Roche says full-year profit up 25%to $10.48 billion

30 January 2008

BASEL – Pharmaceuticals giant Roche Holding AG said Wednesday strong sales of its anti-cancer drugs helped lift full-year net profit by 25%.

Net income rose to CHF11.44 billionfrom CHF9.17 billion a year ago – or CHF11.85 per share compared to CHF9.86.

The figures include sales generated by US biotechnology company Genentech Inc, which is majority-owned by Roche. Without Genentech’s contribution Roche’s net profit attributable to shareholders was CHF9.76 billion last year, up 24% from CHF7.88 billion a year earlier.

Sales reached CHF46.1, a 10% jump on CHF42.04 billion in 2006.

For the first time Roche beat its rival Novartis, which posted sales last year of CHF43.5 billion francs.

The company reports earnings figures only for the half year and full year.

Roche shares rose 1.9% to CHF193 on the Zurich exchange Wednesday.

Roche said sales of the rheumatoid arthritis and non-Hodgkins lymphoma treatment Rituxan topped CHF5.5 billion in 2007, making it the company’s best-selling drug ahead of cancer medicines Herceptin and Avastin.

The Basel-based company said sales of its anti-influenza drug Tamiflu dropped 19 % to CHF2.09 billion, indicating that the period of strong government orders in the wake of fears over a pandemic bird flu outbreak was coming to an end.

Roche said it anticipates a further decrease in Tamiflu sales through 2008. Excluding Tamiflu, the company said it expects group sales “in local currencies to increase at a high single-digit rate.”

Severin Schwan, the head of Roche’s diagnostics division, said the acquisition of Ventana Medical Systems Inc is expected to be completed by the second quarter of the year.

Roche won the approval of Ventana’s board for the deal last week after raising its offer per share by about 19% to US$89.50, valuing the US-based maker of drug testing instruments at US$3.4 billion.

Roche said it proposed to increase its dividend by 35 percent to CHF4.60.

Chief executive Franz Humer said the company would significantly increase spending on research and development this year, focusing on new uses for its existing anti-cancer drugs and late-stage clinical testing of treatments for breast cancer, autoimmune disease, diabetes and cardio-vascular ailments.

Asked about the possiblity of further mergers in the coming year, Humer told reporters during a conference call that Roche was “always looking for opportunities” to expand in both diagnostics and pharmaceuticals, but was not looking to become involved in “mega-acquisitions or mega-mergers.”