Roche delivers strong performance in the first half of 2015
Basel, 23 July 2015
- Group sales up 6% at constant exchange rates1, 3% in Swiss francs
- Pharmaceuticals Division sales up 5%, driven by oncology (HER2-positive breast cancer medicines +21%, Avastin +9%, MabThera/Rituxan +6%) and immunology (Actemra/RoActemra +25%, Xolair +28%)
- Diagnostics Division sales up 7%, driven by Professional Diagnostics (+7%) and Molecular Diagnostics (+12%)
- Strong demand for idiopathic pulmonary fibrosis medicine Esbriet
- Positive phase III results for ocrelizumab in multiple sclerosis
- Immunotherapy candidate atezolizumab delivers positive study results in lung, breast and bladder cancers
- Core earnings per share2 increased by 7% at constant exchange rates, 1% in Swiss francs
- IFRS3 net income stable at constant exchange rates, -7% in Swiss francs
- Outlook for 2015 confirmed
|In millions of CHF||% change|
Core operating profit
Core EPS-diluted (CHF)
|IFRS net income|
Commenting on the Group’s results, Roche CEO Severin Schwan said: “We had continued strong sales growth in both Pharmaceuticals and Diagnostics in the first half. I am very encouraged by the strong uptake of our new medicine Esbriet, for idiopathic pulmonary fibrosis, following our acquisition of InterMune last year. We have made significant progress in cancer immunotherapy and now have over forty programmes in clinical development. I am also pleased with the very positive results of the phase III studies for ocrelizumab in multiple sclerosis. Based on the strong first half, I am confident we will reach our full-year targets for 2015.”
Strong performance across both divisions
Sales increased 6% in the first half, with significant growth of sales of oncology and immunology medicines. There was also strong growth in the Diagnostics Division, driven particularly by immunodiagnostic and molecular diagnostics products.
In the Pharmaceuticals Division, 5% sales growth was driven by medicines to treat HER2-positive breast cancer (Herceptin, Perjeta, Kadcyla, combined +21%) and Avastin (+9%), which saw very strong growth in use for cervical and ovarian cancers. Avastin is now used to treat seven different types of cancer. MabThera/Rituxan (+6%) for blood cancers and rheumatoid arthritis continued to grow solidly. Actemra/RoActemra (+25%), which is used mainly to treat rheumatoid arthritis, also remained a significant growth contributor in the first six months. Xolair (+28%), which is now used in the treatment of chronic hives as well as asthma, continued to grow strongly. Uptake of Esbriet was very strong in the first six months (229 million Swiss francs). Sales of oral chemotherapy drug Xeloda and anti-viral medicine Valcyte declined as these medicines are no longer patent protected. Sales of hepatitis medicine Pegasys and eye medicine Lucentis were lower as a result of increased competition.
In the Diagnostics Division, sales increased 7%, driven primarily by immunodiagnostic products from the Professional Diagnostics business area (+7%). The Molecular and Tissue Diagnostics business areas also performed well, each up 12%, and sales in Diabetes Care increased 1%, despite ongoing challenging market conditions.
The Swiss franc strengthened considerably against the euro during the first half of 2015, after the Swiss National Bank lifted its exchange rate peg in January, whilst weakening against the US dollar. The Japanese yen continued to further weaken against the Swiss franc, as did most European and Latin American currencies. Overall, there was a significant negative currency impact of 3 percentage points on sales.
Core earnings per share growth ahead of sales2
Core4 operating profit increased 7% in the first half, excluding a one-time income from the sale of filgrastim rights in 2014. On the same basis, core earnings per share (7.22 Swiss francs) were 7% higher.
IFRS net income was 7% lower in Swiss francs at 5.2 billion Swiss francs as a result of the significant negative currency impact, the base effect from the one-time income from the sale of filgrastim rights and the impact from the recent acquisitions, in particular InterMune. In constant exchange rates net income was stable.
Positive data in oncology and neuroscience
In May, Roche presented highly encouraging data for cancer immunotherapy candidate atezolizumab (anti-PDL1) in non-small cell lung cancer, both in monotherapy and in combination with chemotherapy, and in recurrent advanced bladder cancer. There were also positive results for atezolizumab plus chemotherapy in triple negative breast cancer reported earlier in the year. In July, further phase II data showed that atezolizumab shrank tumours in people with locally advanced or metastatic urothelial bladder cancer.
Another oncology highlight was updated data on the MEK inhibitor cobimetinib in combination with Zelboraf, which helped people with BRAF-mutated advanced melanoma live for a year without their disease worsening. In addition, updated data from the phase II NeoSphere study provided additional evidence on the role of Perjeta in combination with Herceptin and chemotherapy, in the neoadjuvant (pre-surgical) treatment of HER2-positive early breast cancer. The results suggest that people who received the Perjeta regimen prior to surgery were 31 percent less likely to experience disease worsening, recurrence or death, compared with those who received Herceptin and chemotherapy. There was also very encouraging data presented for trials of alectinib in ALK-mutated lung cancer that will form the basis of regulatory filing in this type of lung cancer; as well as data from an independent phase III study of Avastin in mesothelioma.
In neuroscience, there was an important milestone in the first half with the readout of two phase III studies of ocrelizumab in relapsing multiple sclerosis, the most common form of the disease. The results showed a significant reduction in both relapses and disability progression compared with an interferon-based standard-of-care treatment.5
Investigational medicine crenezumab will move into phase III clinical development in prodromal-to-mild Alzheimer's disease. A strategy for higher dosing is being explored for gantenerumab, another candidate for the treatment of Alzheimer's disease.
Data for investigational biologic ACE910 for hemophilia A was presented in June and showed a reduction in bleeding rates for people on the trial. Roche is moving the ACE910 development programme forward and aims to initiate phase III trials in a subset of patients later in the year.
The FDA granted Roche three Breakthrough Therapy Designations in the first six months: for atezolizumab in PDL1 positive non-small cell lung cancer; venetoclax in a type of relapsed-refractory chronic lymphocytic leukemia; and Actemra/RoActemra in systemic sclerosis. In total, Roche investigational medicines have been granted eight Breakthrough Therapy Designations.
The Group achieved a number of marketing approvals in different markets in the first half: Avastin with chemotherapy in the EU for advanced cervical cancer; Lucentis in the US for diabetic retinopathy; and Zelboraf for advanced melanoma in Japan. In addition, the EU’s Committee for Medicinal Products for Human Use recommended approval of Perjeta for use before surgery in HER2-positive early breast cancer.
Diagnostic product launches to further strengthen key growth areas
There were a number of key product launches in the first half in the Diagnostics division. In Molecular Diagnostics, the cobas DPX test and the cobas HBV quantitative nucleic acid test for use on the cobas 6800/8800 systems were introduced. The US authorities also cleared the cobas HSV1 and HSV2 test, the MRSA/SA test, the cobas Cdiff test, as well as approvals for the cobas KRAS test. In Professional Diagnostics, the improved CARDIAC point-of-care Troponin T test for the cobas h 232 system was launched. Additionally, the Elecsys HTLV-I/II immunoassay has been made available in countries that accept the CE mark (a European Economic Area standard which is used in a number of other countries worldwide). This is a diagnostic test to help detect antibodies against Human T-lymphotropic virus I or II infection in donated blood and routine diagnostic samples.
In the US, the use of the cobas Strep A test and the cobas Liat System were expanded after the CLIA (Clinical Laboratory Improvement Amendments) regulation was waived.
Outlook for 2015
Roche continues to expect sales to grow low- to mid-single digit at constant exchange rates in 2015. Core earnings per share are targeted to grow ahead of sales at constant exchange rates.6 Roche expects to further increase its dividend in Swiss francs.
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, immunology, infectious diseases, ophthalmology 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 diagnostics that enable tangible improvements in the health, quality of life and survival of patients. Founded in 1896, Roche has been making important contributions to global health for more than a century. Twenty-nine medicines developed by Roche are included in the World Health Organization Model Lists of Essential Medicines, among them life-saving antibiotics, antimalarials and chemotherapy.
In 2014, the Roche Group employed 88,500 people worldwide, invested 8.9 billion Swiss francs in R&D and posted sales of 47.5 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 in this document are at constant exchange rates (CER: average full-year 2014).
2) This increase excludes the one-time benefit of 428 million Swiss francs before tax related to the divestment of filgrastim rights in 2014.
3) IFRS: International Financial Reporting Standards.
4) The core basis excludes non-core items such as global restructuring costs, amortisation and impairment of goodwill and intangible assets and loss on major debt restructuring.
5) Interferon beta-1a (Rebif®)
6) This outlook excludes the one-time benefit of 428 million Swiss francs before tax related to the divestment of filgrastim rights in 2014.
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