RHHBY Roche Holdings Ltd AG (QX)

   By Sonia Amaral Rohter 
 

Roche Holding AG (ROG.EB) on Thursday reported its full-year results. Here is how the results came in:

SALES: The Swiss pharmaceuticals company had sales of 53.3 billion Swiss francs ($57.15 billion) in 2017, up from CHF50.58 billion a year earlier. Analysts had expected sales of about CHF53.15 billion, according to a consensus forecast provided by FactSet.

EARNINGS: Net profit for 2017 was CHF8.63 billion, down from CHF9.58 billion in 2016. Core operating profit increased 3.2% to CHF19.01 billion.

WHAT TO WATCH:

U.S. TAX REFORM: Roche said changes to the U.S. tax rate would help earnings in 2018. The company expects high single-digit growth in core earnings per share, compared with growth "broadly in line with sales" when the effects of U.S. tax reform are excluded. Roche forecast sales growth of "stable to low single digits at constant exchange rates" for 2018. The change in the U.S. tax rate resulted in a transitional expense of CHF116 million in 2017, Roche said. If the new rates had applied for all of 2017, the effective core tax rate would have been in the low twenties in percentage terms, Roche said, excluding any transition impact. Roche's actual core effective tax rate in 2017 was 26.6%.

HEMLIBRA: Roche said that Hemlibra has had "promising uptake" in the U.S. and reported sales of CHF3 million for the year. Roche launched Hemlibra, a hemophilia treatment, after FDA approval in November. The hemophilia field is increasingly competitive and analysts have high expectations for Hemlibra sales.

IMPACT FROM BIOSIMILARS: With several of Roche's blockbuster drugs facing competition from cheaper copycats, the topline impact of biosimilars was a source of concern. Biosimilar competition had a noticeable impact in Europe, where Roche called competition from MabThera/Rituxan copycats a "major driver" of sales decline in 2017. Sales of the cancer treatment grew 1% globally at constant currency but fell 11% in Europe following the entry of biosimilars into some markets in mid-2017. Roche expects MabThera/Rituxan biosimilars to launch in the U.S. market later this year.

NEW PRODUCT GROWTH: Roche is relying on new products to offset declining sales of some legacy drugs. Analysts were particularly interested in the performance of Ocrevus, a treatment for multiple sclerosis, and Tecentriq, a cancer immunotherapy. Together with Alecensa, another cancer drug, they contributed CHF1.4 billion of new sales in 2017, representing 65% of pharmaceuticals division growth, Roche said. Full-year sales of Tecentriq more than tripled, while Alecensa's doubled. Ocrevus, which launched last year, brought in CHF869 million in sales in 2017 and "now has over 5% market share of the U.S. multiple sclerosis market, an impressive feat after just three quarters of sales," analysts at Berenberg said.

Write to Sonia Amaral Rohter at sonia.amaralrohter@dowjones.com

(END) Dow Jones Newswires

February 01, 2018 09:30 ET (14:30 GMT)

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