Pharmaceuticals Division

Sales growth in the Pharmaceuticals Division accelerated further during the first nine months of 2006, increasing to 21% in local currencies (23% in Swiss francs; 20% in US dollars), or almost four times the global market rate (6%). Roche’s market share rose from 4.4% to 4.7%, putting the Group in sixth place among the world’s biggest drug makers – up from eighth place last year. Regional sales growth significantly outpaced the market average in North America (27% vs 7%) and Europe (23% vs 5%). In Japan sales declined slightly (–2% vs –1%) due to government-mandated price cuts. Continued strong demand for the division’s oncology products, ongoing pandemic stockpiling of the influenza medicine Tamiflu and sales of the osteoporosis medicine Bonviva/Boniva were the main factors driving robust growth during the period.

Oncology — strong sales growth continues
With sales up 41%, the division’s oncology products continued to deliver outstanding growth, reinforcing Roche’s position as the world’s leading provider of cancer medicines.

Sales of MabThera/Rituxan, for non-Hodgkin’s lymphoma (NHL), continued to grow strongly, advancing 15%. Growth is currently being driven by first-line use in indolent and aggressive NHL. In July Roche received EU regulatory approval to market MabThera for maintenance therapy in patients with relapsed or refractory follicular NHL giving these patients a better chance to live disease-free for longer.

Sales of Herceptin, for HER2-positive breast cancer, almost doubled compared with the first nine months of 2005. Data showing an impressive survival benefit with Herceptin in early-stage breast cancer have been very well received by physicians and have led to several fast-tracked regulatory and reimbursement approvals in the EU and other key markets. Recently announced positive data from the phase III TAnDEM trial, investigating Herceptin in combination with hormone therapy for metastatic breast cancer, have been filed with European regulatory authorities in October.

Avastin, a cancer therapy with demonstrated survival benefits in metastatic colorectal, breast and lung cancer, posted a 90% increase in sales. Moreover, use of the medicine is expected to increase further now that reimbursement is widely in place in Europe for the treatment of metastatic colorectal cancer (MCRC). To further expand the MCRC label for both Avastin and Xeloda, two additional applications — based on data from the largest ever conducted first-line MCRC study and supportive trial data from other studies — will be submitted simultaneously in the first half of 2007. Following priority review, the world’s first angiogenesis inhibitor was approved by the FDA in October for the treatment of non-small cell lung cancer (NSCLC); a filing for the same indication was submitted to EU authorities in August. In addition, Avastin was filed with US and EU regulators for the treatment of advanced breast cancer in May and July, respectively. In September the FDA requested additional data analysis to support the filing in advanced breast cancer, though there are no concerns about the drug’s efficacy or safety. Genentech will supply the requested data by mid-2007.

Xeloda continues to post strong sales growth (22%), performing well in both the US and the EU. A filing for approval of the drug to treat stomach cancer was submitted to EU regulators in July. Positive data from a phase III trial have demonstrated the equivalent efficacy of an oral Xeloda-containing regimen compared with an intravenous 5FU-containing regimen in first-line MCRC. Data from a phase III study in second-line MCRC (comparing Xeloda/oxaliplatin vs 5FU/oxaliplatin) are expected in early 2007. The combined results of these studies will be used for global filings in the first half of 2007.

Tarceva, a novel, targeted drug that has been shown to extend the lives of patients with advanced NSCLC and pancreatic cancer patients, remained on growth track in both the US and the EU with a sharp, 130% rise in sales. A pivotal phase III trial (RADIANT) is under way to support expanded labelling for use in NSCLC in the adjuvant setting. In September Roche requested a re-examination of the data supporting its filing for Tarceva for the treatment of pancreatic cancer, after the EU’s Committee for Medicinal Products for Human Use (CHMP) issued a negative opinion despite a statistically significant survival benefit with the drug in this indication.

Anaemia — sales steady in a highly competitive market
Combined sales of Roche’s NeoRecormon and Chugai’s Epogin were stable overall. NeoRecormon grew 6% and retained its leadership position in its markets, despite sustained pressure on pricing in the renal anemia and oncology segments. In Japan, where Epogin remains the market leader for renal anemia, sales declined 12% due to government-mandated price cuts and reimbursement changes, which resulted in a contraction of the overall anemia market. Roche filed Mircera, the first continuous erythropoietin receptor activators (CERAs), with the US and European regulatory authorities in April for the treatment of anemia associated with chronic kidney disease.

Transplantation
Sales of CellCept, the world’s top-selling branded immunosuppressant for the prevention of organ transplant rejection, rose 7% for the period, despite emerging generic competition in some Latin American markets.

Virology — Tamiflu stockpiling sales continue to grow
Worldwide, sales of Tamiflu rose to 1.6 billion Swiss francs, an increase of 88% over the same period last year. Growth was driven mainly by pandemic stockpiling sales as some governments increased their population coverage. A Tamiflu supply chain capable of producing 80 million treatments a year is now fully operational in the US. This addition to the Roche network will bring total annual production capacity to 400 million treatment courses by the end of 2006, ensuring that enough Tamiflu is available both for pandemic preparedness and for use against seasonal influenza. Sales of Pegasys rose 2%, while Copegus sales continued to decline due to generic erosion in the US.
Sales of the anti-HIV medicine Fuzeon advanced 22%.

Primary care — Bonviva/Boniva gains market share
Sales of once-monthly oral Bonviva/Boniva continued to increase, reaching 309 million Swiss francs in a highly competitive market. Boniva now accounts for about 15% of new prescriptions in the US, and launches are ongoing across Europe and the rest of the world. Data presented for the first time in September, at the Annual Meeting of the American Society of Bone Mineral Research, show that patients on monthly Boniva tend to stay on their treatment significantly longer than those taking weekly bisphosphonates. This raises the prospect of better treatment outcomes.
Xenical, for weight loss, continued to post steady growth (7%).

Rheumatoid arthritis — MabThera/Rituxan approved for autoimmune indication
Following US approval in February, MabThera has also been approved in the EU for use in rheumatoid arthritis (RA) patients with an inadequate response to “anti TNF” biologic therapies. MabThera/Rituxan is the first medicine shown to be effective in preventing joint damage in this patient population.

Development — important milestones achieved
In addition to receiving 16 approvals and filing for 15 more indications in major markets, Roche again achieved a significant number of milestones in developing new drugs and indications.

An international phase III study (NO16966) involving 2,035 previously untreated metastatic colorectal cancer patients met both primary endpoints. Results of the study showed that the chemotherapy combination Xeloda plus oxaliplatin (XELOX) was as effective in terms of progression-free survival as infused 5-FU/leucovorin plus oxaliplatin (FOLFOX). Secondly, the addition of Avastin to chemotherapy (FOLFOX and XELOX) significantly improved progression-free survival compared with chemotherapy alone.

Data presented at this year’s Congress of the European Society for Medical Oncology show that adding Herceptin to hormone therapy significantly prolongs progression-free survival in patients with advanced hormone receptor-positive, HER2-positive breast cancer, compared with hormone therapy alone.

The results of three phase III maintenance therapy trials presented at the Congress of the European Renal Association - European Dialysis and Transplant Association show that dialysis patients treated with short-acting and frequently administered anti-anemia drugs can be switched directly to once-monthly Mircera and maintain stable hemoglobin levels.

Genentech and its partner Biogen Idec have announced that a phase II proof of concept study of MabThera/Rituxan for relapsing-remitting multiple sclerosis has met its primary endpoint.

Roche has exercised its option to license Ipsen’s glucagon-like peptide-1 (GLP-1) analogue for type 2 diabetes. A phase II study to confirm the efficacy and safety of this compound in a sustained release formulation is scheduled to start early in 2007.

Roche entered into several major new alliances during the third quarter. In July Roche and Actelion signed an exclusive worldwide agreement to collaborate on developing and commercialising Actelion’s selective S1P1 receptor agonist for multiple autoimmune diseases. In October Roche and Plexxikon agreed to collaborate on a novel oral drug for several different cancers, and an alliance with InterMune, also announced in October, has strengthened Roche’s research activities targeting hepatitis C.

R873 in male erectile dysfunction has been discontinued, as it did not meet Roche’s hurdles for medical differentiation. After clarification of the regulatory framework for the class of integrin antagonists, R411 was discontinued in the development of asthma. However, clinical development was started in multiple sclerosis. R1438 (DPPIV inhibitor) in diabetes did not show enough clinical differentiation and, therefore, had been replaced by a back-up compound which indicated the profile as requested.

Diagnostics Division

Roche Diagnostics’ sales rose 5% in local currencies (7% in Swiss francs; 4% in US dollars) in the first nine months of 2006. Following gains of 3% and 5% in the first and second quarters, divisional sales accelerated to a third-quarter increase of 6%. All five business areas contributed to growth, with Roche Applied Science and Roche Near Patient Testing posting double-digit increases in sales.

Sales in Iberia/Latin America and Eastern Europe advanced at double-digit rates, while growth in the Asia-Pacific and Europe-Middle East-Africa (EMEA) regions was in the single-digits. Divisional sales in Japan continued to outpace the market, and growth was also positive in the US. In October the FDA lifted its import alert barring US importation of Accu-Chek insulin pumps from Disetronic Medical Systems AG (Burgdorf, Switzerland). Pump shipments to the US market have already resumed.

Diabetes Care — Accu-Chek Spirit launched in US
Fuelled by a third-quarter increase of 5%, Roche Diabetes Care’s sales accelerated to a growth rate of 2% for the first nine months of the year. Accu-Chek Aviva generated high sales volumes in the major EMEA markets and in the US and Canada, as did Accu-Chek Active in Latin America and the Asia-Pacific region. The removal of the FDA’s import alert will enable swift progress on providing worldwide access to Roche’s full insulin delivery portfolio. Today, Accu-Chek Spirit is available in more than 30 countries. Outside the US, the Group’s insulin delivery business posted 15% growth.

Centralized Diagnostics — successful rollout of new cobas 6000 analyser series
Roche Centralized Diagnostics recorded a 5% rise in overall sales, outpacing an average growth rate of 4% in this market segment. The first configurations of the cobas 6000 analyser series, launched in June 2006, have begun contributing to growth. Centralized Diagnostics’ immunochemistry business achieved strong growth, with sales advancing by 13%, or nearly three times the market growth rate. The cardiac marker NT-proBNP showed a further increase in sales and is on its way to becoming one of the business area’s top-selling reagents.

Molecular Diagnostics — continued leadership
Roche Molecular Diagnostics increased its sales by 4%, thus maintaining its leading market share in an increasingly competitive business. Its largest segment, virology, grew 6%, helped by intensified marketing of the Cobas AmpliPrep/Cobas TaqMan systems in the Eastern European and Asian markets. In the blood screening segment, Roche continued to increase sales with ongoing roll out of its cobas s 201 system and multiplex HIV, HCV and HBV test in the EU. These products are now available in all European countries.

Near Patient Testing — new CoaguChek approval
Roche Near Patient Testing’s sales grew 11%. FDA approval of the CoaguChek XS system in the US and the successful introduction of the system there and in many other countries strengthened Roche’s leadership in the coagulation monitoring market. Blood gas and electrolyte testing products, the product portfolio for blood glucose testing in hospitals and the rollout of the Cardiac proBNP assay all contributed to solid sales growth.

Applied Science — strong demand for LightCycler and Genome Sequencer
Roche Applied Science posted 12% sales growth. The LightCycler 480 instrument, the Genome Sequencer 20 system and products for industrial use were the main contributors to this double-digit increase. The Genome Sequencer 20 system is being used in an increasing number of applications and contributed significantly to Applied Science’s nine-month performance.

About Roche
Headquartered in Basel, Switzerland, Roche is one of the world’s leading research-focused healthcare groups in the fields of pharmaceuticals and diagnostics. As a supplier of innovative products and services for the early detection, prevention, diagnosis and treatment of disease, the Group contributes on a broad range of fronts to improving people’s health and quality of life. Roche is a world leader in diagnostics, the leading supplier of medicines for cancer and transplantation and a market leader in virology. In 2005 sales by the Pharmaceuticals Division totalled 27.3 billion Swiss francs, and the Diagnostics Division posted sales of 8.2 billion Swiss francs. Roche employs roughly 70,000 people in 150 countries and has R&D agreements and strategic alliances with numerous partners, including majority ownership interests in Genentech and Chugai. Additional information about the Roche Group is available on the Internet (www.roche.com).

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Annex

Additional information
- Roche Pharma pipeline
- Date of publication of full-year results for 2006: 7 February 2007 (tentative)

Disclaimer: Cautionary statement regarding forward-looking statements
This document 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 document, among others: (1) pricing and product initiatives of competitors; (2) legislative and regulatory developments and economic conditions; (3) delay or inability in obtaining regulatory approvals or bringing products to market; (4) fluctuations in currency exchange rates and general financial market conditions; (5) uncertainties in the discovery, development or marketing of new products or new uses of existing products, including without limitation negative results of clinical 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 2006 or any subsequent period will necessarily match or exceed the historical published earnings or earnings per share of Roche.