Roche earnings sharply up on lower than thought buyout costs
Swiss pharmaceutical giant Roche said Thursday its first half net income rose 37 percent compared to a year ago, thanks to lower than expected costs incurred in its buyout of US biotechnology unit Genentech.
The group's earnings during the period reached 5.6 billion Swiss francs (4.2 billion euros, 5.3 billion dollars), meeting the forecasts of analysts polled by economic news agency AWP.
Excluding the impact of Genentech, the group's net income for the period was up 8 percent.
Roche had borrowed 48.2 billion francs on the capital market to finance its buyout of Genentech in the first half of 2009.
It has repaid 27 percent of the notes and bonds related to the purchase by the end of June, and expects to have repaid a third of the debt by year end.
The group said its first half growth was driven partly by demand for cancer drugs such as Avastin, Herceptin and Tarceva, with sales of oncology products up 9 percent in local currencies.
Its diagnostics division also posted a 9 percent growth rate in local currencies during the first half.
"These positive factors more than offset the expected significant decline in Tamiflu sales," said the group, referring to the flu medication recommended by the UN health agency.
Upon the World Health Organization's declaration of a swine flu pandemic, stockpiling of the medication sharply boosted Roche's sales last year.
The group said that even though Tamiflu sales are falling as stockpiling comes to an end, it confirmed its outlook for the year, expecting local currency sales growth to reach the "mid-single-digit range."
© 2010 AFP