Cancer-Drug Giant Roche Posts Growth as Diversification Efforts Pay Off

By Denise Roland 

New drugs for multiple sclerosis and hemophilia drove growth at Roche Holding AG last year, a sign the company's efforts to move beyond cancer treatments are paying off.

The Swiss health-care giant on Thursday said sales rose 8% to 61.5 billion Swiss francs ($63.2 billion) in 2019. Core operating profit, a closely watched measure that strips out some one-time items, rose 10% to 22.5 billion francs. Net income climbed 30% to 14.1 billion francs, partly because of an impairment charge in the prior-year.

For years, Roche leaned heavily on three cancer drugs -- Herceptin, Rituxan and Avastin -- to drive growth. But with those drugs now facing generic competition -- and expected to lose billions of dollars in sales in the coming years -- the company is looking elsewhere for growth.

Those efforts have proven successful so far. Last year, two of the most significant growth drivers were Ocrevus, for multiple sclerosis, and Hemlibra, for hemophilia. Roche hasn't backed out of cancer entirely: Two oncology drugs, Tecentriq and Perjeta, also performed strongly.

"Based on the progress we made in rejuvenating our portfolio, Roche is very well positioned to grow going forward," said Chief Executive Severin Schwan.

Roche is also branching into gene therapy, a new area of medicine that holds the potential to cure serious inherited diseases by providing a working copy of a defective gene. The Swiss company signed two deals in the past year, including the $4.8 billion acquisition Spark Therapeutics, that handed it a marketed gene therapy and several under development.

Within its pharmaceuticals division, sales rose 10% to 48.5 billion Swiss francs. The smaller diagnostics division notched growth of 1% to 13 billion francs.

The company said it expected sales to grow in the low-to-mid-single digits in 2020, despite increased competition from low-cost competitors to its historic best sellers.

Write to Denise Roland at [e-mail]

(END) Dow Jones Newswires

January 30, 2020 03:06 ET (08:06 GMT)

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