Roche half-year profit rises 37 percent to $5.3B

[July 22, 2010]  GENEVA (AP) -- Pharmaceuticals maker Roche Holding AG on Thursday posted a 37 percent rise in six-month net profit on strong drug sales and lower costs related to its takeover of U.S.-based Genentech.

The Basel-based company said income was 5.6 billion Swiss francs ($5.3 billion). Sales jumped 5 percent to 24.6 billion francs.

Roche, which doesn't announce quarterly profits, also confirmed its full-year outlook despite disappointing sales of antiviral Tamiflu as swine flu fears eased.

Tamiflu sales should reach only 1 billion francs in 2010, from 3.2 billion francs a year ago.

Earnings were boosted by the integration of Genentech, which Roche acquired for $46.8 billion in March 2009. Last year's earnings suffered from exceptional charges linked to the acquisition.

But Roche's results don't yet reflect the massive setback for its cancer drug Avastin, which continued to perform well in the first half of 2010 with sales climbing 14 percent to 3.4 billion francs.

Roche Holding AG shares were trading at their lowest level in more than a year on Wednesday after a panel of cancer experts recommended that the U.S. government should remove its endorsement of Avastin for breast cancer.

The experts said follow-up studies failed to show Avastin's benefits for breast cancer patients, while noting its toxicity risks, and voted 12-1 in favor of removing the drug's approval for use against breast cancer alongside chemotherapy.

The panel's ruling doesn't pertain to Avastin's use in colon, lung, kidney, brain and other forms of cancer. The company cited its positive phase-3 trail results with Avastin in advanced ovarian cancer.

Roche said sales of MabThera, known in the U.S. and Canada as Rituxan, rose 9 percent to 3.3 billion francs. Herceptin sales, another oncology drug, climbed 8 percent to 2.8 billion francs.

The company also confirmed its full-year outlook of double-digit growth for core earnings per share, as operating profit increased significantly faster than sales. Operating profit rose 10 percent, but would have been higher without the strong Swiss franc.

"Roche achieved a strong operating performance in the first half of 2010 despite an increasingly challenging market environment," said Roche CEO Severin Schwan. "Net income for the period was up significantly. Excluding Tamiflu, pharma sales increased faster than the market, and diagnostics continued to grow significantly above the market rate."

[Associated Press; By BRADLEY S. KLAPPER]

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