Roche posts strong sales growth in the first nine months of 2013
Basel, 17 October 2013
- Group sales increase 6% at CER1 to 34.9 billion Swiss francs, strong third-quarter with 8% growth
- Pharmaceuticals sales up 7% at 27.2 billion Swiss francs due to HER2 breast-cancer franchise, Avastin and Actemra/RoActemra
- US (+12%), key emerging markets (+10%) main regional growth drivers
- Positive regulatory decisions in US and Europe strengthen outlook for the HER2 breast cancer franchise
- Diagnostics sales rise 4% to 7.7 billion Swiss francs driven by strong growth in Professional Diagnostics
- Full-year outlook confirmed
|In millions of CHF||As % of sales||% change|
|2013||2012||2013||2012||At CER1||In CHF||In USD|
* Asia–Pacific, EEMEA (Eastern Europe, Middle East, Africa), Latin America, Canada, Others
Commenting on the Group’s first nine months, Roche CEO Severin Schwan said: “Demand for our products has remained strong in both divisions. We will meet our full-year targets. I am very encouraged by the uptake of our new cancer medicines, Perjeta and Kadcyla, which significantly improve the survival rates of patients with a very aggressive form of breast cancer. In diagnostics, we benefited from strong growth in Professional Diagnostics, and the launch of the cobas 8100 will further strengthen our market leadership.”
Continued strong growth
Group sales rose 6% to 34.9 billion Swiss francs in the first nine months of the year due to strong demand for Roche’s HER2 breast-cancer treatments, as well as higher sales of Avastin and clinical laboratory products from the Diagnostics Division.
For the fifth consecutive year Roche was ranked as the Group Leader in sustainability within the Pharmaceuticals, Biotechnology & Life Sciences Industry in the Dow Jones Sustainability Index (DJSI), highlighting the Group’s commitment to responsible business practices and the creation of long-term value.
Pharmaceuticals Division – HER2 franchise key growth driver
Sales in the Pharmaceuticals Division rose 7% to 27.2 billion Swiss francs as a result of strong demand for Roche’s cancer medicines Avastin, Herceptin, MabThera/Rituxan, Perjeta and Kadcyla, as well as rheumatoid arthritis treatment Actemra/RoActemra.
The HER2 breast-cancer franchise, which includes Herceptin, Perjeta and Kadcyla, grew 13% thanks to positive uptake of both Perjeta and Kadcyla following their recent launches. The outlook for the HER2 franchise was further strengthened in September after the European regulatory agency’s Committee for Medicinal Products for Human Use (CHMP) recommended approval for Kadcyla in advanced HER2-positive breast cancer. The FDA also granted accelerated approval of Perjeta for the neoadjuvant treatment of HER2-positive breast cancer prior to surgery. Perjeta is the only approved neoadjuvant breast cancer treatment in the United States. In addition, the subcutaneous formulation of Herceptin was approved in Europe, significantly reducing the administration time and related treatment costs of Herceptin.
Avastin sales rose 13% due to recent approvals in ovarian cancer in Europe, colorectal cancer in the United States and Europe, and the first approval for newly diagnosed glioblastoma in Japan.
The division also benefited from a 33% increase in sales for Actemra/RoActemra. Roche is strengthening its immunology/ophthalmology pipeline with the development of new compounds such as etrolizumab for inflammatory bowel disease and lampalizumab (anti-factor D) for geographic atrophy, an advanced form of dry age-related macular degeneration. Etrolizumab is moving into late-stage development, while promising phase II data for lampalizumab were presented at the 31st Annual Meeting of the American Society of Retina Specialists in August.
The United States (+12%) and key emerging markets2 (+10%), in particular China, which grew 23%, were the main regional growth drivers. The United States nine-month net revenue benefited from a sales reserve release in the third quarter amounting to 184 million Swiss francs related to a provision in the US Healthcare Reform3. Sales in Europe rose 2% despite the challenging environment due to demand for specialty care medicines such as Avastin, skin cancer medicine Zelboraf and Actemra.
Roche now has 65 new molecular entities in its pipeline, and around two-thirds of our late-stage compounds are being developed with a companion diagnostic. In September encouraging efficacy and safety data for alectinib, an ALK inhibitor, in patients with advanced non-small cell lung cancer resistant to available treatment were presented at the European cancer congress. The FDA has granted alectinib breakthrough therapy designation.
Diagnostics Division – clinical laboratories drive growth
Sales in the Diagnostics Division rose 4% to 7.7 billion Swiss francs as a result of strong demand for tests and platforms used in clinical laboratories, especially from Roche’s Professional Diagnostics (+7%) business area. Tissue Diagnostics (+6%) and Molecular Diagnostics (+2%) also contributed to the division’s growth. Diabetes Care sales decreased 2%. Roche Diabetes Care is continuing its restructuring initiatives to sustain long-term profitability.
Asia–Pacific and Latin America continued to grow strongly with a 12% increase in sales. Demand was particularly high in China, where sales rose 23%. Sales grew 3% in Europe, Middle East and Africa (EMEA). The EMEA region accounts for 46% of the division’s business. In North America, sales were flat due to ongoing price pressure in the Diabetes Care business. Divisional sales grew 1% in Japan.
Full-year targets confirmed
Based on the strong operational performance in the first nine months 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 earnings per share (EPS)4 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.
All trademarks used or mentioned in this release are protected by law.
1) Unless otherwise stated, all growth rates are at constant exchange rates (CER). The percentage changes at CER are calculated using simulations by reconsolidating both the 2013 and 2012 results at constant currencies (the average rates for the year ended 31 December 2012).
2) Roche’s seven key emerging markets, also referred to as the E7 key emerging markets, are Brazil, China, India, Mexico, Russia, South Korea and Turkey.
3) The one-time release is based on updated government guidance on a provision that relates to the 340B clause and impacts mainly MabThera/Rituxan, Herceptin and Avastin. Under the 340B drug pricing programme, drug manufacturers are required to provide medicines at reduced prices. Excluding this reserve release, overall US sales year-to-date grew 10%.
4) Excluding one-off Past Service Income impact of around 200 million Swiss francs on core net income and excluding 340B reserve release impact of 184 million Swiss francs on sales and around 100 million Swiss francs on core net income.
Disclaimer: Cautionary statement regarding forward-looking statements
This document contains certain forward-looking statements. These forward-looking statements may be identified by words such as ‘believes’, ‘expects’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’, ‘seeks’, ‘estimates’, ‘future’ or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Various factors may cause actual results to differ materially in the future from those reflected in forward-looking statements contained in this document, among others: (1) pricing and product initiatives of competitors; (2) legislative and regulatory developments and economic conditions; (3) delay or inability in obtaining regulatory approvals or bringing products to market; (4) fluctuations in currency exchange rates and general financial market conditions; (5) uncertainties in the discovery, development or marketing of new products or new uses of existing products, including without limitation negative results of clinical trials or research projects, unexpected side effects of pipeline or marketed products; (6) increased government pricing pressures; (7) interruptions in production; (8) loss of or inability to obtain adequate protection for intellectual property rights; (9) litigation; (10) loss of key executives or other employees; and (11) adverse publicity and news coverage. The statement regarding earnings per share growth is not a profit forecast and should not be interpreted to mean that Roche’s earnings or earnings per share for any current or future period will necessarily match or exceed the historical published earnings or earnings per share of Roche.