Basel, 25 July 2013
Roche posts strong first-half results
- Group sales 5%1 higher at 23.3 billion Swiss francs
- Core EPS 12% higher at 7.58 Swiss francs; net income rose to 6 billion Swiss francs
- Pharmaceuticals sales rose 6% due to cancer medicines and Actemra
- Diagnostics sales increased 3% driven by Professional Diagnostics, offset by decline in Diabetes Care
- HER2 franchise grew 11% to 3.3 billion Swiss francs after successful launches of Perjeta and Kadcyla
- Avastin sales rose 12% to 3.1 billion Swiss francs with strong demand in ovarian and colorectal cancer
- Encouraging GA101 and Bcl-2 inhibitor data strengthen hematology franchise
- Aleglitazar programme stopped after regular safety review
- Roche confirms full-year outlook
|In millions of CHF||% change|
|Core operating profit||9,488||8,641||10||10|
|Operating free cash flow||7,445||7,244||4||3|
|IFRS Net income2||6,047||4,312||41||40|
|Core earnings per share - diluted||7.58||6.88||12||10|
*Constant exchange rates (average full-year 2012)
Roche’s CEO Severin Schwan: “Roche delivered strong operating results in the first half of 2013, driven by our existing portfolio, recently launched cancer medicines Perjeta and Kadcyla, as well as continued growth in the clinical laboratory business.” Schwan added: “We will continue to focus on innovation with 68 new molecular entities in our Pharma pipeline and 55 key Diagnostics platforms and tests in development.”
Strong operating results
In the first half of 2013, Group sales rose 5% to 23.3 billion Swiss francs due to continued demand for Roche’s main oncology medicines, as well as for its clinical laboratory diagnostic products. This strong sales performance contributed to a double-digit increase in the Group’s core operating profit and core earnings per share (EPS), as well as an improvement in profitability.
Sales growth momentum continues
The Pharmaceuticals Division posted a 6% increase in sales to 18.2 billion Swiss francs, while the Diagnostics Division recorded a 3% rise in sales to 5.1 billion Swiss francs.
Demand for Roche’s three major cancer treatments MabThera/Rituxan, Avastin and Herceptin remained strong in the first half of 2013. Sales of Avastin were particularly good, rising 12%, due to its increased use in ovarian cancer in Europe and colorectal cancer in both Europe and the United States. The HER2 breast cancer franchise (+11%) is showing good growth following the recent launches of Perjeta and Kadcyla.
Roche’s Professional Diagnostics business area recorded a 6% increase in sales as a result of the division’s broad offering of tests, software and services. This was partly compensated by a decline in Diabetes Care of 5%, reflecting a difficult market environment and continued pricing pressure.
Core operating profit up in both divisions
The Group’s core operating profit rose 10% to 9.5 billion Swiss francs in the first half of 2013 due to the strong sales performance.
The Group’s marketing and distribution costs rose 2% to support growth in emerging markets, patient access programmes and new product launches, while research and development spending increased 4% mainly due to trials in the oncology and neuroscience franchises. This includes studies for new indications for recently launched products as well as for novel therapies, such as the anti-PDL1 medicine for cancer, and for the advancement of programmes for schizophrenia, multiple sclerosis and Alzheimer’s disease.
Operating free cash flow rose 4% to 7.4 billion Swiss francs, reflecting the underlying cash generation of both divisions.
Continued increase of core earnings per share
Roche’s core EPS, which excludes non-core items such as restructuring charges and amortisation and impairment of intangible assets, rose 12% to 7.58 Swiss francs in the first half of the year. Net income on an IFRS basis rose 41% to 6 billion Swiss francs as the large restructuring charges relating to the closure of the US site in Nutley that were incurred in 2012 were not repeated this year.
Roche further strengthened the outlook for its hematology franchise with encouraging data on obinutuzumab (GA101) and the Bcl-2 inhibitor RG76013, which Roche is developing with AbbVie. Study outcomes were presented at the 49th Annual Meeting of the American Society of Clinical Oncology (ASCO) and at the 18th Annual Meeting of the European Hematology Association (EHA) in June.
GA101 and RG7601 are part of Roche’s next generation of targeted medicines for blood cancers such as non-Hodgkin’s lymphoma (NHL) and chronic lymphocytic leukemia (CLL). GA101 won Breakthrough Therapy Designation and Priority Review from the US Food and Drug Administration (FDA) in CLL on the back of positive phase III results. The FDA’s decision on marketing approval is expected by the end of December. Roche has also filed GA101 for approval in Europe. Roche plans to move RG7601 into late-stage development after phase I data showed an 84% overall response rate in patients with relapsed or refractory CLL and an overall response rate of 53% in patients with relapsed or refractory NHL. RG7601 is designed to promote a natural cell death process known as apoptosis.
Roche’s anti-PDL1 antibody RG74464 is now in mid-stage development for non-small cell lung cancer after promising phase I data were presented at ASCO. The clinical development programme will incorporate an investigational companion diagnostic. Roche is also investigating RG7446 in other cancer types, both alone and in combination with other medicines, such as Avastin and Zelboraf. RG7446 is a new type of cancer treatment that is designed to restore a patient’s own immune system so that it is able to fight tumour cells. It works by interfering with a protein called PD-L1.
The TH3RESA study, which compared Kadcyla to the physician’s choice of treatment in patients with HER2-positive breast cancer who have already been treated with a HER2-targeted therapy, also recently met its co-primary endpoint of progression-free survival. Detailed results will be presented at an upcoming medical conference. The other endpoint is overall survival, but these data are not yet mature.
As previously announced, Roche decided to stop all trials involving aleglitazar after a regular safety review of the AleCardio phase III trial investigating aleglitazar in type 2 diabetes detected safety signals and lack of efficacy.
Full-year targets confirmed
Based on the strong operational performance in the first half of the year, Roche confirms its full-year outlook. Group sales in 2013 are expected to increase in line with last year’s sales growth, at constant exchange rates. Core EPS is targeted to grow ahead of sales. In 2013, Roche expects to further increase its dividend.
Headquartered in Basel, Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world’s largest biotech company, with truly differentiated medicines in oncology, infectious diseases, inflammation, metabolism and neuroscience. Roche is also the world leader in in vitro diagnostics and tissue-based cancer diagnostics, and a frontrunner in diabetes management. Roche’s personalised healthcare strategy aims at providing medicines and diagnostic tools that enable tangible improvements in the health, quality of life and survival of patients. In 2012 Roche had over 82,000 employees worldwide and invested over 8 billion Swiss francs in R&D. The Group posted sales of 45.5 billion Swiss francs. Genentech, in the United States, is a wholly owned member of the Roche Group. Roche is the majority shareholder in Chugai Pharmaceutical, Japan. For more information, please visit www.roche.com.
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1) Unless otherwise stated all growth rates are calculated using constant exchange rates
2) IFRS – International Financial Reporting Standards
3) RG7601 is listed as GDC-0199/ABT-199 on clinicaltrials.gov
4) RG7446 is listed as MPDL3280A on clinicaltrials.gov
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