Two words explain why Roche might well be the envy of Big Pharma: cancer drugs. The company ($RHHBY) posted sales growth, despite European pricing pressures, to $22.61 billion. Drug revenues beat forecasts. Earnings fell, but that's because of one-time charges; without the cost of shutdowns and restructuring, profits actually rose.
All this thanks to cancer drugs old and new. The already-hefty Herceptin turned in 11% growth, while Rituxan, Roche's biggest seller, grew by 9%. The chemo therapy Xeloda saw sales jump by 14%. And Avastin, which had been on a downward slide, reversed that trend with 3% growth. Roche CEO Severin Schwan also credited newly minted Zelboraf, Erivedge, and Perjeta with helping to boost pharma sales by 4%.
Drugs for other diseases contributed, too, particularly the arthritis drug Actemra and hepatitis C fighter Pegasys. And as with its peers, emerging markets growth was another bright spot to counteract the $1.7 billion in charges. "The increase in revenue and core profit as well as the solid cash flow are gratifying and should really outweigh," Notenstein analysts wrote (as quoted by Reuters). "In addition, the long-term potential for Roche still seems to be healthy."
"Roche delivered strong operating results in the first half of 2012, driven by the solid performance of our existing portfolio as well as new product launches," Schwan said in a statement. The company confirmed its full-year forecast of low-to-mid single-digit sales growth and high-single-digit EPS growth.