Roche reports very strong results in 2018
Basel, 31 January 2019
- Group sales increase 7%1 at constant exchange rates and in Swiss francs
- Pharmaceuticals Division sales up 7%, driven mainly by Ocrevus, Perjeta, Tecentriq, Alecensa and Hemlibra
- Diagnostics Division sales grow 7%, primarily due to demand for immunodiagnostic solutions
- In the fourth quarter, the US FDA approves Tecentriq in combination with Avastin for a specific form of lung cancer; Venclexta for a form of leukaemia; and Xofluza for influenza
- Core earnings per share grow ahead of sales at 19%, or 8% excluding the effect of the US tax reform
- On IFRS basis, net income increases 24%
- Board proposes dividend to increase to CHF 8.70
- Outlook for 2019: Sales are expected to grow in the low- to mid-single digit range, at constant exchange rates. Core earnings per share are targeted to grow broadly in line with sales, at constant exchange rates. Roche expects to further increase its dividend in Swiss francs.
Commenting on the Group’s results, Roche CEO Severin Schwan said: “In 2018, Roche achieved very good growth in both divisions. I am particularly pleased with the very strong demand for our new medicines, delivering significant benefit for patients fighting serious diseases like cancer, multiple sclerosis and haemophilia. Roche is also making major progress in driving digitalisation, and in leveraging real-world healthcare data and analytics to support product development and advance personalised healthcare. Based on the successful launches and our strong product pipeline Roche is well positioned for continued growth.”
In 2018, Group sales rose 7% to CHF 56.8 billion. Core operating profit increased 9%, reflecting the strong underlying business performance. Core EPS grew 19% and IFRS net income increased 24%, including the benefits from the US tax reform and higher net financial income.
Sales in the Pharmaceuticals Division increased 7% to CHF 44.0 billion. Key growth drivers were the new multiple sclerosis medicine Ocrevus and cancer medicines Perjeta, Tecentriq, Alecensa as well as the new haemophilia medicine Hemlibra. With sales of CHF 2.4 billion in its first full year on key markets, Ocrevus is the most successful new product launch in the history of Roche. As expected, the strong uptake of newly introduced medicines was partially offset by lower sales of MabThera/Rituxan and of Tarceva.
In the US, sales increased 14%, led by Ocrevus, Perjeta and Lucentis. Ocrevus sales were supported by continued strong new patient demand as well as follow-up treatments. The 32% sales increase of Perjeta was driven by its use for adjuvant (after surgery) treatment of patients with HER2-positive early breast cancer at high risk of recurrence.2
In Europe (-7%), sales were affected by competition from biosimilars for MabThera/Rituxan (-47%) and Herceptin (-16%), offset by the strong launches of our new medicines Ocrevus, Tecentriq, Alecensa, and of Perjeta in metastatic HER2-positive breast cancer and adjuvant therapy.
In the International region, sales grew 10%, led by the Asia–Pacific and Latin America subregions. In Japan, sales declined 1% due to government price cuts and biosimilar competition for MabThera/Rituxan (-36%) and Herceptin (-16%).
Diagnostics Division sales increased 7% to CHF 12.9 billion. Centralised and Point of Care Solutions (+8%) was the main contributor, led by the growth of its immunodiagnostics business (+11%). All business areas reported sales increases. In regional terms, growth was driven by Asia-Pacific (+13%) and North America (+7%). Sales increased 3% in EMEA3, 9% in Latin America, and 6% in Japan.
Important milestones for Roche medicines
Roche medicines passed important regulatory milestones in recent months, including the following key achievements: In December 2018, the US Food and Drug Administration (FDA) approved Tecentriq in combination with Avastin, paclitaxel and carboplatin for the initial treatment of people with metastatic non-squamous non-small cell lung cancer (NSCLC) with no EGFR or ALK genomic tumour aberrations.
The FDA granted accelerated approval to Venclexta in combination with azacitidine or decitabine, or low dose cytarabine, for the treatment of people with newly-diagnosed acute myeloid leukaemia (AML), aged 75 years and older, or for those ineligible for intensive induction chemotherapy due to coexisting medical conditions.4 AML is the most common type of aggressive leukaemia in adults and has the lowest survival rate of all types of leukaemia.
In October, FDA approved Xofluza (baloxavir marboxil) for the treatment of acute, uncomplicated influenza in people aged 12 years and older. Xofluza is a first-in-class, single-dose oral medicine with a novel proposed mechanism of action that inhibits polymerase acidic endonuclease, an enzyme essential for viral replication.5 It has demonstrated efficacy against a wide range of influenza viruses, including oseltamivir-resistant strains and avian strains (H7N9, H5N1) in non-clinical studies.6
Based on the IMpower133 study, the FDA granted priority review for Tecentriq, in combination with carboplatin and etoposide (chemotherapy), for the initial treatment of people with extensive-stage small cell lung cancer (ES-SCLC). The IMpower133 results represent the first clinically meaningful advance in the disease in over 20 years.7
Priority review was granted for Tecentriq plus Abraxane (albumin-bound paclitaxel; nab-paclitaxel) for the initial treatment of unresectable locally advanced or metastatic triple-negative breast cancer (TNBC) in people whose disease expresses the PD-L1 protein, as determined by PD-L1 biomarker testing. The priority review was based on the IMpassion 130 study, the first positive phase III immunotherapy study in TNBC, an aggressive disease with limited treatment options.
Polatuzumab vedotin in combination with MabThera/Rituxan plus bendamustine has been granted breakthrough therapy designation and orphan drug designation by the FDA, as well as PRIME designation and orphan drug designation by the European Medical Agency (EMA), for the treatment of adult patients with relapsed or refractory (R/R) diffuse large B-cell lymphoma who are not candidates for haematopoietic stem cell transplantation. Files for regulatory review and approval of polatuzumab have been submitted to FDA.
Entrectinib, in development for the treatment of neurotrophic tropomyosin receptor kinase (NTRK) fusion-positive solid tumours, was granted breakthrough therapy designation by the FDA, PRIME designation by the EMA, and Sakigake and orphan drug designations by the health authorities in Japan. Files for regulatory review and approval of entrectinib have been submitted to FDA.
Advancing personalised healthcare
In 2018, Roche concluded several transactions to further advance its personalised healthcare strategy. This includes three US-based companies: Foundation Medicine, with its comprehensive genomic profiling assays to identify the molecular alterations in a patient's cancer and match them with relevant targeted therapies, immunotherapies and clinical trials; Flatiron Health, a market leader in the curation and development of real-world evidence for cancer research; Ignyta, with entrectinib as its lead drug candidate. Entrectinib is an example of highly targeted novel treatment approaches based on genetic profiling.
In early 2018, Roche Diagnostics and GE Healthcare announced their agreement to enter into a strategic partnership, combining Roche’s in vitro diagnostics Know-how with GE Healthcare’s in vivo expertise. The aim is to co-develop and co-market decision support software solutions, anchored by a shared digital platform designed to also allow third parties to potentially place their product and company-agnostic applications. The initial focus is on oncology and acute care.
Outlook for 2019
Sales are expected to grow in the low- to mid-single digit range, at constant exchange rates. Core earnings per share are targeted to grow broadly in line with sales, at constant exchange rates. Roche expects to further increase its dividend in Swiss francs.
Roche is a global pioneer in pharmaceuticals and diagnostics focused on advancing science to improve people’s lives. The combined strengths of pharmaceuticals and diagnostics under one roof have made Roche the leader in personalised healthcare – a strategy that aims to fit the right treatment to each patient in the best way possible.
Roche is the world’s largest biotech company, with truly differentiated medicines in oncology, immunology, infectious diseases, ophthalmology and diseases of the central nervous system. Roche is also the world leader in in vitro diagnostics and tissue-based cancer diagnostics, and a frontrunner in diabetes management. Founded in 1896, Roche continues to search for better ways to prevent, diagnose and treat diseases and make a sustainable contribution to society. The company also aims to improve patient access to medical innovations by working with all relevant stakeholders. Thirty medicines developed by Roche are included in the World Health Organization Model Lists of Essential Medicines, among them life-saving antibiotics, antimalarials and cancer medicines. Moreover, for the tenth consecutive year, Roche has been recognised as the most sustainable company in the Pharmaceuticals Industry by the Dow Jones Sustainability Indices (DJSI).
The Roche Group, headquartered in Basel, Switzerland, is active in over 100 countries and in 2018 employed about 94,000 people worldwide. In 2018, Roche invested CHF 11 billion in R&D and posted sales of CHF 56.8 billion. 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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- Unless otherwise stated, all growth rates in this document are at constant exchange rates (CER: average 2017).
- US Food and Drug Administration prescribing information for Perjeta
- EMEA = Europe, Middle East and Africa
- Venclexta/Venclyxto sales are booked by partner AbbVie.
- Shi F, et al. Viral RNA polymerase: a promising antiviral target for influenza A virus. Curr Med Chem. 2013;20(31):3923–34
- Taniguchi K, et al. Inhibitory Effect of S-033188, a novel inhibitor of influenza virus cap-dependent endonuclease, against avian influenza A/H7N9 virus in vitro and in vivo. Poster presentation at ESWI, September 2017.
- Evans WK, et al. J Clin Oncol, 1985
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