Roche Profit Growth Boosted by New Drugs -- Update

By Denise Roland

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

The Swiss healthcare giant on Thursday said that sales rose 9% 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 11% to CHF22.5 billion.

Net income climbed 32% to CHF14.1 billion, partly because of an impairment charge in the prior-year period.

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 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, were also strong growth drivers.

"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 has inked two deals in the last year, including the $4.8 billion acquisition of Spark Therapeutics, that handed it a marketed gene therapy and several under development.

Within Roche's pharmaceuticals division, sales rose 11% to CHF48.5 billion. The smaller diagnostics division reported growth of 3% to CHF13 billion.

The company said it expects 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 02:38 ET (07:38 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.