Swiss franc undercuts Roche growth
pharmafile | October 28, 2003 | News story | |
Sales revenues at Roche have been dealt a serious blow by currency fluctuations in the first quarter, with a strong Swiss franc undercutting sales growth of twice the industry average.
Roche managed just a 3% rise in sales of its core business with combined sales for the pharmaceutical and diagnostics divisions rising to CHF 6.7 billion ($4.9bn), which represented a 15% rise in local currencies. The strong Swiss franc reduced pharma sales growth to 5% from a much stronger 18% in local currencies, totalling CHF4.6 billion ($3.3bn).
The figures were further distorted by the integration of Chugai, the Japanese pharma company that Roche bought last October, whose sales rose 205% (236% in local currencies) to CHF656 million ($470m).
The first quarter results follow losses of $2.8 billion in 2002, as the company wrote off costs related to its soon-to-be divested vitamins division and suffered the effects of damaging stock market drops on investments.
The company remained upbeat, however, with Chairman and Chief Executive Franz Humer saying: he initiatives launched in recent years to strengthen our core business in the long term are bearing fruit, and I am very pleased that Group sales are growing at a double-digit rate and significantly faster than our markets.
He reiterated the company aim of double-digit sales and operating profit growth in local currencies for the year, while retaining its operating margins.
Aside from Chugai, pharma sales benefited most from the company flagship oncology portfolio, including MabThera for non-Hodgkin lymphoma, which generated a 39% increase in sales to CHF620 million ($444m).
Sales of NeoRecormon for cancer-related anaemia rose 120% to CHF450 million ($323m), while breast cancer treatment Herceptin rose 36% to CHF268 million ($192m) and breast/colorectal cancer therapy Xeloda rose 50% to CHF133 million ($95m).
The company novel treatment for hepatitis C, Pegasys, and a related product, Copegus, have secured 29% of the US market, with global sales of CHF120 million ($86m). Japanese approval is expected in the autumn following a fast-track review,
Along with novel antiretroviral Fuzeon, recently approved by the FDA, Pegasys is one of several new drugs that Roche hopes will secure its growth and help protect it from advances from Swiss rival Novartis.
Novartis has been steadily increasing its stake in Roche over the last few years with its eye on a full acquisition, but Mr Humer and the company controlling Oeri and Hoffman families remain firmly opposed to a merger with any company.
