009
Patients on clinical trials 4
332,183277,079
268,614
2011
2010
2009
Total employee remuneration
10,30011,934
12,080
2011
2010
2009
mCHF
Total dividend
5,8653
5,693
5,175
2011
2010
2009
mCHF
Key figures
Roche Group Index 2009 = 100
Price development of non-voting equity security (Genussschein) in CHF
1 Key figures indexed to 2009 = 100.2 Core results.3 Proposed by the Board of Directors.4 Development phase I to IV; Numbers exclude patients
in Genentech studies initiated prior to the merger.5 For calculation of the Eco-Efficiency rate see:
www.roche.com/environment
Figures for 2009 as in Annual Report 2010.For a full index of Global Reporting Initiative (GRI)indicators used in the report see: www.roche.com/reporting_and_indices
Index1 40 60 80 100 120 Index1 40 60 80 100 120
Sales
42,53147,473
49,051
mCHF Free cash flow
3,9044,699
8,893
2011
2010
2009
mCHF
Research and development 2
8,0739,050
9,509
mCHF
Operating profit 2
16,591
16,272
mCHF
15,149Number of employees
80,12980,653
81,507
2011
2010
2009
Income taxes 2
2,8953,135
3,287
mCHF
Net income
9,5448,891
8,510
mCHF
Core Earnings per Share
12.3012.78
12.34
CHF
100
150
200
250
2010 20112009
Roche non-voting equity security Swiss Market Index (rebased)
Eco-efficiency rate 5
0.5390.414
0.460
2011
2010
2009
Patients on clinical trials 4
332,183277,079
268,614
2011
2010
2009
Total employee remuneration
10,30011,934
12,080
2011
2010
2009
mCHF
Total dividend
5,86535,693
5,175
2011
2010
2009
mCHF
Key figures
Roche Group Index 2009 = 100
Price development of non-voting equity security (Genussschein) in CHF
1 Key figures indexed to 2009 = 100.2 Core results.3 Proposed by the Board of Directors.4 Development phase I to IV; Numbers exclude patients
in Genentech studies initiated prior to the merger.5 For calculation of the Eco-Efficiency rate see:
www.roche.com/environment
Figures for 2009 as in Annual Report 2010.For a full index of Global Reporting Initiative (GRI)indicators used in the report see: www.roche.com/reporting_and_indices
Index1 40 60 80 100 120 Index1 40 60 80 100 120
00_02_Roche_AR11_Key Figures_ENG.indd 3 27.01.2012 10:16:22
Highlights 2011
March
April
August
October
February
April
September
November
March
May
September
December
Roche Annual General Meeting votes to increase shareholder dividend by 10%
US marketing approval for targeted skin cancer medicine Zelboraf and cobas BRAF test companion diagnostic
Investigational medicine ocrelizumab shows significant reduction in multiple sclerosis disease main-tained for almost two years
Study with Avastin shows that womenwith newly diagnosed advanced ovar-ian cancer live significantly longer without their disease getting worse
Investigational medicine MetMAb in combination with Tarceva doubles the time people with lung cancer live without their disease getting worse
Roche named Healthcare Super-sector Leader in Dow Jones Sustainability Indexes for third year running
FDA grants priority review for New Drug Application for vismodegib in advanced form of skin cancer
Launch of the innovative, fully auto-mated clinical chemistry module cobas c 702 in the EU
Tarceva receives European approval for first-line use in a genetically distinct type of lung cancer
Marketing applications submitted in EU and US for pertuzumab in HER2-positive metastatic breast cancer
Roche announces positive clinical test results for its investigational medi-cine T–DM1 for an aggressive form of metastatic breast cancer
FDA approves cobas HPV test for cervical cancer screening, which detects high-risk genotypes 16 and 18
10 %
00_03_Roche_AR11_Highlights_ENG.indd 3 27.01.2012 10:18:15
626 x 297 195 210 21011
10 Management
Contents
Key figuresinside cover
Highlights 2011inside cover
4 Letters to Shareholders
Business Review
Research and Development
Manufacturing and Procurement
Marketing and Distribution
Our People
Community Involvement
Environmental Stewardship
Corporate Governance, Remuneration Report
138 Independent Assurance Report
16 Group results and outlook20 Market environment and Group strategy
26 Responsible business
34 Pharmaceuticals for unmet medical needs44 Diagnostics for better treatment decisions
47 Accessing external innovation49 Conducting responsible R & D
54 Manufacturing58 Quality and compliance
59 Green logistics61 Procurement
65 Access to healthcare69 Value-added services
72 Customer relationships73 Patient safety and advocacy
92 Great place to work95 Talent attraction
96 Employee development98 Reward and recognition
103 Humanitarian and social projects 105 Science and education
105 Arts and culture105 Community and environment
109 Health and safety110 Environmental footprint
115 Biodiversity115 Pharmaceuticals in the environment
120 Corporate Governance126 Remuneration Report
14
28
52
62
90
102
106
118
4 Roche Business Report 2011 | Letters to Shareholders
Letters to Shareholders
5Roche Business Report 2011Letters to Shareholders |
Dear Shareholders
The deepening debt crises in Europe and the United States, turbulent currency markets and slower global economic growth all had a profound impact on the business landscape in 2011. Increasing pressure on government budgets also weighed heavily on healthcare markets. With resources stretched, many countries are focusing on short-term savings targets and budget controls. A number of governments, particularly in Europe, have sought to ease their deficits by imposing substantial price cuts on pharmaceuticals — including innovative, patent-protected medicines — along with other measures aimed at controlling or reducing healthcare expenditure.
Amid these challenges Roche posted very strong results for the year. Group sales advanced 2% at constant exchange rates (excluding Tamiflu) to 42.2 billion Swiss francs. Earnings performance improved significantly faster, with net income rising 7% to 9.5 billion Swiss francs.
I am also very pleased that the Dow Jones Sustainability Indexes once again named us the Super-sector Leader in healthcare, ranking Roche as the world’s most sustainable healthcare company for the third consecutive year. We are convinced that sustainable corporate policies and practices create long-term value and promote innovation. They therefore support our primary mission as a company, which is to prolong people’s lives or improve quality of life through excellence in science.
For a research-based company like ours, recent developments in healthcare policy and policy-makers’ short-term focus on costs are a major cause for concern. Of course I understand that Roche as a leading pharmaceutical and diagnostics company — and indeed, our industry as a whole — must play its part in efforts to overcome the current financial and debt crises. We are pre-pared to do that. Through constructive dialogue we aim to contribute to finding a fair and sus-tainable balance between health policy and industrial policy — a balance that encourages and rewards the type of innovation from which society as a whole will benefit.
In my nearly four decades of working in the healthcare industry, I have rarely been as optimistic as I am now about the medium- to long-term outlook for research-based, innovation-driven companies. The fundamental trends point in the right direction: a growing, ageing global population; increas-ingly affluent emerging markets; rapid scientific and technological advances that are paving the way for more targeted, cost-effective treatments; and an undiminished need for medical progress, since many diseases are still not effectively treated.
We must not forget the increasing economic significance of innovation and the fact that nations, regions and communities around the globe compete with each other for investment and jobs. We see countries increasingly taking targeted action to promote research and innovation within their borders. I am very impressed by the progress Shanghai, Beijing, Singapore and other cities in emerging markets have made as they strive to become global leaders in the life sciences, particu-larly in pharmaceuticals and diagnostics. Moreover, their positive attitude and openness towards new scientific discoveries and technologies are definite assets.
6 Roche Business Report 2011 | Letters to Shareholders
These countries recognise that the research-based healthcare industry’s high productivity can translate into significant economic growth, generating skilled jobs, further investment and exports. High expenditures on research and development lead ultimately to strong value creation. Much of Roche’s R & D activity continues to be located at our headquarters in Switzerland precisely because of the country’s competitive advantage. Switzerland will remain one of the best places in the world for investments in science if we can maintain and strengthen these innovation-pro-moting advantages.
Why am I particularly optimistic about our company’s future? For over a decade now Roche has maintained its strategic focus on innovative diagnostics and therapeutics. As the world’s biggest biotech company, with 14 biopharmaceuticals on the market, we are ideally equipped to transform our growing knowledge of disease biology into novel treatments and tests. In 2011 we spent 8 billion Swiss francs on research and development — a sum that puts us among the top R & D spenders, regardless of the industry. Unlike some of our competitors, we intend to continue invest-ing heavily in research and development, particularly in those areas where we have competitive advantages: oncology, diabetes, inflammatory and autoimmune diseases, and neuroscience. At the same time, we will maintain our strong focus on the optimal use of resources and continued productivity improvements.
Roche remains the world’s leading supplier of cancer medicines and the number one in vitro diag-nostics company. With its combined strengths in pharmaceuticals and diagnostics and proven expertise in molecular biology, our company is uniquely positioned to make Personalised Healthcare a reality. The achievements of the past year — the US launch of Zelboraf in record time, the Euro-pean Medicines Agency’s positive opinion on this novel treatment for skin cancer and the progress of other projects in our development pipeline — are all testimony to this.
Cost-effective, targeted medicines and diagnostics have a key role to play in overcoming the health-care sector’s current difficulties. As pricing pressures increase, payers will shift resources to products and services offering the greatest incremental benefit to patients. As a company focused on developing medicines and tests that create real value for patients and physicians, we are well equipped to compete successfully in an increasingly challenging healthcare market. The strengths that serve us well today will be even more important tomorrow.
In view of the company’s strong performance and positive outlook — the difficult economic and financial environment notwithstanding — the Board of Directors is proposing a dividend increase of 3% to 6.80 per share and non-voting equity security for 2011 (up from 6.60 Swiss francs in 2010). Subject to your approval at the Annual General Meeting on 6 March 2012, this will be Roche’s 25 th consecutive annual dividend increase.
Finally, I want to inform you that André Hoffmann and Prof. Sir John Irving Bell, two highly experi-enced and distinguished Roche Board members, have agreed to stand for election for a further term at the forthcoming Annual General Meeting. I will be standing for re-election as Chairman and would be honoured by your continued confidence.
Franz B. Humer Chairman of the Board
7Roche Business Report 2011Letters to Shareholders |
Given the significantly harsher market conditions we faced, 2011 was no easy year for your company, but it was nevertheless a successful one.
Let’s look at Roche’s financial performance first. We met all of our 2011 targets, despite the significant impact of a strong Swiss franc on our reported results. Excluding sales of our influenza medicine Tamiflu, which as anticipated were down sharply from the previous year, Group sales advanced 2% at constant exchange rates, with pharmaceutical sales up 1%, in line with market growth. The Diagnostics Division posted a 6% increase in sales, reinforcing its position as the leading supplier of in vitro diagnostics.
Group profitability continued to improve ongoing productivity gains and cost savings. This is all the more impressive given the price cuts that were imposed on our products in some major markets. Core Earnings per Share — a key metric of underlying performance which excludes non-core items such as global restructuring charges, amortisation and impairment of intangible assets — increased 11% at constant exchange rates. Core operating profit grew strongly and faster than sales, rising 6% on a currency-adjusted basis to 15.1 billion Swiss francs. Both divisions again increased their core operating profit margins. Our solid earnings performance will enable us to continue investing heavily in research into the causes of disease and advancing the growing number of late-stage projects in our product pipeline.
The success rate of our clinical trial programmes has been extraordinary and makes me very opti-mistic about Roche’s future. In 2011 no fewer than 17 of our 20 major clinical trials for new medi-cines reported positive data — an excellent mark also compared to the industry as a whole. These results help position us even more strongly for future growth.
Roche owes its success to its employees. Thanks to their tremendous dedication and hard work we — once again — met our annual objectives in an ever more challenging market environment. On behalf of the Executive Committee, I take this additional opportunity to thank all Roche employees for their valuable contributions.
Importantly, 2011 was a landmark year for Roche Personalised Healthcare. Due to advances in molecular diagnostics, our therapies can increasingly be targeted at particular patient populations. Already, roughly half the new molecular entities in our late-stage portfolio are tailored to subsets of patients who can be identified using specific diagnostic tests.
Dear Shareholders
8 Roche Business Report 2011 | Letters to Shareholders
Zelboraf, our novel, personalised therapy for metastatic melanoma, the most aggressive form of skin cancer, is a major milestone for patients and their doctors, and for Roche. The US Food and Drug Administration approved Zelboraf and its companion diagnostic test in August 2011, followed late in the year by a recommendation for approval from the European Medicines Agency. This is the first time Roche has simultaneously launched a new medicine and a companion diagnostic. Close collaboration between our Pharmaceuticals and Diagnostics Divisions was crucial to bring-ing Zelboraf to market in the record time of just five years. Metastatic melanoma is extremely difficult to treat and every hour of every day a patient somewhere dies of the disease. Zelboraf inhibits a mutated form of the BRAF protein which occurs in about half of all melanomas and can be detected with the Roche test. This is the first targeted treatment shown to extend the survival of patients with metastatic melanoma and significantly improve their quality of life. We expect that approvals in many additional markets over the course of 2012 will make Zelboraf and its companion diagnostic available to patients worldwide.
In 2011 we also filed for regulatory approval of our novel biologic pertuzumab for the treatment of breast cancer. This is another instance of a new drug addressing a significant medical need. Breast cancer is the most common form of cancer in women, with more than 1.4 million new cases diag-nosed annually. Worldwide, breast cancer still claims the lives of over 450,000 women every year, despite major advances in therapy.
Pertuzumab is effective in the roughly 20% of breast cancer patients whose tumours carry a genetic mutation causing them to overproduce a protein known as the HER2 receptor. These HER2-posi-tive tumours are highly aggressive, fast growing and associated with a high risk of recurrence. Pertu zumab is designed specifically to prevent the HER2 receptor from pairing with other HER receptors, a process that is believed to play an important role in the formation and growth of several types of cancer. Adding pertuzumab to a treatment regimen of Roche’s medicine Herceptin and chemotherapy was found to reduce the risk of disease progression or death by an impressive 38%. Indeed, the clinical trial data are so encouraging that this drug combination could become the new standard first-line treatment for HER2-positive breast cancer.
We aspire to make good treatment options better. One of our goals is to see cancer — once a certain death sentence — increasingly become a chronic condition. Unfortunately, many cancers eventu-ally develop resistance to therapies. Cancer cells are ‘masters of evasion’ and often start growing and multiplying again. Combination regimens that attack cancers on several fronts simultaneously will thus gain in importance.
Zelboraf and pertuzumab are tangible examples in the field of cancer of how we deliver significant benefits to patients through excellence in science. We intend to build on successes like these in oncology, and in other therapeutic areas, by developing more effective, targeted strategies for fighting serious diseases. In addition to new cancer therapies, we are working on personalised medicines for hepatitis C, for asthma, and drugs to alleviate or cure various disorders of the central nervous system, including Alzheimer’s disease, schizophrenia and depression. We currently have more than 200 drug development projects in which we are also doing research that could lead to a companion diagnostic.
9Roche Business Report 2011Letters to Shareholders |
Molecular biology is ushering in a new era in medicine. Our clear strategic advantages in this field will figure more and more prominently in our R & D successes going forward. As our understanding of the underlying biology of diseases grows, so will our ability to develop targeted medicines and companion diagnostics. We are increasingly making personalised healthcare a reality. This holds tremendous potential for patients and healthcare systems — and for Roche.
We will encounter significant challenges and opportunities in the years ahead. Roche will respond boldly and decisively to both as we continue to serve the interests of patients, employees and you, our shareholders. Thank you for your continued confidence in our company.
Severin SchwanChief Executive Officer
10 Roche Business Report 2011 | Management
Board of Directors
Dr Franz B. Humer Prof. Bruno Gehrig André Hoffmann
Dr Andreas Oeri Prof. Pius Baschera Prof. Sir John Irving Bell
Paul Bulcke William M. Burns Lodewijk J. R. de Vink
Dr DeAnne JuliusDr Christoph Franz Dr Arthur D. Levinson
Prof. Beatrice Weder di MauroPeter R. Voser
Board of Directors per 31 December 2011
11Roche Business Report 2011Management |
A Corporate Governance and Sustainability Committee.B Audit Committee.C Remuneration Committee.D Presidium/Nomination Committee.E Non-executive director.
* Committee chairperson.
Board of Directors
Name (year of birth) Term ends First elected
Board of Directors Dr Franz B. Humer (1946) D *, E Chairman 2012 1995
Prof. Bruno Gehrig (1946) C *, D, E Vice-Chairman 2013 2004
André Hoffmann (1958) A, C, D, E Vice-Chairman 2012 1996
Prof. Pius Baschera (1950) A, E 2013 2007
Prof. Sir John Irving Bell (1952) B, E 2012 2001
Paul Bulcke (1954) B, E 2013 2011
William M. Burns (1947) A, E 2013 2010
Lodewijk J. R. de Vink (1945) B, E 2013 2004
Dr Christoph Franz (1960) C, E 2013 2011
Dr DeAnne Julius (1949) B *, E 2013 2002
Dr Arthur D. Levinson (1950) C, E 2013 2010
Dr Andreas Oeri (1949) A *, E 2013 1996
Peter R. Voser (1958) C, E 2013 2011
Prof. Beatrice Weder di Mauro (1965) B, E 2013 2006
Secretary to the
Board of Directors Dr Gottlieb A. Keller (1954)
Honorary Chairman
of the Board
of Directors Dr Fritz Gerber (1929)
12 Roche Business Report 2011 | Management
Corporate Executive Committee
Dr Severin Schwan
Dr Alan Hippe
Dr Pascal Soriot
Silvia Ayyoubi
Daniel O’Day
Dr Gottlieb A. Keller
Dr Richard Scheller
Osamu Nagayama
Dr Jean-Jacques Garaud
Dr Stephan Feldhaus
Dr Dan Zabrowski
Dr Sophie Kornowski-Bonnet(member as of 1 February 2012)
Corporate Executive Committee per 31 December 2011
13Roche Business Report 2011Management |
Corporate Executive Committee
Name (year of birth) Position
Corporate Executive Committee Dr Severin Schwan (1967) CEO of the Roche Group
Dr Alan Hippe (1967) Chief Financial and IT Officer
Dr Pascal Soriot (1959) COO Division Roche Pharmaceuticals
Daniel O’Day (1964) COO Division Roche Diagnostics
Dr Gottlieb A. Keller (1954) General Counsel
Silvia Ayyoubi (1953) Head Group Human Resources
Enlarged Corporate Executive Osamu Nagayama (1947) President and CEO Chugai
Committee Dr Richard Scheller (1953) Head Genentech Research and
Early Development (gRED)
Dr Jean-Jacques Garaud (1955) Head Roche Pharma Research and
Early Development (pRED)
Dr Stephan Feldhaus (1962) Head Group Communications
Until February 2012 Dr Dan Zabrowski (1959) Head Roche Partnering
As of 1 February 2012 Dr Sophie Kornowski-Bonnet (1963) Head Roche Partnering
Secretary to the Corporate
Executive Committee
Per-Olof Attinger (1960)
Statutory Auditors
of Roche Holding Ltd
KPMG Klynveld Peat Marwick Goerdeler SA (reporting years 2004–2008)
KPMG AG (since 2009)
Auditor in charge: John A. Morris (2004–2010)
Ian Starkey (since 2011)
Chief Compliance Officer Dr Urs Jaisli (1956)
14 Roche Business Report 2011
Swiss francsCore Earnings per Share
15Roche Business Report 2011
BUSINESS REVIEW Group results in 2011. Roche posted strong overall results in a challenging
business environment. Core operating profit grew faster than sales, and Core
Earnings per Share (EPS) increased at a double-digit rate.
Outlook for 2012. Roche expects sales for Pharmaceuticals and the Group to
grow in the low-single-/mid-single-digit range. Diagnostics sales expected to grow
above the market. Roche targets high single-digit Core EPS growth in 2012.
Market environment. A changing healthcare sector, cost pressure and the
vast potential of modern science are transforming both the development and delivery
of healthcare, with innovation at the centre.
Group strategy. We strive to benefit patients and make healthcare more
efficient through innovations built on excellence in science. This is our response
to the medical and economic challenges facing society.
| Business Review16 Roche Business Report 2011
Group results
The Roche Group posted strong overall results in a challenging
market in 2011. Core operating profit grew faster than sales,
and Core Earnings per Share (EPS) increased by 11% at con-
stant exchange rates (–4% in Swiss francs) 1. The strengthen-
ing of the Swiss franc against major currencies, notably against
the US dollar and the euro, had a significant negative impact on
the results expressed in Swiss francs.
However the underlying currency translation exposure arising
from non-Swiss franc revenues is mitigated by the majority of
1 For a full explanation of the core results concept, see page 146 of the Finance Report (part 2 of this Annual Report).
the Group’s cost base (83%) being located outside Switzer-
land.
Solid sales growth
Group sales increased by 1% in constant currencies (–10% in
Swiss francs; +5% in US dollars) to 42.5 billion Swiss francs.
Underlying growth was able to compensate for the expected
decline in Tamiflu and Avastin sales, and the impacts of health-
care reforms, austerity measures and price cuts. Excluding
Tamiflu, sales increased by 2% in constant currencies. The
Pharmaceuticals Division represented 77% of Group sales and
the Diagnostics Division contributed 23%.
Pharmaceuticals
Sales by the Pharmaceuticals Division, excluding Tamiflu, grew
1% in 2011. Including Tamiflu, sales expressed in constant cur-
Group results and outlook
42,531 +1%15,149 +6%
9,544 +26%
millions of CHF (CER 1)Group sales
millions of CHF (CER)Core operating profit
millions of CHF (CER)Net income
Key figures
In millions of CHF % changes As % of sales
2011 2010 CER CHF USD 2011 2010
Group sales 42,531 47,473 1 –10 5 100 100
excl. Tamiflu 42,172 46,600 2 –10 6
— Pharmaceuticals Division
excl. Tamiflu
32,794
32,435
37,058
36,185
0
1
–12
–10
4
5
77 78
— Diagnostics Division 9,737 10,415 6 –7 10 23 22
Core operating profit
— Pharmaceuticals Division
— Diagnostics Division
15,149
13,406
2,178
16,591
14,776
2,202
6
5
14
–9
–9
–1
35.6
40.9
22.4
34.9
39.9
21.1
Operating free cash flow 13,733 14,149 14 –3 32.3 29.8
Core Earnings per Share (CHF) 12.30 12.78 11 –4
1 CER: Constant exchange rates (average full-year 2010).
Business Review
17Business Review | Roche Business Report 2011
rencies remained stable (–12% in Swiss francs; +4% in US
dollars) for a total of 32.8 billion Swiss francs. Sales reflected
solid growth of key medicines, including recently launched
products. Demand for cancer medicines Herceptin, MabThera/
Rituxan, Xeloda and Tarceva continued to grow, and initial
sales of the new targeted skin cancer medication Zelboraf,
launched in the US in August, have been very encouraging.
Additional major growth drivers were the eye medication
Lucentis, Actemra/RoActemra for rheumatoid arthritis and
Mircera for renal anemia. Negative impacts included expected
decreases in sales of Tamiflu, Avastin (metastatic breast can-
cer indication), NeoRecormon/Epogin, Bonviva/Boniva and
CellCept. The US healthcare reforms, European austerity mea-
sures and a base effect from the Japanese biennial price cuts
had a combined negative growth impact of 295 million Swiss
francs, equivalent to 1.0 percentage point, on divisional sales.
Oncology continued to account for the majority of the
di vision’s sales, with continued growth in Herceptin and
MabThera/Rituxan offsetting the expected decline in Avastin
sales. In virology sales of Tamiflu continued to decrease sub-
stantially, and while overall Pegasys sales declined for the year,
they began to recover in the second half following US launches
of new hepatitis C medicines that are used in combination with
Pegasys. Sales in inflammation/autoimmune/transplantation
increased due to strong uptake of Actemra/RoActemra and
growth of MabThera/Rituxan in rheumatoid arthritis more than
compensating for the negative impact of continued generic
erosion of CellCept.
In the regions, growth in US pharmaceutical sales was driven
mainly by demand for Lucentis, Rituxan and Actemra. Lower
sales in Western Europe were due primarily to government
austerity measures and budget constraints, including manda-
tory price cuts, higher rebates and increased utilisation con-
trols in some countries. Excluding Tamiflu, sales in the Inter-
national region grew 7%, helped by increasing demand for
key products in certain Asia—Pacific and Latin American
countries, notably China (+34%), Venezuela (+76%) and Brazil
(+12%).
A decrease of 3% in sales in Japan, excluding Tamiflu, was due
primarily to the direct and indirect effects of the disastrous
earthquake in March. Emergency relief efforts and the rapid
implementation by Chugai of a recovery programme to ensure
product supplies and restore production took priority over
marketing activities until normal operations could be resumed
towards the end of 2011. To ensure uninterrupted supplies
of medicines to patients, shipment controls were introduced
for a number of key products immediately following the earth-
quake. In some cases these controls were maintained well into
the fourth quarter, with promotional activities reduced accord-
ingly.
Diagnostics
Diagnostics sales grew significantly faster than the in vitro
diagnostics (IVD) market at 6% at constant exchange rates
(–7% in Swiss francs; +10% in US dollars) totalling 9.7 billion
Swiss francs in 2011. With 20% market share, Roche continued
to lead the global IVD market. The business areas Professional
Diagnostics (+9%) and Tissue Diagnostics (+15%) were the
main contributors.
Sales of Professional Diagnostics, by far the largest business
area, were driven by continued strong momentum in immu-
noassays and solid instrument placements. In early 2011 Roche
Professional Diagnostics took the leading position in its market
which includes IVD solutions for clinical laboratories and hos-
pital/ambulatory point-of-care testing. In Tissue Diagnostics,
demand for advanced staining products for the detection of
genes and proteins in tissue samples continued to fuel growth
at around twice the market rate. In Diabetes Care (+2%) and
Molecular Diagnostics (+4%), the new generation Accu-Chek
blood glucose monitoring systems and viral load tests for
infectious diseases, respectively, remained the main growth
drivers. Applied Science’s sales (–3%) were impacted by the
year-on-year decline in H1N1 influenza virus testing, increas-
ing competition in sequencing, and a slowdown in research
funding.
Diagnostics sales again grew in all regions with significant
contributions from both established and emerging markets.
The strongest gains were recorded in Asia—Pacific, driven
mainly by Professional Diagnostics’ immunoassay business
and reflecting Roche Diagnostics’ strong presence in China
(+27%). In Latin America, all business areas grew, with the
greatest contributions from Professional Diagnostics and Dia-
betes Care. Professional Diagnostics also drove sales in the
Pharmaceuticals Division — sales by region
–4% Western Europe (25%)
+3% United States (37%)
–3% Japan (12%)
+7% International (26%)
Excluding Tamiflu. At constant exchange rates (average full-year 2010).
| Business Review18 Roche Business Report 2011
EMEA (Europe, Middle East and Africa) region, where pricing
pressure and budget constraints were felt. In North America
Roche gained market share in the IVD core business following
the launch of new immuno assays, molecular and tissue tests.
The decline in Diabetes Care sales, due to the postponed
launch of the latest product portfolio in the US, was offset by
strong sales of the IVD core business. Sales in Japan contin-
ued to grow at several times the market rate, driven by gains in
Professional Diagnostics and Tissue Diagnostics.
Operating profit further improved
The Group’s core operating profit increased by 6% in constant
currencies (–9% in Swiss francs), resulting in an increase of
the core operating profit margin by 0.7 percentage points to
35.6% at reported exchange rates. Continued pressure on
sales prices was more than compensated by increased sales
volume and efficiency measures. Operating costs decreased
primarily as a result of the Operational Excellence programme
announced in November 2010.
Core operating profit in the Pharmaceuticals Division grew
5% at constant exchange rates to 13.4 billion Swiss francs. The
core operating profit margin of the division increased signifi-
cantly by 1.0 percentage point at reported exchange rates,
driven by Genentech integration synergies, resource prioriti-
sation and productivity improvements. This was achieved in
spite of the expected decline in Tamiflu sales of over 0.5 billion
Swiss francs, lower sales of Avastin in the metastatic breast
cancer indication, and the impact of healthcare reforms and
austerity measures.
Core operating profit in the Diagnostics Division increased by
14% at constant exchange rates to 2.2 billion Swiss francs. The
division’s core operating profit margin increased 1.3 percent-
age points to 22.4% of sales at reported exchange rates, driven
by sales growth and further positive effects from ongoing pro-
ductivity improvements.
Net income and Core EPS significantly up
Net income grew strongly mainly due to the good operating
performance, lower financing costs and a lower tax rate,
advancing 26% on a currency adjusted basis to 9.5 billion
Swiss francs (+7% in Swiss francs).
Core EPS, which excludes non-core items such as global
restructuring charges and amortisation and impairment of
intangible assets, increased by 11% in constant currencies
(–4% in Swiss francs).
Strong operating free cash flow and improved
net debt position
The Group’s operating free cash flow remained strongly posi-
tive at over 13.7 billion Swiss francs, advancing 14% in con-
stant currencies (–3% in Swiss francs).
Mainly due to the free cash flow, the net debt position of the
Group at the end of 2011 decreased by 3.6 billion Swiss francs,
from 19.2 billion Swiss francs at the start of the year to 15.6 bil-
lion Swiss francs. The net debt to asset ratio reached a level
of 25%.
Outlook 2012
Roche expects low to mid-single-digit sales growth at con-
stant exchange rates for the Group and the Pharmaceuticals
Division in 2012. Pharmaceuticals sales growth is expected
to accelerate, driven by the strength of its established product
portfolio as well as planned new product launches. Sales by
the Diagnostics Division are expected to again outpace the
market.
Despite a challenging market environment, based on the
expected sales growth and continued efficiency improve-
ments, Roche is aiming for a high single-digit increase in Core
EPS at constant exchange rates.
Roche will continue its attractive dividend policy.
Diagnostics Division — sales by region
+3% Europe, Middle East and Africa (EMEA) (50%)
+6% Japan (5%)
+17% Asia—Pacific (13%)
+15% Latin America (7%)
+4% North America (25%)
At constant exchange rates (average full-year 2010).
19Business Review | Roche Business Report 2011
Key achievements in 2011*
Business/Finance
achievements
Group sales rise 2%, excluding Tamiflu. Significant foreign exchange impact of –12 percentage
points due to appreciation of the Swiss franc; overall Group sales at 42.5 billion Swiss francs
Pharmaceuticals sales, excluding Tamiflu, up 1% in line with the market; Diagnostics sales increase
6%, significantly ahead of the market
Core operating profit increases by 6%, significantly faster than sales, driven primarily by savings
from the Operational Excellence programme and continued productivity improvements
Core EPS rise 11% due to solid operating performance, lower financing costs and a lower tax rate
Strong operating free cash flow of 13.7 billion Swiss francs, up 14%
10% dividend increase for reporting year 2010; board proposes a dividend increase of 3% to
6.80 Swiss francs for 2011, the 25 th consecutive year of dividend growth
Responsible business Roche named Healthcare Supersector Leader in Dow Jones Sustainability Indexes for third
consecutive year
Established IT system and process for reporting on contributions to individual healthcare profes-
sionals to meet new regulatory requirements
Research and development Excellent progress in late-stage pipeline: 17 out of 20 trials deliver positive results in 2011;
24 key drug approvals and 21 major regulatory filings; 50 diagnostic tests and 13 instruments
launched in key markets
Leading position in Personalised Healthcare strengthened: targeted melanoma medicine Zelboraf
and companion diagnostic test successfully launched in the US; Tarceva approved in EU for EGFR-
mutated non-small cell lung cancer; launch of EGFR mutation test. Marketing applications filed in
US and EU for targeted cancer medicines vismodegib and pertuzumab
Very rich pipeline with 79 new molecular entities (NMEs) all of which are designed to be first
in class or best in class
Pharmaceuticals and Diagnostics Divisions collaborated on more than 200 projects
Manufacturing
and procurement
Established a unified sustainability audit protocol for suppliers, together with other
industry members
Marketing and distribution Basic principles of Swiss health technology assessments developed in joint initiative between
pharmaceuticals industry and santésuisse, the association of Swiss health insurers
Continued exploring differential pricing models to increase access to our medicines in emerging
markets, such as the Patient Assistance Programme in China
Hosted third annual International Experience Exchange for over 130 patient organisations to share
challenges, best practices and build relationships
Our people Ran first-ever global employee survey for Roche Group, with 80% participation rate
Prepared worldwide 2012 launch of CHRIS, a global IT solution hosting all employee-related
information and 12 major human resources processes
Increased number of women in key positions from 13% in 2009 to 18% in 2011, in line with our
5-year goal of 50% increase from 2009 to 2014
Community involvement Commenced building and equipping of two schools in Haiti and one in Pakistan following the
devastation caused by natural disasters
Laid foundation stone for a new teachers training college in Malawi, designed to house and train
540 teachers by 2013
Environmental stewardship Improved our eco-balance impact per employee by 4.3%, on target for improving our eco-balance
by 15% from 2010 levels by 2020
Reduced energy consumption by 7.7%, on track with our 5-year goal of 10% efficiency improve-
ment from 2009 to 2014 levels
* All growth rates at constant exchange rates (average full-year 2010).
| Business Review20 Roche Business Report 2011
Operating environment
The industry’s operating environment is characterised by two
opposing sets of forces. We are experiencing driving forces in
the form of constantly increasing demand for better healthcare
solutions in both industrialised and emerging markets, coupled
with dramatic progress in medical science and technologies
that can help provide the tools to meet that demand. In con-
trast, our industry faces resisting forces from unprecedented
pricing pressure and increasing regulatory hurdles. Innova-
tion, in our view, will be the agent for bringing decisive positive
change to this environment and for achieving sustainable
growth.
Growing demand for better healthcare options
Despite continued breakthroughs in treating serious diseases,
the need for medical care and for new treatments and tests
remains enormous. Two-thirds of all known diseases — some
5,000 — still go undiagnosed or untreated. Even where treat-
ments exist, response rates are unsatisfactory — only 50% of
patients, on average, respond favourably to today’s medicines.
Moreover, many treatments can cause serious side effects.
Genetic differences between patients are one of the main rea-
sons why even the best treatments can sometimes be ineffec-
tive. People are different, but medicines are not yet differenti-
ated. If these differences can be identified, the efficacy of
medicines can be increased significantly. Diagnostic testing
also holds tremendous potential for improving response rates.
Today, it accounts for only 2% of healthcare spending, even
though diagnostics adds value along the entire healthcare
chain, from prevention to diagnosis to monitoring, and directs
over 70% of medical decision-making.
Demand for better healthcare is also being driven by an
expanding world population, which is expected to grow from
seven billion in 2011 to nine billion by 2050. Additionally, sus-
tained economic growth, ageing populations and unhealthy
lifestyles point to a rising prevalence of acute and chronic dis-
eases such as cancer, diabetes, rheumatoid arthritis, respira-
tory diseases, Parkinson’s and Alzheimer’s diseases. The four
main non-communicable diseases — cardiovascular disease,
cancer, chronic lung diseases and diabetes — already kill three
in five people worldwide and cause great socioeconomic
harm, especially in the developing world.
Market environment and Group strategy
Patients worldwide are waiting for better treatment options
12 million diagnosed with cancer each year Oncology
235 million living with asthma
21 million living with rheumatoid arthritis Inflammation and autoimmune disorders
170 million infected with hepatitis C Virology
17 million die from cardiovascular disease every year
346 million living with diabetes Metabolism
24 million living with schizophrenia
1.3 million living with multiple sclerosis Neuroscience
21Business Review | Roche Business Report 2011
Increasing price pressure in major markets offset by
growth in emerging markets
The slowdown of growth in pharmaceutical markets to low
single-digit rates in recent years reflects the rising number of
major products that have gone off-patent and, as a conse-
quence, face generic competition. In addition, political pres-
sure to contain healthcare costs has led several countries to
impose significant price reductions on pharmaceutical prod-
ucts. Concerted austerity measures were taken by govern-
ments in Germany, France, Spain, the UK, Greece and other
European countries, while government-mandated price cuts
were introduced in Japan, China, India, Brazil and Russia. In
the US, the government imposed a fee on branded pharma-
ceutical products as part of ongoing healthcare reforms and
further savings are expected over the coming years for Medi-
care- and Medicaid-funded medicines. As a result of these
cost containment measures, overall growth in developed mar-
kets is expected to remain stagnant.
In contrast to the modest outlook for industrialised countries,
we expect continued high growth in emerging markets. This
robust outlook is underpinned by rapid population increases,
rising personal incomes and efforts to improve access to
basic healthcare. We expect these favourable long-term
trends to lead to rising awareness of health issues and an
increased voice for patients in virtually all major emerging
markets.
Today, eight emerging countries are among the top 20 health-
care markets. The Asian market has grown twice as fast as
the overall global market in recent years. With a population of
1.35 billion, China is the world’s second-largest economic
power and third largest pharmaceuticals market. Nearly one-
quarter of the Chinese population will reach age 60 or above
by 2030, and incidence rates of cancer and other chronic dis-
eases increase as the population ages. In addition, govern-
ments are rapidly building diagnostics infrastructure that often
requires highly automated instruments to bridge the gap in the
number of skilled laboratory personnel.
Even though political volatility and talent retention are signifi-
cant challenges in many emerging markets, they hold signifi-
cant potential for the industry.
Rising regulatory hurdles for safety and value
Healthcare authorities, particularly those in the US and Europe,
have continuously raised their standards in assessing the ther-
apeutic benefits and safety of new drugs. It now takes ten to
twelve years, on average, to bring a new pharmaceutical prod-
uct to market, while new diagnostics require increasingly
higher upfront investments to generate clinical data and dem-
onstrate medical value.
At the same time healthcare authorities and research-driven
companies are working more closely together to adapt to
rapid advances in medical science and to improve regulatory
science, the science of developing tools, standards and ap -
proaches to assessing the safety and value of new products.
Pharmaceutical companies are also being challenged to justify
the value of their products, as many countries have imple-
mented health technology assessment (HTA) procedures to
improve healthcare services by making pricing, reimburse-
ment and funding decisions using the methods of evidence-
based medicine. This is a rapidly evolving field in Europe and
the US. Other countries, meanwhile, are introducing value-
based decision-making or value-based pricing to their HTA
systems to meet the expectations and needs of their citizens.
Consequently, decisions about what medicines to administer
are increasingly being made by public agencies and health
insurers rather than by physicians.
Expanding knowledge of disease biology
presents vast potential
Even though science is transforming the delivery of healthcare,
today’s medicines address only about 150 targets among the
more than two million proteins in the human body, many of
which may be implicated in disease. Clearly, we are just begin-
ning to understand disease processes.
The vast potential for further advances is steadily being
revealed with findings in new branches of research, such as
genomics or proteomics. As researchers refine their knowl-
edge of diseases at the molecular level, their insights are lead-
ing to new strategies for detecting and fighting disease. Take,
for example, the knowledge derived from molecular research
that cancer is not just cancer: the term covers approximately
250 different conditions, almost all of which affect body
tissues. Thanks to ultramodern methods for sequencing the
genome scientists know of some 350 genes involved in the
genesis of cancer. These include the breast cancer genes
BRCA1 and BRCA2 and a recently discovered mutated gene,
found in about 50% of all malignant melanomas and in approx-
imately 8% of all solid tumours.
The search to identify genes critical to the development of
cancers is by no means complete. Scientists worldwide are
participating in the Cancer Genome Project, an integrated
research venture that aims to detect all the mutations that
cause the 50 most common types of cancer. Efforts such as
these hold enormous promise to rapidly expand our knowl-
| Business Review22 Roche Business Report 2011
edge of disease biology and, in turn, transform the treatment of
disease through targeted diagnostic methods and medicines
adapted to the genetic constitution of degenerated cells.
Roche strategy
Roche’s mission has remained virtually unchanged since the
company was founded in 1896: to improve health and help
patients live longer, better lives. The entrepreneurial spirit and
inventiveness of our founders still define our culture. Today,
they provide the basis for medical advances, such as those
pioneered by Roche in the development of therapeutic anti-
bodies, that have led to the company becoming the world
leader in cancer medicines.
To continue anticipating and creating new trends, we are
harnessing our increasing understanding of disease biology to
make tomorrow’s treatments safer, more effective and more
personalised — to better fit them to patients’ genetic and other
characteristics. Over the past decade Roche has pursued a
strategy of developing medically differentiated medicines and
diagnostics. We believe that such products are more likely to
obtain regulatory approval and be accepted by patients, physi-
cians and payers because they provide value to the entire
healthcare system and, in turn, to our other stakeholders.
Focus on innovation in pharmaceuticals and diagnostics
We are convinced that innovation in healthcare is the driving
force for discovering and developing better and more cost-
efficient treatments. By focusing on prescription medicines
Observational biology
Disease mechanismsBasic biological mechanisms
Number of plausible targets
Pre-1950s 1950/60s 1990/00s Today
Cells/organisms
Pathways
Human genomeGenetic codeDNA structure
1970/80s
1,000Understanding disease mechanisms
New technologies allow better understanding of diseases
23Business Review | Roche Business Report 2011
and in vitro diagnostic tests (IVDs) that create real value for
patients and physicians, Roche is positioned to succeed in an
increasingly challenging operating environment. As cost pres-
sures mount, payers will channel funding into options that offer
the greatest incremental benefits for patients.
By strategically aligning our organisation around our Pharma-
ceuticals and Diagnositics Divisions and encouraging inter-
divisional collaboration throughout the value chain — from
discovery to commercialisation — we have created distinct
competitive advantage: targeted therapies that offer medical
and economic value exceeding other options.
Our Pharmaceuticals and Diagnostics Divisions must, how-
ever, succeed in their own right, given their distinct business
models and success factors. We therefore maintain separate
organisations for each business, including product and leader-
ship responsibilities, while aligning both groups across the
value chain for advancing personalised healthcare.
Pharmaceuticals. Our Pharmaceuticals Division strives to
discover and develop first- and best-in-class targeted thera-
pies that provide unique benefits to patients. By pursuing sci-
entific excellence and maintaining high levels of R & D, we
expect to continue delivering medically differentiated prod-
ucts that address unmet medical needs. We will keep our focus
on areas where we believe our expertise can make a differ-
ence: oncology, virology, inflammatory and autoimmune disor-
ders, cardiovascular and metabolic disorders and diseases of
the central nervous system.
Diagnostics. Our Diagnostics Division is by far the world’s
leading supplier of IVDs, with a market share of 20%. We
develop instruments and tests for disease screening, for diag-
nosis and monitoring in laboratories and at the point of care
and for patient self-management. The division’s continued
success depends on the focused pursuit of testing efficiency
and medical value. By testing efficiency, we mean offering lab-
oratories complete test menus and solutions for efficient work-
flow and information management, ensuring that patients
receive fast, accurate and reliable test results. We are also
devoting substantial resources to acquiring intellectual prop-
erty and developing novel IVDs with high medical value, that
provide patients and physicians with answers to key medical
questions, and to validating and demonstrating the medical
and economic benefits of those tests.
Leverage our expertise in molecular biology
The rapidly expanding knowledge base of disease biology
and of the causes of disease holds enormous potential to pro-
vide significant benefits to patients. Our early understanding of
molecular biology prompted us make significant investment
in genetic engineering and related molecular sciences while
these exciting new approaches were still in their infancy. Today,
Roche is the world’s largest biotechnology company, with 14
biological products on the market. These biologics constitute
65% of our product portfolio, compared with an industry aver-
age of just 16%.
As our understanding of the molecular mechanisms of disease
grows, so does our ability to develop targeted treatments that
can make important contributions to healthcare management
Working together from discovery to market
Diagnostics
Pharma
BiomarkersAntibodiesDisease mechanisms
Tools e.g. sequencing
Pipeline projectse.g. lung cancer, asthma, hepatitis C
Medicines and tests
Research
Research assay
Development
Technically validated IVD assay
Commercialisation
Clinically validated IVD assay
| Business Review24 Roche Business Report 2011
and society. Our strengths in biotechnology research, devel-
opment and manufacturing mean that we are ideally equipped
to transform breakthrough innovations in science into benefits
for patients.
Deliver Personalised Healthcare
By combing our expertise and strengths in diagnostics and
pharmaceuticals, we are paving the way for Roche Personal-
ised Healthcare. Drawing on the growing body of knowledge
and our own research findings of the molecular causes of dis-
ease, we can now demonstrate that, in many cases, Personal-
ised Healthcare•identifies patients most likely to best respond to a specific
treatment•enhances the cost effectiveness of healthcare through the
stratification of the patient population•increases the efficiency and productivity of research and
development•supports the development of safer, more effective treat-
ments, thus reducing the risk and cost of side effects •improves medical outcomes and quality of life for patients
Today, we are interweaving the knowledge of our Pharmaceu-
ticals and Diagnostics Divisions with increasing effectiveness
throughout the development process for new medicines and
tests:•Many of our novel active substances have made an excellent
showing in scientific studies.•Our skin cancer drug, Zelboraf, and its companion test were
both approved in the US in 2011 in record time.•Our cancer drug, Tarceva, received approval in the EU for an
additional indication linked to the use of a Roche diagnostic
test.•One-half of our medicines in late-stage development have
companion tests and are tailored to specific patient popula-
tions.•All of our pharmaceutical projects have biomarker pro-
grammes (200+).
Foster innovation and empower people
Roche relies on a global network of specialised research cen-
tres, all operating with a high degree of autonomy. In addition,
Roche Pharmaceuticals partners with about 150 companies
worldwide. This approach reflects our view that innovative
research stems from fresh ideas and is most likely to flourish in
a company with strong in-house capabilities and a diverse
external network of partnerships.
Our goal is to lead through innovations in science by combin-
ing the critical mass of Big Pharma with the flexibility and
entrepreneurial spirit of smaller business units. This extends to
our talent management processes, which are all designed to
recognise and drive innovation. We also focus on creating
a working environment in which everyone feels valued and
respected. Fostering diversity is essential for our success, and
we are striving to increase the number of females in key posi-
tions by at least 50% from 2009 levels by 2014.
Creating sustainable value
Our commitment to discovering and developing innovative
products and services that are both commercially and medi-
cally successful is, and will continue to be, our most important
contribution to society. For Roche, business sustainability is
about the creation of shared value. We aim to provide value to
all stakeholders — be they patients, doctors, employees, inves-
tors or society at large. Indeed, our success in improving
patient’s lives hinges largely on our ability to integrate the ele-
ments of sustainability — social, environmental and economic
— throughout our operations and culture.
We strive, therefore, to achieve the following in all aspects of
our business:•Innovation through a focus on pharmaceuticals and diag-
nostics•Broader access to our products for patients in need of new
medicines•Respect for our employees, including offering high-quality,
rewarding employment
By making sustainability a part of everything we do, and coor-
dinating those efforts through our Corporate Sustainability
Committee, we encourage a corporate culture that seeks the
highest levels of sustainability. Roche, moreover, acknowl-
edges the United Nation’s Guiding Principles on Business and
Human Rights and recognises and follows the international
standard ISO 26000 guidance on social responsibility.
The effectiveness of this approach was reaffirmed in 2011
when Roche was named the most sustainable global health-
care company for the third consecutive year in the Dow Jones
Sustainability Indexes.
25Business Review | Roche Business Report 2011
Behandlungs-beginn
24 WochenTherapie
Einstellungder Behandlung
48 WochenTherapie
72 WochenTherapie
Einstellungder Behandlung
Virusmengekeine Abnahme
Virusmengesignifikant gesunken
Virusmengegeringfügig gesunken
HCV-Konzentration:
Test
Woc
he 4
Test Woche 12
Test Woche 24
25Roche Business Report 2011Roche Personalised Healthcare |
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50
60
100
116
How Personalised Healthcare works
Today, findings from new basic research disciplines are enabling
scientists to refine their understanding of diseases at the molecular
level and identify subgroups of outwardly similar patients whose
disorders have different causes.
The features below highlight the subject from four different angles.
How Roche is making Personalised Healthcare a reality
Combining strengths in pharmaceuticals and diagnostics with proven
expertise in molecular biology, Roche is committed to the systematic
pursuit of Personalised Healthcare. This concept is becoming a reality
for more and more of our development projects.
Intervening at the molecular level
Cancer is a case in point of important insights derived from molecular
research. Thanks to ultramodern research techniques, including a series
of innovative systems from Roche, today’s scientists have identified
some 350 genes involved in the genesis of cancer and which may serve
as targets for therapy.
Personalised treatment strategies
Infection with the hepatitis C virus can cause liver disease. Information
on the infecting viral subtype can help doctors choose the right treatment
duration and predict the likelihood of a lasting virological response.
Common cause
2011 was a landmark year for Roche Personalised Healthcare.
Roche Personalised Healthcare
00_06_Roche_AR11_Boxed features_ENG.indd 25 27.01.2012 12:05:54
| Business Review26 Roche Business Report 2011
Our corporate culture is built on the values of integrity, cour-
age and passion. We are passionate about improving patients’
lives. And we have the courage to take appropriate risks,
knowing that we can manage those risks competently and with
high standards of integrity. Our values also underpin our cor-
porate responsibility and that of our employees to comply with
laws, regulations and standards. Our commitment to responsi-
ble behaviour goes beyond strict legal compliance to demand
conduct that is ethical and open and that creates long-term
value for our stakeholders.
Integrity and compliance
The Roche Group Code of Conduct guides our employees’
business behaviour worldwide and clearly expresses Roche’s
expectations as an employer. Our Code of Conduct covers top-
ics such as corporate and personal integrity, social responsi-
bility and compliance management. It provides information on
where to find help and advice and how to raise a compliance
concern.
To help comply with Roche’s standards of business behaviour,
we provide employees appropriate instruction, guidance and
support, including a mandatory series of interactive e-learning
programmes. Roche leaders, moreover, are obliged to carefully
consider business behaviour guidelines when selecting, in -
structing and monitoring people reporting to them.
The Chief Compliance Officer, supported by a network of 118
compliance officers, Group Audit & Risk Advisory and line
management, is committed to ensuring that the Roche Group
Code of Conduct is consistently complied with throughout the
company. The officer serves as a contact for our shareholders,
employees, customers, suppliers and the general public on
issues relating to the implementation of and compliance with
the Code of Conduct.
Roche also maintains a worldwide network of Export Control
Compliance Officers to ensure that it conforms to foreign trade
control legislation.
Strengthening compliance
In addition to our already comprehensive compliance pro-
gramme, we launched several initiatives in 2011, with a focus
on anti-corruption and good marketing practices. These in -
cluded six regional meetings where local compliance officers
reported on the implementation of Roche’s comprehensive
anti-corruption programme and on the Marketing and Sales
Compliance Questionnaire. Furthermore, Roche line managers
signed an assurance declaration confirming their compliance
with and commitment to implementing, controlling and enforc-
ing Roche’s integrity standards.
Roche requires partners, suppliers and other third parties with
whom we collaborate to adhere to the same high standards as
its employees. Local managers are responsible for monitoring
and reporting compliance with Roche integrity standards and
for responding quickly to non-compliant behaviour of Roche
business partners. To assist in this work, we introduced an
Anti-Corruption Compliance Questionnaire for Roche busi-
ness partners in 2011.
Fair and correct behaviour in competition is mandatory for
every Roche employee. During 2011 we updated the Behaviour
in Competition Compliance Questionnaire that enables per-
sonnel who are affected by competition law to self-assess
and monitor their own behaviour, as well as the behaviour of
employees reporting to them. Additionally, we have updated
the Roche guidelines for appropriate behaviour in the event of
an investigation by authorities.
New regulatory requirements involving transparency, such as
the so-called ‘Sunshine Act’ provisions in the US and similar
provisions in other countries, require companies to publically
report payments and other contributions granted to individual
healthcare professionals and institutions. To meet the new
reporting requirements, Roche set up an extensive internal
reporting system in 2011 to monitor its contributions to patient
organisations, health institutions and healthcare professionals,
as well as to ensure that those payments comply with Roche’s
integrity standards.
Reporting on compliance
Our employees are expected to report Code of Conduct viola-
tions to either their line manager, the local compliance officer
or the Chief Compliance Officer. Alternatively, they are also
encouraged to report non-compliance issues anonymously by
the Roche SpeakUp Line, which was established in 2009 and
can be accessed in 47 languages and 98 countries. Addition-
ally, any material violation of Roche’s integrity standards must
be reported in the Business Ethics Incidents Reporting system.
Responsible business
27Business Review | Roche Business Report 2011
Roche does not tolerate violations of its Code of Conduct.
Employees who violate that code will be held accountable and
sanctioned in the appropriate way. This may include termina-
tion of employment. In 2011 we received 81 incident reports
by the Roche SpeakUp Line and 114 by the business ethics
reporting system. After investigating each incident and taking
corrective measures where necessary, 69 employment con-
tracts were terminated on account of unethical behaviour.
Risk and crisis management
Our Risk Management Charter sets out our approach for iden-
tifying, managing and reporting internal and external risks. We
also use stakeholder feedback to help manage social, environ-
mental and ethical risks. Our Risk Management Charter is
available on our website along with a list of principal risks to our
business.
Using consistent methodologies and processes, we routinely
perform risk assessments at all levels of our organisation. A
Group risk report, which covers all material risks, is annually
discussed with the Corporate Executive Committee and the
Audit Committee of the Board of Directors. We regularly
update our risk management processes to raise awareness
and understanding of risk throughout the Roche Group. In
drug development, for instance, we are developing a risk man-
agement methodology to identify and manage any risk that
could impact the achievement of a development project’s
goals.
Additionally, we have established incident management teams
throughout the Roche Group to ensure that we act quickly in
an emergency. These teams regularly rehearse different crisis
scenarios, alerts and escalation procedures.
In 2011 we strengthened our business continuity management,
including establishing a Business Continuity Management task
force to ensure that all our sites respond effectively to cata-
strophic events. The importance of these efforts was high-
lighted by the tsunami that struck Japan in March 2011 and the
widespread flooding in Thailand in fall 2011. The task force is
developing a Group-wide business continuity framework, as
well as guidelines for local implementation. This work will con-
tinue through 2012, with the goal of establishing strategies and
responses to mitigate business continuity risks.
Political donations
Roche remains independent of any political affiliation.
In Switzerland, Roche spends around 8 million Swiss francs on
contributions and donations to various organisations to safe-
guard its interests. These include payments to Interpharma,
economiesuisse, scienceindustries, SwissHoldings and vari-
ous chambers of commerce, financial assistance to trade
unions and donations to political parties at the cantonal and
federal level. Donations to political parties are each low-dou-
ble-digit thousand franc sums and overall less than 4% of total
contributions and donations.
Our employees in the US can make personal political contri-
butions through Roche’s Good Government Committee and
Genentech’s GenenPAC. Both are voluntary bipartisan non-
profit political action committees. In 2011 employees donated
273,304 US dollars to political campaigns through these com-
mittees.
More on the Web
• Roche Group Code of Conduct: www.roche.com/code_of_conduct• Group policies, positions and guidelines: www.roche.com/
policies_guidelines_and_positions• Risk management and compliance: www.roche.com/
risk_management_and_compliance• Responsible marketing: www.roche.com/
business_integrity_and_responsible_marketing
28 Roche Business Report 2011
collaborations between Pharmaceuticals and Diagnostics
29Roche Business Report 2011
RESEARCH AND DEVELOPMENTCommitted. 8,073 million Swiss francs invested in research and development.
Innovative. Our Pharmaceuticals pipeline is one of the strongest in the industry.
As of January 2012 it included 122 projects: 79 involving new molecular entities and
43 additional indications or line extensions for existing medicines.
Successful. The Pharmaceuticals Division filed 21 major marketing applications —
including three for new molecular entities — gained 24 major approvals and announced
positive results from 17 out of 20 late-stage clinical trials.
Impactful. The Diagnostics Division launched 50 tests delivering enhanced
information for medical decision-making and 13 new or upgraded instruments in
key markets.
Integrated. Our Pharmaceuticals and Diagnostics Divisions are collaborating
on more than 200 projects across all therapeutic areas of interest at Roche.
collaborations between Pharmaceuticals and Diagnostics
30 Roche Business Report 2011 | Research and Development
Our R & D strategy
No company in the world invests more than we do in the quest
for innovative healthcare solutions. In 2011 Roche invested 8.1
billion Swiss francs in R & D (core basis 1), a decline of 1%, on a
currency-adjusted basis, versus 2010. More than 330,000
patients are currently enrolled in over 2,100 clinical trials
involving investigational or currently marketed Roche Group
medicines. We plan to maintain high levels of R & D investment
so that we can continue to move the most advanced projects
towards market launch while ensuring a steady flow of promis-
ing new compounds into late-stage development. We will also
1 For a full explanation of the core results concept, see page 146 of the Finance Report (part 2 of this Annual Report).
continue to develop newer and better diagnostic systems and
expand the range of tests they can perform, which is already
one of the broadest in the in vitro diagnostics industry.
People react differently to medications due to variations in
their genetic makeup. Identifying specific gene variants that
determine how well a certain treatment works and is tolerated
is a key element of our research and development efforts. This
is what drives our personalised healthcare approach — fitting
treatments to defined groups of patients. And its success
depends on systematically leveraging the combined capabili-
ties of our Pharmaceuticals and Diagnostics Divisions. Over
the last few years Roche has shown how the interweaving of
diagnostic and pharmaceutical expertise is increasingly paving
Key figures
Pharmaceuticals clinical development projects
Phase I Phase II Phase III, registration
New molecular entities (investigational new medicines) 47 21 11
Line extensions (additional indications, new dosage forms
for marketed or investigational medicines) 2 7 34
8,073
18,449
–1%
15,502
19.0%
2,947
7,173
332,183
–2% 21.9%900 +12% 9.2%
millions of CHF
Roche Group
(CER 2)
Pharmaceuticals
of sales
Diagnostics
Roche Group 1
Employees in R & D
Core R & D expenditures in 2011
millions of CHF (CER ) of salesPharmaceuticals
Patients in clinical trials
millions of CHF (CER) of salesDiagnostics
1 Decrease by 1% due to resource prioritisation and savings from the Operational Excellence programme. 2 Constant exchange rates (average full-year 2010).
Research and Development
31Roche Business Report 2011Research and Development |
the way for personalised healthcare, especially in oncology,
but now also in immunology and neuroscience. Our aim is to
provide healthcare professionals and patients with more pow-
erful diagnostic tools and targeted treatments based on new
insights into how diseases arise at the molecular level.
Diversity of approaches
Scientific breakthroughs are most likely to occur when scien-
tists are free to tackle problems from different angles and in
different ways. Roche scientists have this freedom. We believe
that a diversity of views, cultures and approaches promotes
creativity, especially in research and early development: Pharma
Research and Early Development (pRED), Genentech Research
and Early Development (gRED), Roche Diagnostics and Chu-
gai operate independently within the Group, forming the hubs
of an innovation network that includes alliances with more than
150 outside partners, such as universities, research institutes
and biotech companies. In 2011 Roche was again recognised
as one of our industry’s top partnering organisations. Together
with our partners we turn the multiplicity of ideas into medical
innovation; about one third of the current projects in Roche’s
pipeline have come from these alliances. You will find details
of the Group’s partnering activities in 2011 under Accessing
external innovation (page 47, below).
Collaborate from discovery to commercialisation
Over the past few years we have continuously improved the
organisational and technological framework for cooperation
between our Pharmaceuticals and Diagnostics Divisions.
Although they have different R & D processes, the two divisions
can share research facilities, technologies and discoveries
when working together on internal projects. This is a unique
advantage that sets Roche apart from other companies.
Diagnostic tools are finding increasing use in pharmaceutical
research. Most importantly, close cooperation is the basis for
the successful implementation of our personalised healthcare
strategy. Roche has identified a multitude of potential biomark-
ers 2 that can be used to evaluate disease processes, under-
stand disease diversity, identify drug targets and recognise
differences between patients. Once a biomarker is found, a
standardised diagnostic test can be developed before or dur-
ing clinical trials and prepared for regulatory approval along-
side the drug.
Today, Roche has biomarker programmes and dedicated bio-
marker teams for every drug in development. Our Pharmaceu-
ticals and Diagnostics Divisions are currently collaborating on
more than 200 projects across all therapeutic areas of interest
at Roche. More than half of these projects are in oncology,
followed by inflammation/immunology, neuroscience, virology
and metabolic diseases.
Our collaborative efforts improve not only the prospects
for more effective healthcare and better use of healthcare
resources but also the efficiency of bringing new therapies and
diagnostic tests to market.
2 Biomarker: a characteristic that can be measured and evaluated as an indicator of a normal biological process, a disease process, or a response to treatment.
Roche Diagnostics
Research andearly development
Late-stagedevelopment
Roche Pharma pRED
Roche Partnering
Pharma Medicines pMED
Genentech gRED
Unique structure fosters innovation
Chugai Pharmaceuticals
32 Roche Business Report 2011 | Research and Development
Improving development with Personalised Healthcare
We continue to intensify our efforts to improve R & D produc-
tivity and innovate drug development through our Personal-
ised Healthcare approach. Here and in other areas the Roche
Group’s expertise in molecular biology gives us a clear com-
petitive advantage.
Understanding the heterogeneity of diseases and using diag-
nostic tools to improve drug discovery and clinical develop-
ment, we can identify better drug targets and select patient
subgroups that are most likely to benefit from our treatments.
This is the core of Roche Personalised Healthcare, and this
targeted approach has already proven effective in reducing
the attrition rate of drug candidates by:•better profiling of drug candidates at early stages in develop-
ment •improving clinical trials results through better selection of
endpoints and stronger data•increasing the efficacy of drug candidates in clinical studies
by recruiting suitable patient subgroups
This allows us to pursue projects that might otherwise be
stopped because of side effects or lack of significant efficacy
in the patient sample as a whole, despite promising results in
some patients.
R & D pipeline
Growing number of new drug candidates and diagnostic tests
Roche has produced a steady flow of new drug candidates and
diagnostic tests in key therapeutic areas over the past few
years by leveraging its strengths in biotechnology and in vitro
diagnostics. By the end of 2011, our late-stage pipeline included
13 investigational new medicines (new molecular entities,
NMEs), compared with two in 2007. Seven of these are being
developed as personalised therapies.
Our goal in each case is to produce new medicines that are
first in class or best in class. Our commitment to following the
science translated into positive results in 17 out of 20 late-
stage clinical trials in 2011, seven of which have already formed
the basis for regulatory approvals or filings. The results sug-
gest that many of our investigational medicines have the
potential to offer significant advances in areas where new
treatment options are needed, including breast, lung and skin
cancer, asthma, and adult and childhood forms of rheumatoid
arthritis.
At the end of 2011 the Pharmaceuticals Division’s clinical
development portfolio (phases I to III and registration) included
79 new molecular entities (NMEs), up from 62 a year earlier,
and 43 additional indications. In 2011 we filed marketing appli-
cations for no fewer than three NMEs. Roche’s pharmaceuti-
cals development pipeline is shown on pages 38–39 of this
report. Further details are available at www.roche.com.
The Diagnostics Division’s R & D efforts resulted in the launch
of 50 tests and 13 new or upgraded instruments in key mar-
Number of collaborations between Roche Pharmaceuticals and Roche Diagnostics
2011
2009101
200738
2010
2008 70
200625
200+169
33Roche Business Report 2011Research and Development |
Roche companion diagnostics on the market or in late development *
Disease area Disease Drug Diagnostic test ** Technology Application
Virology CMV Valcyte CMV viral load PCR monitoring
HBV Pegasys and
other antivirals
HBV viral load PCR monitoring
HBV Pegasys, peginterferon
alfa-2b (Merck/SP)
HBsAg levels immunoassay monitoring
HCV Pegasys, peginterferon
alfa-2b (Merck/SP)
HCV viral load PCR monitoring
HCV merictabine (R7128) HCV viral load PCR monitoring
HCV danoprevir (RG7227) HCV viral load PCR monitoring
HIV antivirals HIV viral load PCR monitoring
HIV abacavir (GlaxoSmithKline) HLA-B genotype PCR screening
Oncology breast cancer Herceptin, lapatinib
(GlaxoSmithKline)
HER2 expression/
gene amplification
IHC, ISH selection
breast cancer tamoxifen and other
hormonal therapies
ER/PR expression IHC selection
breast cancer pertuzumab (RG1273) HER2 expression/
gene amplification
IHC, ISH selection
breast cancer trastuzumab emtansine
(T–DM1, RG3502)
HER2 expression/
gene amplification
IHC, ISH selection
cancer compound (Merck) p53 mutations microarray selection
colon cancer cetuximab (Merck) KRAS mutations PCR selection
colon cancer panitumumab (Amgen) KRAS mutations PCR selection
gastric cancer Herceptin HER2 expression/
gene amplification
IHC, ISH selection
melanoma Zelboraf BRAF mutation PCR selection
NSCLC Tarceva ***,
gefitinib (AstraZeneca)
EGFR mutations PCR selection
NSCLC onartuzumab
(MetMAb, RG3638)
Met expression IHC selection
NSCLC TG4010 (Transgene) MUC1 expression IHC selection
NSCLC crizotinib (Pfizer) ALK IHC selection
pancreatic cancer CP-4126 (Clovis Oncology) hENT1 expression IHC selection
sarcoma MDM2 antagonist
(RG7112)
p53 mutations PCR selection
Inflammation asthma lebrikizumab (RG3637) serum periostin
levels
immunoassay selection
rheumatoid
arthritis
MabThera/Rituxan RF, anti-CCP Ab immunoassay selection
Others osteoporosis Bonviva/Boniva and
other bisphosphonates
B-Crosslaps;
P1NP levels
immunoassay monitoring
transplantation CellCept MPA levels immunoassay monitoring
* We have further projects with other pharmaceutical companies which are not disclosed for confidentiality reasons. ** not available in all markets; *** selection of patients eligible for first-line treatment.black type = on the market, grey type = in development. monitoring = monitoring of a patient’s response to a particular treatment; screening = screening of patients for a particular genetic variation of HLA associated with hypersensitivity to abacavir; selection = selection of patients eligible for a particular treatment. ALK= anaplastic lymphoma receptor tyrosine kinase; anti-CCP = antibodies against cyclic citrullinated peptide; BRAF = B-isoform of the rapidly growing fibrosarcoma oncogene; CMV = cytomegalovirus; EGFR = epidermal growth factor receptor; ER/PR = estrogen receptor/progesterone receptor; HBV = hepatitis B virus; HBsAg = HBV surface antigen; HCV = hepatitis C virus; HER2 = human epidermal growth factor receptor 2; HIV = human immuno deficiency virus; hENT1 = human equilibrative nucleoside transporter; HLA = human leucocyte antigen; IHC = immunohistochemistry; ISH = in situ hybridisation; KRAS = member of the Ras family of oncogenes; MPA = mycophenolic acid; NSCLC = non-small cell lung cancer; PCR = polymerase chain reaction; P1NP = procollagen type 1 N-terminal propeptide; RF = rheumatoid factor; SP = Schering Plough.
34 Roche Business Report 2011 | Research and Development
kets. These product launches enhance the information avail-
able to guide treatment decisions and drive efficiency in clini-
cal laboratories and research centres.
Pharmaceuticals for unmet medical needs
In addition to progress with key investigational compounds, in
2011 Roche also passed significant regulatory and develop-
ment milestones with several currently marketed medicines.
An overview can be found in the tables of clinical trials, approv-
als and filings on pages 36, 42 and 43. The main regulatory and
clinical highlights from programmes in the fields of oncology,
immunology and ophthalmology are summarised below, to-
gether with status updates on promising investigational medi-
cines being developed to address viral diseases and disorders
of the central nervous system.
Oncology
We currently have 42 new compounds in development in
oncology. In addition to obtaining positive results from ten key
clinical trials in 2011, we filed marketing applications for the
most advanced of our investigational new medicines in the US
and the European Union: Zelboraf, for metastatic melanoma
(now approved in the US, Switzerland and Brazil); vismodegib,
for basal cell carcinoma (a form of skin cancer); and pertuzu-
mab, for HER2-positive metastatic breast cancer. In addition,
we made significant progress in the development of other
investigational compounds and with projects aimed at extend-
ing approved indications or introducing new dosage forms
of marketed products such as Avastin, Herceptin and Tarceva.
Zelboraf approved in US for metastatic melanoma
In August the US Food and Drug Administration (FDA)
approved Zelboraf for the treatment of BRAF V600E mutation-
positive inoperable or metastatic melanoma, as determined by
an FDA-approved test. The FDA simultaneously approved
Roche Diagnostics’ cobas BRAF test, a companion diagnostic
used to identify patients for whom treatment with Zelboraf is
appropriate. The approvals enabled Genentech to launch this
new oral, targeted cancer medicine in the US less than four
months after the marketing application was filed, and only five
years after the start of clinical trials. Marketing approval was
also obtained in Switzerland and Brazil in the fourth quarter.
In December the European Medicines Agency’s Committee
for Medicinal Products for Human Use (CHMP) unanimously
recommended that Zelboraf be granted full EU marketing
approval. The approvals and recommendation are based on
results from two clinical studies (BRIM3 and BRIM2), which
demonstrated a significant clinical benefit with Zelboraf in
patients with BRAF V600-mutated unresectable or metastatic
melanoma. We have filed marketing applications in a number of
other countries worldwide, including Australia and New Zea-
land, where rates of malignant melanoma are high. Roche
Diagnostics’ BRAF test received CE Mark 3 certification in
August.
Zelboraf (vemurafenib; RG7204, PLX4032) is being co-devel-
oped under a 2006 licence and collaboration agreement
between Roche and Plexxikon, a member of the Daiichi Sankyo
Group. Zelboraf is designed to target and inhibit some mutated
forms of the BRAF protein found in about half of all cases of
melanoma, the deadliest and most aggressive form of skin can-
cer. The BRAF protein is a key component of the RAS-RAF
pathway involved in normal cell growth and survival. Certain
mutations at position V600 keep the BRAF protein in an active
state and may cause excessive signalling in the pathway, lead-
ing to uncontrolled cell growth and survival. Roche is con-
ducting a broad development programme with Zelboraf that
includes testing combinations with other medicines (both
approved and investigational, from Roche, Genentech and
other companies), as well as studies in other tumour types. In
December 2011, in collaboration with Bristol Myers Squibb, we
initiated a phase I/II study with combined Zelboraf and Yervoy
(ipilimumab) in BRAF-mutated metastatic melanoma.
Vismodegib filed in US and EU for BCC skin cancer
In November the FDA accepted and filed Genentech’s new
drug application for vismodegib for the treatment of adults
with advanced basal cell carcinoma (BCC) for whom surgery
is considered inappropriate. The application was granted Pri-
ority Review status, and the FDA has assigned an action date
in March 2012. In December Roche submitted a marketing
application for the same indication in the EU. Both applications
are based on results from the pivotal phase II ERIVANCE BCC
study, which showed that vismodegib substantially shrank
tumours or healed visible lesions in 43% of patients with locally
advanced BCC and 30% of patients with metastatic BCC. Vis-
modegib (RG3616) is an investigational, oral, targeted medi-
cine designed to selectively inhibit abnormal signalling in the
Hedgehog pathway, an underlying molecular driver of BCC
that is implicated in more than 90% of cases. Roche is develop-
ing vismodegib under a collaboration agreement with Curis.
BCC is the most common type of skin cancer and is generally
considered curable by surgery. However, when advanced,
3 Certification that an in vitro diagnostic product complies with all requirements for use in the EU.
35Roche Business Report 2011Research and Development |
BCC can cause disfiguring and debilitating effects and in some
patients can ultimately be life-threatening.
Pertuzumab filed for HER2-positive breast cancer
In December we submitted marketing applications in the US
and EU for pertuzumab as a treatment for previously untreated
HER2-positive metastatic breast cancer. The filings are based
on results from CLEOPATRA, the first randomised phase III
study with pertuzumab, which compared combined pertuzu-
mab, Herceptin (trastuzumab) and docetaxel chemotherapy
with Herceptin and chemotherapy alone in people with previ-
ously untreated HER2-positive metastatic breast cancer. Peo-
ple who received pertuzumab in combination with Herceptin
and chemotherapy experienced a 38% reduction in the risk of
their disease worsening or death (progression-free survival,
PFS). Median PFS improved by 6.1 months from 12.4 months
for Herceptin and chemotherapy to 18.5 months for pertuzu-
mab, Herceptin and chemotherapy.
Pertuzumab (RG1273) is the first in a new class of targeted
anticancer agents known as HER2 dimerisation inhibitors. It is
designed to block the dimerisation (pairing) of HER2 with
other members of the HER family of receptors. HER dimerisa-
tion is believed to play an important role in the growth and
formation of several different cancer types. The mechanisms of
action of pertuzumab and Herceptin are believed to comple-
ment each other, as both bind to the HER2 receptor but on
different regions. This is thought to provide a more compre-
hensive blockade of HER signalling pathways. Pertuzumab is
being studied with the current standard of care, Herceptin plus
chemotherapy, in HER2-positive breast and stomach cancer.
Avastin regulatory update
Breast cancer. In July the European Commission approved an
extension to the Avastin EU breast cancer label. Avastin may
now be used in combination with Xeloda (capecitabine) for the
first-line treatment of women with metastatic breast cancer in
whom other chemotherapy options are not considered appro-
priate. In September the Japanese authorities approved Avas-
tin for the treatment of inoperable or recurrent breast cancer.
In November the FDA issued a final decision revoking US
approval of Avastin for the treatment of metastatic breast can-
cer. This followed a recommendation in July 2010 by an FDA
expert panel, the agency’s initial notice of revocation in Decem-
ber 2010, and an appeal in 2011 by Roche against removal of
the indication. The FDA decision does not affect the medicine’s
other approved indications in the US and elsewhere.
Ovarian cancer. Avastin received EU approval in December
for the treatment of women with newly diagnosed advanced
ovarian cancer. Based on the results of the phase III ICON-7
and GOG 218 trials, the new approval allows the use of Avastin
in combination with standard chemotherapy (carboplatin and
paclitaxel) for the front-line treatment (first-line treatment fol-
lowing surgery) of advanced epithelial ovarian, primary perito-
neal or fallopian tube carcinoma. Roche filed an additional EU
Late developmentPhase III and registration
42 projects
2 ophthalmology
3 metabolic
4 neuroscience
5 inflammation/immunology
28 oncology
Research and early developmentDiscovery programmes + phase 0, I and II projects
345 projects
2 ophthalmology
42 virology
42 metabolism
62 neuroscience
50 inflammation/immunology
147 oncology
R & D projects by therapeutic area (Roche and Genentech)
36 Roche Business Report 2011 | Research and Development
Pharmaceuticals Division — major clinical trials in 2011
Product Indication Trial (phase) Outcome Aim
Actemra moderate to severe rheumatoid arthritis, Actemra monotherapy vs combined Actemra + methotrexate
ACT-RAY (IIIb) efficacy (remission)and safety
additional data
Actemra (subcutaneous formulation)
rheumatoid arthritis double-blind, ran-domised, parallel group study (III)
non-inferiority of efficacy of subcutaneous formulation versus intravenous formulation
registration (new dosage form)
Actemra ankylosing spondylitis Builder 1 + 2 (III) Builder 1 did not meet proto-col-specified primary endpoint; programme terminated
registration (potential new indication)
Avastin recurrent platinum-sensitive ovarian cancer, versus chemotherapy
OCEANS (III) significantly improved PFS registration (potential new indication)
Avastin previously untreated, advanced non-squamous NSCLC, maintenance treatment in combination with pemetrexed chemotherapy
AVAPERL (III) significantly improved PFS additional data
Avastin + Herceptin
HER2-positive metastatic breast cancer
AVEREL (III) study did not meet protocol-specified primary endpoint
registration (potential new indication)
dalcetrapib patients with CHD, or CHD risk equivalents
dal-PLAQUE (IIb) data suggest possible beneficial vascular effects, generally well tolerated
exploratory (safety, efficacy)
dalcetrapib patients with CHD, or CHD risk equivalents
dal-VESSEL (IIb) endothelial function preserved, no change in blood pressure, generally well tolerated
exploratory (safety, efficacy)
Herceptin (subcutaneous formulation)
HER2-positive early breast cancer HannaH (III) comparable efficacy of subcutaneous formulation versus intravenous formulation
registration (new dosage form), personalised medicine
lebrikizumab adult asthma not adequately control-led by inhaled corticosteroids
MILLY (II) significantly improved pre-bronchodilator FEV1
proof of concept, personalised medicine
Lucentis diabetic macular edema, compared with sham injection
RIDE, RISE (III), 2-year data
rapid and sustained improve-ment in vision (significantly improved eye chart scores versus baseline)
registration (potential new indication)
Lucentis wet age-related macular degenera-tion, comparing alternative dosing regimens with monthly Lucentis
HARBOR (III) efficacy data do not support initiation of further high-dose studies, 0.5 mg PRN dosing to be discussed with FDA
registration (new dosing regimen)
obinituzumab (GA101)
relapsed indolent NHL, head-to-head comparison with MabThera/Rituxan
GAUSS (II) higher response rates with GA101 versus MabThera, phase III testing initiated
proof of concept
ocrelizumab relapsing-remitting multiple sclerosis randomised, multi-centre, placebo-controlled study (II)
significant reduction in disease activity, maintained through 96 weeks
dose-finding with open-label extension
onartuzumab (MetMAb)
2 nd -/3 rd -line NSCLC, combination with Tarceva
OAM4558g (II), final data (including OS)
significantly improved PFS and OS
proof of concept, personalised medicine
pertuzumab HER2-positive metastatic breast cancer, combination with Herceptin and docetaxel
CLEOPATRA (III) significantly improved progres-sion-free survival
registration, personalised medicine
Tarceva metastatic non-small cell lung cancer with epidermal growth factor recep-tor-activating mutations, first-line treatment, versus chemotherapy
EURTAC (III) significantly improved PFS potential new indication, personalised medicine
trastuzumab emtansine (T–DM1)
HER2-positive metastatic breast cancer, previously untreated HER2-positive, versus Herceptin plus chemotherapy
TDM4450g (II) significantly improved PFS proof of concept, personalised medicine
vismodegib advanced basal cell carcinoma, (single-arm trial)
ERIVANCE BCC/ SHH4476G (II)
objective response rate (tumour shrinkage, lesion healing)
registration
Zelboraf previously untreated BRAF V600 mutation-positive metastatic melanoma, versus chemotherapy
BRIM3 (III) significantly improved OS and PFS
registration, personalised medicine
BRAF = B-isoform of the rapidly growing fibrosarcoma oncogene; CHD = coronary heart disease; FEV1 = forced expiratory volume 1 (the volume of air that can be forced out in one second after taking a deep breath; a measure of lung function); HER2 = human epidermal growth factor receptor 2; NHL = non-Hodgkin’s lymphoma; NSCLC = non-small cell lung cancer; OS = overall survival (time between the start of treatment and death); PFS = progression-free survival (time between the start of treatment and disease progression); PRN = pro re nata (as needed).
37Roche Business Report 2011Research and Development |
marketing application in August, seeking approval of Avastin
for use in relapsed ovarian cancer. The EU filing is based on the
results of the phase III OCEANS study. The results, which were
also presented at the annual meeting of the American Society
of Clinical Oncology (ASCO) in June, show that an Avastin-
based regimen halved the risk of the disease getting worse
in women with recurrent ovarian cancer. These data add to
the growing body of evidence supporting the potential role
of Avastin in this disease, which includes the ICON-7 and
GOG 218 trials of Avastin in newly diagnosed ovarian cancer.
Roche plans to make a decision on whether to seek US mar-
keting approval for Avastin in ovarian cancer when final overall
survival results from all phase III trials are available (expected
2013). Ovarian cancer is the sixth type of cancer for which
Avastin has been approved.
Upon its initial approval in the US in 2004 for metastatic colo-
rectal cancer, Avastin (bevacizumab) became the first anti-
angiogenic therapy made widely available for the treatment of
patients with an advanced cancer. Today, Avastin continues
to transform cancer care through its proven survival benefit
across several types of cancer. It is approved in the US and
Europe for the treatment of advanced stages of colorectal,
non-small cell lung and kidney cancer, and is also available in
the US and over 32 other countries for the treatment of patients
with glioblastoma, a type of brain tumour. Avastin is approved
in more than 80 countries, including the EU and Japan, for
breast cancer.
Herceptin SC achieves positive phase III results
In October Roche announced that a phase III study (HannaH)
had achieved its primary objectives, demonstrating compara-
ble efficacy of a new investigational subcutaneous (SC) for-
mulation of Herceptin to the current intravenous (IV) infusion
formulation in women with HER2-positive early breast cancer.
Herceptin SC uses Halozyme Therapeutics’ Enhanze technol-
ogy, which enables the injection of large volumes of a medica-
tion under the skin. The SC formulation takes around five min-
utes to administer, compared with around 30 minutes for the
IV infusion. Subcutaneous administration may allow patients
to spend less time in hospital receiving their treatment than is
the case with intravenous delivery.
Herceptin (trastuzumab) is a humanised antibody, designed to
target and block the function of HER2, a protein produced by
a specific gene with cancer-causing potential. Herceptin acti-
vates the body’s immune system and suppresses HER2 to
target and destroy the tumour. Herceptin has demonstrated
unprecedented efficacy in treating both early and advanced
(metastatic) HER2-positive breast cancer as well as HER2-
positive advanced (metastatic) stomach cancer. Since 1998
Herceptin has been used to treat almost one million patients
with HER2-positive breast and stomach cancer worldwide. It is
approved in more than 150 countries.
Tarceva approved for genetically distinct type of NSCLC
In August the EU authorities approved Tarceva for use in
patients with locally advanced or metastatic non-small cell lung
cancer (NSCLC) with EGFR-activating mutations. Based on
the results of the phase III EURTAC study and additional data,
this approval enables the use of Tarceva as first-line mono-
therapy in people with this genetically distinct type of NSCLC.
Treatment with Tarceva in this setting has been shown to
more than triple the number of patients whose tumours shrink
(response rate) and to nearly double progression-free survival
(the time patients live without their disease progressing) com-
pared with chemotherapy. Roche filed a marketing application
for this indication with the Swiss health authorities in August,
and a regulatory submission in the US is planned for 2012.
Tarceva (erlotinib) is a once-daily, oral non-chemotherapy
treatment for advanced or metastatic NSCLC and advanced
pancreatic cancer. It has been shown to potently inhibit the
epidermal growth factor receptor (EGFR), a protein involved in
the growth and development of cancers. Tarceva is developed
in partnership with OSI Pharmaceuticals, a member of the
Astellas global group of companies.
Onartuzumab extends overall survival
in Met-positive NSCLC
Final data from a key phase II trial presented at the ASCO
annual meeting in June showed that people with metastatic
NSCLC whose tumours had high levels of Met, as determined
by Roche’s tissue-based companion diagnostic, lived twice as
long without their disease getting worse and lived three times
longer overall when they received onartuzumab plus Tarceva
compared with Tarceva alone. A phase III trial of combined
onartuzumab and Tarceva as second- and third-line treatment
in patients with metastatic Met-positive NSCLC (MetLung)
started in January 2012.
Onartuzumab (MetMAb, RG3638) is a unique monovalent
(one-armed) monoclonal antibody designed to target Met, a
protein associated with poor outcome in many cancers. The
compound blocks Met signalling in cancer cells by binding
specifically to the cell-surface Met receptor. Onartuzumab
is being investigated as a potential treatment for metastic
NSCLC, breast and colorectal cancer.
38 Roche Business Report 2011 | Research and Development
Pharmaceuticals pipeline
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7458
an
tibod
y–dr
ug c
onju
gate
ov
aria
n ca
ncer
RG
7459
IA
P an
tago
nist
(2)
so
lid tu
mou
rs a
nd ly
mph
oma
RG
7593
an
ti-D
22 a
ntib
ody–
drug
con
juga
te
hem
atol
ogic
mal
igna
ncie
sR
G75
94
anti-
angi
ogen
ic
solid
tum
ours
RG
7596
an
tibod
y–dr
ug c
onju
gate
he
mat
olog
ic tu
mou
rsR
G75
97
anti-
HER
3/EG
FR M
Ab
met
asta
tic e
pith
elia
l tum
ours
RG
7598
an
tibod
y–dr
ug c
onju
gate
m
ultip
le m
yelo
ma
RG
7599
an
tibod
y–dr
ug c
onju
gate
ca
ncer
RG
7600
an
tibod
y–dr
ug c
onju
gate
ca
ncer
RG
7601
B
cl-2
inhi
bito
r ch
roni
c ly
mph
pocy
tic le
ukem
iaR
G76
02
Chk
-1 in
hibi
tor
tum
ours
or
lym
phom
aR
G76
03
(not
dis
clos
ed)
solid
tum
ours
or
non-
Hod
gkin
’s ly
mph
oma
RG
7604
PI
3K in
hibi
tor
canc
erR
G76
86
anti-
glyp
ican
-3 M
Ab
liver
can
cer
CH
U
ALK
inhi
bito
r no
n-sm
all c
ell l
ung
canc
erC
HU
PI
3 ki
nase
inhi
bito
r so
lid tu
mou
rsC
HU
W
T-1
pept
ide
canc
er v
acci
ne
canc
erR
G12
73
pert
uzum
ab
HER
2-po
sitiv
e m
etas
tatic
bre
ast c
ance
r, 2n
d-lin
e
RG
1273
pe
rtuz
umab
H
ER2-
posi
tive
met
asta
tic g
astr
ic c
ance
rR
G35
02
T–D
M1
HER
2-po
sitiv
e ea
rly b
reas
t can
cer
RG
3616
vi
smod
egib
op
erab
le b
asal
cel
l car
cino
ma
RG
3638
on
artu
zum
ab (
Met
MA
b)
met
asta
tic b
reas
t can
cer
RG
3638
on
artu
zum
ab (
Met
MA
b)
met
asta
tic c
olor
ecta
l can
cer,
1st-
line
RG
7160
an
ti-EG
FR M
Ab
(GA
201)
so
lid tu
mou
rsR
G72
04
Zel
bora
f pa
pilla
ry th
yroi
d ca
ncer
RG
7321
PI
3 ki
nase
inhi
bito
r so
lid tu
mou
rsR
G74
22
PI3
K/m
TOR
inhi
bito
r
solid
and
hem
atol
ogic
tum
ours
RG
7414
an
ti-EG
FL7
MA
b m
etas
tatic
col
orec
tal c
ance
r, 1s
t-lin
eR
G10
5 M
abTh
era/
Ritu
xan
non-
Hod
gkin
’s ly
mph
oma,
s.c
. dos
age
form
RG
435
Ava
stin
H
ER2-
posi
tive
brea
st c
ance
r, ad
juva
nt tr
eatm
ent
RG
435
Ava
stin
H
ER2-
nega
tive
brea
st c
ance
r, ad
juva
nt tr
eatm
ent
RG
435
Ava
stin
tr
iple
-neg
ativ
e br
east
can
cer,
adju
vant
trea
tmen
t R
G43
5 A
vast
in
met
asta
tic b
reas
t can
cer,
2nd-
line
RG
435
Ava
stin
no
n-sm
all c
ell l
ung
canc
er, a
djuv
ant t
reat
men
tR
G43
5 A
vast
in
high
-ris
k ca
rcin
oid
RG
435
Ava
stin
gl
iobl
asto
ma,
1st
-lin
eR
G43
5 A
vast
in
met
asta
tic C
RC
, tre
atm
ent t
hrou
gh m
ultip
le li
nes
RG
435 1
A
vast
in
ovar
ian
canc
er, 1
st-l
ine
RG
597
Her
cept
in
HER
2-po
sitiv
e br
east
can
cer,
s.c.
dos
age
form
RG
597
Her
cept
in
HER
2-po
sitiv
e B
C, a
djuv
ant t
reat
men
t (2
year
s)R
G12
73
pert
uzum
ab
HER
2-po
sitiv
e ea
rly b
reas
t can
cer
RG
1415
1 Ta
rcev
a N
SCLC
, EG
FR-a
ctiv
atin
g m
utat
ions
, 1st
-lin
eR
G14
15
Tarc
eva
NSC
LC, a
djuv
ant t
reat
men
tR
G35
02
T–D
M1
(ant
ibod
y–dr
ug c
onju
gate
) H
ER2-
posi
tive
adva
nced
met
asta
tic b
reas
t can
cer
RG
3502
T–
DM
1 (a
ntib
ody–
drug
con
juga
te)
HER
2-po
sitiv
e m
etas
tatic
bre
ast c
ance
r, 3r
d-lin
e
RG
3502
T–
DM
1 (a
ntib
ody–
drug
con
juga
te)
HER
2-po
sitiv
e m
etas
tatic
bre
ast c
ance
r, 1s
t-lin
eR
G36
38
onar
tuzu
mab
(M
etM
Ab)
m
etas
tatic
non
-sm
all c
ell l
ung
canc
er
RG
7159
ob
initu
zum
ab (
GA
101)
ch
roni
c ly
mph
ocyt
ic le
ukem
iaR
G71
59
obin
ituzu
mab
(G
A10
1)
indo
lent
non
-Hod
gkin
’s ly
mph
oma,
rel
apse
dR
G71
59
obin
ituzu
mab
(G
A10
1)
diff
use
larg
e B
cel
l lym
phom
aR
G71
59
obin
ituzu
mab
(G
A10
1)
indo
lent
non
-Hod
gkin
’s ly
mph
oma,
fron
t-lin
eR
G10
5 M
abTh
era/
Ritu
xan
non-
Hod
gkin
’s ly
mph
oma,
fast
infu
sion
RG
435 2
A
vast
in
rela
psed
ova
rian
canc
erR
G12
73
pert
uzum
ab
HER
2-po
sitiv
e m
etas
tatic
bre
ast c
ance
r, 1s
t-lin
eR
G36
16
vism
odeg
ib
adva
nced
bas
al c
ell c
arci
nom
aR
G72
04 3
Zel
bora
f m
etas
tatic
mel
anom
aR
G49
34
anti-
IL-1
7 M
Ab
auto
imm
une
dise
ases
RG
7185
C
RTH
2 an
tago
nist
as
thm
aR
G72
58
anti-
TSLP
R M
Ab
asth
ma
RG
7624
an
ti-IL
17
MA
b au
toim
mun
e di
seas
esC
HU
an
ti-IL
6 M
Ab
rheu
mat
oid
arth
ritis
RG
3637
le
brik
izum
ab
seve
re a
sthm
aR
G74
13
rhu
MA
b B
eta7
ul
cera
tive
colit
isR
G74
15
ront
aliz
umab
sy
stem
ic lu
pus
eryt
hem
atos
usR
G74
16
anti-
LT a
lpha
MA
b rh
eum
atoi
d ar
thrit
isR
G74
49
anti-
M1
prim
e M
Ab
asth
ma
RG
105
Mab
Ther
a/R
ituxa
n A
NC
A-a
ssoc
iate
d va
scul
itis
RG
1569
A
ctem
ra/R
oAct
emra
rh
eum
atoi
d ar
thrit
is, s
.c. d
osag
e fo
rmR
G15
69
Act
emra
/RoA
ctem
ra
early
rhe
umat
oid
arth
ritis
RG
1569
A
ctem
ra/R
oAct
emra
rh
eum
atoi
d ar
thrit
is, D
MA
RD
-IR
, vs
adal
imum
abR
G36
48
Xol
air
chro
nic
idio
path
ic u
rtic
aria
CH
U
Suve
nyl
enth
esop
athy
RG
7795
TL
RH
7 ag
onis
t he
patit
is C
RG
7667
(n
ot d
iscl
osed
) in
fect
ious
dis
ease
RG
7128
m
eric
itabi
ne
hepa
titis
CR
G72
27
dano
prev
ir he
patit
is C
RG
7790
se
trob
uvir
hepa
titis
CR
G72
36
Cat
S a
ntag
onis
t ca
rdio
vasc
ular
ris
k in
chr
onic
kid
ney
dise
ase
RG
7273
A
BC
A1
indu
cer
dysl
ipid
emia
RG
7652
(n
ot d
iscl
osed
) m
etab
olic
dis
ease
s
RG
7685
G
IP/G
LP-1
dua
l ago
nist
ty
pe 2
dia
bete
sR
G49
29
11 b
eta
HS
D in
hibi
tor
m
etab
olic
dis
ease
sR
G15
12
anti-
P se
lect
in M
Ab
acut
e co
rona
ry s
yndr
ome/
card
iova
scul
ar d
isea
seR
G74
18
anti-
oxLD
L M
Ab
seco
ndar
y pr
even
tion
card
iova
scul
ar e
vent
sR
G14
39
aleg
litaz
ar
card
iova
scul
ar r
isk
redu
ctio
n in
type
2 d
iabe
tes
RG
1658
da
lcet
rapi
b at
hero
scle
rosi
s, c
ardi
ovas
cula
r ris
k re
duct
ion
CH
U
tofo
glifl
ozin
(SG
LT2)
ty
pe 2
dia
bete
sR
G36
26 4
Act
ivas
e ex
tend
ed ti
me
win
dow
, acu
te is
chem
ic s
trok
eR
G16
62
GA
BA
-A α
5 in
vers
e ag
onis
t co
gniti
ve d
isor
ders
RG
7314
V
1 re
cept
or a
ntag
onis
t (2)
au
tism
R
G71
29
BA
CE
inhi
bito
r A
lzhe
imer
’s di
seas
e R
G14
50
gant
ener
umab
A
lzhe
imer
’s di
seas
eR
G15
77
MA
O-B
inhi
bito
r A
lzhe
imer
’s di
seas
eR
G15
78
mG
luR
2 an
tago
nist
(2)
de
pres
sion
RG
7090
m
Glu
R5
anta
goni
st (
2)
trea
tmen
t-re
sist
ant d
epre
ssio
nR
G74
12
anti-
Abe
ta M
Ab
Alz
heim
er’s
dise
ase
RG
1594
oc
reliz
umab
re
laps
ing-
rem
ittin
g m
ultip
le s
cler
osis
RG
1594
oc
reliz
umab
pr
imar
y-pr
ogre
ssiv
e m
ultip
le s
cler
osis
RG
1678
bi
tope
rtin
(gl
ycin
e re
upta
ke in
hibi
tor)
sc
hizo
phre
nia,
neg
ativ
e sy
mpt
oms
RG
1678
bi
tope
rtin
(gl
ycin
e re
upta
ke in
hibi
tor)
sc
hizo
phre
nia,
sub
optim
ally
con
trol
led
RG
3645
Lu
cent
is
AM
D/R
VO
/DM
E, s
usta
ined
-del
iver
y do
sage
form
R
G74
17
anti-
fact
or D
MA
b ge
ogra
phic
atr
ophy
RG
3645
Lu
cent
is
AM
D, 0
.5m
g, p
ro r
e na
ta (
as n
eede
d)R
G36
45 4
Luce
ntis
di
abet
ic m
acul
ar e
dem
aC
HU
EP
OC
H
chem
othe
rapy
-ind
uced
ane
mia
1 approved in the EU2 submitted in the EU3 approved in US, CHMP
positive opinion in EU4 submitted in the US Personalised Healthcare project
RG-No Roche- and/or Genentech-managedCHU Chugai-managedRG105 MabThera is branded as Rituxan
in the US and JapanRG1569 Actemra is branded as RoActemra
in the EU
AMD age-related macular degenerationBC breast cancer CRC colorectal cancerDMARD-IR disease-modifying antirheumatic drug, inadequate responseDME diabetic macular edemaRVO retinal vein occlusion
MAb monoclonal antibodyNSCLC non-small cell lung cancerrhu recombinant, humaniseds.c. subcutaneous
On
colo
gy
Infl
am
ma
tio
nIm
mu
no
log
y
Vir
olo
gy
Me
tab
oli
c C
ard
iova
scu
lar
CN
S
Pha
se II
IP
hase
IIP
hase
IR
egis
trat
ion
Op
hth
alm
olo
gy
Oth
ers
38 Roche Business Report 2011 | Pharmaceuticals pipeline 39Roche Business Report 2011Pharmaceuticals pipeline |
Seitenzahl_Pharma-Pipeline_ENG.indd 38-39 24.01.2012 14:55:13
04_R
oche
_AR
11_R
&D
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elin
e_EN
G.in
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2012
14
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38
39Roche Business Report 2011Research and Development |
Pharmaceuticals pipeline
Proj
ect I
D
Proj
ect/
Prod
uct
Indi
catio
n
R
G71
12
MD
M2
anta
goni
st (
2)
solid
and
hem
atol
ogic
tum
ours
RG
7116
an
ti-H
ER3
MA
b so
lid tu
mou
rsR
G71
55
CS
F1R
MA
b so
lid tu
mou
rs
RG
7167
C
IF/M
EK in
hibi
tor
solid
tum
ours
RG
7204
Z
elbo
raf+
ipili
mum
ab
met
asta
tic m
elan
oma
RG
7212
Tw
eak
MA
b ca
ncer
RG
7256
B
RA
F in
hibi
tor
(2)
BR
AF-
mut
ated
mel
anom
a R
G73
04
RA
F +
MEK
dua
l inh
ibito
r so
lid tu
mou
rsR
G73
34
anti-
PLG
F M
Ab
solid
tum
ours
RG
7356
an
ti-C
D44
MA
b so
lid tu
mou
rsR
G74
20
MEK
inhi
bito
r so
lid tu
mou
rsR
G74
21
MEK
inhi
bito
r so
lid tu
mou
rsR
G73
88
MD
M2
(4)
ca
ncer
RG
7440
A
KT
inhi
bito
r so
lid tu
mou
rsR
G74
44
anti-
FGFR
3 M
Ab
canc
erR
G74
46
tum
our
imm
unot
hera
py
canc
erR
G74
50
antib
ody–
drug
con
juga
te
pros
tate
can
cer
RG
7458
an
tibod
y–dr
ug c
onju
gate
ov
aria
n ca
ncer
RG
7459
IA
P an
tago
nist
(2)
so
lid tu
mou
rs a
nd ly
mph
oma
RG
7593
an
ti-D
22 a
ntib
ody–
drug
con
juga
te
hem
atol
ogic
mal
igna
ncie
sR
G75
94
anti-
angi
ogen
ic
solid
tum
ours
RG
7596
an
tibod
y–dr
ug c
onju
gate
he
mat
olog
ic tu
mou
rsR
G75
97
anti-
HER
3/EG
FR M
Ab
met
asta
tic e
pith
elia
l tum
ours
RG
7598
an
tibod
y–dr
ug c
onju
gate
m
ultip
le m
yelo
ma
RG
7599
an
tibod
y–dr
ug c
onju
gate
ca
ncer
RG
7600
an
tibod
y–dr
ug c
onju
gate
ca
ncer
RG
7601
B
cl-2
inhi
bito
r ch
roni
c ly
mph
pocy
tic le
ukem
iaR
G76
02
Chk
-1 in
hibi
tor
tum
ours
or
lym
phom
aR
G76
03
(not
dis
clos
ed)
solid
tum
ours
or
non-
Hod
gkin
’s ly
mph
oma
RG
7604
PI
3K in
hibi
tor
canc
erR
G76
86
anti-
glyp
ican
-3 M
Ab
liver
can
cer
CH
U
ALK
inhi
bito
r no
n-sm
all c
ell l
ung
canc
erC
HU
PI
3 ki
nase
inhi
bito
r so
lid tu
mou
rsC
HU
W
T-1
pept
ide
canc
er v
acci
ne
canc
erR
G12
73
pert
uzum
ab
HER
2-po
sitiv
e m
etas
tatic
bre
ast c
ance
r, 2n
d-lin
e
RG
1273
pe
rtuz
umab
H
ER2-
posi
tive
met
asta
tic g
astr
ic c
ance
rR
G35
02
T–D
M1
HER
2-po
sitiv
e ea
rly b
reas
t can
cer
RG
3616
vi
smod
egib
op
erab
le b
asal
cel
l car
cino
ma
RG
3638
on
artu
zum
ab (
Met
MA
b)
met
asta
tic b
reas
t can
cer
RG
3638
on
artu
zum
ab (
Met
MA
b)
met
asta
tic c
olor
ecta
l can
cer,
1st-
line
RG
7160
an
ti-EG
FR M
Ab
(GA
201)
so
lid tu
mou
rsR
G72
04
Zel
bora
f pa
pilla
ry th
yroi
d ca
ncer
RG
7321
PI
3 ki
nase
inhi
bito
r so
lid tu
mou
rsR
G74
22
PI3
K/m
TOR
inhi
bito
r
solid
and
hem
atol
ogic
tum
ours
RG
7414
an
ti-EG
FL7
MA
b m
etas
tatic
col
orec
tal c
ance
r, 1s
t-lin
eR
G10
5 M
abTh
era/
Ritu
xan
non-
Hod
gkin
’s ly
mph
oma,
s.c
. dos
age
form
RG
435
Ava
stin
H
ER2-
posi
tive
brea
st c
ance
r, ad
juva
nt tr
eatm
ent
RG
435
Ava
stin
H
ER2-
nega
tive
brea
st c
ance
r, ad
juva
nt tr
eatm
ent
RG
435
Ava
stin
tr
iple
-neg
ativ
e br
east
can
cer,
adju
vant
trea
tmen
t R
G43
5 A
vast
in
met
asta
tic b
reas
t can
cer,
2nd-
line
RG
435
Ava
stin
no
n-sm
all c
ell l
ung
canc
er, a
djuv
ant t
reat
men
tR
G43
5 A
vast
in
high
-ris
k ca
rcin
oid
RG
435
Ava
stin
gl
iobl
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positive opinion in EU4 submitted in the US Personalised Healthcare project
RG-No Roche- and/or Genentech-managedCHU Chugai-managedRG105 MabThera is branded as Rituxan
in the US and JapanRG1569 Actemra is branded as RoActemra
in the EU
AMD age-related macular degenerationBC breast cancer CRC colorectal cancerDMARD-IR disease-modifying antirheumatic drug, inadequate responseDME diabetic macular edemaRVO retinal vein occlusion
MAb monoclonal antibodyNSCLC non-small cell lung cancerrhu recombinant, humaniseds.c. subcutaneous
On
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mu
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38 Roche Business Report 2011 | Pharmaceuticals pipeline 39Roche Business Report 2011Pharmaceuticals pipeline |
Seitenzahl_Pharma-Pipeline_ENG.indd 38-39 24.01.2012 14:55:13
04_R
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2012
14
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40 Roche Business Report 2011 | Research and Development
Trastuzumab emtansine (T–DM1) extends PFS
in HER2-positive breast cancer
In September promising phase II proof-of-concept data were
presented at the annual meeting of the European Society of
Medical Oncology (ESMO). The results of the TDM4450g
study showed that patients with previously untreated HER2-
positive metastatic breast cancer who received T–DM1 lived
significantly longer with their disease under control (progres-
sion-free survival, PFS) and experienced fewer side effects
typical of chemotherapy than patients who received standard
treatment with Herceptin (trastuzumab) plus docetaxel che-
motherapy. Recruitment has been completed for a phase III
trial (EMILIA) comparing T–DM1 treatment versus combined
Xeloda and lapatinib in patients whose HER2-positive meta-
static breast cancer had progressed on previous therapy.
Results are expected in the second quarter of 2012. We plan to
use the data as the basis for marketing applications in Europe
and the US in the second half of 2012.
Trastuzumab emtansine (T–DM1, RG3502) is a novel anti-
body–drug conjugate that combines the therapeutic effect of
trastuzumab (the active substance of Herceptin) with intracel-
lular delivery of DM1, a highly potent chemotherapy agent, to
specifically target HER2-positive tumours. The trastuzumab
antibody component blocks the signals that make HER2-posi-
tive cancer cells more aggressive and sends a message to
the patient’s immune system to destroy the cancer cells. It also
delivers the DM1 chemotherapy agent directly to tumour cells
to induce cell death.
Obinituzumab increases overall response rate
in relapsed NHL
Final results from a phase II study (GAUSS) comparing single-
agent obinituzumab with single-agent MabThera/Rituxan
(rituximab) in patients with relapsed indolent non-Hodgkin’s
lymphoma (NHL) were announced in the first half of 2011 and
presented at the annual meeting of the American Society of
Hematology in December. The study showed that obinituzu-
mab increased the overall response rate (ORR) of patients
with CD20+ indolent NHL, a common type of blood cancer,
compared with MabThera/Rituxan. Two phase III registration
trials in first-line diffuse large B-cell lymphoma (DLBCL) and
first-line indolent NHL were initiated in 2011. The phase III pro-
gramme also includes ongoing studies which are assessing
obinituzumab in chronic lymphocytic leukemia (CLL) and
relapsed/refractory indolent NHL.
Obinituzumab (RG7159, GA101) is a type II, glycoengineered,
anti-CD20 monoclonal antibody being developed as a po -
tential treatment for NHL and CLL. It has been specifically
designed to enhance the destruction of cancerous B cells by
activating other immune cells to attack the cancer cells and by
inducing direct cell death.
Immunology, ophthalmology
Further regulatory approvals and filings, along with new data
from phase III clinical trials again confirmed the benefits of
Actemra/RoActemra in rheumatoid arthritis (RA) and of
Lucentis for people with common types of eye disease. In addi-
tion, we currently have ten investigational new medicines in
development for chronic and progressive inflammatory and
autoimmune disorders such as rheumatoid arthritis, ulcerative
colitis, systemic lupus erythematosus and asthma.
Lebrikizumab improves lung function in adult asthma
Positive results announced in August from MILLY, a phase II
proof-of-concept study with the investigational medicine leb-
rikizumab showed that treatment with lebrikizumab resulted in
a significant increase in FEV1 (a measure of lung function) in
adults with asthma whose symptoms were inadequately con-
trolled with inhaled corticosteroids.
Lebrikizumab is a humanised monoclonal antibody being
developed for the treatment of moderate to severe persistent
asthma. It is designed to bind specifically to interleukin-13
(IL-13), which is thought to play a key role in the airway inflam-
mation, hyperresponsiveness and obstruction experienced by
asthma patients. In addition to contributing to the features of
asthma, IL-13 increases levels of periostin, a protein which can
be measured with a blood test. In MILLY patients with high
pretreatment periostin levels experienced a greater improve-
ment in lung function with lebrikizumab than patients with low
periostin levels. The results support further investigation of
lebrikizumab as a potential personalised medicine for patients
who suffer from moderate to severe uncontrolled asthma.
Roche is developing a periostin immunoassay as a companion
diagnostic test. It will be used to support phase III studies with
lebrikizumab, which are planned to start in early 2012.
Actemra/RoActemra approved for childhood arthritis
In April the FDA approved Actemra for the treatment of active
systemic juvenile idiopathic arthritis (sJIA, also known as juve-
nile rheumatoid arthritis), a rare, debilitating form of arthritis, in
children aged two years and older. The European Commission
approved RoActemra for this indication in August. Both approv-
als are based on positive data from the phase III TENDER study,
which showed that treatment with Actemra/RoActemra can
significantly improve the signs and symptoms of sJIA. Actemra/
RoActemra can be given alone or in combination with meth-
otrexate in patients with sJIA.
41Roche Business Report 2011Research and Development |
Effective in RA when used alone. In May a two-year phase
lllb study (ACT-RAY) showed that Actemra/RoActemra is
effective when used on its own in people with RA who do not
respond to methotrexate (MTX). The results demonstrated
that Actemra/RoActemra alone had comparable clinical effi-
cacy to Actemra/RoActemra plus MTX, a disease-modifying
antirheumatic drug widely prescribed for people with RA. Up
to 40% of people given MTX do not adequately respond to
treatment or experience adverse events and require other
drugs to help control their inflammation.
Non-inferiority of new subcutaneous formulation. In July
Chugai announced positive results from a phase III trial with
a new subcutaneous formulation of Actemra in RA patients,
showing non-inferiority of efficacy of the new formulation
compared with the current intravenous formulation. Subcuta-
neous injection is more convenient for patients and healthcare
providers, as it does not require intravenous access and takes
less time to administer than the intravenous infusion. The sub-
cutaneous formulation is being developed by Chugai in Japan
and jointly by Chugai and Roche outside Japan, with filings
planned for 2012 and 2013.
Actemra (tocilizumab), known as RoActemra in Europe, is the
result of research collaboration by Chugai and Osaka Univer-
sity. It is being co-developed globally by Roche, Chugai and
Genentech. Actemra/RoActemra is the first interleukin-6 (IL-6)
receptor-inhibiting monoclonal antibody approved to treat RA.
IL-6 is an immune system protein that plays a pivotal role in the
inflammation process associated with RA and certain other
autoimmune conditions. Actemra/RoActemra is available in
the US, EU, Japan and over 90 other countries for the treat-
ment of RA, alone or in combination with methotrexate or other
disease modifying antirheumatic drugs. It is also approved in
the US and EU for the treatment of systemic juvenile idiopathic
arthritis and in Japan for the treatment of Castleman’s disease
and polyarticular and systemic juvenile idiopathic arthritis.
Lucentis filed for DME in US
In December the FDA accepted and filed Genentech’s supple-
mental biologics licence application (sBLA) for approval of
Lucentis for the treatment of diabetic macular edema (DME),
assigning an action date in August 2012. The sBLA is based
on the results of two phase III studies, RISE and RIDE, which
showed that patients who received Lucentis experienced sig-
nificant, rapid and sustained improvement in vision compared
with those who received placebo (sham) injections.
Lucentis (ranibizumab) is a vascular endothelial growth factor
(VEGF) inhibitor approved by the FDA for the treatment of
neovascular (wet) age-related macular degeneration (AMD)
and for macular edema following retinal vein occlusion (RVO).
Lucentis is designed to bind to and inhibit VEGF, a protein that
is believed to play a critical role in the formation of new blood
vessels (angiogenesis) and the hyperpermeability (leakiness)
of the vessels. In wet AMD these blood vessels grow under the
retina and leak blood and fluid, causing rapid damage to the
macula (the central portion of the retina). In RVO, angiogenesis
and hyperpermeability can lead to macular edema (swelling
and thickening of the macula). Macular degeneration and mac-
ular edema may lead to impairment or loss of vision. Lucentis
was discovered by Genentech, which retains commercial rights
in the US. Novartis has exclusive commercial rights for the rest
of the world.
Virology
Expanded portfolio of investigational
medicines for hepatitis C
The hepatitis market is evolving and, to meet the different
needs of people infected with the hepatitis C virus (HCV),
future treatment options are likely to include interferon-free, as
well as interferon-containing triple- and quadruple-combina-
tion therapy regimens. Roche has several oral, direct-acting
antiviral agents in late-stage development for hepatitis C: the
nucleoside polymerase inhibitor mericitabine (RG7128; part-
nered with Pharmasset), the protease inhibitor danoprevir
(RG7227) and, following the acquisition in late 2011 of Anadys
Pharmaceuticals, the non-nucleoside polymerase inhibitor
setrobuvir. Danoprevir (in phase II development, LIP 4 decision
made in 2011) and mericitabine (in phase II, LIP decision made
in 2010) are being investigated in combinations in interferon-
free and interferon-containing regimens. Results from phase II
trials (INFORM SVR, DAUPHINE, MATTERHORN, PROPEL
and JUMP-C) are expected in 2012. Setrobuvir is currently
being evaluated in a phase II study in combination with the cur-
rent standard of care, Roche’s pegylated interferon Pegasys
and ribavirin (Copegus). Under a strategic agreement, Roche
and Merck have initiated the first of a series of clinical trials to
examine novel combinations of marketed and investigational
medicines for chronic hepatitis C. DYNAMO 1, a phase II study
evaluating the combination of mericitabine, Merck’s Victrelis,
Pegasys and Copegus in patients who have not responded to
prior therapy, began in late 2011.
4 Lifecycle Investment Point: decision to commence late-stage development leading to submission of marketing applications.
42 Roche Business Report 2011 | Research and Development
Metabolism, cardiovascular diseases
Roche has ten compounds in development for metabolic and
cardiovascular diseases. Two promising compounds with
novel modes of action are dalcetrapib for the treatment of
coronary heart disease, atherosclerosis and dyslipidemia, and
aleglitazar for reduction of the risk of heart attack and stroke
in patients with type 2 diabetes.
Dalcetrapib development update
In August Roche announced the results of two exploratory
phase IIb studies investigating the effects of dalcetrapib
on atherosclerotic disease progression (dal-PLAQUE) and
vascu lar function (dal-VESSEL) in patients with or at risk of
coronary heart disease. The studies, which were presented at
a major European medical conference, further support the
compound’s safety profile and potential for slowing athero-
sclerotic plaque progression.
Dalcetrapib (RG1658, JTT-705; licensed from Japan Tobacco)
is a novel cholesteryl ester transfer protein (CETP) modulator
that has been shown to raise levels of ‘good’ functional high-
density lipoprotein cholesterol (HDL-C), potentially promoting
removal of cholesterol from the blood vessels. The ongoing
phase III dal-OUTCOMES study, involving over 15,800 patients,
is investigating whether dalcetrapib reduces the risk of heart
attack and stroke in patients who have experienced a recent
acute coronary syndrome.
Pharmaceuticals Division — major regulatory approvals in 2011
Product Clinical data supporting filing Indication or dosage form Country
Avastin RIBBON 1 metastatic breast cancer, combination with Xeloda EU
Avastin international phase III data,
Japanese phase II data
inoperable or recurrent breast cancer, first-line treatment Japan
Avastin ICON-7, GOG 218 metastatic ovarian cancer, following surgery EU
Actemra/
RoActemra
LITHE (2-year data) rheumatoid arthritis, reduction or inhibition of progression of
joint damage and improvement of physical function
USA
TENDER systemic onset juvenile idiopathic arthritis USA, EU,
Switzerland
Herceptin ToGA advanced HER2-positive stomach cancer in patients who are
not candidates for curative surgery
Japan
Herceptin NOAH (Japan: NOAH and data
in the public domain)
HER2-positive breast cancer, neoadjuvant and/or adjuvant
treatment
Japan, EU
MabThera/
Rituxan
PRIMA advanced follicular lymphoma, first-line maintenance
following induction treatment with Rituxan/MabThera
plus chemotherapy
USA
RAVE Wegener’s granulomatosis, microscopic polyangiitis
(severe forms of ANCA-associated vasculitis)
USA
Pegasys Japanese phase II/III data chronic hepatitis B Japan
4 clinical studies Pegasys pre-filled pen, Pegasys ProClick Auto-Injector EU, USA,
Switzerland
Tarceva SATURN non-small cell lung cancer, first-line maintenance after
chemotherapy
China
EURTAC, published clinical
experience
metastatic non-small cell lung cancer with epidermal growth
factor receptor-activating mutations, first-line treatment
EU
PA 3, Japanese phase II data pancreatic cancer not amenable to curative resection,
combination with gemcitabine
Japan
Xeloda data in the public domain advanced or recurrent stomach cancer in patients who are
not candidates for curative surgery
Japan
XELOXA adjuvant colon cancer, combination with oxaliplatin Switzerland
Zelboraf BRIM2, BRIM3 BRAF-mutated inoperable or metastatic melanoma USA, Switzer-
land, Brazil
43Roche Business Report 2011Research and Development |
Aleglitazar development update
More than 60% of patients with type 2 diabetes (T2D) die from
heart disease and stroke, not from an inability to control blood
glucose. Aleglitazar (RG1439) is an oral medicine with the
potential to be the first therapy to specifically reduce cardio-
vascular risk in people with T2D. A global phase III programme
(ALECARDIO), which started in 2010, is investigating whether
aleglitazar can reduce cardiovascular morbidity and mortality
in patients with T2D who have suffered a recent acute coro-
nary syndrome event. In addition, in 2011 enrolment was com-
pleted for a phase II study (AleNEPHRO) which is evaluating
the benefits of aleglitazar in people with T2D and mild to mod-
erate renal (kidney) impairment.
Aleglitazar represents a new approach to reducing cardiovas-
cular risk in people with T2D, as it activates two key proteins
that regulate metabolic signalling in pathways that are com-
promised in T2D: peroxisome proliferator-activated receptors
alfa and gamma (PPARα and PPARγ). PPARα activation is
thought to increase fat combustion, lower triglycerides and
increase HDL-C (‘good’ cholesterol), potentially slowing the
advance of atherosclerosis. Activation of PPARγ improves glu-
cose metabolism and combats insulin resistance.
Neuroscience
Roche’s pharmaceuticals pipeline includes ten novel com-
pounds in development for central nervous system disorders
representing high unmet medical need. The most advanced of
these are investigational medicines in phase III clinical testing
for schizophrenia and multiple sclerosis. In addition, we have
several compounds in earlier stages of development as poten-
tial treatments for Alzheimer’s disease.
Bitopertin development update
Bitopertin (RG1678, formerly known as GlyT-1) is a glycine
reuptake inhibitor that is being co-developed globally with
Chugai. A phase III programme was initiated in late 2010, with
three trials investigating bitopertin in combination with anti-
psychotics in the treatment of negative symptoms of schizo-
phrenia and another three trials in patients with suboptimally
controlled positive symptoms of schizophrenia. A phase II
proof-of-concept study with bitopertin as monotherapy in
patients with acute exacerbations of schizophrenia began in
the first quarter of 2011. As the first in a new class of medicines,
bitopertin has the potential to become the first compound of
its type for the treatment of negative symptoms of schizophre-
nia. In addition, bitopertin in combination with current treat-
ments has the potential to treat suboptimally controlled posi-
Pharmaceuticals Division — major regulatory filings in 2011
Product Clinical data supporting filing Indication or dosage form Country
Avastin ICON-7, GOG 218 metastatic ovarian cancer Switzerland
OCEANS (AVF4095) ovarian cancer, relapsed EU
Herceptin NOAH (Japan: NOAH and data
in the public domain)
HER2-positive breast cancer, neoadjuvant and/or adjuvant
treatment
EU, Switzer-
land, Japan
Lucentis RISE, RIDE diabetic macular edema US
MabThera/
Rituxan
RAVE anti-neutrophil cytoplasm antibody (ANCA)-associated
vasculitis
Switzerland
RATE faster (90 minute) infusion schedule of Rituxan in combination
with chemotherapy for treatment of NHL
USA
RoActemra TENDER systemic onset juvenile idiopathic arthritis Switzerland
Tarceva EURTAC metastatic non-small cell lung cancer with epidermal growth
factor receptor-activating mutations, first-line treatment
Switzerland
Pegasys Japanese phase II/III data chronic hepatitis B Japan
pertuzumab CLEOPATRA HER2-positive metastatic breast cancer EU, USA
vismodegib ERIVANCE BCC (SHH4476G) adult patients with advanced basal cell carcinoma for whom
surgery is considered inappropriate
USA, EU
Zelboraf BRIM2, BRIM3 BRAF-mutated inoperable or metastatic melanoma EU, USA,
Switzerland,
Australia, NZ,
Brazil
44 Roche Business Report 2011 | Research and Development
tive symptoms, with little or no increase in side effects. Its novel
mode of action could also have valuable therapeutic applica-
tions in other psychiatric disorders.
Ocrelizumab maintains reduction of MS activity
up to 96 weeks
Ocrelizumab (RG1594) is an investigational, humanised mono-
clonal antibody designed to selectively target CD20-positive
B cells, which are believed to play a critical role in multiple
sclerosis (MS). The ocrelizumab phase III clinical programme
consists of two studies (Opera I and II) in patients with relaps-
ing-remitting multiple sclerosis (RRMS) and one (Oratorio) in
patients with primary-progressive multiple sclerosis (PPMS).
The programme was initiated in 2011 and is now enrolling
patients into all three trials. Results from a phase II study of
ocrelizumab in patients with RRMS, the most common clinical
form of the disease, were presented at a major medical confer-
ence in October. The study showed that the significant reduc-
tion in disease activity previously reported for 24 weeks was
maintained through 96 weeks of treatment. RRMS is charac-
terised by infrequent, acute exacerbations, with full or partial
recovery between attacks. There is no approved therapy to
treat PPMS, a much rarer form of the disease, which affects
about 10% of those with MS.
Differential targeting of amyloid in Alzheimer’s disease
Current research into Alzheimer’s disease (AD) suggests that
accumulation of amyloid beta (A-beta) peptides in the brain is
a hallmark of the disease and the main cause of loss of memory
in AD patients. We are currently developing two monoclonal
antibodies that are designed to bind to A-beta. Both are in
phase II clinical testing and represent two different approaches
to reducing amyloid burden in the brain.
Gantenerumab (RG1450), a fully human antibody originating
from a research collaboration with MorphoSys, binds and neu-
tralises disease-relevant aggregated forms of A-beta: those
that accumulate as plaques in the brain and those which inter-
fere with brain-cell functioning. A phase I study using positron
emission tomography (PET) imaging demonstrated that treat-
ment with gantenerumab resulted in reduction of brain amy-
loid, possibly through an immunological clearance mechanism
involving glial cells. An ongoing phase II trial, SCarlet RoAD, is
designed to identify patients with early (prodromal) AD and
treat them before more substantial damage to the brain has
occurred.
RG7412, a humanised antibody licensed from AC Immune,
binds to all forms of A-beta, including plaques, in the brain. Two
phase II studies began in 2011, evaluating treatment with
RG7412 in patients with mild to moderate AD: ABBY, a cogni-
tion study designed to detect a reduction in cognitive decline
to provide proof of clinical activity; and BLAZE, a biomarker
imaging study designed to measure changes in brain amyloid
plaque load using PET.
Diagnostics for better treatment decisions
In 2011 Roche invested 900 million Swiss francs in developing
novel diagnostic tests and platforms designed to provide bet-
ter information for treatment decisions and drive efficiency in
clinical laboratories and research centres.
Product launches in 2011
Our R & D efforts resulted in 50 tests and 13 new or upgraded
instruments and devices being introduced in key markets (see
table on page 45). The most important approvals and launches,
helping to broaden and differentiate our offering, are summa-
rised below.
Screening for cervical cancer
In April the US Food and Drug Administration approved the
cobas HPV test for identifying women at the highest risk for
cervical cancer. This is the only FDA-approved test that iden-
tifies 14 human papillomavirus (HPV) genotypes, twelve as a
pooled result, and genotypes 16 and 18 individually, which are
responsible for more than 70% of cervical cancers. It thereby
helps detect disease missed by current screening methods, as
shown by the ATHENA study, one of the largest-ever diagnos-
tics registration trials. The cobas HPV test is currently being
piloted in Sweden for primary cervical cancer screening.
Personalising cancer treatment
In the second half of 2011 CE Marks 5 were obtained for three
automated molecular tests that assist in tailoring treatment for
melanoma, colorectal and lung cancer patients:•The cobas BRAF test is a companion diagnostic for our
melanoma medicine Zelboraf; it was also approved by the
FDA in August (see page 34). •The cobas EGFR test identifies patients with non-small cell
lung cancer who might be eligible for first-line treatment with
epidermal growth factor receptor (EGFR) inhibitors such as
Tarceva.
5 Certification that an in vitro diagnostic product complies with all requirements for use in the European Union.
45Roche Business Report 2011Research and Development |
Diagnostics Division — major product launches in 2011
Area Product name Description Market Timeline
Instruments/devices
Laboratories cobas c 702 clinical chemistry module for high-volume laboratories EU, US Q1, 3
OptiView detection system for BenchMark tissue staining instruments EU, US Q2
Ultimate Reagent
Access
upgrade to BenchMark ULTRA tissue stainer for expedited
slide processing
WW Q2, 3
iScan Coreo scanner that enables digital viewing of tissue slides EU Q2
Diabetes Accu-Chek Mobile next-generation strip-free blood glucose meter EU, AP Q4
Care Accu-Chek FastClix one-click lancing device supporting blood glucose monitoring EU Q1
Life sciences LightCycler Nano desktop unit for real-time PCR analysis WW Q2
GS FLX+ System upgraded sequencing instrument and kit WW Q2
SeqCap EZ Choice,
SeqCap EZ Exome v3
microarrays for sequence capture WW Q1, 4
4.2M CGH,
2.1M CGH/SNP
microarrays for high-resolution analysis of genomic variations WW Q4
Cedex Bio bioprocess analyser for biotherapeutics manufacturing WW Q3
Tests/assays
Oncology HE4 immunoassay for early ovarian cancer detection EU Q1
HPV PCR test for cervical cancer screening US Q2
BRAF PCR test, identifies patients eligible for treatment with Zelboraf EU, US Q3
KRAS PCR test, supports therapy selection for colorectal cancer EU Q3
EGFR PCR test, supports therapy selection for lung cancer EU Q4
HER2 Dual ISH tissue test, supports diagnosis of HER2-positive breast cancer US Q2
29 IHC Primary
Antibodies
for IHC tissue testing including BCL2 (lymphomas), ERG
(prostate cancer), H. pylori (precursor of gastritis and ulcers),
MLH1 (colorectal cancer) and PR (breast cancer)
WW Q1–4
HER2 (4B5) Algorithm analytical imaging software, supports HER2 diagnostics US Q4
Virology/ HBsAg quant immunoassay for hepatitis B therapy monitoring EU Q1
Infectious
diseases
CMV Avidity,
Toxo IgG Avidity
immunoassays, help distinguish primary and non-primary
cytomegalovirus infections in pregnancy
EU Q1, 4
MPX 2.0 PCR blood screening test, detects HIV, HCV and HBV EU Q2
DPX PCR test, detects parvovirus B19 and HAV in human plasma US Q1
CMV PCR test to monitor cytomegalovirus infections EU Q1
HIV-1 2.0 PCR dual test, detects two HIV subtypes EU Q2
HCV 2.0 PCR test to measure hepatitis C viral load US Q1
HCV 2.0 (qual. and quant.) PCR tests to detect active HCV infections and measure viral load EU Q4
HLA-B 5701 PCR test to screen HIV patients for hypersensitivity to abacavir EU Q4
Metabolism Vitamin D total immunoassay, measures vitamins D2 and D3 EU Q2
hGH immunoassay, supports diagnosis of human growth hormone
disorders
EU, US Q1, 2
PTH (1–84) immunoassay to monitor patients with chronic kidney disease EU Q3
Maltose-independent
test strip chemistries
for the Accu-Chek Aviva blood glucose meter US,
Japan
Q3
GS GType HLA Primer
Sets
gene sequencing primer sets for research on the immune
system
WW Q1
black type = new product/first market launch, grey type = new product/launch in additional markets.AP = Asia—Pacific; EU = European Union; US = United States; WW = worldwide.
BCL2 = B-cell lymphoma 2 gene; BRAF = B-isoform of the rapidly growing fibrosarcoma oncogene; CGH = comparative genomic hybridisation; EGFR = epidermal growth factor receptor; ERG = ETS (E-twenty-six)-related gene; GS = Genome Sequencer; HAV = hepatitis A virus; HBV = hepatitis B virus; HBsAg = hepatitis B surface antigen; HCV = hepatitis C virus; HE4 = human epididymis secretory protein E4; HER2 = human epidermal growth receptor 2; HIV = human immunodeficiency virus; HLA = human leucocyte antigen; HPV = human papillomavirus; IHC = immunohistochemistry; ISH = in situ hybridi-sation; KRAS = member of the Ras family of oncogenes; MLH1= MutL Homolog 1 gene; PCR = polymerase chain reaction; PR = progesterone receptor; PTH = parathyroid hormone; SNP = single nucleotide polymorphism; Toxo IgG = toxoplasma-specific immunoglobulin G antibodies.
46 Roche Business Report 2011 | Research and Development
•The cobas KRAS test identifies mutations in the KRAS gene
that occur in 35% to 45% of colorectal cancers and are
predictive of non-response to anti-EGFR antibody therapies
such as cetuximab and panitumumab.
All three assays run on the cobas 4800 platform and offer
unmatched levels of sensitivity.
In June the FDA approved our Inform HER2 Dual ISH test,
which helps to verify whether a patient with breast cancer is
likely to respond to therapy with Herceptin. As the first fully
automated tissue-based assay able to detect both the HER2
gene and a central part of chromosome 17 on a single tissue
slide, the test allows pathologists to easily identify variations in
gene expression throughout the tumour, increasing the accu-
racy of diagnosis. The test can be combined with our HER2
(4B5) IHC test and Companion Algorithm HER2 (4B5) analyt-
ical imaging software, making Roche the only company offer-
ing a complete HER2 diagnostic workflow solution for labora-
tories.
Improved monitoring of hepatitis B therapy
In February our quantitative HBsAg immunoassay for hepatitis
B monitoring received CE Mark certification. The test uses our
Elecsys technology to measure levels of hepatitis B virus sur-
face antigen in serum or plasma. This enables doctors to
assess sustained treatment success with Pegasys or other
interferon-based medicines, helping them to tailor therapy to
individual needs.
Making blood glucose monitoring safer and easier
In September our maltose-independent test strips for the
Accu-Chek Aviva blood glucose meter received clearance by
the US FDA. The new strips do not cross-react with maltose
and hence offer increased safety; maltose interference can on
rare occasions result in falsely elevated blood sugar readings.
Their clearance paves the way for the launch of our new
Accu-Chek portfolio in the US. In November we started the roll-
out of our next-generation Accu-Chek Mobile with launches in
Australia and the Netherlands. Smaller than its predecessor,
the blood glucose meter provides 50 tests on a continuous
tape, eliminating the handling of single test strips.
Broadening laboratory offering
We expanded our cobas series of fully automated modular ana-
lysers for central laboratories with the launch of the cobas
c 702 clinical chemistry module in the US and the EU. Capable
of performing up to 2,000 tests per hour, the module’s inno-
vative reagent manager provides uninterrupted workflow for
high-volume testing. Following the launch of seven immuno-
assays, including a Vitamin D total test, the Elecsys test menu
for cobas analysers now stands at 95, making it the broadest
immunoassay menu available on a single platform.
Bringing PCR analysis to more researchers
In June Roche launched LightCycler Nano, a compact and
affordable desktop unit for real-time polymerase chain reac-
tion (PCR) analysis for genotyping, gene expression studies
and other applications. The Nano complements the larger
instruments in our LightCycler series, putting real-time PCR
capabilities within reach of many more researchers around the
world.
Ongoing R & D priorities
Roche Diagnostics maintained its significant R & D investments
in 2011, developing technologies and products for launch in
the coming years. Efforts are focused on the five areas high-
lighted below:
Novel biomarkers
In 2011 we continued to engage in biomarker research with our
pharmaceutical partners, drawing on our breadth of technolo-
gies for protein, genetic and tissue-based testing. The primary
focus was on oncology, virology, inflammatory, cardiovascular
and metabolic diseases. Roche Diagnostics collaborated with
Roche Pharmaceuticals on more than 200 projects, including
those addressing Met expression and periostin levels (see
pages 37, 40), and with more than 20 other pharmaceutical
partners on companion diagnostics.
Laboratory coagulation testing
We made significant investments in novel solutions for testing
of patients’ blood coagulation and hemostatic factors. In 2012
we plan to introduce a new instrument for mid- and high-
throughput testing in laboratories together with a comprehen-
sive assay menu, complementing our leading portable coagu-
lation testing systems for use at home and in doctors’ offices.
Our acquisition of Verum Diagnostica, a leader in platelet
function testing, will further strengthen Roche’s coagulation
portfolio.
All-in-one diabetes care systems
Our development pipeline emphasises integrated solutions
that facilitate personalised diabetes management and reduce
the number of devices and steps needed to monitor blood glu-
cose and deliver insulin. The SOLO micropump, for instance,
features a semi-disposable insulin pump patch and remote
control that allow the micropump to continuously deliver insu-
lin based on the patient’s needs. It is scheduled for launch
in the EU in 2012. In addition, a development and distribution
47Roche Business Report 2011Research and Development |
agreement reached with DexCom in November 2011 will en-
able Roche to integrate DexCom’s leading continuous glucose
sensing technologies into future insulin delivery systems.
High-volume DNA testing
We are developing platforms that we expect will be the first
to combine molecular tests for women’s health, virology and
blood screening. The platforms will bring greater automation,
throughput and cost efficiency to molecular diagnostics
and blood-screening laboratories, simplifying workflows and
reducing equipment and complexity. Development is sched-
uled to continue through 2012.
Next-generation sequencing
In 2011 we remained focused on developing faster, more effi-
cient sequencing systems to enable even broader study of the
human genome and genetic causes of disease. We maintained
an exclusive partnership with DNA Electronics for the devel-
opment of an electrochemical DNA sequencer and a collabo-
ration with IBM to develop a nanopore-based single molecule
sequencer. In October Roche licensed several technologies
from Arizona State University and Columbia University, to
directly read the sequence of nucleic acids in a single DNA
molecule as it passes through a nanopore. These technologies
will help advance the development project with IBM.
Accessing external innovation
Access to external innovation through targeted acquisitions,
licensing agreements to exchange intellectual property and
academic alliances are a significant means of strengthening
and expanding our global innovation network. Through col-
laboration agreements Roche explores ideas with some of the
Diagnostics Division — key product launches planned for 2012
Area Product name Description Market
Instruments/devices
Laboratories cobas t 611 coagulation analyser for mid- and high-throughput testing EU
BenchMark Special Stains fully automated tissue stainer WW
VENTANA iScan HT high-throughput scanner that enables digital viewing of tissue slides WW
Point–of- cobas b 101 multi-blood lipid and glucose point-of-care analyser EU
care cobas b 123 * blood gas analyser for critical care US
Diabetes
Care
Accu-Chek Nano
SmartView *
small blood glucose meter requiring no coding of test strips US
Accu-Chek Mobile next-generation strip-free blood glucose meter EU
Accu-Chek Combo* insulin pump with remote control and blood glucose meter US
SOLO Micropump insulin micropump with remote control and blood glucose meter EU
Tests/assays
Oncology HE4 immunoassay for early ovarian cancer detection US
p16 Histology IHC tissue test for cervical cancer early detection EU, US
ER * IHC tissue test for diagnosis of breast cancer US
GS GType TET2/CBL/
KRAS & RUNX1 Primer
Sets
gene sequencing primer sets for leukemia research WW
Virology/ CMV PCR test to monitor cytomegalovirus infections US
Infectious
diseases
CT/NG PCR test to detect chlamydia and gonorrhoea infections US
Metabolism Vitamin D total immunoassay, measures vitamins D2 and D3 US
black type = new product/first market launch, grey type = new product/launch in additional markets.EU = European Union; US = United States; WW = worldwide.
* These products were initially scheduled for launch in 2011; they have been filed with the FDA and will be launched as soon as they are approved.
CBL = Casitas B-cell lymphoma gene; CT/NG = Chlamydia trachomatis/Neisseria gonorrhoeae; ER = estrogen receptor; GS = Genome Sequencer; HE4 = human epididymis secretory protein E4; IHC = immunohistochemistry; KRAS = member of the Ras family of oncogenes; p16 = protein p16INK4a; PCR = polymerase chain reaction; RUNX1 = Runt-related transcription factor 1; TET2 = member of the TET family of oncogenes.
48 Roche Business Report 2011 | Research and Development
world’s leading scientists for translating science into clinically
differentiated medications and novel diagnostics. In a recent
survey by The Boston Consulting Group that measured the
partnering functions of the major pharmaceutical companies,
biotech companies ranked Roche as one of the best compa-
nies with which to partner. We had the highest average score
across all attributes, with particular strengths in deal structure
flexibility, executive leadership, alliance management and man-
ufacturing expertise. We also had the most nominations as ‘top
partner’ by survey respondents.
Acquisitions and licensing agreements
Roche Partnering signed 67 new agreements in 2011, includ-
ing three product transactions covering four products in total
and 53 research and technology collaborations. In addition,
11 product outlicensing agreements were signed. A special
team was created to source ‘open innovation’ by collaborating
at the earliest stages with academic institutions and other
external partners to establish product development partner-
ships. Among the team’s main transactions in 2011 was the
collaboration between PTC Therapeutics and the SMA Foun-
dation, giving Roche access to a first-in-class treatment for
spinal muscular atrophy, a devastating disease effecting chil-
dren and adolescents and the leading genetic cause of mortal-
ity in infants and toddlers. The acquisition of Anadys Pharma-
ceuticals brought setrobuvir into the Roche virology pipeline.
The US-based company is also developing ANA773, an oral,
small-molecule inducer of innate immunity, currenly in phase I
clinical trials, that may prove useful for treating HCV and other
chronic infections and cancer. In addition, Roche entered into
an agreement with Evotec AG of Germany to co-develop and
commercialise EVT-302, a compound that may slow the pro-
gression of Alzheimer’s disease.
Genentech Partnering completed three product transactions
and signed six new research and technology collaborations in
2011. These agreements support the work of gRED and include
an in-licensing agreement, with an option to purchase, with
US-based Forma Therapeutics covering a new cancer target.
The agreement was nominated for Alliance of the Year by IN
VIVO, a leading healthcare industry information provider. An
in-licensing agreement with US-based Array Biopharma adds
a second compound for an important cancer target, a ChK1
inhibitor, to gRED’s development portfolio.
Roche Diagnostics signed more than 40 licensing agree-
ments in 2011, as well as acquiring PVT Probenverteiltechnik
(Germany)/PVT Lab Systems (US), mtm laboratories (Ger-
many) and, in early 2012, Verum Diagnostica (Germany). PVT
is a global market leader in providing customised automation
and workflow solutions for in vitro diagnostic (IVD) testing in
large commercial and hospital laboratories. mtm is a tissue
diagnostics company with a leading portfolio of IVDs for early
detection and diagnosis of cervical cancer. Verum Diagnostica
is specialised in laboratory coagulation testing. The division
also entered into a number of new research and technology
collaborations, including the development of PCR biomarker
tests (Merck and Clovis), tissue-based companion diagnostics
(Bayer and Pfizer), and automated target enrichment for bio-
medical research (Caliper).
Academic alliances
Roche’s innovation network expanded further during the year
thanks to new collaborations with academic institutions around
the world. pRED has developed an academic network with 130
partners in 76 academic institutions and 15 nations in the
Americas, Asia and Europe. In 2011 we added several leading
academic institutions to our Expanding the Innovation Network
programme, which has now 11 umbrella agreements, including
with the Hebrew University in Jerusalem and the Harvard Uni-
versity. Four new agreements are pending in Europe, the US
and China. The collaborations have already produced tangible
results, with two projects brought in-house and joint intellec-
tual property created. In 2011 Roche formed a strategic part-
nership with the Cancer Prevention and Research Institute of
Texas, a cooperation with the Swedish life science initiative
Uppsala BIO, and a three-way research agreement with Har-
vard University and the Chinese biotechnology organisation
Biobay.
Since its inception in 2010, pRED has established translational
R & D hubs with academic institutions through its academic
alliances group. Operating in France, the US, Canada, Switzer-
land, the Netherlands and Singapore, these hubs had more
than 80 programmes and projects under way at year-end. In
2011 pRED opened an R & D institute in France that serves as a
single entry point for academic collaborations across multiple
disease areas and scientific disciplines. Similarly, a transla-
tional research hub opened in Zurich will foster collaborations
between Roche Pharmaceuticals and Roche Diagnostics
and academic researchers from the Swiss Federal Institute
of Technology (ETH), the University of Zurich and University
Hospital Zurich.
49Roche Business Report 2011Research and Development |
Conducting responsible R & D
Safe and transparent clinical trials
Clinical trials determine the safety and efficacy of new medi-
cines and the clinical value of diagnostic tests. They also pro-
vide critical information on the cost-effectiveness of a treat-
ment or diagnostic test and how a treatment improves quality
of life. This information is shared with regulatory authorities
and payers in order to gain marketing approval and, ultimately,
reimbursement. In 2011 more than 330,000 patients received
state-of-the-art care and free treatment as participants in
Roche-sponsored clinical trials. In addition, more than 35,000
participating medical centres received educational, financial
and medical support.
Clinical trials
2011 2010 2009
Number of clinical trials 2,174 2,173 2,182
Number of healthcare
centres involved 35,849 34,636 34,508
Number of patients in
phase I–IV clinical trials* 332,183 277,079 268,614
* Numbers do not include patients in Genentech studies initiated prior to the merger.
Roche follows strict policies and processes to ensure the
safety, well-being and legal rights of people participating in
clinical trials, including the International Conference on Har-
monisation — Good Clinical Practice (ICH-GCP) guidelines. To
ensure compliance with these standards, we train, monitor and
audit those involved in our clinical trials, including contract
research organisations (CROs) that conduct or manage trials
on our behalf. We do not perform trials in countries where we
do not plan to market the medicine being tested.
We maintain a searchable database of clinical trials at www.
clinicaltrials.gov and www.roche-trials.com. Details of Roche
clinical trials are also available through the International Fed-
eration of Pharmaceutical Manufacturers and Associations
clinical trials portal and the US National Institutes of Health
global registry.
Roche further ensures sharing of clinical data by encouraging
its scientists to publish results of their work in medical journals
and to present them at scientific and medical congresses. In
2011 Roche scientist contributed 1025 scientific publications,
including articles that appeared in high-impact journals such as
Nature, Cell, Science or the New England Journal of Medicine.
Ethical practices
We have clear policies and procedures in place to maintain
high ethical standards in our R & D activities, including provid-
ing regular ethics training for employees.
Employees who encounter an ethical dilemma in their work,
and cannot resolve it with their colleagues, can contact our
Global Ethics Liaison Office, which then consults both internal
and external experts to seek a solution. In 2011 this office
received and resolved no enquiries.
The company has established the Roche Scientific and Ethics
Advisory Group (SEAG) to offer advice and counsel on a broad
range of ethical matters. The panel meets annually and is made
up of independent external experts appointed by Roche from
the fields of genetics, bioethics, law and sociology, as well as
lay members, such as representatives from patient advocacy
groups. In 2011 SEAG provided valuable input into Roche’s
new pre-approval access policy. The policy provides a global
approach to enabling access to medicines, prior to commercial
approval, for patients who have life-threatening diseases but
are unable to participate in clinical trials. SEAG also advised
on the development of principles for conducting stem cell
research at Roche.
Bioethics
Roche integrates ethical practices into its scientific research
through responsible, accountable and transparent approaches
to the development of diagnostics and therapeutics. The com-
pany has published several position papers on its R & D activi-
ties in areas such as genetics, stem cells and animal research.
We routinely review and update these positions and our poli-
cies for research involving either humans or animals, taking
into account scientific developments and public concerns.
The Roche Charter on Genetics ensures excellence and social
responsibility in our genetic research. We believe in the right of
every individual to self-determination, privacy and confidenti-
ality regarding the collection and use of genetic information.
Roche will not pursue the creation of genetically identical
human beings.
Stem cells and their application in drug research offer tremen-
dous potential to establish disease models to help identify
potential novel targets and screen compounds. Roche con-
ducts stem cell research in-house and through external col-
laborations as a means of improving drug development while
reducing animal testing and potential serious adverse events in
50 Roche Business Report 2011 | Research and Development50 Roche Business Report 2011 | Roche Personalised Healthcare
How Personalised Healthcare works
On average, only about five out of ten patients who receive a given therapy actually benefit from it, while some
may experience side effects.
Thanks to advances in new research disciplines, scientists now have a better understanding of disease at the
molecular level. As a result, they are able to distinguish patient subgroups in which different causes drive
what has traditionally been regarded as a single disease. In oncology, this has led to efforts to identify genetic
characteristics affecting patients’ responses to particular therapies.
Identifying clinically significant patient subgroups is a key element of our Personalised Healthcare strategy, which marries new diagnostic techniques with advances in biotechnology in an effort to develop more targeted, more efficient therapies.
This strategy is being systematically implemented at every stage of new product development at Roche and is aimed at helping us• better understand disease diversity • identify differences between patients• identify the best drug targets• improve the quality and efficiency of our R & D efforts• develop biomarkers and diagnostic tests
Roche Personalised Healthcare
00_06_Roche_AR11_Boxed features_ENG.indd 50 27.01.2012 12:05:57
51Roche Business Report 2011Research and Development |
clinical trials. Our goal is to establish treatment strategies
for incurable or inadequately treated severe diseases, such as
central nervous system, cardiovascular and metabolic disor-
ders, and viral diseases. Roche is also exploring the potential
therapeutic use of stem cells for incurable or inadequately
treated severe diseases.
Animal welfare
Roche has a long-standing commitment to maintaining high
standards of animal welfare, and we take public concern about
animal research seriously. Wherever possible, we seek alterna-
tives to the use of animals, such as computer simulation or in
vitro testing using differentiated cells or stem cells rather than
animals.
Even so, animal research remains indispensable to biomedical
research for scientific and legal reasons. Regulatory authori-
ties require all healthcare companies to test the safety and
efficacy of new drugs in animals before they can be used in
humans. Roche is committed to acting ethically and to applying
the highest standards of care to animals used in scientific pro-
cedures, including conforming to all laws, regulations and
industry standards.
In 2011 we used 469,004 animals in our research, an 6.6%
decrease from 2010. The number of animals used by CROs
performing research on our behalf increased to 68,606 com-
pared with 55,913 in 2010. Approximately 98% of the animals
used were mice and rats.
Animals used in research
We aspire to use as few animals as possible without putting at
risk the reliability and validity of research and test results by
following a 3Rs approach: •Reduce: the number of animals needed •Refine: by tailoring procedures to minimise pain and discom-
fort •Replace: with other methods that do not involve animals or
use only cells or tissues of animals
In 2011, the Roche Ethics Committee on Animal Welfare spon-
sored the third Roche 3Rs Award, which recognises employ-
ees and contractors for their commitment to the 3Rs approach
and for improving animal welfare in three categories: labora-
tory animal care and management; scientific progress; and
surgery, methodology, training and techniques. Award-win-
ning projects included the development of a computer-aided
prediction tool that can be used to avoid toxicological effects
and reduce the number of animal experiments, and a project
that enables researchers to produce human antibodies with-
out first having to immunise laboratory animals.
Roche is a signatory to the Swiss Charter on Animal Welfare
that was adopted in 2010 by Interpharma, the association of
research-based pharmaceutical companies in Switzerland.
The charter commits us to consistently high standards of ani-
mal welfare through a programme of auditing, employee train-
ing, stakeholder dialogue, promotion of the 3Rs approach and
management of external contractors.
More on the web
• Roche’s Pharmaceuticals and Diagnostics Pipelines: www.roche.com/pipeline
• Personalised healthcare: www.roche.com/personalised_healthcare• Group policies, positions and guidelines: www.roche.com/
policies_guidelines_and_positions• Clinical trials and patient safety: www.roche.com/clinical_trials;
www.roche.com/managing_medication_safety• New products and technologies: www.roche.com/
innovation_and_technologies• Ethical standards: www.roche.com/ethical_standards• Genetics and bioethics: www.roche.com/genetics_and_bioethics• Animal welfare: www.roche.com/animal_welfare
Animals used in research (Roche and contract research
organisations) in 2011
97.8% mice and rats
0.7% other rodents and rabbits
0.3% dogs
0.5% primates
0.8% other
52 Roche Business Report 2011
manufacturing sites
53Roche Business Report 2011
MANUFACTURING AND PROCUREMENTReliable. We maintained a steady supply of more than 120 medicines, 2,600 tests
and 140 instruments to patients and health professionals around the world.
Agile. We supported 100 development projects for new medicines and supplied
around 600 global clinical trials with study medication.
Eco-friendly. We reduced CO2 emissions by up to 85% in logistics pilot
projects by switching to alternative modes of transportation such as road and
sea ferry instead of air.
manufacturing sites
54 Roche Business Report 2011 | Manufacturing and Procurement
Our Pharmaceuticals and Diagnostics Divisions operate global
manufacturing and supply networks that play a vital role at
every stage of the product lifecycle starting with early product
development and manufacturing process design. Both divi-
sions work towards a common aim: deliver high-quality prod-
ucts and meet all quality and compliance requirements with
optimal financial performance. Regardless of where in the world
a Roche product is made, we apply the same set of rigorous
safety, quality, ethical, labour, health and environmental stan-
dards. With Roche’s business based on innovation, we con-
tinuously build and adapt our networks and optimise perfor-
mance to best serve our product pipelines and respond to new
market opportunities and changes in quality and regulatory
requirements.
Our procurement teams create sustainable value by ensuring
the efficient acquisition and delivery of goods and services in
accordance with our quality and compliance standards. The
teams support our business units in achieving their goals and
capturing savings that can be reinvested in the business.
Key figures
28
2,600over 12014,786
instruments140Employees
Portfolio
in manufacturing and logistics
medicines
Manufacturing sites 17 Pharmaceuticals, 9 Diagnostics and 2 joint sites
tests
Manufacturing
Pharmaceuticals
Our network. Our pharmaceutical manufacturing network
comprises 19 sites in Europe, the Americas and Asia, including
three Chugai sites in Japan. The employees at these facilities
make over 120 different medicines for commercial supply and
clinical trials. We synchronise supply with demand, from global
production planning to final delivery of medicines to our cus-
tomers. We synthesise some drug substances (small mole-
cules) chemically, while others (biologics) are produced by
sophisticated biotechnological processes that employ living
organisms. We then transform the drug substances into sterile
drug products such as vials and prefilled syringes and solid
dosage products like tablets and capsules. We dual-register
some sites, which enables us to produce key pharmaceutical
products at more than one site, thereby reducing the risk
of supply interruptions and better balancing production
capacity.
Contract manufacturing organisations (CMOs) complement
our own manufacturing capabilities and help us transition drug
candidates through our pipeline quickly and efficiently. We
outsource various phases of drug production to CMOs to
create capacity, access specialised capabilities and optimise
operating costs. At Roche, a dedicated team manages all
aspects of our relationships with CMOs, assuring product
quality, sustainability and operational and financial perfor-
mance. As part of Roche’s emerging markets strategy, we
work with governments and other partners to strengthen and
expand local manufacturing capabilities in order to improve
access to healthcare (see Access in emerging countries on
pages 65 and 68).
Roche is a global leader in biopharmaceutical production, with
approximately 25% of global biologic production capacity and
Manufacturing and Procurement
per 31 December 2011
Leganés
Florence
Vacaville
Hillsboro
South San Francisco
Oceanside Tucson
Rio de Janeiro
Toluca
Singapore
Shanghai UkimaUtsunomiya
Segrate
Rotkreuz
BaselKaiseraugst Penzberg
BranchburgBranford
Clarecastle
Reykjavik
GrazBurgdorf
Indianapolis
Puerto Rico
Fujieda
Pharma
Diagnostics
Mannheim
Biologics drug substances
Sterile drug products
Solid dosagedrug products
InstrumentsAssays/reagents Diabetes Care
Small molecules drug substances
55Roche Business Report 2011Manufacturing and Procurement |
drawing on decades of experience. Biologics manufacturing is
a challenging process, as it involves the use of living cells that
are highly sensitive to even the slightest changes in their envi-
ronment. Various factors such as nutrient solution, timing and
equipment can determine yield, amounts of unwanted by-
products and even the structure of the active ingredient being
produced. The process steps are illustrated on the next page.
We continue to follow the production of copies of biological
products, or biosimilars, and support regulatory activities to
ensure they are brought to market safely and effectively (see
Biosimilars on page 75).
Objectives and performance. The manufacturing organi-
sation’s primary objectives in 2011 were to support Roche’s
growing R & D pipeline and improve our manufacturing net-
work and processes, while maintaining a strong focus on
supply chain reliability and product quality. We continued to
foster a culture of continuous improvement and share best
practices across sites. Improvements introduced in 2011 include
additional common standards for producing small molecules,
which will help make site performance more transparent, and
establishing best practices for materials flows and productive
maintenance. In biologics production, we improved scrap-
handling practices, resulting in lower manufacturing costs,
Manufacturing sites — Roche Group
1
2
3
4
5
1 2 3 4 5
56 Roche Business Report 2011 | Manufacturing and Procurement
higher yields and improved manufacturing processes for
products such as Pulmozyme and Nutropin.
Supporting pipeline delivery. In 2011 pharmaceutical manu-
facturing supported 100 development projects for new medi-
cines. This included supplying investigational products for
approximately 600 global clinical trials that involved tens of
thousands of patients. Notable among these efforts was the
accelerated development of manufacturing processes for our
melanoma medicine Zelboraf (see R & D, page 34). Rapid scale-
up of the chemistry and an innovative tablet formulation based
on micro-precipitated bulk powder helped Roche to develop
and launch Zelboraf in just five years after the start of clinical
trials, including making it available to patients within five days
of FDA approval. Zelboraf illustrates the effectiveness of our
integrated global manufacturing network — Basel, Switzer-
land, provides the drug substance, Segrate, Italy, finalises pro-
duction and Leganés, Spain, packages the drug.
Investments. We invested in new facilities and upgraded
others — executing 25 major engineering projects in 2011 — to
ensure that we meet growing global demand for our medicines
and are prepared for future product launches. We continued to
transform our manufacturing facility for solid dosage forms in
Shanghai from a local to a global supply operation. In early
2011 the facility received FDA and EMA approvals to produce
Xeloda for US and EU markets. The approvals are among the
first to be issued to an international company in China.
Biotech production process
All process steps are performed under sterile, temperature-controlled conditions. Extensive testing throughout the process assures product quality.
Specific human genes are inserted into bacterial or mammalian cells to create a unique master cell line that yields the target ther-apeutic protein. This mas-ter cell bank is frozen for storage.
The cell culture is trans- ferred to progressively larger bioreactors. Special nutrient medium is added. Its unique composition is optimised for each cell line and enables produc-tion of the desired protein (drug substance).
For production, cells are removed from the master cell bank, cultured in a liquid growth medium and transferred to larger ves-sels as the cells multiply.
The protein is separated from the biomass (cells, culture medium and waste products) leading to a pure solution. The centri-fugation, purification and concentration steps are specific to each desired protein.
The drug substance is for-mulated into a stable dos-age form (sterile liquid or powder), filled into vials or syringes, and packed for shipping.
Cell line Culture Fermentation Purification Formulation, filling
and packaging
57Roche Business Report 2011Manufacturing and Procurement |
In June Roche completed TP Expand in Penzberg (Germany),
a 191 million Swiss francs project that upgraded and expanded
the site’s therapeutic protein development and production
capacity. The project entailed renovating five buildings and
adding production and lab facilities for biotech manufacturing
and development. In November we completed construction of
a new technical R & D facility in Basel at a cost of 250 million
Swiss francs. This facility houses labs, offices and small-scale
production lines and is used to develop innovative processes
and technologies for turning active ingredients into tablets,
capsules and injectable medicines.
Supply chain challenges. The agility and resilience of our
global supply chain was tested in March, when the disastrous
earthquake in Japan interrupted Chugai’s Utsunomiya opera-
tions, and again in September, when a fire damaged our site
in Segrate. In response, Roche and Chugai immediately set up
supply chain taskforces that worked in close cooperation with
health authorities to ensure continued product supply and
regulatory compliance. Both sites have fully recovered from
these incidents and resumed production.
Operational Excellence. As part of the Operational Excel-
lence programme, announced in late 2010, and the ongoing
evaluation of our manufacturing network, we divested techni-
cal development and small molecule manufacturing operations
located in Boulder, USA, to Corden Pharma. Corden will con-
tinue to supply us with commercial-scale peptides and chemi-
cal active ingredients for important medicines. We also sold
our clinical plant in Oceanside, USA, to Gilead Sciences in our
ongoing programme to consolidate clinical and process devel-
opment operations. These divestments, along with other mea-
sures, lowered the number of people employed in pharma-
ceutical operations in the US by 15%.
Diagnostics
Our network. Our diagnostics operations network comprises
11 manufacturing sites and 2 global supply hubs in Europe and
the US. This network handles all aspects of procurement,
manu facturing and logistics for a broad portfolio of diagnostics
and diabetes care products. The portfolio includes over 2,600
tests for use with associated instruments. This translates into
the pro duction of 140 different instruments, ranging from large
work stations to hand-held meters, 6,400 reagent kits with
14,000 reagent and control components, and 160 consuma-
bles such as pipettes and cuvettes. A dedicated function pro-
vides quality and regulatory support to the global operations
network.
The majority of our instruments and tests are manufactured
in-house, which allows us to maintain cost and quality advan-
tages and leverage proprietary technologies and special exper-
tise. In general, we use external manufacturers to access intel-
lectual property and unique technologies, enabling us to focus
on our core competencies and optimise efficiencies and costs.
For example, we outsource the production of hand-held blood
glucose meters, large work stations, and consumables.
Objectives and performance. We reorganised operations
across the Diagnostics Division in 2010 to establish a single,
integrated function for driving excellence in manufacturing,
supply chain management and procurement. Since then, we
have pursued an agenda of delivering cost savings while build-
ing capabilities for sustainable high performance in quality,
cost and supply reliability. In 2011 we again realised an aggres-
sive cost-saving target, which contributed to the division’s
overall improvement in profitability. We also advanced three
performance initiatives: •Asset management: We invested in facilities to expand
capacity, alleviate bottlenecks and mitigate supply risks, and
we transferred product manufacturing to consolidate capac-
ity, increase utilisation and reduce costs. We also consoli-
dated our supplier base to ensure optimal alignment between
external suppliers and internal capacities.•Right-first-time manufacturing: We introduced a system-wide
programme to improve performance by systematically elimi-
nating errors, driving improvements in right-first-time rates,
quality and cost at all sites. The programme also served as a
forum for sharing best practices across the network.•Design for quality and manufacturability: We developed tools
and methodologies to ensure the establishment of robust
production processes and applied them to product develop-
ment projects across the division. We expect these changes
to pay dividends in the form of improved quality and manu-
facturability as new products are brought to market.
Supporting pipeline delivery and investments. Diagnostics
operations maintained the reliable supply of a growing and
increasingly diverse portfolio of instruments and assays, includ-
ing over 60 product launches (see table on page 45). To meet
the growing global demand and support the launches, we
invested in facilities and equipment and undertook more than
20 major capital projects in 2011. These include building a
compounding and filling facility in Mannheim, Germany, and
expanding a cell fermentation facility in Penzberg. Both will be
used for the production of immunoassays.
Operational Excellence. As part of the Operational Excel-
lence programme, we consolidated diagnostics R & D and
oper ational functions at several sites. In the second half of
58 Roche Business Report 2011 | Manufacturing and Procurement
2011, we began the transfer of chemical raw materials and ana-
lytical services from Mannheim to Penzberg. We also started
to set up infrastructure for instrument production of blood gas
and electrolyte monitoring systems in Rotkreuz, Switzerland,
in support of the move of that production from Graz, Austria.
Activities to transfer the production of insulin delivery systems
from Burgdorf, Switzerland, to Mannheim are also on track.
Quality and compliance
Every patient has the right to safe medicines and reliable diag-
nostic test results. Our robust and comprehensive quality man-
agement systems are designed to comply with all relevant laws
and regulations and are based on the most recent quality norms
and standards, including cGMP and those of ICH and ISO 1.
1 cGMP = current Good Manufacturing Practices; ICH = International Conference on Harmonisation of Technical Requirements for Regis-tration of Pharmaceuticals for Human Use; ISO = International Organi-zation for Standardization.
In 2011 our Pharmaceuticals and Diagnostics Divisions contin-
ued to invest in our quality systems to address changing regu-
latory requirements. We also took proactive steps to drive sus-
tainable quality and compliance and manage risks, including:•globally harmonising our quality systems •an end-to-end quality management programme at Roche
Pharmaceuticals to continuously optimise production pro-
cesses•strengthening product quality oversight of suppliers and
CMOs
In 2011 pharmaceutical operations successfully managed more
than 60 site inspections from health authorities worldwide.
Diagnostics operations passed more than 30 inspections.
We also collaborated with health authorities and industry
groups to provide thought leadership on technical quality
requirements. Roche, for example, served as an expert con-
sultant to the FDA for setting approval standards for medicines
labelled for use with a companion diagnostic test. Roche also
helped advance the understanding and use of Good Manufac-
Reducing the logistics environmental footprint by alternative modes of transportation
Canada
Rio de Janeiro
Kaiseraugst
Athens
Frankfurt
Kaiseraugst
Amsterdam
US
Carbon dioxide (CO2) emissions
Switching transportation of products from air freight to either road or sea transport reduced CO2 emissions by roughly 85% in pilot projects.
–85%
59Roche Business Report 2011Manufacturing and Procurement |
turing Practices by, among other activities, chairing a joint
FDA/EMA/PDA ICH Q10 implementation conference and
hosting training sessions for health authority inspectors at its
biologic drug substance and aseptic processing facilities. In
addition, we provided input on more than 130 guidance docu-
ments, proposed regulations and laws.
Green logistics
Roche is committed to incorporating sustainable business
practices in all areas of its supply chain to not only improve
processes but also as a means of ensuring patient safety and
product quality.
The Pharmaceuticals Division has established a green logistics
project to reduce its environmental footprint for the transpor-
tation of raw materials and finished products. The project
includes several pilots to study alternative modes of transpor-
tation. Notable among them was changing from air freight to
refrigerated road and sea ferry transport for cold-chain prod-
ucts shipped between Switzerland and Greece. This change
reduced carbon dioxide (CO2) emissions by roughly 85% and
packaging by a significant amount, as insulating material was
no longer required.
Similarly, the Diagnostics Division realised significant reduc-
tions in CO2 emissions by using alternative modes of transpor-
tation and innovations in packaging. For example, emissions
were reduced by 84% for shipments between the US and
France by switching from air freight to truck and sea transport.
In Italy, changing from road transport to rail cut the division’s
CO2 emissions by 67%. And CO2 emissions from freight ship-
ments between Germany and Great Britain were cut by 33% by
using temperature-controlled trailers.
Our first year of tracking reductions in CO2 emissions, waste
production and energy usage from logistics revealed several
challenges in data availability and quality, including differences
in methodologies among Roche sites for measuring energy
usage. In 2012 we will work to further develop reliable methods
of collecting consistent data throughout our organisation.
For more information, see Environmental Stewardship, pages
110–112.
60 Roche Business Report 2011 | Manufacturing and Procurement
Research assay Clinically validated IVD assay
Technically validated IVD assay
Research Development CommercialisationPharma
Diagnostics
60 Roche Business Report 2011 | Roche Personalised Healthcare
How Roche is making Personalised Healthcare a realityResearchers across the globe are making enormous progress in understanding diseases and
their root causes. This knowledge is leading to a dramatic increase in the identification of biological
targets to fight many diseases. At Roche we combine our strong in-house research capacities
and know-how with the latest external advances in science to identify potential drug candidates
and biomarkers.
Pharmaceuticals and Diagnostics under one roof
For Roche the crucial edge comes from integrating the knowledge in our Pharma-ceuticals and Diagnostics Divisions and drawing on it throughout the R & D process, from early research to approval of new diagnostic tests and medicines and their use by patients. The close cross-divisional cooperation between our R & D scientists distinguishes Roche from other companies.
A more efficient way to develop targeted therapies
Roche Personalised HealthcareRoche Personalised Healthcare
00_06_Roche_AR11_Boxed features_ENG.indd 60 27.01.2012 12:05:59
61Roche Business Report 2011Manufacturing and Procurement |
Procurement
Procurement is a key operating function at Roche. Our pro-
curement teams work closely with Roche business units to
help them achieve their goals and capture savings that can be
reinvested in the business. The teams carefully manage expen-
ditures to third parties, including direct expenses for items
such as raw materials, active pharmaceutical ingredients,
instruments, components, spare parts and contract manufac-
turing, and indirect expenses such as services, temporary
labour, travel, credit cards, IT and laboratory supplies.
In 2011 the Pharmaceuticals Division finished centralising pro-
curement functions, forming various departmental groups into
a single procurement team to simplify processes, align strate-
gies and leverage buying power. Together with the Diagnostics
procurement team, we have established a structured process
for major direct and indirect expenditures. By shifting to a glob-
ally aligned approach, with local execution, we expect to gen-
erate cost savings through larger purchasing volumes and
stronger, more strategic relationships with suppliers.
In 2011 Roche realised significant savings on direct and indi-
rect expenses, particularly for temporary labour, conferences,
events and travel. We also negotiated a global corporate credit
card agreement which, when implemented in 2012, will gen-
erate substantial savings.
Partnering with suppliers
We seek to build mutually beneficial relationships with sup-
pliers and encourage suppliers to continuously improve by: •working together on cost reduction and financial stability•ensuring integrated risk management•reducing our combined environmental footprint•demanding ethical behaviour•promoting innovation
We require our suppliers to commit to the sustainability prin-
ciples in the Roche Supplier Code of Conduct. This code incor-
porates the principles of the Pharmaceutical Supply Chain Ini-
tiative (PSCI), of which Roche is a founding member, and sets
standards on ethics, labour, health, safety, environment and
related management systems. In addition, we educate our
employees in ways to encourage sustainability among our
suppliers.
We audit critical suppliers for compliance with our sustain-
ability requirements. In 2011 we conducted 47 audits in the
direct spend area and 30 audits of service providers, with 36
of those audits conducted in China, India, Russia and Eastern
Europe. The majority of suppliers we audited met or exceeded
our minimum sustainability requirements. Audit findings
requiring corrective action related mainly to labour conditions,
health, safety and excessive work hours. We continue to work
closely with the suppliers concerned to ensure corrective
actions are taken, to offer training in sustainability awareness
and to mitigate risk. For further information, see Environmental
Stewardship, pages 108–109.
Together with other PSCI members, we have adopted a unified
sustainability audit protocol. The protocol sets minimum stan-
dards enabling the sharing of audit findings, which reduces
duplication of audits. In 2011 some suppliers started to share
self-assessment reports with PSCI members. In 2012 we will
pilot joint supplier audits using the new PSCI protocol.
More on the Web
• Roche product portfolio: www.roche.com/products• Biotech production: www.roche.com/biotechnology/production• Pharmaceutical Supply Chain Initiative:
www.pharmaceuticalsupplychain.org• Supplier engagement: www.roche.com/stakeholder_engagement • Supplier Code of Conduct: www.roche.com/
roche_supplier_code_of_conduct.pdf
62 Roche Business Report 2011
patients received treatment with innovative Roche medicines during 2011
63Roche Business Report 2011
marketIng and dIstrIbutIon demonstrating value. We collaborated with payers and other stakeholders on
developing systematic methods for evaluating the cost and efficacy of new medicines
and diagnostics.
Improving access. We continued to pilot differential drug pricing programmes for
several leading Roche therapies in Egypt, Brazil, China and other emerging countries.
strengthening healthcare. We worked with governments and other organisa
tions on strengthening healthcare systems through further education of healthcare
professionals and supporting hospital infrastructure.
Improving outcomes. We funded programmes to increase awareness and
understanding of disease, to improve screening and early diagnosis and to foster
treatment compliance and rehabilitation.
64 Roche Business Report 2011 | Marketing and Distribution
Answering the demand for medical innovation and improved
patient access to healthcare is a challenge that requires the
cooperation of many different segments of society. Break
throughs in science are enabling Roche to improve the lives
of patients and transform the delivery of medicine. To be truly
effective, however, we must identify and meet the differing
needs of various patients and customers through collaboration
and partnership.
Our approach is to increase our emphasis on regional and local
activities that deliver value, improve access and maintain high
standards of patient care and safety. The objective is to deliver
innovative pharmaceuticals and diagnostics that offer signifi
cant medical, economic and social value over existing options.
Patients everywhere are seeking more and better healthcare
options and better access to healthcare. Our market access
strategy addresses this need, while focusing on the growing
demand in emerging and developing markets. The effective
ness of our strategy is reflected in the strong sales growth of
key Roche medicines and diagnostics in 2011, despite challeng
ing conditions in many markets.
Further information on the performance of our products can be
found in the Business Review, pages 14–18, and in the Finance
Report (Part 2 of this Annual Report), pages 10–16.
demonstrating value
We focus on the medical value of our products starting from
the earliest stages of development. Our objective is to com
mercialise only those medicines and diagnostic tests that
improve the length and quality of patients’ lives and that bring
clear medical and economic benefit to healthcare systems and
society.
We work closely with payers to demonstrate the value of our
products and services and, in turn, gain appropriate reim
bursement and market access. We collaborate with various
authorities and policymakers to develop Health Technology
Assessments (HTAs) and other models for systematically eval
uating the costs, benefits and efficient use of new medicines
and diagnostics. Our aim is to sustain medical innovation, meet
medical need and help address the mounting pressure on
healthcare budgets.
For example, in order to attain appropriate reimbursement
for our new oncology test that identifies patients carrying a
mutated BRAF gene, the German affiliate of Roche Diagnos
tics prepared a comprehensive HTA demonstrating the im
proved performance of the Roche test compared to other
methods. The HTA showed that switching to a test with fewer
false results improves treatment outcomes for patients and
reduces costs for payers and laboratories.
Key figures
7,967 –2% 18.7%5,564 –6% 16.9%2,403 +8% 24.7%
millions of CHF (CER)* of salesroche group
Core marketing and distribution (m&d) expenditures in 2011
millions of CHF (CER) of salesPharmaceuticals 1
millions of CHF (CER) of salesdiagnostics 2
1 Decrease by 6% due to tight cost management and savings from the Operational Excellence programme. 2 Increase by 8% reflecting higher launch costs by several business areas along with increased distribution costs following the earthquake in Japan.* Constant exchange rates (average fullyear 2010)
27,748 16,967 10,781 Roche Group Pharmaceuticals Diagnosticsemployees in m&d
Marketing and Distribution
65Roche Business Report 2011Marketing and Distribution |
Similarly, the Diagnostics Divisions’ UK affiliate collaborated
with the National Institute for Health and Clinical Excellence
(NICE), providing input to the institute’s establishment in 2011
of a Diagnostics Assessment Programme. The goal is to pro
mote rapid and consistent adoption of diagnostic tests that are
both clinically and costeffective, and to improve treatment
choice by evaluating diagnostics that have the potential to
improve key clinical decisions.
Roche joined other stakeholders in early 2011 to cofound the
Green Park Collaborative (GPC), an international initiative that
is exploring the feasibility of developing guidelines for the
design of clinical studies to meet the needs of HTA organi
sations and payers. We expect this programme to improve the
relevance of clinical research and accelerate patient access to
new drugs and technologies.
Furthermore, we actively participated in a joint initiative be
tween the pharmaceutical industry and santésuisse, an asso
ciation of Swiss health insurers, to develop basic principles of
future HTAs in Switzerland. We reached a consensus on pro
posals for the valuation of health technologies, with the objec
tive of improving quality and transparency in the healthcare
system, as well as increasing efficiency and thus reducing
costs.
Improving access to healthcare
Access remains a systemic cause of healthcare inequality that
requires the cooperation of governments, healthcare provid
ers, the media, patient groups, companies and nongovern
mental organisations. Roche is committed to making a contri
bution to this effort by working with stakeholders in enable and
improve access to healthcare and associated services globally.
We seek sustainable, effective ways to expand access to med
icines and diagnostics. We also tackle wider problems, such as
lack of disease awareness, low use of diagnostics and limited
healthcare infrastructure and budgets in order to improve
health conditions generally.
During 2011 we continued to work with payers to establish
commercial arrangements that improve access to our prod
ucts. These include flexible options such as volumebased dis
counts, price capping, cost sharing and pay for performance.
We also maintained patient assistance programmes to help
people obtain insurance, copay support or, in some instances,
partial supply of medicines to start or continue treatment.
These patientfocused solutions were particularly important
for maintaining access to our products during the financial
crises in 2010 and 2011, when many governments sought to
reduce or limit the growth of healthcare budgets in the face of
mounting pressure on public finances.
access in developed countries
Even in developed countries with advanced healthcare sys
tems, many people cannot afford treatment. And patients with
insurance still might not be able to pay for treatment if it is not
fully reimbursed.
Recognising this disparity, Roche maintains a number of
patient assistance programmes to improve access to our
medicines. In the United States, for example, Genentech Access
Solutions helps insured patients navigate the complexities of
health insurance and cover outofpocket costs associated
with their medicine, while the Genentech Access to Care
Foundation (GATCF) provides free medicines to patients who
are uninsured or rendered uninsured and meet certain finan
cial and medical criteria. In 2011 Genentech Access Solutions
helped more than 100,000 fully insured, underinsured and un
insured patients with access issues. In 2011 alone, GATCF pro
vided medicine to more than 40,000 uninsured patients who
needed our products.
access in emerging countries
Demand for healthcare services is growing worldwide. In
emerging countries, however, the infrastructure and funding
needed to meet this demand varies considerably, as does the
sustainability of healthcare systems. Roche actively supports
the governments of emerging countries in their efforts to
strengthen public healthcare systems. Our strategy is to focus
on running local clinical trials, working to accelerate regulatory
approvals and supporting market development. We fund pro
grammes for raising disease awareness, collaborate on devel
oping appropriate treatment policies, provide education and
training for healthcare professionals, along with other activities
to help develop healthcare infrastructure.
The cost of medicines and low rates of diagnostic testing are
also barriers to treatment in emerging countries. To improve
affordability and reach more people in need, we are conduct
ing pilot programmes for ‘differential pricing’ of treatments for
cancer, hepatitis C and other chronic illnesses. Under such
arrangements, we sell our products to the public healthcare
system at prices lower than in established markets, in return
for assurances of product reimbursement. We are exploring
the effectiveness of access models that include:•discount schemes for drugs prescribed through public
healthcare systems•second brands for government contracts•contracting local companies to fill, package or distribute our
brands
66 Roche Business Report 2011 | Marketing and Distribution
Top-selling pharmaceuticals in millions of CHF
Product
mabthera/rituxan
Sales growth (CER)*
+8%
Active substance
rituximab
Indications
nonHodgkin’s lymphoma, chronic lymphocytic leukemia, rheumatoid arthritis, ANCAassociated vasculitis
avastin
–7%
bevacizumab
colorectal cancer, breast cancer, nonsmall cell lung cancer, kidney cancer, ovarian cancer, glioblastoma
Herceptin
+9%
trastuzumab
HER2positive breast cancer, advanced HER2positive stomach cancer
Lucentis**
+23%
ranibizumab
wet agerelated macular degeneration, macular edema following retinal vein occlusion
Pegasys
–3%
peginterferon alfa2a
hepatitis B and C
6,005 5,292 5,253 1,4381,523
* Constant exchange rates (average fullyear 2010).** US sales. Lucentis is marketed outside the United States by Novartis.
67Roche Business Report 2011Marketing and Distribution |
Top-selling diagnostics in millions of CHF
Product
accu-Chek monitoring systems
Sales growth (CER)*
+3%
Market segment
Blood glucose monitoring
Business area
Diabetes Care
cobas e modules,modular analytics,elecsys
+13%
Immunoassays
Professional Diagnostics
cobas c modules,modular analytics,Cobas Integra
+7%
Clinical chemistry
Professional Diagnostics
Cobas ampliPrep/Cobas taqman
+3%
Virology (hepatitis B, hepatitis C, HIV)
Molecular Diagnostics
immunohistochemistry and in situ hybridisation
+15%
Advanced tissue staining
Tissue Diagnostics
2,470 1,987 1,397 541 444AccuChek Aviva Nano cobas e 602 cobas c 502 cobas TaqMan 48 Ventana IHC reagents
68 Roche Business Report 2011 | Marketing and Distribution
We seek partnerships with governments in emerging coun
tries through which we can develop tailored programmes that
meet local pricing, service, distribution and participation needs.
Our objective is a sustainable business model that balances
the needs of all stakeholders with our commitment to improve
access in emerging markets.
We have piloted differential pricing programmes for several of
our leading therapies in Egypt, Brazil, the Ukraine, China and
other countries. In Egypt our programme includes local pack
aging and branding of an alternative formulation of Pegasys,
our hepatitis C treatment. Egypt is now one of our topselling
markets, with over 104,000 patients having received treatment
since 2006. Working with the Brazil government, Roche nego
tiated a discount for MabThera, a drug used to treat patients
with nonHodgkin’s lymphoma, on condition that the drug is
reimbursed. Previously MabThera was available to only those
patients covered by private insurance or those paying outof
pocket. The result has been significant expansion of access,
now reaching 2,000 patients.
In China, less than 10% of women with HER2positive breast
cancer receive Herceptin. To address the many challenges
limiting access to our treatment, Roche China started several
programmes in association with Chinese governmental institu
tions and nonprofit organisations. These included improving
HER2 testing quality and running patient education pro
grammes. In August we worked with the Cancer Foundation of
China to establish a patient assistance programme where eli
gible patients pay for the first half of treatment. The Cancer
Foundation, with support from Roche, then provides the sec
ond half, ensuring that women receive the full benefit of treat
ment. Although early, we have already seen a significant in
crease in the number of women gaining access to Herceptin.
access in least developed countries
The world’s least developed countries (LDCs) suffer the high
est levels of disease and weakest healthcare systems. Many
face large budget constraints and a critical shortage of health
care professionals and facilities, as well as low levels of under
standing of the causes, prevention and treatment of disease.
access to healthcare programme highlights
(Further details are available on our website)
54 countries where Roche does not file or
enforce patents for any of its medicines
50+healthcare professionals partici-
pated in pilot online university courses in
oncology under the EDUCARE initiative
in SSA countries, in partnership with IAEA
13HIV/aIds technology agreements
reached with companies in LDCs and
SSA countries for onsite technical help to
manufacture generic versions of Roche’s
HIV medicine saquinavir
3,300children supported in nine African
countries and India in monitoring their
diabetes through a partnership with Novo
Nordisk’s Changing Diabetes in Children
programme
11,000,000treatment courses of anti-influ-
enza medicine tamiflu donated
to the WHO for countries most in need
3–12month secondments granted to
employees for contributing their skills
and expertise to help make a difference
in health services in LDCs
806,045people reached in rural South
Africa by the TransnetPhelophepa
healthcare train since its inception
in 1994
40,000+patients received free medicines
through the Genentech Access to
Care Foundation
1,350,000infants tested for HIV through the
AmpliCare initiative
69Roche Business Report 2011Marketing and Distribution |
To address these inequalities, we use our expertise to support
the modernisation of healthcare systems. Rather than donating
money, we form programmes and partnerships that provide:•sustainable patent and pricing policies•research into diseases with high unmet medical need•education, training, knowledge transfer and capacity building
Establishing and operating these programmes is beyond the
scope of a single entity. For that reason, Roche collaborates
with local governments, nonprofit organisations and other
companies to deliver healthcare to patients and facilitates
experience exchange and education for healthcare profes
sionals, with an emphasis on local engagement.
In 2011 our partnership with Novo Nordisk in the Changing
Diabetes in Children programme expanded to nine countries
with the addition of India, Ethiopia and Kenya. In 2011 approxi
mately 3,300 children were enrolled in this programme, which
provides insulin and other diabetes care supplies, as well as
basic education and training for families and healthcare work
ers. To date, 47 clinics have been established and 600 health
care professionals trained.
AmpliCare, a programme started by our Diagnostics Division
in 2002, continues to supply HIV viral load tests at the lowest
possible price in SSA countries and several countries in South
America and Asia. In 2011 we worked with health ministries
and funding agencies to secure financing for AmpliCare’s Early
Infant Diagnosis (HIV) initiative. By yearend 23% of partici
pating countries were selffinancing the programme, 46%
were accessing the Global Fund’s resources or other third
party funders, while 31% remained dependent on UNITAID
funds. In addition, we renegotiated our funding agreement
with the Clinton Health Access Initiative, a global healthcare
organisation that aims to strengthen integrated health systems
in the developing world and expand access to care and treat
ment for HIV/AIDS, malaria and tuberculosis.
Patents are a fundamental requirement of our business model
of investing in the complex, expensive and risky process of
innovation. However, we are aware that patents can present
one of many barriers to providing basic medical care in the
world’s poorest countries. For this reason, Roche does not file
for new patents or enforce existing patents on any Roche med
icines, for any disease, in LDCs, as defined by the United
Nations, or in lowincome countries, as defined by the World
Bank. Nor do we file or enforce patents for antiretroviral HIV
medicines in the hardhit subSaharan African (SSA) coun
tries. Consequently, generic versions of any Roche medicine
can be produced and distributed in these countries without
applying for a license.
Providing value-added services
Research and development of innovative medicines and diag
nostics is the cornerstone of our contribution to tackling
healthcare challenges. We believe, however, that we have a
responsibility as a leading healthcare company to further help
patients through a holistic approach to healthcare. We put this
into action by providing numerous valueadded services to
develop healthcare infrastructure, raise disease awareness,
host screening programmes, educate healthcare profession
als and provide patient support networks.
We also work with governments and other payers to increase
healthcare productivity and make efficient use of financial
resources. While these services support our negotiations with
payers on the price of our drugs and tests, our overriding con
cern is to help people get better faster, remain healthy and live
longer, productive lives.
Increasing healthcare awareness
Healthcare awareness and education can be as important to
a patient’s wellbeing as proper medical diagnosis and treat
ment. With that in mind, we publish newsletters, magazines
and periodicals aimed at helping people make healthy choices
that prevent disease. Other activities include organising dis
ease awareness campaigns in association with patient groups
or local hospitals and conducting screening programmes.
Through these campaigns we seek to not only increase gen
eral awareness, but also to advance the early detection of dis
eases such as breast, lung and colon cancer, rheumatoid
arthritis, hepatitis, osteoporosis and diabetes.
In 2011 we organised a multidisciplinary workshop on ovarian
cancer in Rome with the National Observatory on Women’s
Health and the patients group. ACTO. Attendees included
national and regional authorities, representatives from regional
institutions, scientific societies, clinicians and media. The
event highlighted the need for increased cooperation amongst
stakeholders, for the establishment of centres of excellence
and for greater awareness and understanding of ovarian
cancer, including the importance of regular medical check
ups.
Roche, in cooperation with four patient associations in Argen
tina, published Reflejos del Alma (Reflections of the Soul) to
increase awareness of breast cancer. The book tells the stories
of 26 women with breast cancer and demonstrates how it is
possible to face the disease with a positive attitude and that
life goes on, even after breast surgery, chemotherapy and/or
radio therapy and possible relapses. The book and its message
of hope reached thousands of women in Argentina, where
Develop healtheducation material
Run diseaseawareness campaigns
Promote healthy lifestyles
Host screeningprograms
Organise patient support programs
Offer therapy adherence program
Run rehabilitation sessions
Co-develop economic models
Collaborate on therapy guidelines
Support managed care programs
Establish patient registries
HEALTHCARE PROFESSIONALS PAYERS
PEOPLE/PATIENTS
„KEE
P W
ELL“„MAKE W
ELL“
Provide furthereducation and training
Enable clinicaltrial participation
Establish healthcarenetworks
Strengthen hospital andlab infrastructure
Provide disease & therapy information
70 Roche Business Report 2011 | Marketing and Distribution
breast cancer is the leading cause of female cancer mortality,
with 16,500 new cases every year.
Every year on World Diabetes Day, Roche Diabetes Care con
ducts numerous campaigns to raise awareness and encourage
people to take action to prevent diabetes. These activities,
which include blood glucose screening on campuses and in
public venues in Germany, Switzerland, France, Spain and Italy,
are accompanied by workshops, healthy food and sporting
events to demonstrate how food and exercise impact blood
glucose levels. In the US, Roche funded the Diabetes Hands
Foundation’s Big Blue Test, an awareness campaign that re
inforces the importance of exercise in managing diabetes.
offering patient support and resources
We also produce information for patients, family members
and caregivers to help them understand diseases, treatment
options and the proper use of our products. We maintain web
Value-added services
71Roche Business Report 2011Marketing and Distribution |
sites that provide the latest information on diagnostic tests and
treatment options, including monitoring and managing poten
tial side effects. These websites serve as portals to resource
centres or patient support programmes and provide access
to trained nurses along with strategies for living with disease.
In addition, we operate counselling centres and telephone help
lines and coordinate services to improve treatment compliance
and rehabilitation.
Our online resources include www.accuchekconnect.com,
which offers personal discovery tools and other resources for
those living with diabetes, as well as clinical evidence and case
studies for healthcare professionals. For osteoporosis preven
tion and care, www.boniva.com supports the Roche prescrip
tion therapy Boniva with safety information and the MyBoniva
Program, a personal resource centre that helps with compli
ance. Similarly, www.herceptin.com offers guidance to those
being treated with Herceptin for HER2positive breast and
gastric cancer and information on financial support, among
other resources.
Working with patient groups
Patient groups are important partners for Roche. They give us
insight into the challenges facing patients and their families,
and share our interest in helping patients understand and
manage their condition. The changing role of patient groups
and patients — from passive to active, informed users — has
increased our level of engagement.
Transparency is essential to these endeavours. We publicly
declare all patient group relationships and provide a short
description of our activities on our website. We also acknowl
edge financial and nonfinancial support, as guided by the
European Federation of Pharmaceutical Industries and Asso
ciations (EFPIA).
Using a variety of channels, we collaborate on education and
training materials and services that are often developed glob
ally but adapted and administered locally for cultural sensitiv
ity and language preferences. We provide financial support
through projects of mutual interest and benefit in the areas of
breast and colorectal cancer, as well as cancer in general. We
also support hepatitis through the World Hepatitis Alliance and
the European Liver Patient Association, and provide advocacy
support by meeting with individuals and responding to patient
requests about new therapies, such as Zelboraf.
Among our many patient advocacy activities in 2011, Roche
hosted the third annual International Experience Exchange
for Patient Organisations in Frankfurt, Germany. The twoday
event was attended by representatives of 130 patient groups
from around the world and provided a forum for discussing
trends and challenges in healthcare and advocacy.
In July we held a Rheumatoid Arthritis (RA) advocacy training
workshop for 12 patient groups. We also provided support
to RA patient groups to attend an EU parliamentary event to
help raise awareness of the social and economic impact of the
disease.
Roche continued its longstanding collaboration with the Euro
pean Patient Network for Medical Research and Health (EGAN)
by holding the seventh joint strategy workshop for patient
organisations, health authorities, academia and industry. Ask
ing how to improve patient involvement during all stages of
research and clinical development, Roche and EGAN trans
lated workshop discussions into ten strategic recommenda
tions on how to make this a reality.
Furthering professional development
We help healthcare professionals improve patient care by pub
lishing a broad range of education and training materials about
diseases, treatment options, safety concerns, product use
and general healthcare topics. In addition, our medical teams
organise symposiums to educate and support physicians. We
have, for example, established virtual medical conferences
connected to the annual meeting of the American Society
of Clinical Oncology (ASCO). As the world’s largest clinical
oncology event, ASCO attracts thousands of healthcare pro
fessionals to learn about the latest clinical trials and research
in the area of cancer.
Our interaction with healthcare professionals is aimed at
exchanging scientific information that improves the use and
effectiveness of our products and services. For that reason, we
routinely seek input from healthcare professionals to identify
unmet medical needs in specific disease areas and to develop
our clinical trials, publications and educational materials.
We also conduct accredited continuing education courses in
areas such as epidemiology, treatment options and patient
Contributions to patient organisations
35.8% disease awareness and general education
9.2% workshops, seminars and meetings
10.3% educational grants
44.7% treatment adherence projects
72 Roche Business Report 2011 | Marketing and Distribution
counselling. We, moreover, help develop healthcare networks,
which have proven invaluable in helping healthcare profes
sionals share knowledge of diseases and new technologies
and in encouraging discussion on standards of care.
In the area of diagnostics, we establish testing laboratories,
train technicians on the correct use of instrumentation, run
pathology educational courses and set up quality control pro
grammes to ensure the reliability of diagnostic test results. We
also educate on how diagnostic products improve medical
value and assist with development of testing and treatment
guidelines to improve patient outcomes.
At the 2011 ASEAN (Association of Southeast Asia Nations)
Cancer Stakeholders Forum, Roche announced a landmark
prospective study, ‘The Burden of Cancer and its Economic
and Social Impact on ASEAN Communities’, involving more
than 10,000 cancer patients in all ten ASEAN countries. The
study, which is wholly supported by Roche and conducted
by the George Institute for Global Health of Sydney, Australia,
will serve as a tool to inform evidencebased policy decisions,
cancer control planning, and research prioritysetting in the
region.
In the US, we provided an educational grant to Omnia Educa
tion, a fullservice continuing medical education provider with
an exclusive focus on women’s health issues. Our grant helped
deliver an educational course about cervical cancer and HPV,
including a report of results from our HPV trial.
managed care programmes and financial modelling
We apply our industryleading expertise and innovative think
ing to develop healthcare networks and managed care pro
grammes for payers and hospitals. We establish patient regis
tries for our new medicines to collect realworld data on their
effectiveness and safety and on patient compliance. Payers
and healthcare professionals use these data to make more
informed decisions for treatment and for budgeting purposes.
Our managed care programmes, such as the Cancer Cham
pion, provide resources for healthcare organisations to start
their own comprehensive programmes for oncology patient
care and management. In addition, we work with payers to
determine the economics of healthcare plans by providing
capacity planning and costing models to assist with planning
and budgeting.
managing customer relationships
With customers ranging from patients and healthcare profes
sionals to hospitals, laboratories and healthcare payers, we
must meet a diverse range of needs and expectations. Regard
less of the customer, we seek to build longterm relationships
that are both professional and transparent.
meeting customer needs
We track customer satisfaction at regular intervals, usually
annually or biannually, benchmarking our performance against
our peers and industry averages. Through surveys conducted
by Roche and third parties, we gauge customer satisfaction in
our representative’s knowledge and helpfulness during visits,
the effectiveness of our medical support and clinical data dis
tribution and the quality of our information, and our educatio
nal materials. In addition our Diagnostics Division looks at deli
very times, service and technical support levels.
We analyse this feedback to identify the most appropriate com
munication channels and to establish sales and marketing
plans, setting targets in areas that have been identified as
important to our customers and where we see opportunities to
improve our performance.
In a number of countries we are transitioning our teams from
transactional selling to consultative selling, as a means of
forming closer working relationships or partnerships with key
customers. In Spain, for example, we developed practices over
several years that increase understanding of customer needs
and expectations, while also gauging their satisfaction with our
services. As a result, Roche Spain received the Madrid Exce
lente award for customer confidence and creating sustainable
value, the first pharmaceutical company to be selected for this
award.
Our Swiss programme ‘Effect — The Roche way of selling’ puts
the customer’s needs at the centre of the sales dialogue in
order to create value for the customer and for Roche. The
programme custom tailors sales representatives competency,
training and coaching framework and aims to achieve excel
lence in valuebased selling through continuous improvement
of all infield teams.
Contributions to healthcare institutions
40.8% education of healthcare professionals
6.7% education of patients and general public
52.5% research
73Roche Business Report 2011Marketing and Distribution |
driving commercial effectiveness
As an organisation focused on developing innovative medi
cines and diagnostic tests, the majority of our expenditures are
directed to proving clinical safety and efficacy. The data we
generate during clinical trials are used to produce articles in
professional publications and educational materials. The reli
ability of this data for confirming commercial effectiveness is
equally critical to Roche and, increasingly, to clinicians who
seek to apply evidence gained from clinical trials to their own
clinical decisionmaking.
In addition, nontraditional customers, such as payers, regula
tors or managed care organisations, are increasingly emerging
as key players in the decisionmaking process between regu
latory delivery to patients. For this reason, our ability to address
these new audiences and translate complex data can provide
us with new opportunities.
Due to these shifts, our sales and marketing practices have
evolved to focus primarily on educating customers and pa
tients. Today our sales representatives must have deep medi
cal knowledge as they are often required to discuss clinical
data and safety profiles in depth with healthcare professionals.
We further drive commercial effectiveness with intensive train
ing courses in professional selling skills and customercentred
approaches that build longterm business partnerships with
our customers.
In Spain we introduced a qualitative performance measure
ment system for our representatives based on sales excellence.
The system mirrors the commercial excellence departments
established by a number of our affiliates, offering professional
selling skills courses and professional coaching for sales man
agers.
Increasing use of social media has created opportunities to
reach out to patients and stakeholders and improve the effec
tiveness of our business. Following the introduction of Roche’s
social media guidelines in 2010, our Social Media Advisory
Board developed employee training materials in 2011 that high
light best practices in support of our business goals and our
policies governing the use of social media. These include train
ing programmes for employees and an internal educational
campaign to raise awareness of various social media channels
and their use. Over 300 socialmedia ambassadors were trained
through 23 fullday classes in ten countries.
Collaborating across divisions
With our advances in Personalised Healthcare, representa
tives from our Pharmaceuticals and Diagnostics Divisions
increasingly work together in many disease areas, starting at
the earliest stages of development and carrying through to
commercialisation. They perform joint sales calls to explain
the value and effectiveness of our products in making better
clinical decisions. And they team up to host sciencebased
symposiums, publish clinician training materials and develop
combined reimbursement strategies.
In France, for example, the two divisions codeveloped a qual
ity assurance programme for HER2 testing that decreases
false negative results by 1%. This increased reliability of diag
nosis resulted in nearly 500 women in France becoming eli
gible for Herceptin therapy who otherwise would not have
received this targeted treatment. Activities like these not only
provide value to our customers, allowing them to make better
use of available resources, but they are also difficult to mimic
or duplicate by our peers, and clearly differentiate Roche in the
marketplace.
ensuring patient safety
Roche products must not only be effective, they must be safe
throughout their life on the market. While any medicine may
cause side effects, our priority is to minimise these and make
sure the benefits outweigh the risks in patients for whom they
are indicated.
We have global systems in place to collect data on adverse
events and monitor the safety profile from the time a medicine
is evaluated in clinical studies to when it is withdrawn from the
market. All products have a proactive safety management plan
that is supported by a qualified physician who continuously
monitors overall safety. We have risk management plans in
place, reviewed and approved by regulatory authorities.
Our Drug Safety Committee is responsible for drug safety gov
ernance and for proactively ensuring patient safety. The com
mittee is chaired by either Roche’s Global Head of Safety Risk
Management or Chief Medical Officer.
We regularly analyse medicines against reference safety data
bases to help us identify potential safety risks, and we have
skilled people, processes and systems in place to collect
safety information from healthcare providers and patients.
We monitor the medical literature to extract any new relevant
safety information about our medicines. All our employees are
required to immediately report any issue relating to the safety
or quality of our medicines.
All adverse events are stored in a global safety database
and reviewed by a qualified physician. Selected reports are
Phase 1–3 clinical trials
Submission to the relevant regulatory authorities (usually 7 or 15 days)
Integrated Safety Risk Management Process
On market
Safety Information captured in Drug Safety Database
Patients
Healthcare providers
Roche representativesStudy Management Teams
Governance: Drug Safety Committee
Drug Safety Operations Department
Approval by health authorities
Signal evaluation New adverse drug reaction ?
Label change or recall
Notification
No action
N
Signal detection Y
74 Roche Business Report 2011 | Marketing and Distribution
promptly submitted to appropriate regulatory authorities, as
required. If there is a link to one of our products, we evaluate
whether the benefits of the medicine still outweigh the risks.
We have procedures in place to promptly inform physicians,
healthcare providers and regulators of new safety information.
We update product labelling with new safety information as
required and inform healthcare providers with updated advice
on the use of our medicines. We have a strict product recall
process to ensure that we can withdraw products rapidly
should quality or safety problems arise. The quality of our
processes and systems are regularly audited internally and
inspected by major regulatory authorities.
During 2011 we completed activities related to the merger of
Genentech and Roche, including implementing a single set of
safety processes and the global safety database.
Counterfeits
Counterfeit medicines and diagnostic products often look
identical to authentic versions and are difficult to detect, par
ticularly for patients. Counterfeits can cause serious illness,
or even death, if they contain harmful ingredients, as well as
depriving patients of proper treatment, if they are ineffective.
Counterfeiting also creates a financial burden on govern
ments, not only from money wasted on counterfeits and related
network global professionals overseeing patient safety
75Roche Business Report 2011Marketing and Distribution |
enforcement measures, but also costs resulting from counter
feits causing severe damage to patients’ health.
While estimates of the scale of the problem vary widely, traf
ficking in counterfeit medicinal products, including medical
devices and diagnostics, is widespread and affects both devel
oping and developed countries. The World Health Organiza
tion (WHO) has identified counterfeiting as a growing, often
underestimated danger, citing, in particular, the problems of
product toxicity, instability and ineffectiveness.
Responsibility for preventing and controlling counterfeiting
rests primarily with national governments and international
organisations. Roche cooperates with and contributes to
efforts to develop stronger laws and improve enforcement as
well as educate the public and train local officials. The goal is
to prevent negative impacts on public health caused by coun
terfeit medicinal products. We have also implemented internal
anticounterfeiting measures for the design, packaging and
labelling of our products. Additionally, we continue to work
with authorities on a system to track and trace products from
distribution to dispensary.
Through our membership in the EFPIA we contributed to the
European Commission’s Falsified Medicines Directive which
was adopted in 2011. The directive aims to protect Europe’s
patients and prevent counterfeit medicines from entering the
supply chain, with strong safety measures, including unique
product identification numbers, tamperevident packaging and
restrictions on repackaging. Other actions include steps to en
sure reliability in wholesale distribution, increased scrutiny of
suppliers of active ingredients and stronger collaboration with
customs authorities, especially with the World Customs Orga
nisation. We have intensified investigative work, together with
other companies, to prevent counterfeits. We hired investigative
staff in Shanghai, China and plan to implement new measures
in highrisk regions such as Latin America and the Middle East.
We continue, meanwhile, to push for a harmonised EU system
for product verification and the resolution of issues related
to the sale of products through the Internet. Additionally, we
advocate increased public awareness of counterfeiting, and
have provided information on our website that explains the
risks of counterfeits and provides contact information for
reporting possible counterfeits.
biosimilars
Unlike traditional medicines that contain small molecules pro
duced by chemical synthesis, biological medical products have
complex molecular structures. They are produced from living
organisms with a unique genetic property using sophisticated
manufacturing processes that are difficult to reproduce. Cop
ies of biological products are therefore similar but not identical
to the original. These biosimilar products cannot be consid
ered generic medicines or approved based on the limited data
most regulatory bodies accept for generics.
We support the development of a clear regulatory framework
for the approval of biosimilar products. The European Medi
cines Agency has established such a system and the United
States Congress introduced a legislative process for approv
ing biosimilars in 2010, as part of US healthcare reform. For
countries that have no such framework, we believe that regula
tory authorities should follow the WHO guidelines on evalua
tion of similar biotherapeutic products. We believe these are
the minimum standard for ensuring that similar versions of
our biotherapeutic products are brought to market safely and
effectively. Further information can be found in the Manufac-
turing and Procurement chapter, pages 55–56. Our position on
biosimilars is available on the Roche website.
Roche actively engaged in discussions and provided feed back
to national regulatory agencies throughout 2011 for develop
ing appropriate pathways for approving biosimilar products,
including biosimilar antibodies. Our activities were largely con
ducted through associations, including the Emerging Bio
pharmaceutical Enterprises (EBE), Biotechnology Industry
As sociation of America and the International Federation of
Pharmaceutical Manufacturers and Associations (IFPMA).
During 2011 regulatory authorities in developing markets,
including Argentina, Brazil, Mexico and Peru, implemented
directives and guidance for the approval of biosimilar prod
ucts. Chile, Columbia, India and several other countries are in
the process of developing similar regulations. Together, these
actions signal a strong commitment from developing countries
to follow WHO guidance and principles on biosimilars.
Contributing to public policy
Roche contributes to the democratic process by sharing its
views and expertise with governments and regulators to help
develop effective laws, regulations and policies for public
health. We also collaborate in more general areas, such as
assessing the value of healthcare and working with public
health organisations, think tanks and academics.
We contribute to policy development through our membership
in industry bodies, including the European Diagnostics Manu
facturers Association (EDMA), Advanced Medical Technology
Association (AdvaMed), EBE, IFPMA and EFPIA.
76 Roche Business Report 2011 | Marketing and Distribution
Through our participation in the EFPIA, we assisted with new
EU legislation aimed at strengthening systems for monitoring
the safety of medicines and, in particular, protecting against
counterfeit medicines and ensuring patients receive reliable
information on prescription medicines. Additionally, we en
gaged in discussions on EU directives for protecting personal
data and marketing in vitro diagnostic (IVD) products. And we
provided input to several EU legislative processes aiming to
modernise the rules for conducting clinical trials.
In conjunction with AdvaMed we advocated on regulatory and
reimbursement reform in the US with both the FDA and Cen
ters for Medicare & Medicaid Services (CMS). Our focus was
on speedier FDA approvals and timelier CMS coverage and
payment determinations. We also engaged with the United
States Congress, along with patient organisations such as the
National Health Council, on the use of IVDs in enabling early
detection of disease and targeting the right treatments to the
right patients, plus the value of diagnostics in reducing overall
healthcare costs.
During 2011 Roche Diabetes Care advocated to the EU an
innovative approach to personalised diabetes management, as
a case study for chronic disease management.
marketing responsibly and ethically
The pharmaceutical industry is governed by strict regulations
and industry guidelines for the sale and marketing of products.
As one of the world’s largest healthcare companies, Roche
takes seriously its obligation to meet these high standards. We
have rigorous internal processes to ensure that our employees
adhere to the laws, regulations and industry codes of conduct
that support good marketing practices. These include uphold
ing our social responsibility for ensuring that decisions about
healthcare products and services are made using transparent,
open, fair and consistent processes.
Our Code of Conduct sets out standards for interacting and
engaging with healthcare professionals. The goal is to enable
healthcare professionals to make decisions independently,
based on all relevant data available, for delivering the greatest
medical benefit to patients. We continuously train staff who
interact with healthcare professionals to increase awareness
and understanding of our Code of Conduct, as well as industry
and countryspecific marketing codes, guidelines and best
practices. In addition, Roche uses a global marketing and
sales compliance questionnaire to help local managers assess
compliance with and awareness of responsible marketing
practices. All general managers, moreover, must sign a decla
ration of assurance acknowledging compliance with those
practices.
In 2011 we further strengthened our practices for promoting
good business practices by ensuring compliance with new
regulatory requirements around transparency, especially the
Sunshine Act in the United States and guidelines of Associa
tion of the British Pharmaceutical Industry (please refer to the
Responsible Business chapter, pages 26–27).
More on the Web
• Our products: www.roche.com/products• Assessing the value of our products and pricing: www.roche.com/
medical_value_patents_and_pricing• Access to healthcare overview: www.roche.com/
access_to_healthcare• Genentech Access solutions:
www.GenentechAccessSolutions.com• List of patient groups supported: www.roche.com/patient-groups• Roche clinical trials and patient safety: www.roche.com/
clinical_trials; www.roche.com/managing_medication_safety• Counterfeiting: www.roche.com/counterfeiting• Patents and biosimilars: www.roche.com/patents• Responsible marketing: www.roche.com/
business_integrity_and_responsible_marketing• Roche’s policies, guidelines and positions: www.roche.com/
policies_guidelines_and_positions• Stakeholder engagement: www.roche.com/
stakeholder_engagement
Roche Business Report 2011Personalised Healthcare |
The benefits as seen by patients and experts
Personalised Healthcare
PatientDoretha ‘Dee’ Burrell
Insurance executiveProf. Thomas Szucs
PhysicianDr Caroline Robert
InvestigatorProf. Henry Lik-Yuen Chan
Medical laboratory scientistDr José Gilberto Vieira
ResearcherDr Shirin Khambata Ford
78 Roche Business Report 2011 | Personalised Healthcare
‘The immediate combination of diagnosis, therapy and monitoring of treatment success in hepatitis B infection is a major step forward. This increases the benefits for our patients enormously!’
‘About 350 million people are infected with the hepatitis B virus;
about 75 percent of these people are living in Asia. By predicting
better and earlier who is going to respond to therapy allows
us to provide more effective care. Assurance of our patients also
increases their compliance to therapy, resulting in an increase
of the desired treatment outcome. For patients who do not respond
very well we may be able to modify treatment to increase their
chances to respond and benefit from modern therapies.’
InvestigatorProf. Henry Lik-Yuen Chan
Roche Business Report 2011Personalised Healthcare |
Director, Cheng Suen Man Shook Centre for Hepatitis Studies, Director, Centre for Liver Health, The Chinese University of Hong Kong, Hong Kong, China
80 Roche Business Report 2011 | Personalised Healthcare
‘It’s a very exciting time for us. We are all aware that we are entering a new era of skin cancer treatment!’
‘Skin cancer was an area of high unmet medical need, but
with the new compounds becoming available we are going
to improve the survival of our patients. The stratification and
targeted treatment of this fatal disease represents a major
step forward. As next steps we have to establish screening
for the relevant genetic mutations. We also need to learn
how best to combine the various compounds, some still in
development, in order to maximise impact and benefit for
patients.’
PhysicianDr Caroline Robert
Roche Business Report 2011Personalised Healthcare |
Chef de Service Cancer Institute Gustave RoussyVillejuif near Paris, France
82 Roche Business Report 2011 | Personalised Healthcare
‘The option of targeted treatment gave me hope and a better quality of life!’
‘Hearing the words, “you have breast cancer” were
the most devastating words I had ever heard. I was so
frightened, not sure how life would be for me going
forward. It gives me peace to know that my oncologist
believed in targeted therapy and I am most grateful
to have been administered such a treatment which has
improved the quality of my life for the past four years.’
PatientDoretha ‘Dee’ Burrell
Roche Business Report 2011Personalised Healthcare |
Author, Motivational Speaker,Mother, Grandmother, Lover of LifePhiladelphia, USA
84 Roche Business Report 2011 | Personalised Healthcare
‘In my view, Personalised Healthcare will be the only way of husbanding our resources in a way that makes good business sense!’
‘For the insurance companies, Personalised Healthcare is
extremely important because in future we will simply not
be able to afford to stick to the “one-size-fits-all” method
of providing patients with medicines or technologies in a
rough-and-ready manner. Professional analyses tell us that
both from an economic and from a medical view-point,
diagnostics-based, optimised therapy, say for hepatitis C,
is superior to standard treatment strategies.’
Insurance executiveProf. Thomas Szucs
Roche Business Report 2011Personalised Healthcare |
Chairman, Helsana Insurance GroupZurich, Switzerland
86 Roche Business Report 2011 | Personalised Healthcare
‘As a researcher strongly committed to driving Personalised Healthcare forward, I appreciate some of the distinct advantages of having both Pharmaceuticals and Diagnostics under one roof.’
‘In the field of oncology it is particularly helpful to involve
diagnostics as early as possible in clinical development.
This increases the efficiency and speed of discovering and
developing patient selection markers that could have an
actual impact in the clinic, and make an important difference
to patients’ lives. In order to do this at a high frequency for
our drug candidates across multiple indications, a dedicated
in-house diagnostics effort is required, and Roche clearly
has one of the largest and strongest in the industry.’
Scientific/Biomarker expertDr Shirin Khambata Ford
Roche Business Report 2011Personalised Healthcare |
Senior Biomarker & Experimental Medicine LeaderOncology Translational MedicineRoche Nutley, USA
88 Roche Business Report 2011 | Personalised Healthcare
‘We see tremendous changes in our tasks. With Personalised Healthcare, diagnostic services gain relevance rapidly since our test results become integral factors for the development of modern treatment strategies.’
‘Increasingly, treatment decisions are based on sophisticated
laboratory analysis covering complex diseases, cancer for
example. Modern diagnostic methods enable us to provide
precise data and thus offer a reliable basis for treatment
decisions. Rapid initiation of the right therapy and an opti-
mised use of the limited resources of our healthcare system
result from this strategy. This is a real win-win sit uation for
patients and for society as a whole.’
Medical laboratory scientist Dr José Gilberto Vieira
Roche Business Report 2011Personalised Healthcare |
Medical Advisor, Fleury LaboratorySão Paulo, Brazil
90 Roche Business Report 2011
employees worldwide
1,735
91Roche Business Report 2011
Our peOpleGlobal. Roche employs 81,735 people in 108 countries worldwide with 23% of
employees working in R&D.
Diverse. Our workforce represents more than 136 nationalities and the percentage
of women in key positions increased from 13% in 2009 to 18% in 2011, in line with our
five-year goal.
engaged. We conducted the first global employee survey for the Roche Group,
with an 80% participation rate overall.
Aligned and performance-focused. We aligned our compensation strategy
and performance management principles worldwide to create a stronger link between
company and individual performance and reward.
1,735
92 Roche Business Report 2011 | Our People
Roche is dedicated to translating innovation in science into
clear benefits for patients. To do so, we need highly skilled,
passionate and motivated people who are inspired to make
a difference in improving health around the world.
We work to achieve this by:•developing our people at all levels to realise their full potential•offering an inclusive culture that draws on the diverse skill,
background and knowledge of every employee•identifying our internal and external talent — those who have
the right skillsets for current and future business require-
ments
Together our activities improve our ability to solve problems,
discover innovative solutions and enhance the effectiveness
and performance of our teams and leaders. Inclusion supports
engagement which, in turn, fosters productivity and creativity.
It is our people worldwide who set us apart and who make
Roche an employer of choice. Our ability to attract, engage and
retain diverse talent ensures that we can continue to deliver
innovative healthcare solutions for patients well into the future.
Building a great workplace, every day
Our people drive our business. By consistently employing and
developing the best people, Roche has achieved its business
goals and excelled in science and innovation year after year.
To attract and retain the best and brightest minds, Roche is
committed to maintaining an excellent workplace — one that
goes beyond offering attractive compensation and benefits to
Key figures
roche employees worldwide (full-time equivalents/FTe*)
2011 2010 2009
Europe 35,509 35,811 35,310
North America 22,429 23,695 25,412
Asia 16,251 14,964 14,169
Latin America 4,506 4,633 4,930
Australia 755 858 891
Africa 679 692 795
Total 80,129 80,653 81,507
* Full Time Equivalent (FTE) is used to reflect the actual working time of full and part time employees. For example, two part-time employees working 50% would result in the equivalent of one full time equivalent (FTE) versus two employees (headcount).
employees (FTe) by operating unit
2011 2010 2009
Roche Pharmaceuticals 44,397 46,335 48,181
Chugai 6,908 6,852 6,632
Diagnostics Division 27,380 26,194 25,508
Other 1,444 1,272 1,186
Total 80,129 80,653 81,507
employees (FTe) by function
2011 2010 2009
Servicing 15,041 15,160 13,408
Manufacturing and logistics 14,786 14,770 16,395
Marketing and distribution 27,748 27,536 28,682
Research and development 18,449 19,039 18,894
General and administration 4,105 4,148 4,128
Total 80,129 80,653 81,507
employees by contract type
2011 2010 2009
Regular (FTE) 78,013 78,537 79,631
Fixed term (FTE) 2,116 2,116 1,876
Full time (headcount) 76,911 76,767 77,866
Part time (headcount) 4,824 4,845 4,562
18% on track to reach 2014 goalWomen in key positions +38% since 2009
Our People
93Roche Business Report 2011Our People |
Selected 2011 external awards and recognition
Rank Award Roche site
eXAMe
Best pharmaceutical company in Brazil
Roche Brazil
CrF Institute
Top employer for China
Roche China
2 universum — Ideal employers 2011
Top employer for natural sciences
Roche Switzerland
4 universum — Ideal employers 2011
Top employer for natural sciences
Pan-European
5 universum — Ideal employers 2011
Top employer for natural sciences
Roche Germany
6 Deloitte Best Company to Work For
Standard of excellence award
South Africa
10 Fortune’s 100 Best Companies by Size Genentech SSF*
15 Science Top employers Roche Basel
15 Great place to Work Roche Portugal
21 Great place to Work
Top 25 multinational employers
Roche Group
23 Great place to Work Latin America Region
Top 50 Fortune’s 100 Best Companies to Work For
Among large companies
Genentech SSF
Top 100 Working Mother Magazine 100 Best Companies Genentech SSF
* South San Francisco
providing employees with the chance to develop personally
and professionally, build their career, gain recognition for their
achievements and make their mark in their area of expertise.
Roche is consistently recognised as an excellent employer by
a range of well-respected organisations. This reflects our
steadfast commitment to create and maintain a working cul-
ture that embodies the Roche core values of integrity, courage
and passion. Our organisational structure aims to strike a bal-
ance between diversity, scale, reach, speed and cohesion to
enable and leverage innovation throughout the value chain.
In October 2011 Roche was honoured as one of the best multi-
national employers by the Great Place to Work Institute. More
than 350 multinational companies were chosen to participate
in this inaugural competition, and only three medical compa-
nies were selected as best employers.
The table below highlights some of the awards we received in
2011.
engaging employees
One measure of a great work environment is whether employ-
ees are actively engaged, both emotionally and intellectually.
Our experience and numerous studies show that employee
engagement is a key driver of employee well-being, as well as
better individual and business performance. For these rea-
sons, we constantly seek new opportunities to engage our
employees and drive innovation. Additionally, one of Roche’s
strategic five-year strategic goals is to achieve an employee
engagement level of 80%, which would bring us in line with the
very best employers.
To help realise this objective, we carried out the first-ever
Roche Group Global Employee Opinion Survey (GEOS) in 2011.
94 Roche Business Report 2011 | Our People
Conducted at all sites worldwide and offered in 20 languages,
the survey gave employees the opportunity to provide man-
agement with candid, anonymous feedback on a variety of top-
ics. The GEOS questionnaire measured the needs, expecta-
tions and desires of our employees, which helps us to continue
to build engagement and to identify areas that may need inter-
vention or additional support; The employee response rate was
80%. This provides solid data from which to infer key findings,
highlight best practices, identify areas for improvement and
design effective programmes. From a top-line standpoint, the
survey indicated an overall engagement level of 62% — which
places us slightly above the pharmaceutical industry bench-
mark.
Group-wide results indicate that employees are proud to work
for the company and believe in its future success. They also
have high satisfaction with their immediate work environment,
which includes factors such as colleagues, line managers and
physical working conditions. Facets of working life at Roche
with lower scores include decision-making, work processes
and the employee connection with senior leaders. These areas
will be the focus of initiatives sponsored by the Corporate
Executive Committee over the coming months.
Roche will continue to measure employee engagement, with
follow-up surveys at 18 months intervals. These efforts will
leave us well positioned to create and deliver the engagement
initiatives required to attract and retain top talent.
leveraging diversity
To realise Roche’s innovation goals, we work to sustain a
culture of mutual respect, integrity and trust, so that differing
views and perspectives can be freely exchanged, debated,
refined and, ultimately, leveraged into valuable scientific break-
throughs and business results.
Today, 46% of our 81,735 employees are women. Our employ-
ees worldwide represent more than 136 different nationalities.
And people from more than 82 nationalities work at our global
headquarters in Basel.
We know a diverse workforce provides the inspiration and
innovation on which our future business depends. People from
diverse backgrounds bring different methodologies, ideas and
knowledge to the workplace, spurring greater creativity, im-
proved problem-solving and unique collaborations.
A key area of focus is increasing the proportion of women in
Roche’s top management. We have committed at the highest
executive level to increase the percentage of women in key
positions 1 by 2014. To achieve this, Roche has established
a host of programmes and practices to better support women
— and other diverse talent — throughout their career. These
range from basic measures such as granting parental leave
and permitting flexible work schedules to enhancing mentor-
ing and sponsorship programmes and maintaining ties with
leadership networks.
Gender diversity
2011 2010 2009
Women in total workforce 46% 46% 46%
Women in line management 35% 37% 37%
Women in top 120 executive
positions 15% 15% 9%
Women in key positions 1 18% 16% 13%
In 2011 we implemented initiatives to attract diverse talent in
our branding and recruitment activities which emphasise diver-
sity and inclusion. Additionally, the Roche careers portal high-
lights our commitment to respect, empowerment and opportu-
nity for all. Another example comes from Roche Italy, where that
business unit participated in the Diversity at Work event in
Milan, which aims to connect diverse candidates (ethnicity,
gender, physical ability and so on) with potential employers
and open positions.
Roche affiliates were asked in 2011 to report on the effective-
ness of local benefit programmes in supporting Roche’s diver-
sity strategy. In 2012 we will use this data to identify areas for
improvement, with family friendly benefits such as flexible
workplace and work-schedule arrangements, and improved
childcare support added to local plans as appropriate. Addi-
tionally, the Pharmaceuticals Division has diversity action plans
in place at its top 20 affiliates. These plans address local needs
after an assessment of the strengths and opportunities of affil-
iates against six diversity best practices, ranging from recruit-
ment to flexible work arrangements.
We revised our benefit and mobility policies, implementing
new programmes that, for example, expand opportunities for
women to gain international experience. We also sought ways
to better assist working parents by delivering improved child-
care services and enhanced support for dual-career families.
And we launched a support programme to help partners of
assignees find employment in their host country.
1 Defined as those roles that are critical to business delivery, that drive significant value, and have the greatest breadth and depth of responsi-bility.
95Roche Business Report 2011Our People |
We have programmes to support a positive work-life balance.
One example is the Family & Career Network formed in 2010
in Basel to help our employees combine family responsibilities
and career. In 2011 this network executed several initiatives,
including championing the recommendations of an internal
review. These included outlining the commuting needs of
working parents, studying and summarising best practices
from other countries and launching a bilingual website to make
life easier for working parents in Basel.
Roche is also working to ensure gender balance in its global
leadership development programmes. During 2011, 33% of the
participants in 16 key leadership programmes were women, up
slightly from 32% in 14 such programmes in 2010. The per-
centage of female high potentials (promising employees who
are being prepared for leadership positions) remained stable in
2011 at 39%.
leadership pipeline
2011 2010
Number of high potentials 4,690 4,681
Percentage of women
high potentials 39% 38%
Percentage of women in global leadership
programmes 33% 32%
Our development efforts are beginning to show results, with
the number of female succession candidates for top positions
rising to 30% in 2011 from 26% in 2010. Additionally, 18% of key
leadership positions within Roche were held by women at the
end of 2011, up from 16% in 2010.
Towards the end of 2011, Sophie Kornowski-Bonnet, former
General Manager of Roche Pharmaceuticals in France, was
appointed Head of Roche Partnering. She assumes her new
role on 1 February 2012, and joins Roche’s Enlarged Corporate
Executive Committee.
In 2011 Roche became a member of Catalyst, an international
non-profit organisation that works to build inclusive work-
places and expand opportunities for women and business. As
a result, every Roche employee now has free access to this
resource for research, information and advice. We also worked
to promote understanding and awareness of diversity across
the organisation through internal communication activities,
including launching a Roche Group diversity and inclusion
intranet and updating the diversity section of our website.
Fostering innovation at work
Innovation is critical to Roche’s success, and our talent man-
agement approach actively fosters the generation and expres-
sion of new ideas.
Our strategy is four-fold:•attract and retain a cross section of exceptional people •create an inclusive environment that fosters ongoing dia-
logue and performance feedback •support employees’ personal and professional development •recognise and reward outstanding performance
Roche sponsors numerous annual competitions, symposiums
and awards to encourage creativity, spur collaboration and
recognise the company’s most innovative thinkers. We also
actively support promising young people through programmes
that provide increased access to leading scientists or the
resources to pursue scientific discoveries. Thinking of socie-
ty’s future workforce needs, our scientists interacted with
youth and children to spark their understanding of and interest
in a career in science. To commemorate UNESCO’s Inter-
national Year of Chemistry in 2011, and as part of Bring Your
Kids to Roche Day, our scientists in Basel presented a theatri-
cal play and an exhibition that explained how new molecules
become medicine. Others were involved on a regular basis
with Swiss Youth Researchers on special projects.
In all cases, the goal is the same: igniting and fostering viable,
innovative ideas that create maximum value for our patients,
customers, employees and investors.
Attracting top talent
We hire outstanding people. This is a central element of our
global HR vision, since employing the best talent is key to
ensuring a steady stream of the promising new ideas that drive
innovation.
Our ability to attract, engage and retain a diverse workforce
worldwide is, and will continue to be, affected by certain vari-
ables, including:•competition for key talent•changes in emerging market dynamics•the rise of technology, which enables flexible working and
new working styles•changes in worldwide demographics
96 Roche Business Report 2011 | Our People
In response to these challenges, Roche continuously develops
innovative recruitment strategies that reflect best practices
and market conditions. We deploy a team of talent scouts, for
example, to strengthen our talent pipelines with critical target
groups. We also target top business schools and attend key
business events to build awareness of Roche as an employer
of choice and as a progressive, engaging company.
To further ensure we reach target candidates, we have imple-
mented a global social media strategy. This initiative and our
talent relationship management strategy were recognised by
the Corporate Leadership Council, an international organisa-
tion that identifies and builds on the best practices of the
world’s top companies.
To reach the maximum number of potential candidates, Roche
hosts career websites in 91 countries. During 2011 Roche
career sites drew approximately 2.8 million visits. The Genen-
tech site attracted an additional 1.06 million visits. In total,
Roche received 360,000 applications for posted vacancies and
registered 205,000 new candidates to the Roche Group talent
pool, a database of employees and job seekers interested in
becoming Roche employees. Approximately 43% of our annual
vacancies are filled internally, as we encourage employees to
constantly identify and pursue new career opportunities.
To maintain our success in developing innovative products, we
aim to attract the best scientific minds by promoting leading-
edge research, strengthening our innovation network and
building scientific collaboration with academia through ini-
tiatives such as our postdoctoral programmes in research and
Early Development (gRED and pRED). These programmes
seek to foster advances in science, emphasising basic and fun-
damental discovery research, with work performed alongside
leading scientists and a clear commitment to publish in top
scientific and medical journals. In 2011 the gRED postdoctoral
programme had 120 positions, while the pRED programme had
117 projects on offer, with 85 active postdocs.
As a top employer, we pay close attention to the changing val-
ues and expectations of the workforce. We recognise, for
example, that many employees today have different attitudes
to and expectations about working more flexibly and merging
work and social life. We continually review our policies to
address these emerging trends and to ensure that Roche
remains an attractive employer of choice for current and future
generations.
Attracting employees: staffing rates
2011 2010 2009
New hires 8,463 8,279 8,192
Internal staffing rate 43% 45% 29%
External staffing rate 57% 55% 70%
retaining employees: turnover
2011 2010 2009
Total 10.1% 9.5% 7.0%
Europe 6.8% 5.7% 5.1%
North America 15.1% 12.3% 7.8%
Asia 8.9% 10.0% 7.2%
Latin America 14.8% 19.3% 13.4%
Australia 18.2% 20.2% 10.9%
Africa 18.4% 16.8% 18.3%
reasons for leaving
2011 2010 2009
Employee-initiated 50% 46% 51%
Employer-initiated 41% 44% 40%
Neutral 10% 10% 9%
Developing employees
At Roche, we recognise that developing and training employ-
ees is not only critical to the personal growth of our people but
also to the success of our company. When our employees are
successful in their positions and prepared to take on future
roles, including leadership positions, they deliver their best
possible performance. Our commitment to developing our
employees remains steadfast in these times of organisational
change.
employees
Roche provides development opportunities for all employees.
These range from formal technical and leadership training
pro-grammes to job assignments that offer valuable on-the-
job experience. We also offer mentoring and coaching pro-
grammes. We continued in 2011 to refresh the local offerings
in well-established markets, such as South San Francisco and
Basel, and introduced suites of programmes in our emerging
markets, such as the Roche China Academy in Shanghai which
opens in early 2012.
97Roche Business Report 2011Our People |
We are supplementing our classroom training with technology-
enabled programmes such as web-based simulations and vir-
tual classrooms. As shown in the next table, these approaches
allow us to manage training investment while ensuring access
to development opportunities for all employees.
learning and development
2011 2010 2009
Total training investment
(million CHF) 116 150 146
Training spend per employee
(CHF) 1,417 1,829 1,794
Total number of training hours
(million) 2.08 1.87 2.16
Average training hours
per employee 26 23 26
Number of postdoc students
and interns * 1,050 780 656
* Excluding Chugai.
To support development activity, we encourage every employ ee
to participate in career development discussions with their
manager. These discussions help to guide personal develop-
ment and identify the skills and training employees need to
achieve their career goals. In 2011 we introduced a suite of
online tools to support career development planning activities,
including building core competencies, establishing develop-
ment focus areas and providing guidance on career paths.
Going forward, we will maintain our efforts to strengthen and
stimulate employee development by introducing a system-
wide process and online development planning tool which will
be available to every Roche employee and manager.
Current and future leaders
Leadership succession planning was again a strategic priority
in 2011 and will continue to be in 2012. Roche has a number of
initiatives in place to accelerate development of its next gen-
eration of leaders. An example is Perspectives, our global
leadership rotation programme. Twenty alumni from this pro-
gramme are building impressive careers across the Roche
world, from Hong Kong, Vietnam and Shanghai to Spain, Basel
and San Francisco.
In addition, we offer a comprehensive suite of leadership
development programmes to help new and prospective lead-
ers progress in their careers. These include specially designed
development and assessment centres and action learning
through special global project teams. The objective is to edu-
cate leaders across the organisation on what it means to be
a leader at Roche and to furnish our leaders with the skills they
need to excel. We foster an approach of ‘leaders leading lead-
ers’ that features significant mentoring and coaching from
executives. In addition, the Executive Committee meets indi-
vidually with prospective leaders and reviews their develop-
ment plans quarterly. We continued in 2011 to encourage the
development of leaders by rotating talent across the organi-
sation and conducting cross-functional and cross-divisional
talent reviews. Our commitment to developing leadership skills
is vital to Roche continuing to lead in science and innovation
with a globally and culturally diverse workforce.
Global mobility
International experience is an important contributor to the
development of our future leaders, as it encourages the shar-
ing of diverse perspectives for improving our global business
in a manner that respects local cultures. The number of Roche
international assignments has risen sharply in recent years,
from 340 in 2005 to 658 in 2011. As part of our diversity strat-
egy, we also increased the number of women on international
assignment from 21% in 2005 to 26% in 2011.
To ease their transition into new cultures and environments,
and support their return home, Roche assists employees and
their families before, during and after their assignment abroad.
We also continuously assess our mobility programmes to
ensure they support the needs of a diverse assignee popu-
lation.
As the health and safety of our international assignees and
their families is one of our primary concerns, we rolled out
a global health insurance programme through a leading expa-
triate health insurer in 2011. This programme offers first-class
treatment and ensures access to high-quality medical facilities
regardless of location. In addition we implemented a security
briefing programme for assignees and their family members in
advance of assignments to high-risk countries.
In 2012 our focus will be on the harmonisation of global desti-
nation services, such as immigration support, welcome ser-
vices and house hunting. Our goal is to ensure a consistent
quality of experience for all assignees and their families,
regardless of destination.
98 Roche Business Report 2011 | Our People
rewarding and recognising employees
We reward strong performance through a transparent and
consistent process that encourages fairness, continuous feed-
back, dialogue and development. This approach, together with
Roche’s competitive compensation and benefits programme,
contributes significantly to attracting and retaining the best
people. Following the integration of Genentech in 2010, we
focused on aligning our remuneration policies and processes.
This culminated in the rollout in 2011 of a new compensation
strategy and global performance management principles that
bring a common philosophy and approach to all Roche employ-
ees worldwide.
performance management
As more employees work on an increasing number of projects
and tasks across borders, functions and sites, it has become
ever more important that we adopt cohesive standards to man-
age and reward employee performance. During 2011 we made
good progress against this objective, laying the groundwork to
roll out Roche’s global performance management principles in
2012. This new unified approach will better enable Roche to
maximise scientific and business results by creating a stronger
link between performance and reward. Moreover, it enables
managers to better differentiate and reward strong employee
performance.
The new programme also emphasises and encourages con-
tinuous two-way dialogue between employees and their man-
agers, instead of a formal once-per-year performance evalua-
tion. This enables both parties to reach a shared understanding
of objectives, achievements and compensation, while provid-
ing more frequent opportunities to share ideas, define busi-
ness objectives, adjust strategies and advance employee
development. In 2011 91% of our employees took part in per-
formance management discussions.
Workplace evaluations of all Roche employees will now follow
common policies and processes, with performance ratings
calibrated to ensure fairness and consistency. Additionally,
evaluations will focus on ‘what’ results were achieved —
whether individual and team objectives were met — as well as
‘how’ the results were achieved — whether Roche values of
integrity, courage and passion as well as our leadership com-
petencies were demonstrated.
To promote the adoption of Roche’s global performance man-
agement principles, our human resources team together with
senior leaders conducted workshops and briefing sessions
throughout 2011 in our primary markets. Additionally, employ-
ees may access supplementary communications materials
such as performance management and annual bonus guides
and web-based training.
During 2012 we will build on these educational efforts by con-
ducting workshops to ensure that our people have the knowl-
edge and expertise required to fully support our performance-
oriented culture.
Compensation
Remuneration is one aspect of Roche’s comprehensive strat-
egy to attract talented people, motivate and retain current
employees, and encourage strong performance. In 2011 the
company’s total investment in remuneration was 10.3 billion
Swiss francs.
In association with our new global performance management
principles, Roche is implementing a globally aligned compen-
sation strategy. The new common approach creates a stronger
link between performance and reward, positioning our employ-
ees to share in Roche’s success by linking their goals to corpo-
rate goals, while promoting a culture of performance, growth
and innovation.
Roche’s new compensation strategy also establishes a com-
mon bonus system for all eligible employees. The annual bonus
will comprise three components: individual performance; per-
formance of the individual’s global function, region or affiliate
organisation; and the Roche Group’s achievement of strategic
goals.
Most Roche employees transition to the new approach in Jan-
uary 2012, with the first bonus payout under the new approach
scheduled for early 2013. A key objective for 2012 will be to
support our managers’ and employees’ adoption of these prin-
ciples and approaches through ongoing training and work-
shops. We will also analyse and share information gained from
Roche business units in North America Pharmaceuticals which
implemented the approach in 2011.
To further align employee interests with those of our share-
holders, we maintain an employee stock purchase programme.
Through Roche Connect, employees in most countries can
purchase non-voting equity shares at a discount of up to 20%.
In 2011, 16,512 employees in 42 countries (37.28% of those
eligible) participated in this programme, purchasing securities
worth 58 million Swiss francs. Additionally, 18,150 managers
and employees received non-voting equity securities through
the Roche Long-Term incentive plan.
99Roche Business Report 2011Our People |
Benefits
A competitive benefit programme is integral to the reward
package Roche offers employees. Typical packages ensure
employees are protected financially in case of illness, disability,
retirement or death, while also offering a series of supplemen-
tary programmes designed to improve health and wellness.
Over 93% of affiliates offer extensive benefits plans.
Roche regularly reviews its benefit programmes to make cer-
tain they reflect the evolving needs of our workforce. During
2011 we implemented benefit plans in some emerging markets
and sought to align affiliates’ benefit programmes within coun-
tries to ensure fairness and to benefit from economies of scale.
In January 2011 we rolled out International SOS, a global assis-
tance programme that provides employees and immediate
family members with access to emergency medical and secu-
rity support services during business and personal travel.
Roche is diligent in its efforts to mitigate financial risks associ-
ated with our benefit plans. Given the uncertainty in the world’s
financial markets in 2011, we monitored the funding status of
our major pension funds closely. Cash injections were made in
some countries, often in combination with pension plan policy
changes, such as the elimination of early retirement incentives.
We also continued to introduce more flexible retirement mod-
els to better accommodate the diverse needs of an ageing
workforce.
In 2012 we will work to increase our employees’ awareness of
the benefits Roche offers through a series of communication
initiatives.
Aligning human resource processes
Roche’s new approaches toward performance management
and compensation will be supported operationally by our
Common Human Resource Information Solution (CHRIS). This
comprehensive system integrates 12 major human resource
processes, including organisational management, compensa-
tion and benefits, performance, succession and talent man-
agement, international assignment management, all learning
and training programmes and payroll and time management in
certain countries.
CHRIS incorporates the best practices of Genentech and
Roche and sets the foundation for a more efficient and effec-
tive HR organisation by streamlining, standardising and simpli-
fying data management across national and affiliate bounda-
ries. This implementation advances Roche’s ability to operate
effectively internationally.
Implementing CHRIS was a major undertaking for Roche’s HR
organisation in 2010 and 2011. Prime challenges included
aligning more than 17 legacy systems across multiple plat-
forms and countries, as well as translating the system into 10
languages. The project encompassed virtually all Roche affili-
ates, with team members located around the world.
In November 2011 CHRIS reached a major milestone when
Roche’s North America Pharmaceuticals Division switched to
the new system with minimal disruption. As of January 2012,
CHRIS is live in 108 countries and at 187 affiliates and agencies.
Maintaining fair employment practices
The Roche Employment Policy governs human rights and
labour relations at every Roche site, setting out our inclusive
workplace philosophy and exacting employment practices.
Roche does not tolerate any form of workplace discrimination
based on gender, race, age, skin colour, religion, marital status,
sexual preference, heritage or physical or mental disability, nor
do specific Roche sites tolerate any other forms of discrimina-
tion prohibited by law or regulation in the countries or localities
where they operate.
The Chief Compliance Officer monitors implementation of and
compliance with this policy in association with a network of HR
managers and compliance officers at each site, who also
ensure the appropriate policies and programmes are in place
to promote fair, respectful and consistent treatment for all
employees. For example, our Basel site reviewed remuneration
fairness with an external expert, achieving good results: equal
pay for equal work for men and women is a reality.
Our directive on the protection of personal data ensures that
we safeguard employee information and comply with all rele-
vant local legislation.
We respect our employees’ right to freedom of association and
collective bargaining. If they desire, Roche employees can be
represented by unions, works councils or similar organisa-
tions. Currently, 8,800 Roche employees are trade union mem-
bers and more than 30,980 belong to other labour groups.
Additionally, the Roche Europe Forum represents the interests
of about 35,300 employees in 26 countries. Our goal is to
maintain an open dialogue with employee representatives at all
times. For example, in 2011 we approached employee repre-
sentative councils in 25 locations and at the European level
to involve them in the implementation of our new compensa-
tion strategy and performance management principles.
100 Roche Business Report 2011 | Our People
Receptors
OncogenicBRAF
KSR
RAF
Grb2
Transcriptionfactor
MEK
ERK
ERK
100 Roche Business Report 2011 | Roche Personalised Healthcare
Intervening at the molecular level
Thanks to ultramodern methods of sequencing the genome — including a series of innovative technologies
from Roche — today’s scientists have identified some 350 genes involved in the genesis of cancer. An
example is the BRAF gene that is found in a mutated form in about 50% of all cases of metastatic melanoma
(the most aggressive form of skin cancer) and approximately 8% of all solid tumours.
A mutation of the BRAF gene results in an abnormal BRAF protein that is locked in an active state. This may lead to uncontrolled cell growth and survival, potentially driving the development and progression of a tumour.
Our new cancer medicine Zelboraf selectively blocks the action of the altered BRAF protein. This may cause cancer cells to stop growing or even die, which in turn can lead to tumour shrinkage, reduce the risk of disease progression and extend a patient’s life.
Personalised Healthcare is the strategy of the future. Not only for cancer, but also for fighting infectious diseases like hepatitis B and C, inflammatory diseases such as asthma and diseases of the central nervous system.
Roche Personalised Healthcare
00_06_Roche_AR11_Boxed features_ENG.indd 100 27.01.2012 12:05:59
101Roche Business Report 2011Our People |
We treat our employees fairly throughout the employment
cycle, including supporting those affected by organisational
changes such as our Operational Excellence programme. To
date around 4,100 positions have been reduced in Roche Phar-
maceuticals as a result of the programme. Of those reductions,
about 1,400 took place in 2010 and a further 2,700 during 2011,
including transfers to third parties. These changes have been
partially off-set by headcount increases in our Diagnostics
Division and in emerging markets, such as China, where we
continue to build capacities and capabilities given the increas-
ing importance of those markets to Roche.
By the end of March 2011, we had concluded consultations
with employee representative bodies about Operational Excel-
lence and ensured that social plans and support measures
were in place to meet the needs of all affected employees.
Those measures included severance pay, outplacement ser-
vices, counselling, access to career centres, retraining and
redeployment options.
More on the Web
• Employees: www.roche.com/employees• Global careers portal: http://careers.roche.com• Employment policy: www.roche.com/employment_policy.pdf• Group policies, positions and guidelines: www.roche.com/
policies_guidelines_and_positions• Commitments to employees: www.roche.com/commitments
102 Roche Business Report 2011
COMMUNITY INVOlVeMeNTFocused giving. We direct our efforts across four strategic areas, with an
emphasis on innovation, collaboration and sustainability, as exemplified by the
EDUCARE programme which trains healthcare professionals in oncology in
sub-Saharan Africa.
Measuring impacts. We assess our engagement through the outcomes of the
projects we support. To advance this, we strengthened our processes for collecting
outcome information from our affiliates during 2011.
Community redevelopment. A particular area of focus in 2011 was
redevelopment projects in communities which had been devastated by natural
disasters, such as the rebuilding of schools in Haiti and Pakistan.
Supporting education. In partnership with UNICEF Switzerland we laid the
foundation for a new teachers training college in Malawi, that will house and train
540 teachers in 2013.
103Roche Business Report 2011Community Involvement |
Our approach
As with our core business activities, Roche’s philanthropic
work aims to leverage innovation and collaboration to create
lasting benefit. For this reason, we evaluate our philanthropic
projects by their impact and not by their cost.
We direct our giving to four areas of priority: humanitarian and
social projects, science and education, arts and culture, and
community and environment. We also seek to respond to
needs that would not be addressed without Roche involve-
ment. Emphasis is placed on projects that reflect four criteria:•Innovation: applies creative and effective solutions to soci-
ety’s challenges•Sustainability: delivers enduring effects in a dynamic,
resource-constrained world•Collaboration: draws on the strengths and capacities of
respective partners•Outcomes: provides tangible long-term benefits to the
people involved
Our actions are guided by Roche’s Corporate Donations and
Non-commercial Sponsorship Policy.
Philanthropic donations, both by the company and its fully-
supported philanthropic entities, may only be made to regis-
tered or accredited non-governmental organisations or not-
for-profit charities. Additionally, donations made by local
affiliates are directed to local purposes. This enables Roche to
tailor its activities to local culture and need, while also support-
ing employee engagement and allowing a quick response
when required.
Our preference is to engage as a true collaborator and at the
earliest possible stage. We aim to be an active, long-term part-
ner by sharing the risks, commitments and investments to
achieve project success. We focus our resources on select
projects that have a lasting impact rather than across many
initiatives.
All of our affiliates must report annual donation amounts
through the Roche Financial Group reporting system. We
also solicit data on project outcomes, such as the number
of patients benefiting from disaster relief, the number of health-
care workers trained or the number of classrooms con-
structed.
Humanitarian and social projects
The largest part of our philanthropic giving is directed toward
humanitarian and social projects, as we believe that improving
human services and support systems is the most effective way
to help build stronger, healthier communities. We also aim to
provide support that can be maintained on a long-term basis
by local resources. In countries that do not have adequate
healthcare infrastructure or delivery systems, we find invest-
ments in education and prevention often a more sustainable
solution than medicine or diagnostic donations.
Our activities in 2011 included continued support of the
EDUCARE programme. Launched in 2010, this programme
supports training of healthcare professionals in sub-Saharan
Africa and is conducted by the International Atomic Energy
Agency, as the launch of their Virtual University for Cancer
Control and Regional African Cancer Training Network. In 2011
EDUCARE conducted a proof-of-concept training model
(18-hour in-service cervical cancer training course with 50
plus enrollees) and identified the ten training priorities among
the pilot member states of Ghana, Tanzania, Uganda and
Zambia.
In association with the Albert Einstein College of Medicine, we
initiated a model programme in Ethiopia to enhance cancer
care and cancer awareness by reducing delays in treatment,
increasing capacity to deliver basic care and improving the
quality of care with a focus on women’s reproductive cancers.
The programme was launched in 2011 at the Oncology National
Conference, a working forum attended by close to 100 Ethio-
pian cancer care leaders and practitioners.
During 2011 the Roche Employee Action and Charity Trust
(Re & Act) launched a disaster relief campaign to aid commu-
Breakdown of giving by area, 2011
88% humanitarian and social projects
4% science and education
5% arts and culture
3% community and environment
104 Roche Business Report 2011 | Community Involvement
nity redevelopment following the devastating earthquake in
Haiti and extensive flooding in Pakistan. Employees from more
than 40 of our affiliates raised donations which, along with
core funding from Roche, are helping to build, equip and oper-
ate two schools in Haiti and one school in Pakistan. All three
schools are expected to open by spring 2012. Both projects
deliver benefit beyond the initial schools since they establish
models that can be further replicated.
The majority of our contributions are managed locally. This
allows each business unit to determine how best to address
the needs of its own community. After the disastrous earth-
quake that occurred in Japan in March 2011, our colleagues
at Chugai initiated emergency support, making a significant
donation to the Japanese Red Cross to help with relief
efforts. This gift was augmented by 60,000 courses of Tamiflu
donated to the health authorities to help fight influenza at
refugee centres. We also contributed a range of diagnostic
instruments and diabetes care supplies to help treat almost
11,000 patients.
We encourage employee engagement. Each year on June 16,
Roche employees worldwide join the Roche Children’s Walk to
generate support for children in need. In 2011 nearly 16,000
employees participated from 104 sites and raised about one
million Swiss francs, including matching funds from Roche.
The majority of these funds will be used to continue supporting
programmes in Malawi which provide HIV/AIDS orphans with
food, education and skills training. The Walk proceeds also
enabled Roche, with its partner UNICEF Switzerland, to assist
building a critical new teachers training college in Malawi. In
April 2011 we helped break ground for the college which will
house and train 540 teachers. The balance of the Walk funds
will be used by individual Roche sites to support vulnerable
children locally.
examples of indicators and measures of success 2011
Category Community beneficiaries Roche employee engagement Infrastructure and system changes
Humanitarian
and social
Individuals screened Field relief medicines logistics
consultations
Social service centres renovated
Student teachers trained Volunteers with disabled children Prototype schools constructed
Children enrolled in secondary
school
Employee walkers raising funds
for vulnerable children
Mobile health clinic operations and
construction of health train
Disabled children assisted Teachers training college
constructed
Electricity installed at day centres
Mothers in maternal health
sessions
Community bore holes drilled
or repaired
Science and
education
Teachers in professional
development workshops
Scientists as workshop trainers Industrial placement of students
Children aided by tutoring Science/technology educational
presentors
Teaching methods adopted
Secondary students conducting
academic research
Volunteer tutors or mentors
Arts and culture Museum visitors Roche expert workshop leaders Creativity workshops established
Arts and science students joint
projects
Performances of commissioned
music
Children in creativity workshop Ongoing museum operations
Concert audiences
for challenging music
Community and
environment
Individuals and families assisted
with community services
Workforce volunteers in local
programmes
Cultural groups sustained
Family counseling sessions Recreation programmes established
Public sites cleaned up
This list of exemplary outcomes is representative of activities by more than 100 Roche affiliates around the globe and corporate headquarters.
105Roche Business Report 2011Community Involvement |
Sharing know-how can yield a more lasting benefit than a strict
material or financial contribution. Since 2005 Roche has sup-
ported the International Committee of the Red Cross (ICRC) in
its work to provide displaced people with access to clean
water. In that time, Roche has assisted more than 1.4 million
civilian beneficiaries in seven countries through cash and in-
kind donations. In 2011 we extended annual commitment to
support the ICRC to 2017.
Science and education
Our business is founded on excellence and innovation in
science and technology. Essentially, we aim to attract the
best scientific minds by promoting leading-edge research,
strengthening our innovation network and building scientific
collaboration with academia. We also support programmes
that improve science education, draw talent to science careers
and engage outstanding young scientists.
To encourage young people to choose science as a career, we
support initiatives that promote interest in natural sciences.
During 2011 in Switzerland, we funded the launch of Science
on the Move, a nationwide competition conducted to identify
the secondary school class with the greatest dedication and
commitment to the field of natural sciences. At the culminating
competition held at Roche headquarters, 10 finalists earned a
science day in Basel or Rotkreuz and the winning class was
awarded a science week in California.
In September we were a lead sponsor of the 2011 Swiss Talent
Forum, which gathered 100 selected secondary and college
students from Switzerland and around Europe to discuss the
future of health. Following extensive debate, this young per-
sons’ think tank developed several concrete proposals to
address emerging healthcare challenges.
Arts and culture
We support arts and culture as a reflection of our passion for
innovative thinking as characterised by creativity, excellence
and distinctiveness. During 2011 we presented Roche Conti-
nents at the Salzburg Festival. The programme encourages art
and science students from across Europe to explore the con-
nection between their two realms through a series of creativity
workshops and related contemporary music performances.
In February Toshio Hosokawa’s orchestral piece ‘Woven
Dreams’ received its New York City premiere at Carnegie Hall.
Hosokawa’s composition is the fifth work Roche has commis-
sioned by an outstanding contemporary composer under the
auspices of Roche Commissions.
We provide further support for creative expression through
monthly Roche ’n’ Jazz events. Together with the Roche-
founded Museum Tinguely and the Bird’s Eye Jazz Club, we
bring modern inventive jazz to the community of Basel. Now in
its sixth year, Roche ’n’ Jazz has entertained more than 17,000
people with performances by 66 ensembles.
Community and environment
One of the keys to Roche’s success is our involvement in the
communities where we operate. To maximise their effect,
projects are selected and managed locally. In 2011 two exem-
plary affiliate programmes made a positive difference in Brazil
and Turkey.
In 2001 Roche planted the seeds that would grow to become
the Programa Vizinho Legal (Good Neighbour Programme) in
São Paulo, Brazil. It aims to transform Jaguaré, a local commu-
nity confronted with numerous social vulnerabilities, into a
healthier place with a commitment to a better future.
With few public facilities and just four hours of school provided
daily, the programme works to mitigate social idleness and
keep children off the streets. Toward that end, the Good
Neighbour Programme has developed numerous cultural and
sports activities and also built proactive attitudes toward
healthcare and critical health issues.
Since initiating the programme, Roche has seen progress on
many measures, including social skills, self-esteem, cultural
repertoire and better societal interactions. In 2011 the Good
Neighbour Programme reached 442 children and adolescents
and 860 families. Since 2001 it has helped over 6,000 children
and adolescents.
Roche Turkey is also deeply engaged with local communities,
often in partnership with UNICEF Turkey. In 2011 Roche Turkey
participated in the Stars of Istanbul, a large-scale arts event
emphasising a brighter future for children. Giant star-shaped
sculptures, inspired by the culture and history of the city, were
displayed throughout Istanbul and then auctioned to raise
money for UNICEF. Additionally, Roche Turkey used a portion
of the funds raised through the Roche Children’s Walk to help
UNICEF Turkey establish a new kindergarten which opened in
March 2011 for 120 pupils aged three to six.
More on the Web
• Donations and sponsorship: www.roche.com/donations_and_sponsorship
• Community programmes: www.roche.com/society• Roche Employee Action and Charity Trust: http://react.roche.com/
106 Roche Business Report 2011
professionals employed globally in the field of health, safety, security and environmental protection
107Roche Business Report 2011
environmental stewardshipprevention. We continued to foster employee engagement in and responsibility
for safety, security and environmental protection through education, awareness and
training.
minimised footprint. We introduced more new sustainable technologies and
processes to minimise our impact on the environment.
improved eco-balance. We reduced our ecological impact per employee by 4%,
on target for a 15% improvement by 2020 from 2010 levels.
reduced energy use. We reduced energy consumption by 7.7% and CO2
emissions by 4.3%, on track to reach our five-year goal of a 10% reduction by 2014.
108 Roche Business Report 2011 | Environmental Stewardship
Protecting people and the environment is essential to our busi-
ness. At Roche, we refer to safety, security, health and environ-
mental protection as SHE, and approach it with the same sense
of responsibility, and just as methodically, as we do issues con-
cerning quality, productivity and cost efficiency.
We strive for continuous improvement in SHE wherever pos-
sible and economically viable. We seek sustainable long-term
improvement by changing behaviour, adapting equipment to
the most recent standards and by developing innovative pro-
cesses throughout our organisation.
Improving and monitoring performance
Employee engagement and training
Prevention is the key to effective SHE management. More than
600 employees support our SHE programmes worldwide. SHE
teams at each Roche site identify risks, develop mitigation
plans and communicate SHE policy and guidelines to employ-
ees and other stakeholders.
We believe that education, awareness and training is the best
way to foster employee engagement in and responsibility for
SHE. We, therefore, conduct regular training sessions, regional
conferences and workshops and provide online tools in local
languages to most employees. In 2011 our employees partici-
pated in more than 200,000 hours of SHE training. We also
encourage employees to identify areas for improvement and
periodically review the effectiveness of our SHE management
system.
Using a wiki-style database of SHE good practices, our
employees regularly share knowledge and exchange new
ideas. The database includes solutions from simple proce-
dures, like a safe method for opening cardboard boxes, to best
practices for operating complex energy management systems
and guidelines for ergonomic office seating.
The Roche Responsible Care Award recognises the best con-
tributors to and applications of our SHE practices. We received
119 entries for the 2011 award and saw implementation of
numerous solutions found in the database with 14 sites being
awarded.
Audits and assessments
We assess SHE performance by comparing our results against
laws and regulations, internal standards and those set by
organisations such as the International Chamber of Com-
merce’s Business Charter for Sustainable Development, the
International Organization for Standardization and the chemi-
cal industry’s Responsible Care programme.
We conduct internal audits every three years at critical chemi-
cal, pharmaceutical and diagnostics manufacturing sites. The
audit frequency for all other facilities is determined by risk
potential, strategic importance, past performance and other
site-specific circumstances. Our internal audits stipulate nec-
essary SHE improvements. Plant management and local SHE
officers, meanwhile, conduct more frequent spot checks and
inspections to assess compliance with SHE standards.
We expect external manufacturers, suppliers and service pro-
viders to meet the same SHE standards as we do. To ensure
compliance with these standards, we, or third-party auditors
retained by us, periodically audit the operations of our suppli-
ers and issue recommendations for improvement. In the event
of unsatisfactory SHE performance, we may terminate a con-
tract or refuse to award a contract to a supplier.
Key figures
0.0670.16412.67
6.88
on track to reach 2015 goal
on track to reach 2014 goal
on track to reach 2014 goal
on track to reach 2015 goal
Roche accident rate (RAR)
tJ/employeeEnergy efficiency
t/employee
million impact points/employee
CO2 efficiency
Total environmental impact
+3.2%–7.7%–4.3%–4.0%
Environmental Stewardship
109Roche Business Report 2011Environmental Stewardship |
she audits
2011 2010 2009 2008
internal audits
Follow-up 23 24 27 25
First time 3 4 2 2
external audits*
Follow-up 5 5 4 n.a.
First time 42 31 34 17
* of direct materials suppliers
Of the 23 internal follow-up audits in 2011, almost all sites
improved their performance. Recommended SHE improve-
ments following these audits included increasing involvement
of line management and improving business continuity man-
agement. Further details can be found in the chapter Manu
facturing and Procurement, page 61.
safeguarding employees and property
security
Our goal is to protect our employees and visitors, physical
assets, intellectual property and products from harm or loss. In
addition, we have a separate IT security organisation that man-
ages issues such as virus protection.
In 2011 Roche implemented travel security and help services
for all employees and their family members. These services
include a 24-hour hotline to professional advice and support in
case of a medical or security emergency during travel. We also
provide preventive medical and security information in about
200 countries and more than 300 cities and regions. By year-
end we issued guidelines for the emergency evacuation of
expats and business travellers.
Further security activities in 2011 included attending the East-
ern Europe Security Workshop in Istanbul, Turkey, where site
security officers together with the Chief Security Officer dis-
cussed priority issues such as transportation security, product
counterfeiting and information security.
health and safety
Employee health and safety is our first priority. Our primary
objective is to keep the Roche accident rate (RAR) below 0.07
through 2015 and reduce it to below 0.06 by 2020, and to
reduce the Roche illness rate (RIR) to less than 0.01 by 2020.
(RAR corresponds to the number of working days lost due to
occupational accidents per employee each year at a Roche
site. RIR corresponds to the number of working days lost due
to occupational illnesses per employee per year.)
We maintain an integrated programme of employee consulta-
tion, workplace inspections and training across all areas of the
business. Our approach is to promote a strong safety culture
that empowers all of our employees to report and address
safety issues. We expect similarly rigorous policies from our
contractors. We also encourage the safety and well-being of
our employees by selling protective equipment for recreational
activities at a discount and conducting bicycle safety checks,
among other activities.
Health and safety activities in 2011 included expanding our
successful US driver-safety programme to other Roche sites,
which includes defensive driving techniques and specific
health checks such as vision and hearing. A number of sites,
such as Pleasanton, California, USA, offer special training in an
ergonomic showroom to prevent injuries from poor use of
furniture, machines and equipment.
These and other on-going efforts to further improve workplace
safety have resulted in a decline of approximately 45% in the
number of work-related accidents per million working hours
from 2005 to 2011. Employees reported 390 occupational acci-
dents in 2011, a 10% decrease in frequency compared with
2010, while the resulting number of lost days increased 3.9%.
Overall, the Roche accident rate worsened by 3.2%. The
number of reported cases of occupational illnesses decreased
to 141 in 2011 from 182 cases in 2010. The increase of the
Roche illness rate (lost days due to occupational illnesses) is
due to a single case causing an absence of nearly a year.
The overall positive trend in occupational accidents and illness
was recognised in 2011 when Roche Spain received a social
safety bonus for their low accident rate and our Mannheim site
received the Chemical Industry Association’s Responsible
Care Award for its ergonomics training programme.
Our occupational accident and illness profile remains consis-
tent, with slips, falls and repetitive strains representing the
majority of work-related incidents in 2011 and no major acci-
dents for three consecutive years. Outside the workplace,
however, two employees died tragically during a summer party
organised by the company in Switzerland. The employees were
hit by a falling tree during a thunderstorm.
110 Roche Business Report 2011 | Environmental Stewardship
employee safety and health
2011 2010 2009 2008
Roche accident rate 0.067 0.065 0.074 0.078
Roche illness rate 0.025 0.014 0.008 0.008
Number of occupational
accidents 390 432 392 474
Cases of occupational
illnesses 141 182 227 270
Work-related fatalities 0 0 0 0
Work-related accidents
per million working
hours 2.67 2.97 2.92 3.42
protecting our property
Counterfeit products are major risk to our patients and our
reputation. We have implemented a number of anti-counter-
feiting measures and we continue to work with authorities on
a system to track and trace products from distribution to dis-
pensary. Further details can be found in the chapter Marketing
and Distribution, pages 73–75.
minimising our environmental footprint
As part of our commitment to sustainable development, we
proactively seek to employ new, more sustainable technolo-
gies and processes and to minimise our impact on the environ-
ment.
eco-balance
Eco-balance measures the demand we place on the Earth’s
eco-systems, allocating environmental impact points to two
ecologically relevant factors: the consumption of resources,
such as raw materials, water and energy, and the impact from
waste and emissions to the air, water and soil. These points are
added and then related to the number of employees which
enables us to monitor our environmental impact per employee
(million impact points).
We have established a Group-wide goal for eco-balance which
allows management at each of Roche site to establish local
strategies and objectives for reducing environmental impacts
best fitted to their individual situation.
Our total environmental impact per employee in 2011 was 6.88
million impact points, a 4% improvement from 2010. We have
targeted to improve our eco-balance by 15% from 2010 levels
by 2020.
eco-efficiency
Eco-efficiency is based on the concept of creating more goods
and services while using fewer resources and creating less
waste and pollution. We quantify eco-efficiency by the eco-
efficiency rate (EER), a ratio of sales to expenditures on envi-
ronmental protection and environmental impact points which
is calculated in accordance with the Swiss Federal Office for
the Environment (FOEN). The more efficiently we increase
sales and reduce environmental harm, while keeping growth of
expenditures on environmental protection lower, the higher
the EER value and thus eco-efficiency.
We seek to improve eco-efficiency by focusing primarily on
reducing material and energy consumption, reducing waste
and using renewable resources. These and other efforts
resulted in our EER in 2011 improving by 30% to 0.539 from
2010.
eco-efficiency rate (eer)
2011 2010 2009 2008
Sales
(million CHF) 42,531 47,473 49,051 45,617
Environmental
expenditure
(million CHF) 140 194 186 209
Environmental
impact (106
environmental
impact points) 563,742 591,592 572,983 564,328
EER (x 1000) 0.539 0.414 0.460 0.387
In 2011 we invested 118 million Swiss francs in SHE measures,
compared with 163 million in 2010. Our SHE costs in 2011 were
311 million Swiss francs, the same as 2010.
increasing energy efficiency
Our goal is to reduce total energy consumption — fossil fuels
and electricity — in gigajoules per employee by 10% by 2014,
with 2009 as a baseline, and by 20% by 2020, based on 2010
levels. Our long-term goal is to reduce energy consumption
per employee by approximately 50% from 2005 levels.
Our long-term strategy is to improve energy efficiency aggres-
sively before substituting fossil fuels with sustainable energy.
The goal is to increase the proportion of sustainable energy we
use to 20% by 2020. Since energy use is the main source of
greenhouse gas emissions, and reducing energy consumption
also lowers operating costs, energy conservation is a priority
Raw materials
Primary energy
Water
Landfilled waste
Emissions to the water
Emissions to the air
Environmental impact per employee in 2011:
6.88 Mio impact points Products
67042
41374
1981
22967
54988
375390
111Roche Business Report 2011Environmental Stewardship |
throughout the Group. Our systematic approach to energy
management includes:•constructing energy-efficient buildings•retrofitting heating, cooling and air conditioning installations•adjusting the range of acceptable temperatures in offices
and other workplaces•purchasing energy-efficient equipment, including hybrid
and diesel-efficient cars•changing work processes•reviewing employees’ travel needs
In 2011 we continued to focus on the responsible use of re-
sources and continuous reductions in energy consumption.
Our activities included:
•reducing automobile fuel consumption and fleet emissions to
meet lower CO2 emissions targets, such as the 120 g/km
standard set by our Western European pharmaceutical oper-
ations reducing fossil fuel and electricity consumption by
recovering waste heat from building cooling systems in Basel•developing ‘green IT programmes’, such as use of low-
energy LED screens, consolidating data centres and using
the heat generated from them for heating other buildings•using recycled and sustainably harvested building materials
to renovate an office building in Nutley (New Jersey), US,
which achieved Leadership in Energy and Environmental
Design (LEED) Gold certification•installing window film in buildings on the Genentech campus,
USA, which provides additional insulation by blocking 99%
eco-balance
112 Roche Business Report 2011 | Environmental Stewardship
of ultraviolet radiation and 90% of infrared heat, but only 30%
of visible light
These activities resulted in improved energy usage in several
areas, including:•a 6.3% reduction in business travel related fuel consumption •a 16.1% decrease in car fuel consumption •a 57% increase in the use of sustainably generated electricity
Together with reduced energy consumption in buildings and
stationary equipment, and a relatively stable staffing level, our
overall energy consumption declined 7.7% in 2011. Energy con-
sumption per employee was 164.2 gigajoules per employee,
which surpassed our 2011 target of 171 gigajoules.
lowering greenhouse gas emissions
Greenhouse gas (GHG) emissions at Roche originate from the
generation and use of energy. Our goal, therefore, for improv-
ing energy efficiency and reducing energy consumption also
applies to GHG emissions: a 10% reduction, measured in
tonnes per employee by 2014 from 2009 levels and a 20%
reduction by 2020 from 2010 levels. We expect to achieve fur-
ther reductions by substituting fossil fuels with energy from
sustainable sources.
We seek to decrease GHG emissions by establishing energy
standards that ensure new plants and buildings are designed
for maximum energy efficiency, while optimising and retrofit-
ting existing assets. We also encourage the exchange of best
practices through a variety of communication channels.
We are reducing the amount of fuel we use to heat, cool and
operate our sites and for business-related travel, however, the
latter is declining at a slower rate. We, nevertheless, reduced
greenhouse gas emissions by 4.3% as a consequence of
energy savings measures.
Greenhouse gas emissions (CO2 equivalents)
2011 2010 2009 2008
Total emissions
(million tonnes) 1,031 1.077 1.053 1.062
Total emissions
per million CHF
of sales (tonnes) 24.23 22.69 21.47 23.28
energy use terajoules
2011 2010 2009 2008
Total energy use 13,372 14,495 13,898 13,662
Total energy use per
million CHF of sales 0.314 0.305 0.283 0.299
Total energy use per
employee 0.164 0.176 0.176 0.178
reducing the use of halogenated hydrocarbons
Halogenated hydrocarbons are in use as refrigerants in cooling
equipment. Chlorinated compounds deplete the ozone layer
whereas the fluorinated and partially fluorinated ones have a
considerable global warming potential. All of them are persis-
tent and thus stay in the atmosphere over a long period of time.
We plan to reduce halogenated refrigerants at all Roche sites
by 90% by 2015. Newly acquired sites, such as Genentech and
Ventana, will work towards separate timelines.
Even though less than 1% of our GHG emissions are haloge-
nated hydrocarbons, our preference is to eliminate all such
emissions. However, recent acquisitions and the lack of alter-
natives in some countries make complete elimination of these
chemicals by 2015 unrealistic. We nevertheless continue to
examine alternatives and work with refrigeration suppliers to
make further reductions.
We have made significant progress reducing emissions of
halo genated hydrocarbons. Since 2004 we have eliminated all
halons and reduced fully halogenated compounds by 90%,
excluding Genentech sites.
halogenated hydrocarbons tonnes
2011 2010 2009 2008
Inventory 181.9 205.2 179.8 144.6
Emissions 3.8 3.8 6.5 3.4
energy use by type
10.0% fuel used by company vehicles
1.6% oil
29.0% grid electricity
16.7% fuel due to business air travel
3.8% district heating
1.2% waste
37.7% natural gas
113Roche Business Report 2011Environmental Stewardship |
decreasing other air emissions
We minimise emissions to air through a variety of technologies
and practices. Our priorities are to avoid pollutants, reduce
quantities of pollutants and control remaining pollutant emis-
sions in line with our eco-balance goals. Our overall objective
is to keep emissions to the low levels we have achieved in
recent years.
Our strategy prescribes a continuous improvement pro-
gramme for reducing emissions to air at our manufacturing
operations. These include flue gas scrubbers to reduce nitro-
gen oxides (NOx) and sulphur dioxide (SO2) and various incin-
eration and freezing processes to reduce the release of volatile
organic compounds (VOCs), which may also reduce energy
use.
We completed pilot studies in 2011 for using cryogenic equip-
ment to reduce air emissions and plan to install this equipment
in our Florence (US) site to freeze out volatile organic com-
pounds from waste air. Our emissions to air fluctuate from year
to year, but remain at very low levels.
emissions to air tonnes
2011 2010 2009 2008
VOCs* 124 164 177 213
Particulates 20 33 27 27
Nitrogen oxides 222 262 286 193
Sulphur dioxide 8 7 9 10
* volatile organic compounds
managing waste
Waste is a parameter of our eco-balance. Our waste reduction
targets, therefore, are reflected in our goal to improve the
Group’s eco-balance by 15% by 2020. We maintain waste
reduction goals for individual sites, however, we do not set a
Group goal because of large year-to-year fluctuations, mainly
due to waste from construction and demolition activities.
Roche, as with other pharmaceutical and diagnostics compa-
nies, produces relatively low volumes of chemicals and thus
generates small quantities of chemical waste. We are reducing
already low volumes of waste as we produce more biotech
products and fewer chemical-based products. We, neverthe-
less, accept responsibility for all waste generated from our
operations, including that deposited in the past at our sites or
in landfills. We permit landfilling only as a last resort and, even
then, only for inert materials such as slag or incineration ash.
Depending on the availability of suitable local waste-treatment
plants, we may dispose of non-hazardous general waste in
authorised landfills.
With an 8.6% increase in total production in 2011, waste gen-
eration went up slightly by 4%, as we incorporated waste
mitigation measures such as increased solvent recycling in
Singapore. General waste, meanwhile, declined 11.5% mainly
because of lower amounts of construction waste and new
recycling methods in South San Francisco and Poncé (Puerto
Rico).
In 2011 the Roche Environmental Awareness in Chemical Tech-
nology (REACT) programme awarded proposals for improving
the sustainability of chemical processes and syntheses. We
received submissions for replacing hazardous chemicals,
avoiding waste and reducing energy consumption, all of which
also cut costs. One winning team reduced by one-half the
amount of reagents and solvents needed to manufacture an
equal amount of product, while replacing hazardous reagents
previously used with less problematic ones.
In 2011 Roche participated in a technical investigation of the
Kesslergrube landfill in Grenzach, Germany, as a former user of
that site. The evaluation of remediation options is ongoing. In
Switzerland, Roche and other companies continued to clean
up hazardous waste landfills in Kölliken and Bonfol.
At its Belleville New Jersey USA site Roche has dismantled all
buildings and is studying various remediation options. At the
Nutley, USA, site, Roche is conducting a full-scale technical
investigation of soil and groundwater conditions. Some local-
ised remediation activities have been completed or are under-
way, including groundwater treatment, soil excavation and
installation of soil-vapour extraction systems.
waste tonnes
2011 2010 2009 2008
General waste
produced 24,121 27,249 19,828 42,823
General waste
per million CHF
of sales 0.57 0.57 0.40 0.94
Chemical waste
produced 30,170 29,020 27,605 31,295
Chemical waste
per million CHF
of sales 0.70 0.61 0.56 0.69
114 Roche Business Report 2011 | Environmental Stewardship
Conserving and protecting water resources
Roche supports global efforts to promote water protection,
conserve water reserves and improve access to clean drinking
water. Our long-term goal is to reduce total wastewater toxicity
by 20% in 2020 from a 2015 baseline, however, we continue to
investigate reliable performance indicators and measurement
methods for establishing that baseline. In the meantime, we are
striving to stabilise water consumption throughout the Group.
Over half of the total quantity of water utilised is used in cooling
circuits and is thus not chemically contaminated. After analysis
it is discharged as such. The rest is purified in treatment plants
before being released to watercourses.
Even though we do not operate sites that demand large vol-
umes of water in areas of water scarcity, we adopt conserva-
tion and reduction programmes according to local conditions
and needs. For example, our Californian sites use drought-
resistant landscaping. At other sites we reduce water con-
sumption by:•collecting and recycling water from cooling towers, creating
a closed-loop system•reusing cleaning water for next ‘first rinse’ and recycling
used water•reducing cooling requirements and improving cooling pro-
cesses•improving heat recovery
We record organic emissions into water as total organic car-
bon (TOC) after treatment in a wastewater treatment plant. We
only discharge wastewaters and pollutants if they comply fully
with relevant regulations, including pre-treatment require-
ments. At above 90%, the elimination rates in our wastewater
treatment plants are already high. We seek to further minimise
contamination of water by:•reducing discharges of toxic and poorly biodegradable sub-
stances and heavy metals•reducing wastewater production•treating or pre-treating wastewater, with ozone in some
cases, for non- or poorly degradable contaminants
Our method for calculating environmental impact (eco-bal-
ance) includes water usage, reflecting the importance of
reducing total withdrawal to our overall environmental target.
In 2011 our activities in the area of water management included:•Collaborating with German scientific institute Wasserver-
sorgung Langenau on establishing a new indicator for meas-
uring the total toxicity of wastewater rather than total organic
carbon (TOC)
•Eliminating a chemical containing an octyl phenol moiety
from our processes because of potentially negative impacts
on aquatic life•Analysing water-related risks using the World Business
Council for Sustainable Development water tool, which iden-
tified five sites that will be studied to determine the availabil-
ity of clean water to meet future business needs•Commissioning a wastewater treatment plant with anaerobic
degradation at Penzberg, Germany, that captures methane
to generate heat and electricity, with surplus energy fed into
site grids and other buildings
As a result of these and other activities our water consumption
decreased by 9% in 2011 to 3.3 million cubic metres, with major
reductions achieved in cooling and irrigation because of cooler
weather, particularly in California.
In 2011 we transferred 5.7 million cubic meters of water to
treatment plants, resulting in the discharge of 228 tonnes of
organic matter. In addition, 288 kilogrammes of heavy metals,
of which most were leaching from metal pipes, was discharged
from our operations into watercourses.
water usage and discharge
2011 2010 2009 2008
Water withdrawn
(million cubic metres) 20.4 19.6 18.6 21.0
Water used
(million cubic metres) 3.3 3.6 2.8 2.4
Wastewater discharged
to treatment plant
(million cubic metres) 5.7 6.3 5.2 7.3
Organic matter
discharged to
watercourses after
treatment (tonnes) 228 242 154 592
Heavy metals
discharged to
watercourses after
treatment (kilogrammes) 288 463 426 545
115Roche Business Report 2011Environmental Stewardship |
supporting biodiversity
Roche supports the principles of resource stewardship defined
in the Convention on Biological Diversity (CBD) and its three
main goals covering:•the conservation of biological diversity •the sustainable use of its components•the fair and equitable sharing of the benefits from the use of
genetic resources
We avoid the use of non-commodity natural-resource materi-
als as a source for products or the discovery and development
of pharmaceuticals. If, however, we discover or develop a com-
mercial product derived from natural plant, microbial or animal
genetic materials, our use of those resources will be guided by
the principles and goals of the CBD.
We, otherwise, do not operate facilities in protected areas or
areas of high biodiversity values, as all our sites require access
to city infrastructure and are as such in urban environments.
pharmaceuticals in the environment
We consider the entire lifecycle of our drugs, and take steps to
minimise the release of pharmaceuticals into the environment
at all stages.
We design our manufacturing sites to reduce the risk of active
ingredients entering wastewater. We also support pharmaceu-
tical take-back programmes and employ proactive measures
to prevent the release of our products into the environment in
several ways:•offering financial incentives to ensure that unused or out-
dated products are returned by retailers and others in the
supply chain•establishing policies that require returned or waste pharma-
ceutical product be incinerated rather than disposed of in
landfills •supporting research into the effects of our pharmaceuticals
in the environment •providing to authorities environmental risk assessments for
all new medicines
Traces of pharmaceutical products can enter the environment
in a variety of ways: the manufacturing process, improper dis-
posal of unused medicines and through natural process fol-
lowing normal patient use. Patient use, however, is generally
recognised as the primary contributor.
Evidence suggests that exposure to these trace concentra-
tions in surface, ground and drinking water does not pose
harm to human health. The risks to aquatic life are thought to
be greater. Scientific studies have not identified any short-term
effects from exposure to low-level concentrations of pharma-
ceuticals, but more research is being conducted to evaluate
potential long-term impacts. We, therefore, recognise the
need for further research into possible effects and support
scientific work in this field.
legislation and compliance
We meet all local laws or regulations, however, our Group pol-
icies are often more rigorous than external standards.
We are fully on track with the registration of our chemical
materials according to the European legislation on Registra-
tion, Evaluation, Authorisation and Restriction of Chemicals
(REACH) and requirements from the Globally Harmonised
System of Classification and Labelling of Chemicals.
For eight consecutive years prior to 2011, we incurred no sig-
nificant fines for SHE-related violations. During 2011, however,
we were assessed small fines for four minor infractions with
respect to environmental issues and one for failing to comply
with equipment safety regulations. While these incidents pre-
sented no significant risk to our employees or the local com-
munity, we take all incidents seriously and have taken steps to
correct each problem and prevent similar incidents from
occurring in future. Additionally, a fire caused by an electrical
failure in our finished-goods warehouse in Budaörs (Hungary)
destroyed products stored there for the Hungarian market and
a fire at our Segrate (Italy) plant resulted from overheating of a
powder mill. Fortunately, nobody was hurt in either incident.
116 Roche Business Report 2011 | Environmental Stewardship
Test week 12
Test
wee
k 4
Test week 24
Start oftreatment
72 weeksof therapy
Treatmentstopped
Treatment stopped
Viral load not reduced
Viral load reduced significantly
Viral load reduced slightly
HCV concentration:
24 weeks of therapy
48 weeks of therapy
116 Roche Business Report 2011 | Roche Personalised Healthcare
Personalised treatment strategies
Infection with the hepatitis C virus (HCV) can cause acute or chronic liver damage and ultimately lead
to liver failure, cirrhosis or cancer of the liver. Worldwide, about 170 million people are infected with HCV.
Today we know that there are a number of subtypes of HCV that differ not only in their molecular structure
but also in their responsiveness to treatment. Roche has developed molecular tests that can identify
which HCV subtype a patient has. This information helps physicians predict how long a patient should
continue treatment (e.g. 24, 48 or 72 weeks) in order to achieve a lasting virological response.
Personalised Healthcare — improving physicians’ ability to predict response and adjust treatment
Roche’s Personalised Healthcare strategy draws on advances in molecular biology to• monitor patients’ responses to therapy• adjust the duration of therapy to patients’ needs• administer medicines at precisely the right time within a long-term treatment strategy• develop new diagnostic tests and medicines in a more focused, efficient way
Roche Personalised Healthcare
00_06_Roche_AR11_Boxed features_ENG.indd 116 27.01.2012 12:06:00
117Roche Business Report 2011Environmental Stewardship |
she goals
education
Goal Basis Target date
Improve SHE education by increasing
SHE training per employee to an
average of 4hr/year
2020
safety
Goal Basis Target date
Improve Roche accident rate
(number of lost working days due to
occupational accidents) by 12%
(RAR < 0.07) until 2015 and by 24%
(RAR < 0.06) until 2020
2010 2015
2020
Reduce number of occupational
accidents causing lost working days
(cases per 200,000 working hours)
by 12% (< 0.6) until 2015 and by 27%
(< 0.5) until 2020
2010 2015
2020
Keep Roche illness rate (number
of lost working days due to
occupational illnesses) below 0.01
2010 2020
Bring number of cases of occupational
illnesses causing lost working days
(cases per 200,000 working hours)
below 0.32 until 2015
2010 2015
environmental protection
Goal Basis Target date
Improve energy efficiency
(GJ/employee) by 10% until 2014
and by 20% until 2020
2009
2010
2014
2020
Increase share of sustainable
energies in total energy consumption
to 20% until 2020
2010 2020
Reduce CO2 emission per employee
in line with improving energy
efficiency by 20% until 2020
2010 2020
Reduce total environmental impacts
(calculated as eco-balance according
to Swiss Federal Office for the
Environment (BAFU)) per employee
by 15% until 2020
2010 2020
Reduce total waste water toxicity
by 10% until 2020
2015 2020
More on the Web
• Environmental protection: www.roche.com/environment• SHE policy: www.roche.com/
safety_health_and_environmental_protection.pdf• EER and eco-balance: www.roche.com/
fact_sheet_eco_efficiency.pdf • SHE goals: www.roche.com/she_goals• SHE performance: www.roche.com/she_performance• SHE services: www.roche.com/she_services• Group fact sheets, positions, policies and guidelines:
www.roche.com/policies_guidelines_and_positions; www.roche.com/policy_guidelines_and_audits
118 Roche Business Report 2011
After its foundation 115 years ago, Roche over the years specialised as a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics.
119Roche Business Report 2011
Corporate GovernanCe roche is committed to all its stakeholders. The operating businesses’
focus on value creation and innovation, a management culture that conforms to
modern standards of corporate governance and the Group’s policy of communicating
transparently build the basis for a successful implementation of commitments to
all stakeholders.
remuneration report roche’s success depends on the abilities and dedication of its
people. Recognition of this forms the basis for guidelines and the system of
Roche’s performance-oriented remuneration policy.
120 Roche Business Report 2011 | Corporate Governance
Roche complies with all relevant corporate governance
requirements, in particular with all applicable laws, the Swiss
Stock Exchange (SIX Swiss Exchange) directives (including
the commentaries thereto) and the Swiss Code of Best Prac-
tice for Corporate Governance promulgated by the Swiss busi-
ness federation ‘economiesuisse’. The company’s internal gov-
ernance framework, particularly its Articles of Incorporation
and Bylaws, embodies all the principles needed to ensure that
the company’s businesses are managed and supervised in a
manner consistent with good corporate governance, including
the necessary checks and balances. 1
Our printed Annual Report contains selected links to the
Roche website (www.roche.com). Readers are thus provided
not only with a ‘snapshot’ of our company at the reporting date
but are also directed to sources which they can consult at any
time for up-to-date information about corporate governance at
Roche. Whereas each annual report covers a single financial
year ending 31 December, our website contains information of
a more permanent nature as well as the latest Roche news. The
company’s Articles of Incorporation, Bylaws and the curricula
vitae of the members of the Board of Directors and the Corpo-
rate Executive Committee are published on our website.
Board of Directors
At the 93 rd Annual General Meeting (AGM) of Roche Holding
Ltd, on 1 March 2011, shareholders approved shortening the
term of office of new or directors for re-election from three
to two years and re-elected Pius Baschera, Bruno Gehrig,
Lodewijk J.R. de Vink and Andreas Oeri as members of the
Board of Directors for the new term of two years as provided
by the Articles of Incorporation. Walter Frey and Wolfgang
Ruttenstorfer have decided to retire as members of the Board
of Directors. Paul Bulcke, Peter R. Voser and Christoph Franz
were elected as new Members of the Board for a term of two
years as provided by the Articles of Incorporation.
At its organising meeting immediately following the 2011 AGM,
the Board of Directors has approved its committees’ structure
and its committees’ memberships as shown on page 11.
At the AGM on 6 March 2012, the Board of Directors will nomi-
nate John I. Bell, André Hoffmann und Franz B. Humer for re-
election to the Board.
Corporate executive Committee
Erich Hunziker, Chief Financial Officer, Chief Information Offi-
cer and Deputy Head of the Corporate Executive Committee,
had decided to retire from Roche at the end of March 2011.
The Board of Directors has appointed Alan Hippe to succeed
Erich Hunziker as Chief Financial and IT Officer and as a mem-
ber of the Corporate Executive Committee as of 1 April 2011.
Sophie Kornowski-Bonnet, former General Manager of Roche
Pharma in France, has been appointed Head of Roche Partner-
ing at the Group’s headquarters in Basel and joined the
Enlarged Corporate Executive Committee as a new member on
1 February 2012 reporting to Severin Schwan, CEO of the
Roche Group.
She succeeded Dan Zabrowski, who took over the position as
Head of Roche Applied Science in the Diagnostics Division,
located in Penzberg, Germany, as of 1 February 2012. Dan
Zabrowski is a member of the Diagnostics leadership team
and is reporting to Daniel O’Day, COO Roche Diagnostics.
Information on each member of the Board of Directors (includ-
ing the years in which they were elected and the years in which
their terms end) and on each member of the Corporate Execu-
tive Committee is listed on pages 10 to 13.
information relating to Corporate Governance
1 Group structure and shareholders•Roche’s operating businesses are organised into two divi-
sions: Pharmaceuticals and Diagnostics. The Pharmaceuti-
cals Division comprises the two business segments Roche
Pharmaceuticals and Chugai, whereas Genentech as the
former third segment has been integrated into Roche Phar-
maceuticals. The Diagnostics Division consists of the follow-
ing five business areas: Applied Science, Diabetes Care,
Molecular Diagnostics, Professional Diagnostics and Tissue
Corporate Governance
1 http://www.roche.com/about_roche/corporate_governance.htm
Corporate Governance
121Roche Business Report 2011Corporate Governance |
Diagnostics. Business activities are carried out through
Group subsidiaries and associated companies. Detailed
information of Roche Holding Ltd and of significant subsidi-
aries and associated companies (including company name,
listing information, domicile, share capital, and equity inter-
est) are listed in the Finance Report, Note 33 to the Roche
Group Consolidated Financial Statements (‘Subsidiaries and
associates’, page 132).•Major shareholders are listed in the Finance Report, Notes
27 and 32 to the Roche Group Consolidated Financial State-
ments (‘Equity attributable to Roche shareholders’ and
‘Related parties’, pages 115 and 130) and in Note 4 to the
Financial Statements of Roche Holding Ltd (‘Significant
shareholders’, page 158).•André Hoffmann, Vice-Chairman of the Board of Directors,
and Andreas Oeri, Member of the Board of Directors and
Chairman of the Board’s Corporate Governance and Sustain-
ability Committee, serve in their respective capacities on the
Board and its committees as representatives of the share-
holders group with pooled voting rights and receive the
remuneration set forth in the Remuneration Report on page
128 and in the Finance Report, Note 32 to the Roche Group
Consolidated Financial Statements (‘Related parties’, page
130) and Note 6 to the Financial Statements of Roche Hold-
ing Ltd (‘Board and Executive remuneration’, page 159). In
2011/2012 Lukas Duschmalé, member of the shareholders
group with pooled voting rights makes a six-month intern-
ship at Roche in Singapore and Shanghai. No other relation-
ships exist with the shareholders with pooled voting rights.•There are no cross-shareholdings.
2 Capital structure•Information on Roche’s capital structure is provided in the
Finance Report, Notes to the Financial Statements of Roche
Holding Ltd (page 157). Additional details are contained in
the Articles of Incorporation of Roche Holding Ltd. 2
•Changes in equity are detailed in the Finance Report, Notes
to the Financial Statements of Roche Holding Ltd (page 157).•The company has a share capital of 160,000,000 Swiss
francs, divided into 160,000,000 fully paid bearer shares with
a nominal value of 1 Swiss franc each. There are no restric-
tions on the exercise of the voting rights of these shares.
Upon deposit, shares can be voted without any restrictions.•There is no authorised or conditional capital.•In addition, 702,562,700 non-voting equity securities (NES)
have been issued in bearer form. They do not form part of the
share capital and confer no voting rights. Each NES confers
the same rights as one share to participate in available earn-
ings and in any liquidation proceeds following repayment of
the share capital. Roche’s NES and the rights pertaining
thereto (including the provisions protecting the interests
of NES holders) are described in §4 of the Articles of Incor-
porat ion of Roche Holding Ltd.•Information on debt instruments which have been issued
and on outstanding bonds is provided in the Finance Report,
Note 26 to the Roche Group Consolidated Financial State-
ments (‘Debt’, page 110).•Additional information on employee stock options is pro-
vided in the Finance Report, Note 10 to the Roche Group
Consolidated Financial Statements (‘Employee stock options
and other equity compensation plans’, page 83).•Roche has issued no options apart from employee stock
options, Stock-settled Stock Appreciation Rights (S-SARs)
and options issued in connection with debt instruments.•Neither the options awarded to employees nor the debt
instruments which have been issued have any effect on
Roche’s share capital.
3 Board of Directors and Corporate executive Committee•Information on each member of the Board of Directors
(including the years in which they were elected and the years
in which their terms end) and on each member of the Corpo-
rate Executive Committee is listed on pages 10 to 13. Cur-
ricula vitae and other information (including information on
board memberships) are available and continuously updated
on the Internet. 3
•The Annual General Meeting elects the members of the
Board of Directors in staggered elections in which each
nominee is voted on separately (see §18 of the Articles of
Incorporation of Roche Holding Ltd 4 and the Minutes of the
93 rd Annual General Meeting of Roche Holding Ltd, held
1 March 2011 5).•With the exception of Franz B. Humer, William M. Burns and
Arthur D. Levinson none of the members of the Board of
Directors has been a member of Roche’s Corporate Execu-
tive Committee or served in an executive capacity at any
Group subsidiary during the three financial years proceeding
the current reporting period.•The internal organisation of the Board of Directors and the
division of authority and responsibilities between the Board
and management, the remits of the Board committees and
3 http://www.roche.com/about_roche/management/ board_of_directors.htm and http://www.roche.com/about_roche/ management/executive_committee.htm
4 http://www.roche.com/about_roche/corporate_governance/ article_of_incorporation.htm
5 http://www.roche.com/about_roche/corporate_governance/ annual_general_meetings.htm
2 http://www.roche.com/about_roche/corporate_governance/ article_of_incorporation.htm
122 Roche Business Report 2011 | Corporate Governance
the information and control mechanisms available to the
Board in its dealings with corporate management are gov-
erned by the Bylaws. 6
•The Board of Directors of Roche Holding Ltd is organised
so as to ensure that the Group’s businesses are conducted
responsibly and with a focus on long-term value creation. To
this end, the Roche Board has delegated certain responsi-
bilities to several committees 7. Their composition and chair-
persons as of 1 January 2012 are described on page 11. Each
committees’ authorities and responsibilities are defined in
detail in the Bylaws of the Board of Directors.8
•All the committees except the Presidium are chaired by inde-
pendent directors. •According to the Bylaws of the Board of Directors at the
request of any of its members a Board meeting without the
Chairman present may be convened. The Roche Board
meets once a year to assess the Chairman’s performance.
This meeting, which is not attended by the Chairman, is
chaired by one of the Vice-Chairmen.•As part of the Management Information System the Board of
Directors is informed about the most important issues, sales
development etc. on a monthly basis. The Board has access
to an electronic information platform which provides timely
information to the Board of Directors and the Board’s com-
mittees along with the systems of controls as set forth below.•The Board of Directors has established a system of controls
which is continuously monitored by the Audit Committee and
by the Corporate Governance and Sustainability Committee
and consists of the following elements:
— Report on operating and financial risks (risk management
system)
Roche has a system in place to identify and manage all type
of risks potentially affecting its business. Roche’s Risk
Management Charter sets out the approach and accom-
panying responsibilities. Pharmaceuticals and Diagnostics
divisions and global functions conduct a formal risk
assessment process at least once a year and must develop
risk plans for their most material risks. These are monitored
and deviations reviewed in regular performance dialogues.
The consolidated Group Risk Report including target risk
profile is discussed at the Corporate Executive Committee
and approved together with the Group Business Plan. It is
also presented to the Audit Committee. The process is
subject to regular reviews, with findings presented to the
Audit Committee or the full Board.
For details on risk management including risk factors and
the Risk Management Charter see ‘Risk Management and
Compliance’ on our website. 9 Financial risk management is
specifically described in the Finance Report. 10
— System of internal controls over financial reporting (see
pages 137 and 140 in the Finance Report)
— Internal audit
Group Audit reports to the General Counsel with direct
access and regular briefings to the Audit Committee about
ongoing activities and audit reports. The Chief Audit &
Risk Advisory Executive attends all Audit Committee
meetings, as do the external auditors.
Group Audit is an independent appraisal function, which
evaluates and reviews the Group’s activities as a service to
Management. The annual audit plan with yearly defined
focus areas (e.g. emerging markets, third-party manage-
ment) is validated by Senior Management and presented
to the Audit Committee. The Roche Group is committed to
maintain a high standard of internal control throughout
its worldwide operations. Management is responsible to
assess the business risks in all aspects of its operation and
to implement effective and efficient processes and con-
trols whilst ensuring compliance with internal and external
rules and regulations.
By conducting operational audits, Group Audit determines
management’s response to the risks surrounding business
processes and systems and evaluates the appropriate-
ness, completeness and efficiency of the processes and
controls. Action plans to implement necessary changes
and enhancements are developed together with the busi-
ness/auditee and are tracked to completion.
— External auditors, see page 124
— Chief Compliance Officer and Compliance officers in sub-
sidiaries, see page 125
— Safety, Health and Environmental Protection Department 11
— Corporate Sustainability Committee 12
— Science and Ethics Advisory Group (SEAG), for issues
relating to genetics and genetic engineering (established
in 1999) 13.•The members of the Corporate Executive Committee are
invited to attend for, and report in person on, those agenda
items concerning them. When the situation warrants, mem-
bers of the Enlarged Corporate Executive Committee may
9 http://www.roche.com/corporate_responsibility/business_ethics/ risk_management_and_compliance.htm
10 Additional information is provided in the Finance Report, Note 31 to the Roche Group Consolidated Financial Statements, ‘Risk management’, page 121.
11 http://www.roche.com/corporate_responsibility/environment.htm12 http://www.roche.com/corporate_responsibility.htm13 http://www.roche.com/corporate_responsibility/
csr_research_and_development/genetics_and_bioethics.htm
6 http://www.roche.com/about_roche/corporate_governance/ article_of_incorporation.htm
7 http://www.roche.com/about_roche/corporate_governance/ committees.htm
8 http://www.roche.com/about_roche/corporate_governance/ article_of_incorporation.htm
123Roche Business Report 2011Corporate Governance |
also be invited to attend. The Board committees invite the
Chairman of the Board and other Corporate Executive Com-
mittee members to deliver reports at Committee meetings
and may elect to commission independent expert reports
and call on the services of consultants. •Each year several black-out periods are imposed during
which senior employees are prohibited from trading in com-
pany stock. The following black-out periods are in effect for
2012:
26 December 2011 to 1 February 2012
1 April to 12 April 2012
26 June to 26 July 2012
1 October to 16 October 2012
Black-out periods can be changed by the Chairman of the
Board of Directors if circumstances warrant.•In 2011 the Board of Directors met for four meetings, each
from 3 to 6 hours in length *; once for a full-day meeting *; and
once for a three-day visit to a major subsidiary *. The Board
committees met as follows in 2011:
— Presidium of the Board of Directors/Nomination Commit-
tee: four meetings (approx. 2 hours each*)
— Remuneration Committee: two meetings 14 (approx. 2 to 3
hours each *)
— Audit Committee: four meetings (approx. 3 to 4 hours
each *)
— Corporate Governance and Sustainability Committee:
three meetings (approx. 3 hours each *).
As of 1 March 2011, the Board’s committees have partly
changed their membership. The individual participation of
Board members at Committee meetings outlined in the chart
above reflect the attendance in the old (1 January until
28 February 2011) and in the new (as of 1 March 2011) Com-
mittee compositions.
14 Remuneration Committee members are not permitted to contribute to or attend Remuneration Committee meetings at which matters concerning them are deliberated or decided.
* These figures indicate the actual length of meetings and do not include the directors’ extensive pre-meeting preparations and post-meeting follow-up activities.
Board and Board committees attendance 2011
Board
Presidium/ Nomination Committee
Remuneration Committee
Audit Committee
Corporate Governance
and Sustainability
Committee
number of meetings 4 4 2 4 3
F. B. Humer 4 4 – *** ***
B. Gehrig 4 4 2 – –
A. Hoffmann 4 4 2 – 2
P. Baschera 4 – – – 2
J. I. Bell 4 – 1 2 –
P. Bulcke ** 3 – – 3 –
W. M. Burns 4 – – 1 1
L. J. R. de Vink 4 – 1 3 –
Ch. Franz ** 3 – 1 – –
D. A. Julius 4 – – 4 –
A. D. Levinson 4 – 2 – –
A. Oeri 4 – – – 3
P. R. Voser ** 3 – 1 – –
B. Weder di Mauro 4 – – 3 1
– Not a member of that Committee.** New Board and Committee member since 1 March 2011.*** Franz B. Humer is invited as a guest to these Board Committee meetings.
Board and Board committees attendance 2011 of (as of 28 February 2011) retired Board members
W. Frey 1 – – 1 1
W. Ruttenstorfer – – – – –
124 Roche Business Report 2011 | Corporate Governance
•The Board of Directors regularly conducts an assessment of
its performance.•Members of the Corporate Executive Committee have a
maximum ordinary notice period of twelve months.•There are no management contracts which fall within the
scope of Subsection 4.3 (annex) of the SIX Directive on
Information relating to Corporate Governance.
4 remuneration, shareholdings and loans
All details regarding remuneration, shareholdings and loans
are set forth in the separate Remuneration Report on pages
126 to 136 and in the Finance Report, Notes 27 and 32 to the
Roche Group Consolidated Financial Statements (‘Equity
attributable to Roche shareholders’ and ‘Related parties’,
pages 115 and 130) and are listed in the Notes 6 and 7 to the
Financial Statements of Roche Holding Ltd (‘Board and
Executive remuneration’ and ‘Board and Executive share-
holdings’, pages 159 and 162).
5 participatory rights of shareholders•The participatory rights of shareholders are defined in
Roche’s Articles of Incorporation. 15 As Roche shares are
issued to bearer, there are no restrictions on admission to
Annual General Meetings, with the exception that shares
must be deposited within a specified period before the date
of a meeting and an admittance card must be issued in the
shareholder’s name, as provided in §12 of the Articles of
Incorporation. Any shareholder can elect to be represented
a third party at an Annual General Meeting. The Articles of
Incorporation contain no restrictions on the exercise of vot-
ing rights, and the only quorum requirements are those stip-
ulated in §16, in conformity with the Swiss Code of Obliga-
tions. •Under §10.2 of the Articles of Incorporation, shareholders
representing shares with a nominal value of at least 1 million
Swiss francs can request the placement of items on the
agenda of an Annual General Meeting. This must be done no
later than 60 days before the date of the meeting.
6 Change of control and defensive measures•The Articles of Incorporation contain no provisions on the
mandatory bid rule. Swiss law applies.•There are no change-of-control clauses. Those components
of remuneration based on Roche NES would be terminated
in the event of an acquisition, and vesting period restrictions
on pre-existing awards would be removed, so that all such
options could be exercised immediately.
7 relationship to statutory auditors
At the Annual General Meeting of Roche Holding Ltd on
1 March 2011, the shareholders voted to appoint KPMG AG
(KPMG) as statutory auditors. Based on the existing legal
requirements of the Swiss Code of Obligations (Article 730a)
about the maximum term of office of seven years of the audi-
tor in charge, Ian Starkey replaced his predecessor John
Morris as auditor in charge starting with the business year
2011 (information on how long the auditors and auditor in
charge have been serving in these capacities is provided on
page 13). The statutory auditors participate in Audit Commit-
tee meetings. They prepare written and oral reports on the
results of their audits. The Audit Committee oversees and
assesses the auditors and makes recommendations to the
Board (for information on the responsibilities of the Audit
Committee, see Article 8.1 of the Bylaws 16). The statutory
auditors participated in four meetings of the Audit Commit-
tee in 2011.
The reports of statutory auditors on the Consolidated Finan-
cial Statements and on the Financial Statements can be
found on pages 138 and 166, respectively, of this year’s
Finance Report.
KPMG received the following remuneration for their services
as statutory auditors of Roche Holding Ltd and as the audi-
tors of other Roche companies (new including Chugai):
2011 2010 (millions of CHF)
Auditing services 19.2 20.8
Audit-related services 1.3 2.6
Tax consultancy services 1.6 1.5
total 22.1 24.9
The statutory auditors are elected each year by the Annual
General Meeting.
8 information policy•As provided by §33 of the Articles of Incorporation 17, corpo-
rate notices are published in the Swiss Official Gazette of
Commerce and in other daily newspapers designated by the
Board of Directors (Basler Zeitung, Finanz und Wirtschaft,
L’Agefi, Le Temps, Neue Zürcher Zeitung). •Roche reports its half-year and full-year results in business
reports (published in print and online formats) and at media
15 http://www.roche.com/about_roche/corporate_governance/ article_of_incorporation.htm
16 http://www.roche.com/about_roche/corporate_governance/ article_of_incorporation.htm
17 http://www.roche.com/about_roche/corporate_governance/ article_of_incorporation.htm
125Roche Business Report 2011Corporate Governance |
events. In addition, detailed first- and third-quarter sales fig-
ures are published each year in April and October. The most
current list of publication dates is available in English and
German on the Internet. 18 •All relevant information and documents, including all media
releases, investor updates 19 and presentations to analyst
and investor conferences are available on the Internet. Fur-
ther publications can be ordered by e-mail, fax or telephone:
basel.webmaster@roche.com,
tel. +41 (0)61 688 83 39,
fax +41 (0)61 688 43 43.•The contact address for Investor Relations is: F. Hoffmann-
La Roche Ltd, Investor Relations, Group Finance, 4070 Basel,
Switzerland;
tel. +41 (0)61 688 88 80,
fax +41 (0)61 691 00 14.
Additional information, including details on specific contact
persons, is available on the Internet. 20
9 Chief Compliance officer and
Compliance officers network
The Chief Compliance Officer with his compliance officers
network is committed to ensuring that the Roche Group
Code of Conduct 21 is consistently complied with throughout
the Roche Group. He also serves as a contact person for
shareholders, employees, customers, suppliers and the gen-
eral public on issues relating to the implementation of and
compliance with this Code. Employees and other parties
who become aware of violations of the Roche Group Code of
Conduct can bring them to the attention of their managers or
supervisors or report them to the Chief Compliance Officer
(Urs Jaisli, direct phone number: +41 (0)61 688 40 18,
e-mail: urs.jaisli@roche.com). Such disclosures will be
treated confidentially. In addition, as of the end of 2009,
employees may anonymously report irregularities or com-
plaints in their corresponding mother language via a ‘speak-
up hotline’.
In addition Roche has established a Business Ethics Incident
Reporting (BEIR) system which enables the Chief Compli-
ance Officer to capture, track and monitor alleged violations
from initial reports by local Compliance Officers through to
resolution. Business ethics incidents are recorded in the sys-
tem when the local Compliance Officer receives specific and
concrete information about a material alleged violation of the
Roche Group Code of Conduct in one of certain pre-defined
categories. 22 The Corporate Governance and Sustainability
Committee and the Audit Committee of the Board of Direc-
tors are informed on substantial violations.
The Chief Compliance Officer reports to the General Counsel
and regularly to the Corporate Governance and Sustainabil-
ity Committee and to the Audit Committee of the Board of
Directors.
10 non-applicability/negative disclosure
It is expressly noted that any information not contained or
mentioned herein is non-applicable or its omission is to be
construed as a negative declaration (as provided in the SIX
Swiss Exchange Corporate Governance Directive and the
Commentary thereto).
18 http://www.roche.com/media.htm19 http://www.roche.com/investors.htm20 http://www.roche.com/investors/contacts.htm21 http://www.roche.com/about_roche/corporate_governance/
code_of_conduct.htm 22 http://www.roche.com/corporate_responsibility/business_ethics/
risk_management_and_compliance.htm
126 Roche Business Report 2011 | Remuneration Report
Summary
Roche’s success depends on the abilities and dedication of its
people. Recognition of this forms the basis of our remuneration
policy and system.
One of the primary aims of our remuneration policy is to
encourage a long-term focus and align management’s inter-
ests with the interests of Roche’s shareholders and holders of
Roche’s non-voting equity securities (NES).
•This remuneration report will be submitted separately for a
consultative vote at the 2012 Annual General Meeting.•The remuneration of Corporate Executive Committee mem-
bers and other senior Roche executives is comprised of:
— Base salary (fixed), in 2011 base salaries remained un-
changed with the exception of Daniel O’Day’s base salary
— Bonus (variable), in 2011 for the Corporate Executive Com-
mittee the bonus was provided 50% in cash payments and
50% in non-voting equity securities which are blocked for
3 or 10 years (blocking period according to each Corpo-
rate Executive Committee member’s individual decision)
— Stock-settled Stock Appreciation Rights (S-SARs) 1 (vari-
able)
— Performance Share Plan (PSP) awards (variable)•Under the PSP 2009–2011 no NES will be awarded.•The S-SARs granted in 2006 until 2008 and 2010 have strike
prices above the NES price as of 31 December 2011 and for
the time being have no value for the recipients. This can
change if Roche’s future NES price improves.•There has been no change in the base remuneration of the
Board of Directors since 2001.
Please see the rest of this report for full details 2.
Remuneration policy
Roche fundamentally renewed its remuneration policy in 2004
and reviewed it in 2010, reconfirming the key principles. It is
part of a framework of employee policies aimed at motivating
and retaining current employees, attracting talented new ones
and helping all Roche employees to perform at consistently
high levels. Our remuneration policy is designed to foster value
creation and reinforce a culture of performance and innova-
tion, and it applies to non-managerial employees as well as to
managers.
The key principles underpinning this policy are:•Focus on value creation•Pay for performance•Enabling employees to share in the company’s success•Fairness and transparency in remuneration decisions•A balanced mix of long- and short-term remuneration components•Market competitiveness
Base pay, bonuses, blocked non-voting equity securities
(NES), awards of Stock-settled Stock Appreciation Rights
(S-SARs) and a Performance Share Plan (PSP) support these
principles. These remuneration components are linked to our
company’s financial performance and commercial success
and thus align the interests of Roche employees with those of
the shareholders.
The amount of the separate components of remuneration for
each individual member of the Corporate Executive Committee
is shown in the individual description of the remuneration of
the Corporate Executive Committee in this report.
Base pay
Base pay (cash payment) levels are determined according to
market data of the world’s biggest pharmaceuticals compa-
nies 3 for specific positions and individual employees’ abilities,
experience and performance over time. Pay increases are
linked to individual performance and also take into account
prevailing market conditions 3 and the company’s overall eco-
nomic situation. Base pay and pay increases are conclusively
monitored and determined by the Remuneration Committee.
Bonuses
Bonuses are awarded in recognition of individual contributions
to value creation which go beyond normal job expectations,
Remuneration Report
1 See ‘Stock-settled Stock Appreciation Rights (S-SARs)’, pages 127, 130, 134 and 136.
2 See also in the Finance Report, Note 32 to the Roche Group Consoli-dated Financial Statements (‘Related parties’, page 130) and Notes 6 and 7 to the Financial Statements of Roche Holding Ltd (‘Board and Executive remuneration’ and ‘Board and Executive shareholdings’, pages 159 and 162).
3 Peer set for 2011: Abbott Laboratories, Amgen, Astellas, AstraZeneca, Bayer, Becton Dickinson, Bristol-Myers Squibb, Eli Lilly, GlaxoSmithKline, Johnson & Johnson, Merck & Co., Novartis, Pfizer, Sanofi-Aventis, Takeda.
Remuneration Report
127Roche Business Report 2011Remuneration Report |
and they are meant to be an incentive to create or strengthen
new business opportunities and strive for outstanding results.
Bonus amounts are linked to Group or divisional business per-
formance considering profit, sales growth, OPAC (Operating
Profit After Capital Charge) performance and to the achieve-
ment of individual and functional, measurable and qualitative
performance objectives. For reasons of competitiveness Roche
does not disclose details of individual objectives of the mem-
bers of the Corporate Executive Committee. The Remuner-
ation Committee of the Board of Directors has defined the
Corporate Executive Committee members bonuses in Decem-
ber 2011 based on the before mentioned objectives and cor-
responding results achieved for 2011.
Stock-settled Stock Appreciation Rights (S-SARs)
Stock-settled Stock Appreciation Rights were introduced on
1 January 2005, thus establishing a uniform system of remu-
neration throughout Roche. S-SARs entitle holders to benefit
financially from any increase in the value of Roche’s non-voting
equity securities between the grant date and the exercise date.
Awards are allocated individually upon the Remuneration
Committee’s decision at its own discretion. Detailed informa-
tion is available on pages 130, 134 and 136.
Performance Share Plan (PSP)
The members of the Corporate Executive Committee and other
members of senior management (currently some 145 individu-
als worldwide) participate in the Performance Share Plan
(PSP). The PSP was established in 2002 for periods of three
years each and is based on a three-year comparison of the
total shareholder return (TSR) with 15 competing companies 3.
In 2011 there were three overlapping performance cycles,
(PSP 2009–2011, PSP 2010–2012 and PSP 2011–2013) of which
PSP 2009–2011 closed on 31 December 2011. The terms of the
Performance Share Plan are determined annually by the Board
of Directors, acting upon recommendations from the Remu-
neration Committee.
Details for the PSP 2009–2011 calculation and additional infor-
mation are set forth in ‘Remuneration of members of the Cor-
porate Executive Committee, D. Performance Share Plan
(PSP)’, page 131.
Remuneration of the Board of Directors and the
Corporate Executive Committee
Each year the Remuneration Committee of the Board of Direc-
tors sets remuneration for the members of the Board of Direc-
Variable remuneration elements (bonuses, S-SARs and PSP)
in relation to fixed base pay of the Members of the Corporate Executive Committee
Bonus S-SARs PSP
Individual target value, assessed in
consideration of the performance
of competitors 3 and the
macroeconomic development
(in % relation to value of base pay)
max. 100% 100% 33.33%
(based on annual base pay
measured at 1 January
of first year of cycle)
Minimum
Maximum
(in % relation to value of base pay)
0%
200%
(Cash payment/
blocked NES)
0%
150%
(Value development
determined by
performance of NES
after grant)
0%
66.66%
(Value development
determined by
performance of NES
after grant)
Performance criteria Group objectives (Group
and divisional business
performance) and
individual objectives
considering profit,
sales growth, OPAC
(Operating Profit After
Capital Charge)
Individual contributions
upon the Remuneration
Committee’s decision at
its own discretion
Group performance of
TSR in relation to
TSR performance
of peer set
(see pages 131 to 132)
Split in %
a) Group objectives
b) Individual objectives
70%
30%
n.a.
n.a.
100%
–
128 Roche Business Report 2011 | Remuneration Report
tors and the Corporate Executive Committee (cash payments,
bonuses, Stock-settled Stock Appreciation Rights and policy
decisions about pension benefits). The terms of the Perfor-
mance Share Plan are determined annually by the Board of
Directors, acting upon recommendations from the Remunera-
tion Committee. The Remuneration Committee continuously
tracks salary trends in the market of the world’s biggest phar-
maceuticals companies 3 and reports to the Board of Directors.
Information on this committee’s remit, powers and its proce-
dures for making remuneration decisions can be found in the
Bylaws of the Roche Board of Directors 4.
Following the revision of the remuneration policy including
market comparisons with the world’s major pharmaceutical
companies 3, the Remuneration Committee has determined the
bonuses and remuneration of the Chairman of the Board of
Directors, the members of the Corporate Executive Committee
taking into consideration personnel changes.
The following pages provide detailed information on the remu-
neration earned by each member of the Board of Directors and
by each member of the Corporate Executive Committee for
2011.
1 Remuneration
1.1 Remuneration of members of the Board of Directors. In
2011 the members of the Board of Directors 5 received the
remuneration in cash shown in the table ‘Remuneration of
members of the Board of Directors’ below for their Board activ-
4 http://www.roche.com/about_roche/corporate_governance/ article_of_incorporation.htm
5 For a list of members, their positions and their committee memberships and chairmanship, see page 11.
Remuneration of members of the Board of Directors
Remuneration 2011(in CHF)
Additional compensation 2011for committee members/chairs 6
(in CHF)Additional special compensation
2011
F. B. Humer (see page 133 7) 50,000 (Remuneration as Chairman
of the Board of Directors
see page 133 7)
B. Gehrig 400,000 8 –
A. Hoffmann 400,000 8 –
P. Baschera 300,000 30,000
J. I. Bell 300,000 30,000
P. Bulcke 250,000 9 30,000
W. M. Burns 300,000 30,000
L. J. R. de Vink 300,000 30,000
Ch. Franz 250,000 9 30,000
D. A. Julius 300,000 60,000
A. D. Levinson 300,000 30,000
A. Oeri 300,000 60,000
P. R. Voser 250,000 9 30,000
B. Weder di Mauro 300,000 30,000
Remuneration of former members of the Board of Directors
Remuneration 2011(in CHF)
Additional compensation 2011for committee members/chairs 6
(in CHF)Additional special compensation
2011
W. Frey 50,000 10 –
W. Ruttenstorfer 50,000 10 –
6 With the exception of members of the Presidium and the Vice-Chairmen, Board members receive CHF 30,000/year for each committee they serve on and CHF 60,000/year for each committee they chair.
7 See ‘G. Highest total remuneration to a member of the Board of Directors’, pages 132 and 133. 8 Remuneration for serving as Vice-Chairman of the Board. 9 Prorated remuneration for the period from March to December 2011.10 Prorated remuneration for the period from January to March 2011.
129Roche Business Report 2011Remuneration Report |
ities. Remuneration of all members of the Board of Directors
will again remain unchanged for 2012.
Beside the cash payments, the non-executive members of the
Board of Directors were not awarded any shares, non-voting
equity securities, Stock-settled Stock Appreciation Rights
(S-SARs) 11, Restricted Stock Units (RSUs) in 2011.
William M. Burns received honoraria amounting to a total of
25,000 US dollars (22,250 Swiss francs) for serving as a mem-
ber of the Board of Directors of Chugai Pharmaceutical Co.,
Ltd. Arthur D. Levinson received payments for his consulting
work and for his Board membership of Genentech amounting
to 396,620 US dollars (352,992 Swiss francs). John I. Bell
received payments for his consulting work in the scientific
advisory board of Roche totalling 60,000 Swiss francs.
In 2011 Horst Teltschik, a former member of the Board of
Directors, received honoraria amounting to 19,635 euros
(24,151 Swiss francs) for serving on the boards of several
Roche subsidiaries in Germany.
For 2011 the members of the Board of Directors received
remuneration totalling 13,784,080 Swiss francs12 (2010:
14,662,589 Swiss francs; 2009: 18,608,650 Swiss francs).
No additional remuneration was paid to members of the Board
of Directors.
1.2 Remuneration of members of the Corporate Executive
Committee. The general provisions assigning authority for
decisions on Corporate Executive Committee remuneration to
the Remuneration Committee and to the Board of Directors are
outlined on pages 126 to 128 of this remuneration report.
Due to contractual obligations from his former Roche assign-
ment in the US, in 2011 Daniel O’Day received 446,864 Swiss
francs in addition to his remuneration.
Alan Hippe received additional payments for costs occurred
for his relocation to Switzerland etc. amounting 118,276 Swiss
francs.
11 See ‘Stock-settled Stock Appreciation Rights (S-SARs)’, page 134. 12 See ‘Remuneration of members of the Board of Directors’, page 128.
Remuneration of members of the Corporate Executive Committee
A. Base pay in CHF
Annual salary2011
Annual salary2010
Annual salary2009
S. Schwan 4,000,000 3,750,000 2,875,002
S. Ayyoubi 1,200,000 1,100,000 725,004
A. Hippe 1,200,000 ** * *
G. A. Keller 1,500,000 1,500,000 1,500,000
D. O’Day 1,225,000 1,000,000 *
P. Soriot 2,000,000 2,000,000 1,246,878
Total 11,125,000
* Not a member of the Corporate Executive Committee.** Prorated remuneration for the period from April to December 2011.
For 2011 the members of the Corporate Executive Committee
received remuneration totalling 43,925,402 Swiss francs 13
(2010: 39.959 million Swiss francs; 2009: 56.970 million Swiss
francs).
B. Bonus
All members of the Corporate Executive Committee will receive
the bonus 2011 as a 50% cash payment and 50% in form of
Roche non-voting equity securities which are blocked for 3 or
10 years (blocking period according to each Corporate Execu-
tive Committee member’s individual decision). Cash payment is
due at the end of April 2012, the Roche non-voting equity
securities are granted at the beginning of 2012 based on the
market value averaged over the last three months of 2011.13 See ‘Remuneration of members of the Corporate Executive Committee’,
(A.–F. and H.) including AHV/IV/ALV, pages 129 to 133.
130 Roche Business Report 2011 | Remuneration Report
Bonus
Bonus for 2011
Bonus for 2010
Bonusfor 2009
Total(in CHF)
Total(in CHF)
Total(in CHF)
S. Schwan
Cash payment 1,500,000 3,000,000 3,000,000
Blocked non-voting equity securities 837,585 ** – 1,675,178 **
Total bonus 2,337,585 3,000,000 4,675,178
S. Ayyoubi
Cash payment 500,000 1,000,000 1,000,000
Blocked non-voting equity securities 419,810 *** – 637,909 ***
Total bonus 919,810 1,000,000 1,637,909
A. Hippe *****
Cash payment 600,000 * *
Blocked non-voting equity securities 335,034 ** * *
Total bonus 935,034 * *
G. A. Keller
Cash payment 500,000 1,000,000 1,000,000
Blocked non-voting equity securities 279,195 ** – 813,506 **
Total bonus 779,195 1,000,000 1,813,506
D. O’Day
Cash payment 650,000 1,300,000 *
Blocked non-voting equity securities 545,753 *** – *
Total bonus 1,195,753 1,300,000 *
P. Soriot
Cash payment 1,000,000 3,312,500 **** 2,000,000
Blocked non-voting equity securities 839,620 *** – –
Total bonus 1,839,620 3,312,500 2,000,000
Total 8,006,997
* Not a member of the Corporate Executive Committee.** Calculation of value in consideration of reduction of value due to blocking period (reduced market value: for 10 years = 55.839%), value at grant date
on 6 January 2012: CHF 162.80 per non-voting equity security. Number of blocked non-voting equity securities granted based on the market value averaged over the last three months of 2011 (value CHF 146.85 per non-voting equity security).
*** Calculation of value in consideration of reduction of value due to blocking period (reduced market value: for 3 years = 83.962%), value at grant date on 6 January 2012: CHF 162.80 per non-voting equity security. Number of blocked non-voting equity securities granted based on the market value averaged over the last three months of 2011 (value CHF 146.85 per non-voting equity security).
**** Including an additional compensation for the successful integration of Genentech amounting to CHF 1,312,500 paid in 2010.***** Prorated remuneration for the period from April to December 2011.Number of blocked non-voting equity securities granted: S. Schwan: 10,214, S. Ayyoubi: 3,404, A. Hippe: 4,085, G. A. Keller: 3,404, D. O’Day: 4,426, P. Soriot: 6,809.
C. Stock-settled Stock Appreciation Rights (S-SARs)
S-SARs 14
2011(value in CHF 15)
S-SARs 14
2010(value in CHF 15)
S-SARs 14
2009(value in CHF 15)
S. Schwan 3,560,209 3,559,911 3,559,849
S. Ayyoubi 1,068,095 1,068,022 889,993
A. Hippe 178,086 * *
G. A. Keller 1,335,107 1,335,010 1,334,989
D. O’Day 890,087 890,030 *
P. Soriot 1,780,127 1,779,990 1,401,735
Total 8,811,711
* Not a member of the Corporate Executive Committee.14 See ‘Stock-settled Stock Appreciation Rights (S-SARs)’, pages 134.15 Black-Scholes value as described in ‘Stock-settled Stock Appreciation Rights (S-SARs)’, pages 134 and 136. Values for 2009 and 2010 according to
Annual Report 2010, page 95.
131Roche Business Report 2011Remuneration Report |
The S-SARs granted in 2006 until 2008 and 2010 have strike
prices above the NES price as of 31 December 2011 and have
for the time being no value for the recipients. This can change
if Roche’s future NES price improves. 16
Members of the Corporate Executive Committee additionally
receive annual expense allowances of 30,000 Swiss francs,
totalling 180,000 Swiss francs.
D. Performance Share Plan (PSP)
The members of the Corporate Executive Committee and other
members of senior management (currently some 145 individu-
als worldwide) participate in the Performance Share Plan
(PSP).
In 2006 the PSP moved to overlapping three-year performance
cycles, with a new cycle beginning each year. In 2011 there
were thus three cycles in progress (PSP 2009–2011, PSP 2010–
2012 and PSP 2011–2013). As in the previous years for the PSP
2007–2009 and PSP 2008–2010, the PSP 2009–2011 ended on
31 December 2011 without any awards of targeted NES.
Under the provisions of this plan, a number of non-voting
equity securities have been reserved for the participants in
each cycle. The number of securities actually awarded will
depend on whether and to what extent an investment in Roche
securities (shares and NES) outperforms the average return
on an investment in securities issued by a peer set of compara-
tor companies 17. Comparisons are based on the securities’
market prices and dividend yields, i.e. on Total Shareholder
Return (TSR). To reduce the effect of short-term market fluc-
tuations, security prices are averaged over the three months
(October to December) prior to the start of a performance
cycle and over the three months (October to December) at the
end of the cycle. If Roche securities perform as well as or
better than those of 75% of the peer set and, in addition,
Roche’s TSR increases at least 10% during a cycle, the Board
of Directors can elect to increase the maximum NES award by
as much as two-fold. In the event that an investment in Roche
securities underperforms the average return delivered by the
peer companies, fewer or no NES will be awarded.
In 2011 NES were reserved under the plan for members of the
Corporate Executive Committee as shown in the table below.
The Board of Directors will decide on the actual level of
NES or cash equivalent awards for the cycles 2010–2012 and
16 See strike prices in table ‘S-SARs’, page 136. 17 See footnote 3, page 126.
Performance Share Plan (PSP)
Target number of NES for PSP
2011–2013
Target number of NES for PSP
2010–2012
No awards of targeted
number of NES for PSP
2009–2011
2011 18
Total estimated
value of PSP awards (2009–2011,
2010–2012 and
2011–2013) (value in CHF)
2011
No NES awarded
in 2011 for PSP 2009–2011 (value in CHF)
2010
No NES awarded
in 2010 for PSP 2008–2010 (value in CHF)
2009
No NES awarded
in 2009 for PSP 2007–2009
(value in CHF)
S. Schwan 9,460 5,991 – 819,933 – – –
S. Ayyoubi 2,838 1,597 – 235,351 – – –
A. Hippe 2,838 * * 150,603 * * *
G. A. Keller 3,547 2,995 – 347,162 – – –
D. O’Day 2,365 1,997 – 231,477 – – *
P. Soriot 4,730 3,994 – 462,954 – – –
Total 25,778 16,574 – 2,247,480 – – –
* Not a member of the Corporate Executive Committee.18 Total estimated value for 2011: PSP 2009–2011: none of the originally targeted NES awarded. PSP 2010–2012 and 2011–2013: Estimated value calculated
using the year-end price as of 31 December 2011, CHF 159.20 per non-voting equity security (NES), based on the number of NES originally targeted subject to changes in the number and value of NES awardable under the plan on 31 December 2012 and 31 December 2013, respectively, and spread over the relevant period of time, i.e. 1/3 for the year 2011. The Board of Directors will vote on the actual allocation of NES originally targeted on 31 December 2012 and 31 December 2013, respectively, according to the TSR achieved.
132 Roche Business Report 2011 | Remuneration Report
2011–2013 after the close of the 2012 and 2013 financial years,
respectively. The aim of the PSP is to provide an incentive to
participants to achieve steady value growth.
At the end of the PSP 2009–2011 cycle (based on a three-
month moving average) with distributed dividends totalling
15.179 billion Swiss francs (2011: 5.692 billion Swiss francs,
2010: 5.175 billion Swiss francs, 2009: 4.312 billion Swiss
francs), the TSR of the Roche securities (NES and shares)
ranked #15, compared with its peer set of companies operat-
ing in the same industry. Therefore, according to the terms of
the plan, the participants received none of the originally tar-
geted NES (see table on page 131 for details).
E. Indirect benefits
Employer contributions made in 2011 to social security
schemes, pension plans and a Group-wide employee stock
purchase plan (Roche Connect) in respect of members of the
Corporate Executive Committee are shown in the table ‘Indi-
rect benefits in 2011’ below.
Indirect benefits in 2011
Pension funds/MGB 19
(in CHF) AHV/IV/ALV 20
(in CHF)Roche Connect
(in CHF)
Payments for tax consulting services
(in CHF)
S. Schwan 459,527 371,276 100,008 4,654
S. Ayyoubi 479,139 127,513 3,000 4,166
A. Hippe 164,937 68,973 23,331 16,714
G. A. Keller 548,149 132,894 37,500 –
D. O’Day 309,080 142,009 12,504 3,132
P. Soriot 311,796 208,331 – –
Total 2,272,628 1,050,996 176,343 28,666
19 MGB: Stiftung der F. Hoffmann-La Roche AG für Mitarbeiter-Gewinnbeteiligung (employee profit-sharing foundation supplementing occupational pension benefits).
20 AHV/IV/ALV: Swiss social security programmes providing retirement, disability and unemployment benefits.
Roche Connect is a voluntary stock purchase plan offering
employees the opportunity to buy Roche non-voting equity
securities (NES) up to an amount equal to 10% of their annual
salary at a 20% discount. NES purchased under this plan are
subject to a holding period, which is four years in Switzerland.
F. Other remuneration, emoluments and loans
Erich Hunziker, Chief Financial Officer, retired from Roche at
the end of March 2011. In 2011 Erich Hunziker received the fol-
lowing payments based on existing contractual obligations:
salary (2,000,004 Swiss francs, last payment per December
2011), bonus (612,860 Swiss francs, will be paid in April 2012),
Employer contribution to Pension funds etc. (2,153,559 Swiss
francs). In 2012 he will receive the agreed payment as per his
contract consisting of an one-year salary of 2 million Swiss
francs and a bonus of 2 million Swiss francs. This payment is
already included in the Corporate Executive Committee mem-
bers total amount of 43,925,402 Swiss francs.
In 2011 pensions totalling 2,095,748 Swiss francs were paid to
two former Corporate Executive Committee members.
Members of the Corporate Executive Committee have a maxi-
mum notice period of twelve months. In connection with the
new company and personnel structure, members of the Cor-
porate Executive Committee can receive compensation of one
annual base pay in case of termination of the contract by the
company (termination through no fault and not based on lack
of performance) until the age of sixty.
G. Highest total remuneration to a member of the
Board of Directors
Franz B. Humer as the chairman was the member of the Board
with the highest total remuneration for 2011 (see ‘Remunera-
tion of members of the Board of Directors’, pages 128 and 133).
The Chairman’s remuneration consists of base salary and
bonus awards. As Chairman of the Board after the handover of
his executive function as CEO at the Annual General Meeting
on 4 March 2008, he did not receive any additional S-SARs or
NES from new PSP cycles and was no longer enrolled in any
Roche S-SARs programme.
133Roche Business Report 2011Remuneration Report |
H. Highest total remuneration to a member of the
Corporate Executive Committee
Severin Schwan as CEO was the member of the Corporate
Executive Committee with the highest total remuneration for
2011 (see ‘Remuneration of members of the Corporate Execu-
tive Committee’, A.–F., pages 129 to 132 and table above).
No additional remuneration other than the before stated pay-
ments was paid to current or former members of the Corporate
Executive Committee.
Highest total remuneration to a member of the Corporate Executive Committee
2011 (in CHF)
2010 24
(in CHF)2009 24
(in CHF)
Salary 4,000,000 3,750,000 2,875,002
Bonus
— Cash payment 1,500,000 3,000,000 3,000,000
— Blocked non-voting equity securities 837,585 ** – 1,675,178 **
Total 6,337,585 6,750,000 7,550,180
S-SARs
(Black-Scholes value 25 at grant minus 11%) 3,560,209 3,559,911 3,559,849
Pension funds/MGB 26 459,527 456,122 456,941
Roche Connect 100,008 89,588 69,790
Estimated value of targeted (not awarded) NES according to
Performance Share Plan 27
(*2010–2012, 2011–2013, no awards/value of NES of 2009–2011)
Total 819,933 * 502,425 408,793
Total (value) 11,311,916 28 11,396,873 12,101,478
** Calculation of value in consideration of reduction of value due to the 10-year blocking period (reduced market value: for 10 years = 55.839%).24 For detailed calculation of the remuneration for 2010 and 2009 see Annual Report 2010, page 98.25 Black-Scholes value as described in ‘Stock-settled Stock Appreciation Rights (S-SARs)’, pages 134 and 136.26 MGB: Stiftung der F. Hoffmann-La Roche AG für Mitarbeiter-Gewinnbeteiligung (employee profit-sharing foundation supplementing occupational
pension benefits).27 Basic rules and detailed calculation see ‘Remuneration of members of the Corporate Executive Committee, D. Performance Share Plan’, page 131,
footnote 18, respectively.28 Includes an annual expense allowance (CHF 30,000), payments for tax consulting services (CHF 4,654), excluding employer contribution to AHV/IV/ALV
payments.
Highest total remuneration to a member of the Board of Directors
2011 (in CHF)
2010 21
(in CHF)2009 21
(in CHF)
Salary 4,000,000 4,507,500 6,030,000
Bonus
— Cash payment 1,600,000 2,200,000 2,200,000
— Blocked non-voting equity securities – – 2,792,018 *
Total 5,600,000 6,707,500 11,022,018
Pension funds/MGB 22 2,983,549 2,995,801 2,995,109
Roche Connect 75,000 75,000 75,000
Total (value) 8,884,687 23 10,033,431 14,353,552
* Calculation of value in consideration of reduction of value due to the 10 year blocking period (reduced market value: for 10 years = 55.839%).21 For detailed calculation of the remuneration for 2010 and 2009 see Annual Report 2010, page 97.22 MGB: Stiftung der F. Hoffmann-La Roche AG für Mitarbeiter-Gewinnbeteiligung (employee profit-sharing foundation supplementing occupational
pension benefits).23 Includes additional compensation for Committee members (CHF 50,000), payments for tax consulting services (CHF 42,638) and Chugai advisory
mandate USD 150,000 (CHF 133,500), not including employer contribution to AHV/IV/ALV (CHF 369,782).
134 Roche Business Report 2011 | Remuneration Report
1.3 Security holdings. Directors André Hoffmann and
Andreas Oeri and members of the founders’ families who are
closely associated with them belong to a shareholder group
with pooled voting rights. At the end of 2011 this group held
72,018,000 shares (45.01% of issued shares). Detailed informa-
tion about this group can be found in the Finance Report, Note
32 to the Roche Group Consolidated Financial Statements
(‘Related parties’, page 130) and in the Note 4 to the Financial
Statements of Roche Holding Ltd (‘Significant shareholders’,
page 158). In addition, as of 31 December 2011 the members
of the Board of Directors and persons closely associated with
them and the members of the Executive Committee and per-
sons closely associated with them held shares and NES as
shown in the table on page 135.
1.4 Stock-settled Stock Appreciation Rights (S-SARs). At
31 December 2011 Franz B. Humer and William M. Burns
(being the only members of the Board of Directors holding
S-SARs due to their former positions) and the members of the
Corporate Executive Committee held Stock-settled Stock
Appreciation Rights (S-SARs) as shown in the table ‘S-SARs’
on page 136.
The S-SARs shown in the table on page 136 were introduced
by Roche on 1 January 2005 in place of stock options. S-SARs
entitle holders to benefit financially from any increase in the
value of Roche’s NES between the grant date and the exercise
date. The strike price for S-SARs under the terms of this multi-
year plan was the closing price for Roche NES at grant date. All
S-SARs vest within three years of the grant date: i.e. one-third
vest at the end of one year, one-third at the end of two years,
and one-third at the end of three years. Vested S-SARs must
be exercised (converted into NES) within seven years of the
grant date, and unexercised S-SARs lapse without compensa-
tion. The fair value of the S-SARs is calculated at the date of
issue using the Black-Scholes formula and as if the S-SARs
were tradable, with an 11% deduction for the average two-year
vesting period.
The strike prices, expiry dates and grant values for S-SARs are
shown in the table on page 136. The numbers of S-SARs as
calculated at the time of issue have been entered as values in
the table ‘Remuneration of members of the Corporate Execu-
tive Committee, C. Stock-settled Stock Appreciation Rights
(S-SARs)’ on page 130.
135Roche Business Report 2011Remuneration Report |
Security holdings (at 31 December 2011)
Shares (number)
NES (number)
Close relatives’
security holdings (number/type)
Others (number)
Board of Directors
F. B. Humer 7,492 192,680 – S-SARs see 1.4
2500 ROGTPK Tracker-plus Cert.
Zürcher Kantonalbank on
Roche Genussschein (ROG) as underlying,
(Valor: 10 716 273, ISIN: CH0107162734)
B. Gehrig 50 300 – –
A. Hoffmann –* 200 – 250,000 UBS Long/Short Certificates
linked to Roche Bearer Shares/
Roche Non-Voting Equity securities
(Valor: 10 690 162, ISIN: CH0106901629)
P. Baschera 1 – – –
J. I. Bell 300 1,647 – –
P. Bulcke - 850 – –
W. M. Burns 3 83,784 – S-SARs see 1.4
L. J. R. de Vink – – – 31,600 American Depository Receipts (ADR),
RHHBY, US ISIN: US7711951043
Ch. Franz – 350 – –
D. A. Julius 350 – 1,550 NES –
A. D. Levinson – – – –
A. Oeri –* 307,793 – 250,000 UBS Long/Short Certificate
linked to Roche Bearer Shares/
Roche Non-Voting Equity securities
(Valor: 10 690 162, ISIN: CH0106901629)
P. R. Voser – 3,600 – –
B. Weder di Mauro 200 800 – –
Total 8,396 592,004 1,550 NES
Corporate Executive
Committee
S. Schwan 3 39,867 570 NES S-SARs see 1.4
S. Ayyoubi 3 12,329 – S-SARs see 1.4
A. Hippe – 2,708 – S-SARs see 1.4
G. A. Keller 2,153 28,168 1,100 Shares S-SARs see 1.4
D. O’Day 3 674 – S-SARs see 1.4
P. Soriot 2 6,373 – S-SARs see 1.4
Total 2,164 90,119 570 NES
1,100 Shares
* Shares held by the shareholders group with pooled voting rights not listed.
136 Roche Business Report 2011 | Remuneration Report
S-SARs
Number of S-SARs held by current and former membersof the Corporate Executive Committee on 31 December 2011
2011 2010 2009 2008 2007 2006 Total
Corporate Executive
Committee
S. Schwan 231,483 154,443 175,362 105,576 29,190 15,696 711,750
S. Ayyoubi 69,447 46,335 43,842 21,117 3,243 2,517 186,501
A. Hippe 10,767 – – – – – 10,767
G. A. Keller 86,808 57,918 43,842 63,345 24,327 15,696 291,936
D. O’Day 57,873 38,613 21,762 20,133 10,269 5,856 154,506
P. Soriot 115,743 77,223 69,051 63,345 29,190 23,544
+
21,636
399,732
Total 572,121 374,532 353,859 273,516 96,219 84,945 1,755,192
Former Corporate
Executive Committee
members
F. B. Humer None 29 None 29 None 29 None 29 48,651 52,317 100,968
W. M. Burns None 30 None 30 109,602 105,576 48,651 26,160 289,989
Strike price (CHF) 140.10
140.30
175.50 145.40 195.80 229.60 195.00
196.50
Market price per NES on
31 December 2011 (CHF)
159.20
Expiry date 28.2.2018
29.04.2018
4.2.2017 5.2.2016 31.1.2015 8.2.2014 2.2.2013
2.1.2013
Grant value per S-SAR
in CHF
(Black-Scholes value
minus 11%)
15.38
16.54
23.05 20.30 21.08 36.59 34.02
37.02
29 As of 2008 Franz B. Humer does not receive any additional S-SARs. Franz B. Humer received S-SARs as a Member of the Corporate Executive Committee until 2007.
30 As of 2010 William M. Burns does not receive any additional S-SARs. William M. Burns received S-SARs as a Member of the Corporate Executive Committee until 2009.
138 Roche Business Report 2011 | Independent Assurance Report
To the Corporate Governance and Sustainability Committee of
Roche Holding Ltd., Basel (‘Roche’).
We have performed assurance procedures to provide assur-
ance on the following aspects of the 2011 corporate responsi-
bility reporting of Roche.
Subject matter
Data and information disclosed in the corporate responsibility
reporting of Roche and its consolidated subsidiaries, exclud-
ing Chugai Pharmaceutical Co. Ltd., for the business year
ended December 31, 2011 on the following aspects and with
the indicated level of assurance:•The management and reporting processes with respect to
the corporate responsibility reporting and to the preparation
of SHE, people and donations & sponsorships key figures as
well as the control environment in relation to the data aggre-
gation of these key figures with a reasonable assurance;•The SHE key figures in the tables on pages 106 to 118 and
some selected people key figures disclosed on pages 90 to
101 of the Roche Business Report 2011 with a limited assur-
ance; and•The consolidated data and information on the Roche Group
level in relation to donations & sponsorships data, disclosed
on page 103, excluding health care professionals (HCPs)
related activities, with a limited assurance.
Criteria•The Roche Group internal corporate responsibility reporting
guidelines based on the Responsible Care Health, Safety and
Environmental Protection reporting guidelines published by
the European Chemical Industry Council CEFIC and the ‘Sus-
tainability Reporting Guidelines G3.1’ published in 2011 by
the Global Reporting Initiative (GRI); •The Roche Group internal Corporate Reporting Manual, ver-
sion 2011 ‘Sustainability Reporting — Economic Performance
Data’;•The defined procedures by which SHE, people and dona-
tions & sponsorships key figures are gathered, collated and
aggregated internally; and•Good practice procedures by which internal reporting sys-
tems and processes are designed, managed and operated.
Responsibility and Methodology
The accuracy and completeness of corporate responsibility
indicators are subject to inherent limitations given their nature
and methods for determining, calculating and estimating such
data. Our assurance report should therefore be read in con-
nection with Roche’s internal guidelines, definitions and pro-
cedures on the reporting of its corporate responsibility per-
formance.
The Roche Corporate Governance and Sustainability Commit-
tee is responsible for both the subject matter and the criteria.
Our responsibility is to provide a conclusion on the subject
matter based on our assurance procedures in accordance
with the International Standard on Assurance Engagements
(ISAE) 3000.
For those subject matters with a limited assurance the evi-
dence-gathering procedures are more limited than with a rea-
sonable assurance (for example, an audit of financial state-
ments), and therefore less assurance is obtained than in an
overall reasonable assurance engagement.
Independent Assurance Report
139Roche Business Report 2011Independent Assurance Report |
Main Assurance Procedures
Our assurance procedures included the following work:•Evaluation of the application of group guidelines Reviewing the application of the Roche internal corporate
responsibility reporting and donations & sponsorships
guide lines;•Site visits Visiting selected sites of Roche’s Pharmaceuticals and Diag-
nostics Divisions in Austria, Ukraine, Poland, Romania, Tur-
key, UK, Ireland and Puerto Rico. The selection was based on
quantitative and qualitative criteria; Interviewing personnel responsible for internal corporate
responsibility reporting and data collection at the sites we
visited and at the Group level to determine the understand-
ing and application of Roche internal corporate responsibility
guidelines.•Assessment of the key figures Performing tests on a sample basis of evidence supporting
selected SHE, people and donations & sponsorships key fig-
ures (Roche accident rate, energy consumption, CO2 emis-
sions related to energy consumption, release of halogenated
hydrocarbons, use of water, general waste, headcount/FTE
data, staff turnover and labor practices information, contri-
butions to philanthropic organizations, patient organizations,
health institutions, public policy bodies) concerning com-
pleteness, accuracy, adequacy and consistency.•Review of the documentation and analysis of relevant
policies and basic principles Reviewing the relevant documentation on a sample basis,
including group corporate responsibility policies, manage-
ment and reporting structures and documentation.•Assessment of the processes and data consolidation Reviewing the appropriateness of the management and
reporting processes for corporate responsibility reporting;
and Assessing the consolidation process of data at the group
level.
Conclusions
In our opinion•The internal corporate responsibility reporting guidelines are
being applied properly;•The internal reporting systems to collect and aggregate SHE,
people and donations & sponsorships key figures are func-
tioning as designed and provide an appropriate basis for its
disclosure.
Based on our work described in this report and the assess-
ment of criteria, nothing has come to our attention that causes
us to believe that the corporate responsibility information men-
tioned in the subject matter and disclosed with the corporate
responsibility reporting in the Roche Business Report 2011
does not give a fair picture of Roche’s performance.
Zurich, 27 January 2012
PricewaterhouseCoopers AG
Clive Bellingham Stephan Hirschi
Cautionary statement regarding forward-looking
statementsThis Annual Report contains certain forward-looking statements.
These forward-looking statements may be identified by words such as
‘believes’, ‘expects’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’, ‘seeks’,
‘estimates’, ‘future’ or similar expressions or by discussion of, among
other things, strategy, goals, plans or intentions. Various factors may
cause actual results to differ materially in the future from those
reflected in forward-looking statements contained in this Annual
Report, among others: (1) pricing and product initiatives of competi-
tors; (2) legislative and regulatory developments and economic con-
ditions; (3) delay or inability in obtaining regulatory approvals or bring-
ing products to market; (4) fluctuations in currency exchange rates
and general financial market conditions; (5) uncertainties in the dis-
covery, development or marketing of new products or new uses of
existing products, including without limitation negative results of clini-
cal trials or research projects, unexpected side effects of pipeline or
marketed products; (6) increased government pricing pressures; (7)
interruptions in production; (8) loss of or inability to obtain adequate
protection for intellectual property rights; (9) litigation; (10) loss of key
executives or other employees; and (11) adverse publicity and news
coverage.
The statement regarding earnings per share growth is not a profit
forecast and should not be interpreted to mean that Roche’s earnings
or earnings per share for 2011 or any subsequent period will neces-
sarily match or exceed the historical published earnings or earnings
per share of Roche.
All trademarks mentioned enjoy legal protection.
Links to third party pages are provided for convenience only. We do
not express any opinion on the content of any third-party pages and
expressly disclaim any liability for all third-party information and the
use of it.
The Roche Annual Report is published in German and English.
Printed on non-chlorine bleached, FSC-certified paper.
The Roche Annual Report is issued by
F. Hoffmann-La Roche Ltd, Basel, Group Communications.
Published by
F. Hoffmann-La Roche Ltd
4070 Basel, Switzerland
Tel. +41 (0)61 688 11 11
Fax +41 (0)61 691 93 91
Media Office
Group Communications
4070 Basel, Switzerland
Tel. +41 (0)61 688 88 88
Fax +41 (0)61 688 27 75
Investor Relations
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Tel. +41 (0)61 688 40 18
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To order publications
Tel. +41 (0)61 688 83 39
Fax +41 (0)61 688 43 43
E-mail: basel.webmaster@roche.com
Next Annual General Meeting:
6 March 2012
Sales
42,53147,473
49,051
mCHF Free cash flow
3,9044,699
8,893
2011
2010
2009
mCHF
Research and development 2
8,0739,050
9,509
mCHF
Operating profit 2
16,591
16,272
mCHF
15,149Number of employees
80,12980,653
81,507
2011
2010
2009
Income taxes 2
2,8953,135
3,287
mCHF
Net income
9,5448,891
8,510
mCHF
Core Earnings per Share
12.3012.78
12.34
CHF
100
150
200
250
2010 20112009
Roche non-voting equity security Swiss Market Index (rebased)
Eco-efficiency rate 5
0.5390.414
0.460
2011
2010
2009
Patients on clinical trials 4
332,183277,079
268,614
2011
2010
2009
Total employee remuneration
10,30011,934
12,080
2011
2010
2009
mCHF
Total dividend
5,86535,693
5,175
2011
2010
2009
mCHF
Key figures
Roche Group Index 2009 = 100
Price development of non-voting equity security (Genussschein) in CHF
1 Key figures indexed to 2009 = 100.2 Core results.3 Proposed by the Board of Directors.4 Development phase I to IV; Numbers exclude patients
in Genentech studies initiated prior to the merger.5 For calculation of the Eco-Efficiency rate see:
www.roche.com/environment
Figures for 2009 as in Annual Report 2010.For a full index of Global Reporting Initiative (GRI)indicators used in the report see: www.roche.com/reporting_and_indices
Index1 40 60 80 100 120 Index1 40 60 80 100 120
00_02_Roche_AR11_Key Figures_ENG.indd 3 27.01.2012 10:16:22
Highlights 2011
March
April
August
October
February
April
September
November
March
May
September
December
Roche Annual General Meeting votes to increase shareholder dividend by 10%
US marketing approval for targeted skin cancer medicine Zelboraf and cobas BRAF test companion diagnostic
Investigational medicine ocrelizumab shows significant reduction in multiple sclerosis disease main-tained for almost two years
Study with Avastin shows that womenwith newly diagnosed advanced ovar-ian cancer live significantly longer without their disease getting worse
Investigational medicine MetMAb in combination with Tarceva doubles the time people with lung cancer live without their disease getting worse
Roche named Healthcare Super-sector Leader in Dow Jones Sustainability Indexes for third year running
FDA grants priority review for New Drug Application for vismodegib in advanced form of skin cancer
Launch of the innovative, fully auto-mated clinical chemistry module cobas c 702 in the EU
Tarceva receives European approval for first-line use in a genetically distinct type of lung cancer
Marketing applications submitted in EU and US for pertuzumab in HER2-positive metastatic breast cancer
Roche announces positive clinical test results for its investigational medi-cine T–DM1 for an aggressive form of metastatic breast cancer
FDA approves cobas HPV test for cervical cancer screening, which detects high-risk genotypes 16 and 18
10 %
00_03_Roche_AR11_Highlights_ENG.indd 3 27.01.2012 10:18:15
626 x 297 195 210 21011
7 000 917
F. Hoffmann-La Roche Ltd4070 Basel, Switzerland
© 2012
All trademarks are legally protected.
www.roche.com
E
Ro
che
| Annual R
eport 2011
Annual Report
00_00_Roche_AR11_Front Cover_ENG.indd 1 27.01.2012 10:07:43
was a landmark year for Roche Personalised Healthcare. This
annual report highlights the progress we made in advancing a strategic
priority shared by the entire Roche Group. We successfully launched
new tests and medicines tailored to the needs of specific patient popu-
lations and made good progress in developing others that also promise
to make treatment safer and more effective. At Roche we believe that
medically differentiated products benefit all healthcare stakeholders, from
patients and physicians to regulators and payers.
00_01_Roche_AR11_Our_business_Topic2011_ENG.indd 2 27.01.2012 10:13:51
626 x 297 210 210 19511
Recommended