Roche beats economic crisis

Sales of Avastin rebounded in 2012 after its use for ovarian cancer treatment was approved Roche

Swiss drug maker Roche has posted a slight increase in its full-year profits, boosted by a weakening franc and growing demand for its cancer medicines and diagnostic tests used by clinical laboratories.

The Basel-based company on Wednesday reported a net profit for 2012 of nearly SFr 9.8 billion ($10.6 billion) compared with just over SFr9.5 billion for 2011.

It credited the rise to the approval of the breast cancer medicine Perjeta and the weakening of the franc against the dollar and Japanese yen. Improvements in productivity also helped boost the company’s bottom line.

“We met our financial targets, grew faster than the market, and our strong pipeline positions us well for further growth,” said Roche CEO Severin Schwan.

The drug maker said its top-selling products MabThera/Rituxan, Herceptin and Avastin all performed strongly in 2012 as demand grew in all regions. Genentech, which is owned by Roche, makes all three cancer drugs, which are the best-selling in the world.

Avastin, which had dipped in sales, was “back on the growth path” after its launch for ovarian cancer in Europe at the end of 2011. It was also helped by stronger sales in Japan, the company said.

Roche also cited robust demand in 2012 for its clinical laboratory products, with the diagnostics division, which launched several new instruments and devices, reporting a four per cent rise in sales to SFr10.3 billion.

Roche said the outlook for 2013 is for the group’s sales to grow in line with the previous year, when they rose seven per cent to SFr45.5 billion. The company posted an 11 per cent rise in 2012 core earnings per share, which was SFr13.62 compared with SFr12.30 a year ago.

Generic competition

Roche’s assessment was more upbeat than cross-town rival Novartis, which was heading for a fall in profit in 2013 as it grapples with competition from cheaper copies of its top-selling product.

Novartis will have to weather the loss of exclusivity on its top-selling blood pressure drug Diovan in the United States and also resolve lingering manufacturing problems at its factory in Lincoln, Nebraska.

Roche has been spared the pain of a wave of patent expiries sweeping the global drugs industry as most of its medicines do not face imminent generic competition.

Some analysts have raised red flags about the loss of exclusivity on chemotherapy drug Xeloda at the end of 2013 and possible competition for hepatitis C drug Pegasys from other oral treatments, which they say could drag on Roche’s mid-term growth.

But the company hopes sales of its newest products, like skin cancer drug Zelboraf and breast cancer medicine Perjeta, will plug the gap. It is developing follow-on medicines to try to fend off anticipated competition from so-called biosimilar copies of its cancer drugs.

Perjeta, a treatment for women with a particularly aggressive form of breast cancer, is a follow-on to Roche’s current second-biggest seller Herceptin and part of its strategy to develop new drugs to extend the longevity of its best-selling brands. It won approval from United States regulators in June.