Roche Sales Boosted by New Drug Pipeline -- Update
July 25 2019 - 4:14AM
Dow Jones News
By Denise Roland
Roche Holding AG lifted its outlook for the year as strong sales
of its newer medicines blunted the impact of emerging generic
competition to several of its top-selling cancer drugs.
The Swiss health-care giant has long been a dominant force in
cancer drugs but is increasingly looking beyond oncology as several
of its old blockbusters start to compete against lower-cost copies.
Of its newer drugs, the biggest sellers are Ocrevus for multiple
sclerosis and Hemlibra for hemophilia.
Roche said Thursday that strong sales of those medicines in the
first six months of the year offset a decline in best-selling
cancer drugs Herceptin and Rituxan, which have lost patent
protection in Europe and now compete with cheaper copies known as
biosimilars. That competition is likely to intensify later this
year, with the expected launch of biosimilars of those two drugs,
plus another top-seller Avastin, in the U.S.
Chief Executive Severin Schwan said first-half results showed
Roche was "very well on track to rejuvenate our portfolio," as the
sales of older medicines start to fall. The company expects to lose
billions of dollars in revenue from its big cancer drugs in the
next few years.
Diversifying its portfolio has also gained importance as the
cancer drug market becomes more competitive, with several rivals
piling into cancer-drug research in recent years.
Despite these pressures, the company said it now expects sales
and core earnings per share to grow by a mid to high single digit
percentage in 2019, having previously said it expected mid single
digit percentage growth.
Roche reported sales of 30.5 billion Swiss francs ($30.94
billion) for the first half of the year, a 9% increase at constant
currencies. Core operating profit, a closely watched measure that
strips out some one-time items, rose 11% to 12.4 billion francs.
Net income grew 19% to 8.9 billion francs.
As part of its efforts to diversify, Roche is looking to gain a
toehold in gene therapy, a type of treatment that provides a
working copy of a defective gene to address inherited diseases. In
February, it said it had agreed to acquire Philadelphia-based Spark
Therapeutics Inc. for about $4.8 billion, but has faced delays in
closing the deal due to competition concerns.
The U.S. Federal Trade Commission hasn't specified its concerns,
but competition experts say they likely center on the possibility
that Roche could delay one of Spark's gene therapy programs to
boost sales of one of its own drugs.
One of Roche's key growth drivers, Hemlibra, is injected
regularly to prevent bleeding in patients with hemophilia A, the
most common form of the disease. Spark is in the advanced stages of
developing a gene therapy directed at hemophilia A that would
potentially cure the disease in one shot, drastically shrinking the
market for Hemlibra. Gene therapies introduce new DNA into the body
to replace faulty or missing genes, raising the prospect of curing
certain inherited diseases.
"We feel very confident we can answer all the questions that are
part of this review and confident we can close the transaction by
the end of the year," said Mr. Schwan.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
July 25, 2019 03:59 ET (07:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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