Roche Lifts Forecast as Bet Outside Cancer Starts to Pay Off
(Bloomberg) -- Roche Holding AG’s bet on fields outside cancer is starting to pay off as the Swiss drugmaker boosted its forecast even as sales of one of its top drugs collapsed in Europe.
New medicines such as Ocrevus for multiple sclerosis and Hemlibra for hemophilia are driving growth, the company said in a statement Thursday. The world’s biggest maker of cancer treatments reported sales that exceeded analysts’ estimates in the first quarter.
Roche is working to replace sales lost as its three biggest drugs -- all medicines for cancer -- face competition from cheaper copies known as biosimilars. With the $450,000-a-year hemophilia drug Hemlibra, the Swiss drugmaker is facing off against market leader Shire Plc, which is close to an agreement to be acquired by Takeda Pharmaceutical Co.
“Based on the successful launch of the new medicines, I am very confident to see continued growth during this transition phase,” Chief Executive Officer Severin Schwan told Bloomberg Television’s Nejra Cehic in an interview. Schwan predicted slower U.S. sales growth due to biosimilars, even as new medicines start to offset the slump in Europe.
The breast cancer drug Perjeta, Roche’s follow-on for its best-selling drug Herceptin, contributed to growth last quarter while former star Rituxan saw sales plunge a worse-than-expected 44 percent in Europe. Revenue rose 6 percent overall at constant exchange rates to 13.6 billion Swiss francs ($13.8 billion) in the quarter, beating analysts’ estimates.
Roche shares fell less than 0.1 percent to 217.60 francs at 10:32 a.m. in Zurich trading, giving the company a market value of about 188 billion Swiss francs.
The Basel, Switzerland-based drugmaker raised its forecast for the year, saying overall sales will probably rise by a low single-digit percentage at constant exchange rates. It previously said they might show little change. Core earnings per share will grow roughly in line with sales, it said.
Hemlibra, which went on sale in November, garnered sales of 23 million francs. It needed first-quarter sales of about $10 million to $20 million to meet expectations, and revenue will probably tick upward in the second half, when the drug is expected to win approval for a broader group of patients, said Elizabeth Krutoholow, an analyst with Bloomberg Intelligence.
Hemlibra’s wholesale price -- which starts at $482,000 for the first year of treatment before dropping to about $448,000 a year for an average patient after that -- is less than half that of its main rival, according to Roche. Analysts expect the drug to reach about $2 billion in sales by 2021.
The Roche compound’s initial approval was for people with a particularly hard-to-treat type of hemophilia A, a disorder in which patients lack a crucial protein called factor VIII that helps blood clot. Hemlibra mimics the action of factor VIII to stop bleeding.
Ocrevus garnered 479 million francs in sales last quarter. That’s 21 percent more than expected, according to analysts at Jefferies LLC. The drug is approved for both forms of multiple sclerosis, a chronic and incurable disease that destroys the nerves and robs patients of their ability to control their movements. It’s on track to reach 2 billion francs in sales this year, according to estimates compiled by Bloomberg.
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