Roche 2018 Financial Report Highlights: Strong Growth Driven by Pharmaceuticals and Diagnostics Innovation

2Month1Roche Group announced on2018Annual Financial Report.

As of2018By year-end, Roche employees had reached9.4ten thousand people,30R&D Centers and26factories are distributed globally. As evidenced by the distribution of its workforce, in addition to its European headquarters, the number of employees in North America and Asia has reached2With a workforce of over 10,000 employees, North America, Europe, and Asia constitute Roche’s largest revenue sources by headcount ratio; within Asia, Japan and China are the primary contributors.

Total Revenue Growth

Roche Global2018Total Annual Operating Revenue for the Year568CHF billions, reaching the peak of growth in the past three years. For the industry giant Roche, achieving organic growth is remarkable given its extremely high market share, massive base approaching saturation, and the absence of growth driven by major consolidated acquisitions.7%Above,The Pinnacle of Three-Year Growth,2018The year also delivered a solid performance.

and2017Year-on-year growth compared to the previous year7.1%, performance growth surpasses that of the previous two years, (2017and2016Annual Growth5%, and2016Year and2015Annual Growth4.0%）。

Revenue Performance of the Two Major Business DivisionsCondition

The primary growth contributions still came from the pharmaceuticals and diagnostics businesses, respectively,439.7100 million francs and128.8billion Swiss francs, with respective business proportions77%(proportion greater than3/4），23%(Accounting for approximately1/4)：

Total Revenue from Pharmaceutical Operations439CHF 100 million, growth7.2%, withstood the impact of similar generic drugs entering the European market, driving growth through a continuous pipeline of oncology drugs and new product launches.

Total Revenue from Diagnostic Business128100 million francs, growth7.0%. Led primarily by immunology products, which made the highest contribution. (In recent years’ annual reports, it is also necessary to offset one of Roche Diagnostics’ core businesses: blood glucose20The continuous decline in Roche's business performance,2018annual blood glucose business also experienced a slight increase).

Revenue Performance of the Diagnostics Business

Central LaboratoryCobasSeries andPOCT accuSeries

Operating Revenue77.7million Swiss francs, year-on-year growth8%, is the highest-contributing product in the diagnostic business.

Immunodiagnostics accounts for the central laboratory andPOCTBusiness Line33%Sales, Global Growth11%。2017Year-over-Year Growth13%, which is why in recent years, chemiluminescence has seen fierce competition among major domestic manufacturers, leading to a thriving and diversified landscape, and occupying a significant share in laboratory services.1/3sales revenue, a large cake worth going all out for.

Growth in Clinical Chemistry Testing7%，Biochemistry has long been recognized as an intensely competitive "red ocean" within central laboratories, characterized by widespread price wars and the extensive adoption of domestically produced alternatives. Nevertheless, Roche continues to achieve growth in this business segment.7%, is also highly respected.

Overall, the central laboratory andPOCTThe series has experienced rapid growth in North America and the Asia-Pacific region, with China being a major contributor.15%growth, growth in Europe, the Middle East and Africa4%, representing growth across the entire region.

Molecular Diagnostics Line

Molecular Diagnostics2018Annual Revenue20million Swiss francs, year-on-year growth5%。2017Year-on-Year Growth4%, with a slight increase in the growth rate. Among them, the sequencing business grew4%, Growth in Blood Screening Tests9%，HPVBusiness Growth8%， cobas Liat systemDemand continues to increase, and newPOCTMolecular testing is also experiencing significant growth in North America. Growth in the Middle East, Africa, and Europe7%, particularly with South Africa making a significant contribution to growth, North America's growth6%。

Blood Glucose Business

Blood Glucose Business19.8100 million francs, year-on-year increase2%, primarily in North America (20%)) and South America (14%) growth drivers, primarily from productsAccu-Chek Guide &Accu-Chek Instant, but Africa, the Middle East, and Europe continue to decline-4%, with European sales primarily originating from France. In summary, there are also2%growth, after all, North America is the largest market, marking the first time in recent years that growth has been maintained.

In recent years, the "Big Four" in blood glucose monitoring have struggled amid a wave of price cuts driven by declining reimbursement rates in North America and Europe, with some even showing signs of exit; ownership of these major players has frequently changed hands.BayerbyPanasonicSecured,J&Jby capital tycoonsplatinum equityAcquisition,NiproAcquired by China's Sinocare, remainingAbbottCurrent blood glucose level, atCGMScarving a bloody path through China, relying onLibreThe FreeStyle Libre series turned the tide. This year, Roche achieved incremental growth in its blood glucose business; amid a challenging market environment for blood glucose monitoring, this slight reversal from decline to growth was no easy feat, reflecting substantial efforts.

Tissue Diagnosis (Pathology Services)

Tissue DiagnosisVENTANASeries2018Annual Revenue11CHF 100 million, growth10%，（2017Year-on-Year Growth11%), with advanced staining and immunohistochemistry services as the primary growth drivers10%, Companion Diagnostics9%Growth, Basic Diagnostics13%growth, globally the primary source of growth remains in the Asia-Pacific region18%, particularly contributing significantly to growth in China. North America also has8%Growth, Growth in Africa, the Middle East, and Europe10%. It can be described as blossoming across the entire region.

Global Sales Distribution and Major Contributions of the Diagnostics Business by Region

Roche2018Continue to prioritize the Asia-Pacific region as the primary growth driver13%, Asia-Pacific33billion, of which China contributed22100 million, followed by Latin America9%, small base8100 million; North America7%, comparable to the revenue in the Asia-Pacific region,32billion; Japan6%，5100 million; the largest revenue source is not Central Europe, with sluggish growth3%, recent50100 million.

Emerging markets, as a new growth engine for the Roche Group, have achieved substantial growth in recent years, particularly in the followingTOP7,Total revenue has already accounted for the diagnostics business32billion Swiss francs, accounting for a total proportion of32/128=25%,1/4Sales Volume.

2018Top-Selling Product of the Year

2018YearTop salesImmunodiagnostic42100 million, blood glucose19.8100 million, biochemistry18Yi, Histopathology8.5Yi, Virology6.6CHF 100 million. Growth in any of the top five products will serve as a growth driver; likewise, a decline in any business segment will have a significant impact on overall performance. Notably, the blood glucose monitoring business has not grown in recent years but has instead declined, exerting a substantial negative impact on overall operations. This year has unfortunately seen...2%growth, and the large immunology base has consistently driven the growth of the diagnostics business,Maintain10%The aforementioned growth has maintained a strong foundation for business expansion.

2018Annual Highlights

Consolidating Leadership in Laboratory Diagnostics and Big Data Healthcare

2018Year1Month8Day——GEMedical Group and Roche (SIX：RO，ROG；OTCQX：RHHBY) announced the establishment of a long-term strategic partnership to jointly develop and promote digital clinical decision support solutions. This collaboration will initially focus on digital products that can accelerate and improve personalized diagnosis and treatment plans for cancer patients and those in intensive care.

2018Year2received in the monthcobas Factor II and Factor V test on the cobas 4800 systemofFDA, providing more powerful thrombus detection services,4800To undergo genetic testing,genomics, Oncologyoncology, Microorganismsmicrobiology and viral testingvirology testingDeploy to the same platform.

Brand NewCOBAS4800will also be with2017Listed in the year, just obtainedCEofCOBAS T511Blood cells andCOBAS T711Coagulation analyzers provide integrated coagulation and thrombosis solutions for the central laboratory.

2018Year3Month of LaunchVentana DP 200 High-throughput digital pathology will continue to maintain its leading position in histopathology, targetingCEMarketing in the region; the United States will be used for the research market.

2018Year4Received in the monthCT/NG ofFDA, will be incobas 6800/8800 systemsDirect Detection by the PlatformChlamydia trachomatis (CT) and/or Neisseria gonorrhoeae (NG) DNAHelp laboratories address the growing volume of tests.

2018Year7Monthly Blood Glucose Section,Accu-Chek Solo micropumpThe micro pump has been received.CE, launched on the market, while simultaneously withNovo Nordisk and SenseonicsSign the data management and sharing agreement, which will subsequently be accessible to users in Canada and the United States.my suger APP(AustriaMYSUGERproceeds from the acquisition), receive qualified online diabetes education on this platform, while customers will also obtain through this platformAccu-Chek GuideHome Delivery Service. Integrated insulin dosage data,CGMSData andBGMSData includesMY suger APPPlatform Education provides a comprehensive big data management solution for blood glucose monitoring.

2018Year9Month of Market LaunchNavifyClinical Decision-MakingAPP,Laying the groundwork for future personalized healthcare.Viewics, It will better provide major central laboratories and hospitals with advanced data analytics platforms, enabling more precise personalized medical services.

2018Year10In [Month], a new R&D and production base was established in Suzhou, in collaboration with Roche China.8Branches will continue to deepen their operations in China’s vast market.

2018Year10Roche Next-Generation Sequencer by MonthNGS, Tumor Reagent Analysis and Testing Launched GloballyAvenio Tumor Tissue Analysis Kits, this series will provide testing for all four gene mutations.

2018Year12Month Serum Work Area (SWA) testingHigh throughput will also meet the needs of medium to large laboratories, with a throughput reaching2200test/hours.

Roche asIVDLeader in the industry,2018The most emphasized aspect over the years has been none other than“Big Data”、“Artificial Intelligence”。Through joint naming andGEDevelopment of clinical decision support software is believed to be a significant driver for clinical medicine in the future.

The central laboratory’s diagnostic leadership will be empowered by more robust big data, advancing further toward smart healthcare and big data-driven medicine. Roche currently boasts comprehensive medical data transmission capabilities and is one of the few global providers truly delivering the largest scale of medical data, with a daily output of nearly10One hundred million tests,2018> over years200data results, with nearly100Multiple data technology carriers.

andGEJoining hands with big data, integrating diagnostic business big data withGEBig Data Integration: Backend Provides Roche Drug Solutions, Truly Integrating Diagnostic Business (Biomarkersbiomarkers, Histopathologytissue pathology,Genetic Testing genomics, Blood Glucose MonitoringDiabetic) Diagnostic Big Data andGE Healthcare (Imagingmedical imaging)Imaging Big Data Joins Forces with Rich True Big Data Master, Equipped with Roche's Comprehensive Drug Treatment SolutionsPharmaceutical。

Roche Group's Comprehensive Diagnostic Big Data+GEImaging Synergy with Big Data: Backend Leveraging Big Data for Pharmacotherapy, Enabling Holistic Big Data-Driven "Diagnosis"-“Cure”: Unprecedented and unsurpassed. In four words: Flawless.

Reference;Roche 2018 annual reportand the Roche official website.