Roche Sees More Cancer Success as Sales Top Forecast
Swiss drugmaker Roche Holding is banking on a new generation of breast cancer medicines to drive sales growth after strong demand for its established cancer treatments helped it to top forecasts in the third quarter.
Most of Roche's best-selling cancer drugs do not face imminent generic competition, sparing it the pain from a wave of patent expiries currently sweeping the global drugs industry.
It is further buttressing its defences by developing follow-on drugs which can be used in combination with its existing medicines, helping to extend the longevity of its expensive brand name drugs.
On a conference call for journalists, Chief Executive Severin Schwan declined to comment on speculation Roche would reconsider its dropped $6.8 billion bid to buy U.S. gene-sequencing company Illumina. But he added Roche was looking at ways to expand in sequencing "both internally and externally."
Third-quarter sales rose 15% to 11.27 billion Swiss francs ($12.1 billion), beating the average analyst forecast of 11.12 billion francs in a Reuters poll.
This figure was helped by the weakening of the Swiss franc against the dollar and the yen in the quarter.
"Third quarter results are once again a strong set of numbers. (The) company continues to grow, while the rest of the industry is fighting against patent expirations and pricing pressures," said Vontobel analyst Andrew Weiss, who has a 'buy' rating on the stock.
Roche said it had high hopes for newly-launched drug Perjeta, a treatment for women with a particularly aggressive form of breast cancer which was approved by U.S. regulators in June and is a follow on to its third biggest seller Herceptin.
It said there was broad willingness among doctors in the United States to prescribe Perjeta. Sales of the drug, which many analysts tip as a future blockbuster - which would mean selling over $1 billion a year - were 26 million francs so far.
The Basel-based company is also hoping to gain European and U.S.
approval for a new chemotherapy-carrying "armed" antibody called T-DM1, a drug for advanced breast cancer.
Roche, which kicks off the third-quarter reporting season for major drugmakers, kept its guidance for sales to grow by a low-to-mid single digit percentage at constant exchange rates this year, with core earnings up in the high single-digits.
In the third quarter group sales grew 4% at constant exchange rates.
Sales at the dominant pharmaceutical business surpassed forecasts, driven by solid growth in its top three cancer medicines - MabThera, Avastin and Herceptin - and a 27% leap in rheumatoid arthritis medicine Actemra in the quarter.
This helped offset declines in eye drug Lucentis due to competition from Regeneron's drug Eylea, and lower sales of CellCept, a medicine given to organ transplantation patients.
In Roche's diagnostics division, strong growth in its professional and tissue diagnostics units helped offset a decline in its diabetes business, which suffered from ongoing price pressures and reimbursement cuts.