Roche ups outlook as sales growth offsets price hit

Drugs division chief Bill Anderson said Roche Pharmaceutical's drug revenue is soaring even as it honours a price-freeze pledge it made last year after Trump took to the phone and Twitter to urge companies to back off price hikes.

ZURICH: Swiss drugmaker Roche lifted its 2019 outlook on Wednesday, as sales growth in China and the United States outpaced price declines it has suffered amid President Donald Trump's pressure on the industry to hold down charges.

Roche, the world's biggest cancer drug maker, now sees mid-single-digit revenue growth, up from the previous forecast of low- to mid-single digit growth. It sees core earnings per share mirroring sales growth.

Drugs division chief Bill Anderson said Roche's drug revenue is soaring even as it honours a price-freeze pledge it made last year after Trump took to the phone and Twitter to urge companies to back off price hikes.

"We haven't taken any price increases in the U.S. since July 1," Anderson said on a call. "Overall in the world, our 10 per cent sales growth in pharma was based on 15 per cent volume growth and 5 per cent average price declines across the portfolio."

Chief Executive Severin Schwan is getting a lift as sales of newer drugs offset the erosion of older cancer drugs that face fierce competition in Europe.

Multiple sclerosis drug Ocrevus's sales rose by two-thirds to 836 million francs, while cancer immunotherapy Tecentriq jumped two-fold to 336 million. Breast cancer medicine Perjeta rose 41 per cent to 870 million francs and Hemlibra, Roche's new haemophilia A drug, hit 219 million francs.

"I'm very pleased that 90 per cent, the vast majority of our growth, comes from our new medicines," Schwan said.

Still, a big unknown for the Austrian CEO is how swiftly rivals' soon-to-be-launched copies of Roche's $22 billion-per-year cancer medicines Rituxan, Herceptin and Avastin will eat into U.S. sales this year and next.

"Roche can keep up the unbroken growth, as long as Ocrevus, Hemlibra and the entire (breast cancer) franchise maintain their momentum," Zuercher Kantonalbank analyst Michael Nawrath said.

Schwan expects the $4.3 billion takeovers of Philadelphia-based Spark Therapeutics to be completed by June, despite a regulatory hiccup with the U.S. Federal Trade Commission that required an extension.

"Our firm expectation is it will close at the conditions we have offered," the CEO said.

First-quarter sales rose 8 per cent to 14.8 billion Swiss francs ($14.7 billion), beating the 14.2 billion Infront Data poll average estimate. Drug sales rose 10 per cent to 11.9 billion francs, besting the 11.2 billion poll average, while diagnostics sales edged higher.

Roche shares were little changed at 269 francs by 0800 GMT, beating a 1.5 per cent drop in the STOXX Europe 600 Health Care Index.

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