Roche sales slip after lower demand for Tamiflu

Source: Healthcare Exec

Date :18/04/2008 11:53:37

Roche Holding AG said first-quarter revenue fell more than analysts estimated because of lower sales of the Tamiflu influenza pill and a weaker U.S. dollar.

Revenue declined fell to 10.9 billion Swiss francs ($10.9 billion) from 11.34 billion francs a year earlier, Roche, the world's biggest maker of cancer drugs, said Friday.

Analysts had a median estimate of 11.24 billion francs.

Tamiflu

Pandemic sales of Tamiflu, seen as a first-line treatment in the event of a bird flu pandemic, declined by 710 million Swiss francs ($707.69 million) year-on-year, the Basel, Switzerland-based company said.

Governments and companies have stopped buying the antiviral drug as they have already have built up their stockpiles of the product, one of only two drugs available for pandemic influenza.

"It must be remembered that in the first quarter last year Roche had extremely high sales of Tamiflu," said Helvea analyst Andrew Fellows. "It is only natural that there has been a drop year-on-year."

Weak dollar

Another factor in falling sales is the impact of the weak dollar. With the greenback's current slide, U.S. sales lose value when translated into Swiss francs.

The dollar bought 1.00350 Swiss francs Thursday morning, down from 1.25380 Swiss francs in July 2007.

The effect that has had on Roche, who has a big presence in the U.S., can be seen in its first-quarter diagnostics sales.

In local currencies, diagnostics sales were up nine percent year-on-year, growing ahead of the market, but when translated into Swiss francs, the division's sales growth became a meager three percent.

Despite considerably lower Tamiflu pandemic sales and significantly higher R&D spending, the group predicted high single-figure sales through the rest of the year.

April 18, 2008