Cautious Roche as drug sale slows

The world’s largest maker of cancer drugs, looking to cut costs after a string of product setbacks, said yesterday sales were expected to grow at low single-digit rates in local currencies this year.

Its sales outlook does not include flu drug Tamiflu.

Net income rose 4 per cent to 8.89 billion Swiss francs in 2010, as sales growth of top-selling cancer drug Avastin slowed. Full-year core earnings per share rose 4 per cent to 12.78 francs, compared with a forecast for 13.0 francs.

Roche is now aiming for 2011 core earnings per share growth at a high single-digit rate at constant exchange rates.

“The outlook for 2011 is disappointing,” said Kepler analyst Martin Voegtli, adding analysts would have to lower estimates for the company’s core earnings per share.

Roche’s comment echoed downbeat 2011 outlooks from rivals as the sector braces for higher costs from US healthcare reform, pressure to keep a lid on prices and patent expirations of key drugs.

Analysts at Jefferies said Roche’s reduced expectations for Avastin sales added another disappointment.

Roche now expects Avastin peak sales to be around 7 billion francs. The group had said peak sales were likely to be at the low end of the 8-9 billion franc range if US authorities were to revoke approval of Avastin in breast cancer.