Investor Update

Basel, 19 April 2005

Roche leads off in 2005 with impressive first quarter - pharmaceutical sales grow three times as fast as the global market

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Roche Group
• Group sales for the first quarter up by 17%* (14% in Swiss francs)
• Both divisions successfully launch a number of products
• Outlook raised for 2005: despite significant expenditures and expiry of the Rocephin patent, the Pharmaceuticals Division expects its operating profit margin to be in line with or better than last year’s margin

Roche Pharmaceuticals
• Pharmaceuticals Division posts strong sales growth of 22%* (18% in Swiss francs)
• Avastin successfully launched in Europe for colorectal cancer
• Study shows Avastin also improves survival in lung cancer patients
• Positive data of Avastin also in first-line metastatic breast cancer
• Strong market uptake for Tarceva in the US and Switzerland - EU market authorisation expected in the fourth quarter of 2005
• Study demonstrates that Tarceva also prolongs life in pancreatic cancer patients
• Boniva/Bonviva becomes first and only FDA-approved once-monthly tablet for osteoporosis - market launch successfully under way

Roche Diagnostics
• Diagnostics Division opens year with 4%* sales growth (1% in Swiss francs), in line with market growth
• Solid gains for diabetes care and molecular diagnostics, including women’s health and blood screening products; immunodiagnostics sales also up substantially for the quarter
• AmpliChip CYP450 Test successfully launched; rollout of next generation of Accu-Chek products off to a good start in selected markets
• Roche Diagnostics expects sales growth to accelerate, particularly in the second half, following new product launches in major markets

* Unless otherwise stated, all percentage changes are changes from the first quarter of 2004 and are based on results in local currencies.

Commenting on the first quarter of 2005, Roche Chairman and CEO Franz B. Humer said, ‘Sales advanced by a very strong 17%, extending the record of success our Group has sustained in recent years. And at the same time our product development activities are setting the stage for future growth. Avastin is now approved in Europe as well as the United States for the treatment of colorectal cancer. In addition, recent data show that Avastin extends the lives of lung cancer patients and significantly improves progression-free survival in patients with breast cancer. Moreover, the FDA recently approved Boniva/Bonviva as the first and only once-monthly tablet for osteoporosis. At Roche Diagnostics the launch of the first AmpliChip test got off to a strong start, and the division successfully began rolling out its next generation of Accu-Chek products. Although we anticipate generic competition to Rocephin, we remain confident about the outlook for 2005 and beyond.’



Roche Group

	2005	2004	% Change	% Change
Sales from January to March	m CHF	mCHF	In CHF	In local currencies
Pharmaceuticals	6,155	5,217	+18	+22
Roche	3,859	3,546	+9	+11
Genentech	1,341	923	+45	+54
Chugai	955	748	+28	+32
Diagnostics	1,935	1,908	+1	+4
Roche Group	8,090	7,125	+14	+17

Roche recorded sales of 8.1 billion Swiss francs in the first quarter of 2005, an increase of 17% (14% in Swiss francs; 21% in US dollars) over the year-earlier period. Sales in the Pharmaceuticals Division increased 22% (18% in Swiss francs), three times as fast as the global market average. The Diagnostics Division maintained its strong market position with sales growth of 4% (1% in Swiss francs).

Full-year outlook reaffirmed for Diagnostics and raised for Pharma
Roche reaffirms the outlook for full-year 2005 announced at its Annual Media Conference in early February, and now expects results in the Pharmaceuticals Division to be even better than previously indicated (all statements are based on the Group’s previous accounting policies and exclude the effects of changes in International Financial Reporting Standards): The Pharmaceuticals Division expects sales in local currencies to grow at a double-digit rate above the global market average. Similarly, Roche Diagnostics expects sales for 2005 to show another above-market increase, with growth in the single-digit range. The Pharmaceuticals Division now expects its operating profit margin (before exceptional items) to be in line with or better than the margin for 2004. Roche Diagnostics anticipates the margin development to continue towards its goal of achieving an operating profit margin of around 23% (before exceptional items) in 2006. Roche also continues to anticipate a balanced financial income in 2005.



Pharmaceuticals Division

Dynamic sales growth significantly above the market average
The Pharmaceuticals Division posted extremely strong growth in the first three months of 2005 as sales for the period rose 22% (18% in Swiss francs; 25% in US dollars). This was three times the global market growth rate of roughly 7%, resulting in significant market share gains for Roche. Growth was driven primarily by strong demand for the division’s oncology products, including the new cancer treatments Avastin and Tarceva, and by the anti-influenza drug Tamiflu, which saw sales quadruple during the quarter. Overall, sales were up 28% in North America, 14% in Europe and 32% in Japan - advancing faster than the market average in all three regions.

Oncology - key products Avastin, Tarceva, MabThera, Xeloda and Herceptin all deliver strong growth
Avastin, for the treatment of colorectal cancer, posted first-quarter sales of 260 million Swiss francs, bringing to roughly 1 billion Swiss francs the total sales generated by the product since its US launch by Genentech about one year ago. In January the European Commission approved Avastin for the first-line treatment of patients with advanced colorectal cancer, and the drug is already available in key European markets, including Germany, Switzerland and the United Kingdom. A large-scale study has additionally shown that first-line treatment with Avastin significantly improves survival in patients with advanced non-small cell lung cancer (NSCLC); NSCLC is the most common form of lung cancer. Roche expects to file Avastin for NSCLC in the United States and Europe in the first half of 2006. Further on, interim analysis of a study demonstrated significantly improved progression-free survival with Avastin, in combination with chemotherapy, for patients with previously untreated metastatic breast cancer - the third cancer to show benefit with Avastin. Avastin is also being investigated in other cancers.
Tarceva, a novel cancer drug with a proven survival benefit in advanced NSCLC, was approved in the United States in November last year and generated first-quarter sales totalling 57 million Swiss francs. The product was approved by the Swiss regulatory authorities in March. An application for marketing authorisation in the European Union is currently undergoing regulatory review, with a decision expected in the fourth quarter of this year. In January new data also showed significant improvement in overall survival of pancreatic cancer patients when Tarceva is added to chemotherapy.
Sales of MabThera/Rituxan, for non-Hodgkin’s lymphoma (NHL), were up 24%. Following positive data from clinical trials showing that maintenance treatment with MabThera/Rituxan improves progression-free survival in patients with indolent NHL, Roche is preparing to file a marketing application for this indication in Europe in the second half of 2005. Results from a recently published pivotal phase III study show that MabThera/Rituxan significantly improves symptoms in rheumatoid arthritis patients, indicating that the product has the potential to play a major role in the future treatment of many patients with this disease.
Xeloda sales continued their upward trend, advancing by a strong 48% for the quarter. At the end of March the European authorities approved Xeloda for the treatment of colon cancer after surgery. Roche anticipates FDA approval of this indication later this year. The new indication will double the number of patients eligible for treatment with Xeloda. The breast cancer medicine Herceptin achieved double-digit growth in key markets.

Influenza - late flu season and orders for pandemic readiness supplies spur unexpectedly strong increase in Tamiflu sales
First-quarter sales of Tamiflu totalled 424 million Swiss francs. This impressive increase was driven by seasonal sales and by early orders for some pandemic readiness supplies. Although it started late, the 2004/2005 flu season has been severe, with unexpectedly serious outbreaks occurring particularly in Japan. In Japan alone, Tamiflu sales totalled 260 million Swiss francs. Following experts’ warnings of an imminent influenza pandemic, an increasing number of countries have begun ordering stockpiles of Tamiflu, with some countries - including France, the United Kingdom, New Zealand and Norway - planning to purchase enough to treat 20% to 25% of their populations. The large orders received to date will be delivered in phases over the next two years and then recorded as sales.

Anemia - strong uptake of NeoRecormon pre-filled syringe
Sales of the anti-anemia products NeoRecormon and Epogin, prescribed in patients with kidney disease and cancer, grew steadily despite price pressure in the anemia market as a whole. Combined sales of the two drugs were up 7%. NeoRecormon remained the leading product for renal anemia in its markets. The new pre-filled syringe successfully launched last year is now the top-selling NeoRecormon dosage form for cancer-related anemia.

Transplantation - global market leadership maintained
Sales of CellCept increased 4%, helped by double-digit growth outside the United States. While wholesaler buying patterns led to an 8% decline in US sales of CellCept, new prescriptions in the United States rose 13% for the quarter, demonstrating the underlying strong demand for the product in this market.

Virology - Pegasys gains additional indications
Pegasys, which was approved for several new indications early this year, maintained its market leadership with sales growth of 15%. While the US market experienced a decline in 2004, the market now appears to be stabilising again. Pegasys plus ribavirin became the first and only pegylated interferon combination therapy to be approved by both the FDA and the European Commission for the treatment of hepatitis C in patients co-infected with HIV. In addition, Pegasys received EU approval in February for the treatment of hepatitis B. FDA approval of the hepatitis B indication is anticipated later this year. These new indications, combined with initiatives to increase the detection rate for hepatitis C infections, will further enhance the potential of Pegasys. Sales of Fuzeon, for HIV, increased steadily both in the United States and in key European markets.

Osteoporosis - Boniva/Bonviva approved in the United States
Boniva, the first once-monthly oral bisphosphonate for the effective treatment and prevention of osteoporosis, was approved by the FDA in March. Filings for approval of this once-monthly oral formulation for the treatment of osteoporosis have also been submitted in the European Union and Switzerland, where the product will be marketed as Bonviva; approvals are anticipated later this year. Along with the established efficacy of its class, Boniva/Bonviva can offer greater convenience for the patient with the possibility of improved adherence to treatment.



Diagnostics Division

Sales growth in line with the market
In the first three months of 2005 Roche Diagnostics recorded sales of 1.9 billion Swiss francs, an increase of 4% (1% in Swiss francs; 8% in US dollars) over the previous year’s very strong first quarter. The division’s molecular diagnostics business, which includes women’s health and blood screening products, and the diabetes care and immunodiagnostics portfolios all made major contributions to growth. Sales grew significantly faster than the market in the Asia-Pacific region, Japan and Latin America. In Eastern Europe sales showed double-digit gains, while elsewhere in Europe and in Africa growth was in the single digits. In the United States divisional sales kept pace with market growth. Roche Diagnostics is currently launching new diabetes care products in selected markets in Europe and expects to see accelerated sales growth from mid-year on as these products are rolled out in major European markets and in the United States.

Diabetes Care - two innovative products ready for launch worldwide
Roche Diabetes Care increased its sales by 4% during the quarter and anticipates above-market growth going forward this year. Two innovative new products launched in their first markets during the quarter - the Accu-Chek Aviva blood glucose meter and the Accu-Chek Spirit insulin pump - will help build additional sales momentum. Accu-Chek Aviva is now on the market in the Netherlands and Scandinavia, and Accu-Chek Spirit is available in Germany and the Netherlands. The global rollout of these products will continue in the months ahead.

Near Patient Testing - strong quarter for coagulation monitoring and glucose testing products
Roche Near Patient Testing posted a 15% increase in sales of its coagulation monitoring products. Total sales revenues in this business area were down 1%, however, primarily as a result of weaker sales of blood gas and electrolyte analysers in Europe and the United States. With the Omni S now available worldwide, Roche expects to see a return to dynamic growth in this segment before the end of the year. Sales of the Accutrend GC/GCT meters, used for cholesterol testing in doctors’ offices, experienced double-digit growth. Cardiac markers also contributed to growth, with sales showing a high single-digit increase for the quarter. Recent clinical trials confirming the benefits of patient self-monitoring contributed to a double-digit increase in sales of the CoaguChek S meter. The rollout of a new coagulation monitoring device in the second half of this year will fuel additional growth.

Centralized Diagnostics - immunodiagnostics drives growth
Roche Centralized Diagnostics grew in line with the market at 4%. Immunodiagnostics was a major growth driver, with placements of Elecsys instruments increasing by 28% for the quarter which will fuel future, highly profitable reagent sales. Clinical chemistry placements of Cobas Integra and Modular Analytics increased 14%, which will further strengthen Roche’s position in the market. This year Roche Centralized Diagnostics is focusing on expanding and strengthening its lead in the serum work area segment and on developing new immunoassays for cancer, rheumatoid arthritis and cardiovascular disease.

Molecular Diagnostics - blood screening products a key growth driver
Diagnostics sales in this business area rose 8%. Roche Molecular Diagnostics received FDA approval to market its Cobas AmpliScreen HIV-1 and hepatitis C blood screening tests for use in screening organ and tissue donations. In the virology segment, the business area obtained CE certification for the first fully automated real-time PCR tests for hepatitis C, hepatitis B and HIV-1 on its Cobas AmpliPrep/Cobas TaqMan system. US clearance of the AmpliChip CYP450 Test represents a major step towards personalised medicine. This new test provides doctors with information that can help them in selecting the most appropriate medications and dosages for their patients.

Applied Science - outlook good for full-year 2005
Roche Applied Science posted 2% growth compared with a very strong first quarter in 2004. The business area expects growth to increase significantly in the course of 2005 as a result of additions to its portfolio of PCR systems - particularly the launch of a new, high-throughput LightCycler system - and increased reagent sales.

Annex

All trademarks used or mentioned in this release are protected by law.

Additional information:
- First-half results 2005: 20 July (tentative)
- Nine-month sales 2005: 19 October (tentative)


Disclaimer
This release 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 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 presentation 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; (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 or news coverage.


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