- Drugmaker raises forecast for full-year sales growth
- CEO says drug innovation acts as price pressure shield
Roche Holding AG, the world’s biggest maker of cancer drugs, reported a 6 percent increase in third-quarter revenue and raised its full-year forecast, buoyed by demand for two new breast tumor medicines.
Sales increased to 11.9 billion Swiss francs ($12.4 billion) on a constant currency basis, the Basel, Switzerland-based company said in a statement on Thursday. That compared with the 11.8 billion-franc average of 10 analysts’ estimates compiled by Bloomberg. Roche doesn’t report profit figures for the three months ended Sept. 30.
The Swiss drugmaker, whose cancer drugs face resistance from U.K. authorities due to their hefty prices, isn’t too exposed to the recent U.S. political and regulatory debate about drug costs because society will be willing to pay a premium for medicines that make a difference for patients, according to Chief Executive Officer Severin Schwan.
"If you think of a drug like Perjeta, which has transformed the life of people with breast cancer, if you think of the progress in areas like cancer immuno-therapies, where we can start talking about cures, I think this kind of innovation will continue to be rewarded," he said in a conference call.
Roche shares rose 1.3 percent to 256.60 francs at 11:30 a.m. in Zurich trading. The stock had dropped 9 percent over the past year.
The U.K.’s National Health Service said Sept. 4 that the Cancer Drug Fund set up by Prime Minister David Cameron in 2011 would no longer pay for treatment with Avastin, Roche’s second-best-selling product, for cervical, breast and colorectal cancer. The ruling also affects the breast cancer medicine Kadcyla.
Roche had a "decent quarter," wrote Tim Anderson, an analyst at Sanford C. Bernstein & Co., in which a mix of older products like Avastin and new ones like Perjeta and Kadcyla supported sales.
"The numbers for the quarter came in slightly above estimates," Eric Le Berrigaud, an analyst at Bryan, Garnier & Co., said in a note. "What is more positive is to get an increased outlook for revenue growth for the whole year from the company."
Sales this year will climb by a mid-single digit percentage range, the drugmaker said. A measure of profit labeled as core earnings per share, which excludes some expenses, will grow faster, the company reiterated. In July, it forecast sales would grow by a low- to mid-single digit percentage in 2015, assuming exchange rates are unchanged.
Revenue from Perjeta increased by 57 percent to 376 million francs in the quarter, in line with analysts’ estimates. The drug has helped boost sales of Herceptin, because they are administered in combination. Revenue from the older product grew by 7 percent to 1.6 billion francs, also matching estimates. Kadcyla, the other new breast medicine, saw sales climb 44 percent to 196 million francs.
The arthritis blockbuster Actemra also buoyed growth while the eye drug Lucentis suffered an 18 percent sales drop as it faced pressure from rival Bayer AG’s Eylea. Tamiflu soared 46 percent as pharmacies stockpiled the medicine in preparation for the flu season.
Roche is counting on new products to offset generic competition to its aging cancer blockbusters. Next year, it plans to seek regulatory approval for an experimental multiple sclerosis drug that shows promise in some hard-to-treat patients, as well as a cancer treatment that harnesses the power of the immune system to fight lung and bladder tumors.