Roche lifts full-year outlook as new drugs drive first-half growth

Headline results for the first half:

Pharmaceuticals division sales

21.8 billion Swiss francs ($22 billion)

+6%

Revenue

28.1 billion francs ($28.3 billion; forecasts of 27.5 billion francs)

+7%

Profit

7.5 billion francs ($7.6 billion)

+35%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Given the very good, continuously growing uptake of our new medicines, we are well on track to rejuvenate our portfolio," remarked CEO Severin Schwan, noting that the multiple sclerosis therapy Ocrevus had the company's best launch ever. "We're only in the beginning, so I see continued growth from the new medicines, which help us offset and actually overcompensate for the entry of biosimilars, and that has been also the reason why we have raised our guidance for the full year," Schwan added.

Other results:

  • Herceptin: 3.6 billion francs ($3.6 billion), up 2 percent, with sales in Europe down 5 percent to 1.1 billion francs ($1.1 billion) due to competition from biosimilars
  • MabThera/Rituxan: 3.5 billion francs ($3.5 billion), down 9 percent due to biosimilar competition
  • Avastin: 3.4 billion francs ($3.4 billion), flat versus prior year
  • Perjeta: 1.3 billion francs ($1.3 billion), up 23 percent, driven by use for adjuvant treatment of patients with HER2-positive early breast cancer at high risk of recurrence
  • Ocrevus: 1 billion francs ($1 billion), up 456 percent
  • Tecentriq: 320 million francs ($322 million), up 37 percent
  • Tamiflu: 320 million francs ($322 million), down 11 percent, with high sales at the beginning of the year due to a severe influenza season
  • Tarceva: 298 million francs ($300 million), down 32 percent
  • Alecensa: 279 million francs ($281 million), up 91 percent

What analysts said:

The results beat expectations, with Roche's business "firing on all cylinders," commented Jefferies analyst Ian Hilliker.

Looking ahead:

Roche now expects mid-single digit sales growth, at constant exchange rates, for the full year, up from an earlier forecast of a low single-digit rate. Meanwhile, core earnings per share are predicted to grow in the mid-teen digits, while excluding US tax reform, earnings growth will be broadly in line with sales.

The company also said that Joerg Duschmale will stand for election as a supervisory board member in 2020, replacing Andreas Oeri, who after more than two decades on the board plans to step down. "I don't expect any change in terms of strategy and support from the founding families," Schwan remarked.

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