Drugmaker Roche Predicts Small Gain in Profit This Year

(Bloomberg) --

Roche Holding AG issued the same prudent prediction for a small gain in profit and sales this year as in 2019, a strategy that allowed it to boost its outlook three times in the course of the year.

Core earnings per share will grow by a percentage in the low-to mid-single digit range this year, in line with sales, the company said in a statement Thursday. Profit by that measure was just above analysts’ estimates last year.

Roche expects its new guard of medicines, which includes Hemlibra for hemophilia, to continue fueling growth and help it transition away from aging cancer blockbusters like Herceptin and Avastin.

Last year, after issuing a similar growth forecast at the end of January, the Basel, Switzerland-based company went on to raise its outlook in April, July and October.

Roche shares rose 1.2% in Zurich trading. The stock has climbed about 27% in the past year.

Profitability in the months ahead will depend in part on how much Roche spends in marketing its new drugs and also fighting competition from cheaper copies called biosimilars, especially in the U.S.

The impact of biosimilars was an estimated 1.5 billion Swiss francs ($1.54 billion) last year and will probably swell to 4 billion francs this year, Chief Executive Officer Severin Schwan said in a conference call.

After clinching the $4.8 billion acquisition of Spark Therapeutics, Roche needs to elaborate on how next-generation medicines including gene therapies will play a bigger role in its pipeline without threatening sales of existing treatments like Hemlibra.

To contact the reporter on this story: Tim Loh in Munich at tloh16@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Marthe Fourcade, Thomas Mulier

©2020 Bloomberg L.P.