Roche sees 2019 sales, profit rise despite competition from copies
ZURICH (Reuters) – Roche expects sales and earnings to rise in 2019 as new drugs more than offset competition from copies of its $20 billion-plus per year trio of cancer medicines Rituxan, Herceptin and Avastin, the Swiss drugmaker said on Thursday.
Core operating profit last year climbed 9 percent to 20.5 billion Swiss francs ($20.65 billion), the company said. Sales rose 7 percent to 56.8 billion francs, just ahead of the 56.4 billion francs average estimate in a Reuters poll.
CEO Severin Schwan forecast “low- to mid-single digit” growth in 2019 sales and earnings-per-share, spurred by new drugs including Ocrevus for multiple sclerosis, Hemlibra for hemophilia A and cancer medicines Alecensa and Tecentriq.
“Almost 90 percent of our growth comes from newly launched products, demonstrating we are successfully rejuvenating our portfolio,” Schwan said.
Roche shares were indicated 1.2 percent higher.
The company proposed a dividend increase to 8.70 francs per share, from 8.30 francs last year.
Net profit rose 24 percent to 10.9 billion francs, as the company was helped by U.S. tax reform that lowered its tax rate.
One drag continued to be InterMune, which Roche spent $8.3 billion on buying in 2014 but which resulted in more than half the 3.3 billion franc impairment of goodwill and intangible assets in 2018.
Sales of Ocrevus more than doubled to 2.4 billion francs, while Hemlibra in its first full year on the market reached 224 million francs, which Schwan called “beyond expectations.”
Tecentriq, Roche’s cancer immunotherapy, posted 772 million in sales, up nearly 60 percent but still dwarfed by rival medicines Keytruda from Merck and Opdivo from Bristol-Myers Squibb.
Schwan said Bristol-Myers’s $74 billion offer for Celgene this month would not impact his strategy of focusing on smaller, bolt-on acquisitions.
“We are not into the mega-mergers,” he said.
The CEO said Roche continued to benefit from growing sales in China, which bought more older medicines whose sales have fallen elsewhere following patent expiries.
“Volumes have really soared,” he said. “I would expect the momentum to continue in 2019.”
Sales of Herceptin rose 1 percent to 6.98 billion francs, despite a 16 percent decline in Europe where biosimilar copies are impacting revenue. Avastin sales rose 3 percent, to 6.85 billion francs, while blood cancer medicine Rituxan – the hardest hit medicine, so far, from copies – slipped 8 percent to 6.75 billion.
Schwan is expecting biosimilar competition in the U.S. market to intensify from the second half of 2019.
Roche and partner AC Immune SA on Wednesday delivered bad news for their Alzheimer’s medicine crenezumab, calling a halt to two late-stage clinical trials after hopes of success faded.
Schwan called the result “disappointing”, but the consequence of taking risks on new medicines, saying that other work on Alzheimer’s would continue.
Reporting by John Miller; Editing by Subhranshu Sahu and Mark Potter