Roche Group has pushed its bottom line by 4.5 per cent during the year ended December 2010 despite lower sales. Its net profit increased to Swiss Francs (CHF) 8,891 million from CHF 8,510 million in the previous year. Its sales declined to CHF 47.5 billion from CHF 49.1 billion in the previous year. The pharmaceuticals division represented 78 per cent of Group sales and the diagnostics division contributed 22 per cent.
The Group's pharmaceuticals sales declined by 5 per cent to CHF 37,058 million mainly due to lower sales in Europe and Japan. Excluding Tamiflu sales, its sales improved by 5 per cent. The sales of Tamiflu declined sharply to CHF 873 million from CHF2.3 billion. Its sales in Europe declined by 13 per cent to CHF 9,467 million and that in Japan moved down by 9 per cent to CHF4,319 million. Its pharmaceutical sales in US also declined by 5 per cent to CHF 14,071 million. Major growth drivers were key products for cancer, Actemra/RoActemra for rheumatoid arthritis and Lucentis in ophthalmology. The strong growth in sales was recorded in Latin America (20 per cent), led by Brazil and Venezuela. Further, Asia Pacific region registered sales growth of 8 per cent led by China and Taiwan.
Late-stage development pipeline with twelve innovative new molecular entities, including six potential personalized healthcare medicines with planned companion diagnostic tests. Roche personalized investigational medicine RG7204 shows survival benefit in advanced skin cancer. Four new molecular entities moved into late-stage clinical development: lebrikizumab (asthma), MetMAb (lung cancer), RG 7128 (hepatitis C) and ocrelizumab (multiple sclerosis). The company has decided to stop the development of taspoglutide for type 2 diabetes and to return the product to Ipsen.
The sales of Avastin (bevacizumab) and MabThera/Rituxan increased by 9 per cent respectively to CHF 6,461 million and CHF 6,356 million. The company launched Avastin in its first indication, first-line treatment of metastatic colorectal cancer. Similarly, its sales of Herceptin moved up 7 per cent to CHF 5,429 and that of Lucentis improved by 27 per cent to CHF 1,458 million.
Its diagnostics sales increase by 4 per cent CHF 10.4 billion mainly due to Professional Diagnostics and Diabetes Care. It launched fifty tests and instruments in key markets. All five divisional business areas contributed to sales growth. Immunoassays and blood glucose monitoring systems remained these businesses primary growth drivers.
Roche CEO Severin Schwan said: “The Group results are solid despite an increasingly challenging market environment. Excluding Tamiflu the pharma division grew above the market. Diagnostics kept its strong momentum and grew significantly ahead of the market. The twelve innovative new molecular entities in our late-stage pharmaceutical pipeline form a strong basis for the company’s future success. Six of these drug candidates are being developed for specific patient subpopulations with the aim to advance personalised healthcare in key therapeutic areas such as cancer and asthma.”
Based on the strong operating free cash flow, Roche expects to reduce debt progressively and to return to a net cash position by 2015.The Group’s operating free cash flow remained strong at 14.1 billion Swiss francs. A free cash flow of 4.7 billion Swiss francs was achieved in 2010 despite higher interest, tax and dividend payments.
Of the debt raised in early 2009 to finance the Genentech transaction, 33 per cent had already been repaid by 31 December 2010. In addition, the Group exercised its option to call for redemption a portion of the US dollar notes due 1 March 2014. Of the total principal amount of 2.75 billion US dollars, 1.0 billion US dollars will be redeemed in March 2011. The net debt position of the Group is 19.2 billion Swiss francs, a decrease of 4.7 billion Swiss francs from 31 December 2009.
In 2011, Group and Pharmaceuticals sales (excluding Tamiflu) are expected to grow at low single-digit rates in local currencies, reflecting the impact of US healthcare reform and European austerity measures. Pharmaceuticals sales are thus expected to grow in line with the market. Diagnostics sales are again expected to grow significantly ahead of the market, driven by further roll out of new products in all business areas.