Roche hikes full-year targets as new drugs drive Q3 growth, led by Ocrevus

Headline results for the third quarter:

Pharmaceuticals division sales

CHF 12.4 billion ($12.4 billion)

+15%

Overall revenue

CHF 15.6 billion ($15.6 billion)

+13%

Note: All changes are versus the prior-year period on a constant exchange rate basis unless otherwise stated

What the company said:

CEO Severin Schwan remarked that the uptake of new medicines, including Hemlibra, Ocrevus, Perjeta and Tecentriq, "is very strong," adding "we are successfully entering new disease areas." The executive noted "based on the strong demand for our new medicines and continued progress of our product pipeline we have raised the outlook for 2019."

Commenting on the company's performance in China, drugs division head Bill Anderson said "we're benefiting from the fact that we have a major geographic expansion of both Herceptin and Mabthera, especially into rural areas," calling the sales growth this year likely a "high-water mark." Anderson remarked "we've got our new medicines launching in China at an increasing pace, so we look forward to continued strong growth," adding "but greater than 50% is hard to achieve in an ongoing fashion."

Other results:

  • Pharmaceuticals division sales in US: CHF 6.7 billion ($6.7 billion), up 14%
  • Pharmaceuticals division in international markets, including China: CHF 2.5 billion ($2.5 billion), up 27%
  • Pharmaceuticals division sales in Europe: CHF 2.1 billion ($2.1 billion), up 5%
  • Avastin: CHF 1.8 billion ($1.8 billion), up 8%, with "strong" uptake in China
  • MabThera/Rituxan: CHF 1.6 billion ($1.6 billion), down 1%, due to biosimilar competition in Japan, although the erosion rate is "softening" in Europe
  • Herceptin: CHF 1.5 billion ($1.5 billion), down 7%, hit by biosimilar competition in the EU and Japan, although a "limited" decline in the latter market due to restricted labels
  • Ocrevus: CHF 929 million ($931 million), up 48%, gaining market share in all MS indications and displacing oral drugs
  • Perjeta: CHF 910 million ($912 million), up 33%, with global growth driven by use in early breast cancer
  • Tecentriq: CHF 515 million ($516 million), up 154%, driven by first-in-class launches in first-line small-cell lung cancer and triple-negative breast cancer
  • Hemlibra: CHF 386 million ($387 million), versus CHF 56 million ($56 million) in the prior year, boosted by strong uptake in non-inhibitors in the EU, Japan and the US
  • Alecensa: CHF 235 million ($236 million), up 50%, driven by first-line launches

Looking ahead:

Roche now expects revenue this year to grow in the high-single digit range, at constant exchange rates, up from prior guidance of growth in the mid- to high-single digit range. The company added that core earnings per share are targeted to grow "broadly in line" with sales, on the same basis.

According to Roche, it still expects the proposed $4.3-billion acquisition of Spark Therapeutics to close by the end of the year, despite ongoing scrutiny of the deal by regulators in the US and UK.

What analysts said:

"The long-feared skid marks caused by biosimilars in the US market are not visible," remarked Zuercher Kantonalbank's Michael Nawrath.

Pipeline updates:

Roche disclosed that during the third quarter, a Phase I study of RG6102 was initiated. The experimental therapy uses the company's "brain shuttle" technology to deliver gantenerumab, an IgG1 monoclonal antibody designed to bind to aggregated forms of beta-amyloid, across the blood-brain barrier.

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