Roche Holdings Ltd.
) recently reported 2012 results. Revenues grew 4% year over year
to CHF 45.5 billion driven by solid demand for its cancer drugs
and increased sales of diagnostic tests to clinical laboratories.
Sales were also positively impacted by the weakening of the Swiss
franc against the dollar and the Japanese yen.
On a geographical basis, strong sales in the US and emerging
markets, which more than offset weakness in Western Europe. Sales
in Western Europe were hurt by pricing pressure and generic
All growth rates mentioned below are on a year-on-year basis
and at constant exchange rates.
Sales for the Pharmaceuticals Division climbed 5% to CHF 35.2
billion, driven by strong sales of MabThera/Rituxan (up 9%) and
Herceptin (up 11%). Avastin returned to growth following its
successful launch in ovarian cancer in Europe at the end of 2011.
Growth was broad-based across the US (7%) and international
markets (9%). Strong sales of Xeloda (up 9%) Pegasys (up 11%)
along with newly launched Zelboraf, Erivedge and Perjeta also
benefited 2012 segmental sales.
However, drugs such as CellCept, NeoRecormon and Bonviva did
not perform well in 2012. Sales of these drugs were hurt by
Revenues from the Diagnostics Division went up 4% to CHF 10.3
billion, driven by solid demand for clinical laboratory
solutions, professional, molecular and tissue diagnostics, which
grew at a consolidated rate of 7%.
Operating profit increased 11% to CHF 17.2 billion. Operating
margin came in at 37.7% in 2012, up 2.1%. Core earnings per share
(excluding restructuring charges and amortization and impairment
of intangible asset) increased 10% to CHF 13.62.
Roche continues to expect sales in 2013 to increase in line
with 2012 levels. Strong sales of drugs such as Avastin,
MabThera, and Herceptin along with the newly launched products
such as Perjeta, Zelboraf, Erivedge, T-DM1 are expected to
contribute to 2013 growth. Sales are expected to be strong in
emerging markets in 2013. Roche expects core earnings per share
to grow at a higher rate than sales in 2013.
The pipeline at Roche fared impressively during 2012.Roche
received positive results on 11 of its 14 late-stage candidates
in 2012. Roche launched three new cancer drugs in 2012. While
Perjeta (HER2-positive metastatic breast cancer) and, Erivedge
(advanced basal cell carcinoma) were launched in the US, Zelboraf
(BRAF V600 mutation-positive metastatic melanoma) was launched in
Europe. In addition, the company is positive about the approval
of its HER2-positive metastatic breast cancer treatment,
trastuzumab emtansine (T-DM1). The candidate has been granted
priority review in the US and has been filed for approval in
Europe as well.
Roche carries a Zacks Rank #3 (Hold). However, other large cap
pharma stocks, such as
Eli Lilly and Company
) currently look more attractive with a Zacks Rank #2 (Buy).
BAYER A G -ADR (BAYRY): Free Stock Analysis
LILLY ELI & CO (LLY): Free Stock Analysis
NOVO-NORDISK AS (NVO): Free Stock Analysis
(RHHBY): ETF Research Reports
To read this article on Zacks.com click here.