Roche's third-quarter sales rise 7 percent on "strong" growth for new drugs

Headline results for the third quarter:

Pharmaceuticals division sales

11.2 billion Swiss francs ($11.3 billion)

+7%

Revenue

14 billion francs ($14.1 billion; forecasts of 13.8 billion francs)

+7%

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

What the company said:

"In the first nine months of the year, both our pharmaceuticals and diagnostics divisions achieved very strong sales growth," commented CEO Severin Schwan, adding "the uptake of our new medicines continued to be strong in the third quarter," including Ocrevus, Perjeta, Alecensa and Tecentriq.

Daniel O'Day, head of the pharmaceutical division, noted "in China, we have very good growth," which he explained was largely due to the fact that Avastin, Herceptin and Rituxan are "now broadly reimbursed" in the country. "We expect that growth to continue," O'Day added.

Other results:

  • Herceptin: 1.7 billion francs ($1.7 billion), up 1 percent
  • MabThera/Rituxan: 1.7 billion francs ($1.7 billion), down 7 percent, impacted by biosimilar competition in Europe
  • Avastin: 1.7 billion francs ($1.7 billion), up 6 percent
  • Perjeta: 699 million francs ($705 million), up 27 percent, boosted by use for the adjuvant treatment of patients with HER2-positive early breast cancer at high risk of recurrence
  • Ocrevus: 633 million francs ($639 million), up 104 percent, supported by "continued strong" new patient demand
  • Tecentriq: 204 million francs ($206 million), up 71 percent
  • Alecensa: 158 million francs ($159 million), up 62 percent
  • Tarceva: 127 million francs ($128 million), down 37 percent

What analysts said:

"It's a beat driven by stronger performance of the legacy drugs," commented Deutsche Bank analyst Tim Race, adding "this may be a theme until we see biosimilar launches in the US." For related analysis, see ViewPoints: Some turbulence, but Roche riding out the biosimilar cold front.

Looking ahead:

Roche confirmed its outlook for the year, with mid-single digit sales growth, at constant exchange rates, while core earnings per share are predicted to grow in the mid-teen digits. The company added that excluding US tax reform, earnings growth will be broadly in line with sales.

Pipeline update:

Roche indicated that the experimental drug RG6125, also known as SDP051, has been removed from Phase II development. The monoclonal antibody, which targets cadherin-11, was being studied in patients with rheumatoid arthritis. The company gained the drug after paying $105 million upfront to buy Adheron Therapeutics in 2015.

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