If Roche's numbers are a harbinger of pharma's overall first-quarter performance, then drugmakers must be bracing themselves. The Swiss company reported a 9 percent drop in revenues, including a 10 percent decline in pharma sales. Some of that shrinkage can be attributed to the strong Swiss franc, but soft Avastin sales, a sharp drop in Tamiflu revenues and government pricing pressures also contributed.
Avastin sales fell by 15 percent, measured in francs, as regulators put the cancer drug under greater scrutiny, Bloomberg said. The FDA said it intended to pull Avastin's approval as a treatment for metastatic breast cancer last year--a decision Roche is appealing--and European regulators put new restrictions on that indication for the drug. Meanwhile, Tamiflu sales seriously suffered; last year, governments were stockpiling the drug, and that source of demand has withered.
U.S. healthcare reform got some of the blame; CEO Severin Schwan (photo) said the government's cost cuts will knock about 2 percent off of revenues, compared with last year. Other governments have forced price cuts on drugmakers as well, and insurance coverage changes also took a toll, the Wall Street Journal reports. Cancer drugs such as Herceptin and MabThera didn't grow as much as usual because of those pressures.
Revenues came in at 11.1 billion francs, or $12.4 billion, down from 12.2 billion francs last year. Analysts had expected 11.3 billion. Still, the company said it expects to meet its full-year targets, including single-digit growth in EPS (Roche doesn't report quarterly earnings).