Roche's 2018 Profit and Sales Rose -- Update
January 31 2019 - 3:33AM
Dow Jones News
(Adds breakdown of revenue figures, patent-expiry details,
geographical analysis of result)
--Roche reported 2018 revenue increased 7% as U.S. drug sales
rose 13%
--Swiss pharmaceutical facing challenges in Europe from
competition for its two top-selling drugs
--Positive 2019 forecast based on strong sales growth from newer
drugs
By Denise Roland and Donato Paolo Mancini
Roche Holding AG (ROG.EB) said Thursday that sales and profit
rose last year as strong growth in the U.S. offset a decline in
Europe, where lower-cost drugs are chipping away at sales of its
top two medicines.
The Swiss pharmaceutical giant said revenue increased 7% to 56.8
billion Swiss francs ($57.2 billion), while net income rose 23% to
CHF10.9 billion. Core operating profit grew 8% to CHF20.5
billion.
Those results masked a decline in Europe, where Roche is for the
first time facing competition for its two top-selling drugs,
Herceptin for breast cancer and Rituxan for certain immune diseases
and cancers. In Europe, pharmaceutical sales declined 4% to CHF8.7
billion, while in the U.S., where the company as yet faces no
competition for its top medicines, drug sales rose 13% to CHF23.2
billion.
Roche faces a number of new challenges this year. Chief
Executive Severin Schwan said Roche expects lower-cost versions of
Herceptin, Rituxan and Avastin, another bestseller, to start
eroding U.S. sales of those drugs in the second half of this
year.
At the same time, the company is losing a lucrative revenue
stream after a patent protecting a key process in the manufacture
of antibody-type drugs expired at the end of last year. The Cabilly
patent, as it is known, allowed Roche to collect hundreds of
millions of dollars in royalties a year relating to some of the
world's biggest-selling drugs, including AbbVie Inc.'s Humira. The
patent generated CHF834 million for Roche in 2017.
Even so, the company expects sales and core earnings per share
to rise by a low-to-mid single-digit percentage this year.
That upbeat forecast is in large part thanks to strong sales
from Roche's newer drugs. Mr Schwan said such drugs, like
multiple-sclerosis treatment Ocrevus and cancer drug Tecentriq,
accounted for almost 90% of pharmaceutical sales growth last
year.
Roche's smaller diagnostics division also contributed to the
growth, with sales rising 7% to CHF12.9 billion.
Write to Denise Roland at denise.roland@wsj.com and Donato Paolo
Mancini at donatopaolo.mancini@dowjones.com
(END) Dow Jones Newswires
January 31, 2019 03:18 ET (08:18 GMT)
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