Chemistry at Roche is working well
Roche has posted strong interim results, with net profit of SFr3.24 billion ($2.5 billion), up four per cent over last year and above market expectations.
The company, which is the world’s largest maker of cancer drugs, reported first-half sales of SFr16.62 billion, up 14 per cent over the comparable period last year.
The Basel-based group, with pharmaceuticals and diagnostics as core businesses, said that the pharma division was the “key growth driver” with sales increasing three times faster than the global market average.
Market expectations had been for net profit to fall due to one-off gains of almost SFr1 billion which were booked in the first half last year from a debt restructuring.
“Roche performed extremely well in the first half of 2005. We increased our net income, strengthened our market position and made progress on major development projects,” said chairman and chief executive Franz Humer in a statement on Wednesday.
Strong growth
“Our strong sales growth resulted in additional market share gains, and we saw a further significant improvement in the group’s earnings performance,” he added.
The pharmaceuticals division posted strong growth in the first half, with sales up by 19 per cent to SFr12.65 billion, significantly ahead of average growth rates in the United States, Europe and Japan – the division’s three most important markets.
Roche said sales in its diagnostics division rose two per cent to SFr3.97 billion.
“We therefore remain confident about the outlook for full-year 2005 despite the loss of our Rocephin patent in the United States and so we are raising our guidance again for the pharmaceuticals division,” said Humer.
Roche repeated its forecast that the division will post double-digit sales growth for the full year while diagnostics would see above-market, single-digit percentage sales growth.
Potential
The company, which received European approval for the Avastin cancer drug in January, is the only one of Europe’s five top drug makers to obtain clearance for a new product with billion-dollar sales potential this year.
Analysts say that sales of new products are helping the company counter rising costs.
“You can withstand pressure on margins if you’re growing the top line,” said Eden Securities analyst Martin Hall in an interview.
“Roche has a relatively young portfolio with prices at the top end of the range,” he added.
Last week, cross-town rival Novartis reported a net profit of SFr3.1 billion for the first six months of 2005 (+12 per cent) on sales of SFr15.1 billion.
swissinfo with agencies
Roche first-half results:
Sales – SFr16.6 billion (+14 per cent)
Net profit – SFr3.242 billion (+4 per cent)
Sales in Pharmaceutical Division – SFr12.652 billion (+19 per cent)
Sales in Diagnostics Division – SFr3.97 billion ((+2 per cent)
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