Roche records $2.8bn loss in 2002
pharmafile | October 27, 2003 | News story | |
Roche has recorded a $2.8 billion net loss for 2002 after writing off CHF9 billion costs following its embarrassing exit from the vitamins market and heavy stock market losses.
The company's Chief Executive Franz Humer has decided to take losses from a number of sources now as part of a radical shake-up of the company's finances.
The company has sold its vitamins business and settled a related US legal case with Genentech, and has written off a number of stocks that have failed to recover lost value.
Mr Humer said the charges were "all the more unfortunatebecause the company showed otherwise promising progress in 2002, including stronger than average growth in its key pharmaceutical and diagnostics businesses. Excluding special items, operating profit rose 22% in local currencies to CHF5 billion.
Fighting a rearguard action against its Swiss neighbour and rival Novartis, Roche said it anticipated double-digit growth for 2003. Novartis recently increased its stake in the company to 32.7%, in a move that has been widely seen as preparation for a merger.
Roche has clearly stated that it is against a merger, with Mr Humer saying it would "destroy the inherent value of Roche". The company's founding families, who own a majority stake in the voting shares have also stated they are opposed to such a deal with any company.
The company indicated that it would be reducing its reliance on income generated from its investment portfolio, which has in the past accounted for as much as one-third of its operating profits. Roche said the uncertain nature of the stock markets has made such a policy too risky.
Pharma sales rose 9% in local currencies to CHF19.3 billion ($14.2 billion), driven mainly by the oncology portfolio, which topped revenues of CHF5 billion ($3.7 billion). The company's biggest earning drug was MabThera/Rituxan a humanised monoclonal antibody for non-Hodgkin's lymphoma, with sales of CHF2.3 billion ($1.7 billion). Sales of breast and colorectal cancer treatment Xeloda rose 82% to CHF444 million ($328 million) while breast cancer treatment Herceptin rose a third to over CHF1 billion ($700 million).
But anti-obesity drug Xenical suffered a drop of 16%, which the company said was in line with the general decline of the anti-obesity market.
Roche recently announced the European price of new antiretroviral drug Fuzeon would top $20,000 by far the most expensive anti-HIV treatment a premium which it says reflects the highly complex process needed to manufacture the drug.
Developed with Trimeris, the drug has been shows to be highly effective in patients who are no longer responding to conventional HIV therapy. It has been granted fast track review status by both the EMEA and FDA, with a positive recommendation expected within a few months.
Roche's existing HIV portfolio Viracept, Invirase and Fortovase suffered a drop of over a fifth with sales of CHF501 million ($370 million). The intensely competitive market and discounts offered to developing nations contributed to the decline, said the company.
