Roche Holding AG (ROG.VX) Wednesday reported an 8% drop in full-year net profit and slightly lower sales, as the strong Swiss franc and a sharp drop in revenue from flu drug Tamiflu offset the boost from briskly selling cancer drugs.

Roche, based in Basel, said net profit attributable to shareholders fell to 8.97 billion Swiss francs ($7.83 billion) in the year ended Dec. 31 from CHF9.76 billion in 2007, below analysts' average forecast of CHF9.81 billion. Roche, which doesn't publish quarterly earnings figures, said sales declined 1% to CHF45.62 billion from CHF46.13 billion.

Sales at the flagship pharmaceutical unit suffered from the fall in Tamiflu revenue. The drug had seen healthy sales in earlier years when governments bought in bulk to stockpile to be prepared for the possible outbreak of an influenza pandemic. The franc's appreciation against the dollar and the euro further dented sales.

Excluding Tamiflu and expressed in the currencies of where the drugs were sold, pharmaceuticals sales grew 10% last year.

Still, key drugs continued to post solid sales increases. Cancer drugs Rituxan/MabThera, Avastin and Herceptin all recorded sales of more than CHF5 billion in 2008, Roche said.

All three products were developed by U.S. biotech company Genentech Inc. (DNA), of which Roche owns a majority. The Swiss drugmaker plans to take full control of Genentech.

Last Friday, Roche launched a hostile bid to buy the roughly 44% of the U.S. biotech company that it doesn't already own, after its earlier friendly offer was rejected. For the full year 2009, Roche expects sales at its flagship pharmaceutical division to rise at mid-single-digit pace, and group sales to expand at the same rate.

The company plans to increase its dividend to CHF5 a share, from CHF4.60 in 2007.

Roche shares closed Tuesday at CHF162.60, down 0.6% on the day. The stock's value is unchanged so far this year, while the European healthcare sector as a whole is 0.9% higher.

Company Web site: www.roche.com

-By Anita Greil, Dow Jones Newswires; +41 43 443 8044 ; anita.greil@dowjones.com

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