By Andrew Morse And Denise Roland
ZURICH-- Roche Holding AG said strong growth of its core cancer
franchise pushed sales 3% higher in the first quarter, prompting
the Swiss drug giant to confirm its guidance for the year and
suggest it will raise its dividend.
Basel, Switzerland-based Roche said sales rose to 11.83 billion
Swiss francs ($12.4 billion) in the quarter ended March 31, beating
an analyst forecast of 11.508 billion francs. The pharmaceutical
giant said revenue rose 5% when reported in constant currency, a
measure that strips out the impact of foreign exchange swings.
The company doesn't provide earnings for the first quarter.
Roche credited the performance to its huge pharmaceutical
division, which was powered by growing sales of its treatments for
cancers. The company said sales of treatments for HER2+ breast
cancer, including Herceptin, Perjeta and Kadcyla, grew 23%.
Avastin, another cancer treatment that is used for seven different
forms of the disease, rose 6%.
The company has been positioning Perjeta to replace Herceptin, a
predecessor treatment that will lose patent protection in Europe
this year and in the U.S. in 2019. Perjeta sales rose 82% to 322
million francs in the quarter, driven by growing use of the drug in
combination with Herceptin.
Sales of Herceptin, Roche's second-biggest selling drug, rose
12% to 1.65 billion francs in the quarter.
Investors were eager to hear about Roche's pipeline of new
drugs, especially those in a hot new area of cancer treatment known
as immunotherapy, which enhances the body's own immune response to
tumors. Its most advanced treatment, targeted at non-small-cell
lung cancer, received breakthrough designation from the U.S. Food
and Drug Administration in February. But it faces fierce
competition from Merck & Co., which filed a rival treatment
with the FDA on Monday.
Daniel O'Day, chief operating officer for pharmaceuticals at
Roche, told analysts that the company's "base case" for filing was
in 2016 but gave off signals that this could come sooner, adding:
"We will not hold back. We have a very comprehensive package and
found the FDA to be very receptive to our program. We want to get
[this drug] to patients as quickly as possible."
Roche and many of its rivals are betting that cancer
immunotherapies will drive future sales growth as revenue from
older drugs declines in the face of cheaper versions.
Like other multinational companies, Roche was affected by
volatile exchange rates that cut into its performance in Swiss
francs, the currency it uses for financial reporting. The company
said a sharp rise in the Swiss franc against the euro, which erodes
reported sales in the bloc, was offset by a rise in the U.S.
dollar.
Still, exchange rates cut two percentage points from the
company's reported sales in the quarter.
The performance led Roche to confirm its 2015 guidance of sales
growth in the low- to mid-single-digits when measured in constant
currency. The company also said it expected to increase its
dividend, which stood at 8 francs before tax in fiscal 2014.
Write to Andrew Morse at andrew.morse@wsj.com and Denise Roland
at denise.roland@wsj.com
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