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Swiss drug maker Roche posts 7 percent profit drop

Thursday - 7/24/2014, 12:20pm  ET

JOHN HEILPRIN
Associated Press

GENEVA (AP) -- Swiss drugmaker Roche Holding AG on Thursday posted a net profit drop of 7 percent compared with a year ago, weighed down by a strong Swiss franc and charges from one of its diagnostic units.

The world's biggest manufacturer of cancer drugs, which reports earnings every six months, said it had 5.64 billion Swiss francs ($6.25 billion) in net income from April to June, down from 6.05 billion francs in the comparable period of 2013.

The company based in Basel, Switzerland, said its first-half sales were 22.97 billion francs, down 1 percent from a year ago.

It reported impairment charges of 414 million francs in tissue diagnostics and said the Swiss franc was stronger against most currencies in the first half of the year, particularly against the dollar, the yen and several Latin American currencies.

"The overall impact is strongly negative on the results expressed in Swiss francs compared to constant exchange rates, with a 6-8 percentage point impact on sales," the company reported.

In a statement, Chief Executive Severin Schwan described the company's first half as "good," driven mainly by its cancer medicines, especially new breast cancer treatments Perjeta and Kadcyla, and by its diagnostics products.

This month, Roche said its U.S.-based biotech company Genentech had agreed to acquire American biotechnology firm Seragon Pharmaceuticals, Inc. for up to $1.73 billion in cash and contingency payments.

The deal, which would give Genentech rights to Seragon's portfolio of oral drugs under development to treat certain kinds of breast cancer, is expected to be completed in the third quarter of 2014 after regulatory approval is obtained.

Roche said it expects low to mid-single digit growth in overall sales for the year, and to further increase its dividend.

"Based on our half year performance, I am confident that we will meet our full-year targets," Schwan said.

Shares in Roche closed up 0.6 percent at 268.20 francs Thursday on the Zurich exchange.


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