The FINANCIAL — Commenting on the Group’s results, Roche CEO Severin Schwan said: “We started the year with strong growth and good uptake of new products. In particular, I am pleased to see continued strong demand for Perjeta for breast cancer, as well as Esbriet, which was recently approved in the US for idiopathic pulmonary fibrosis. During the first quarter, the FDA also granted a second Breakthrough Therapy Designation for our cancer immunotherapy medicine anti-PDL1, for a specific type of lung cancer, in addition to bladder cancer. In Diagnostics, we further broadened the menu for the recently launched cobas 6800/8800 instrument platform. Overall, we are on track to reach our full-year targets for 2015.”
Group Sales
The Roche Group posted strong sales growth in the first three months in both divisions, with demand for oncology and immunology medicines driving growth in Pharmaceuticals, and immunodiagnostics products driving growth in Diagnostics.
In Pharmaceuticals, medicines for HER2-positive breast cancer (Herceptin, Perjeta, Kadcyla) saw very strong growth of 23% as the combination of Perjeta and Herceptin in treatment becomes increasingly widespread. Avastin (+6%), which is used to treat seven different cancers, also continued to grow strongly, with increased use in two recently approved indications, ovarian and cervical cancer, as well as breast and lung cancer. MabThera/Rituxan (+5%), used in treatment for blood cancer and rheumatoid arthritis, also made a significant contribution to growth. Actemra/RoActemra (+27%), for rheumatoid arthritis, benefited from increased demand in early stage treatment and in monotherapy, as well as with the new subcutaneous formulation. Xolair (+28%) continued to grow significantly after its approval for an additional indication, chronic hives, in 2014. There was strong uptake of new products, in particular the newly-acquired medicine Esbriet for idiopathic pulmonary fibrosis and Gazyva/Gazyvaro for chronic lymphocytic leukemia. Generic competition impacted two medicines, Xeloda, a chemotherapy drug and Valcyte, an antiviral medicine. Pegasys, a medicine for hepatitis also declined in the quarter, as a result of competition from a newer generation of treatment, according to Roche.
In Diagnostics, sales increased 6% in the first quarter, with Professional Diagnostics (+6%) driving growth from its immunodiagnostics business. Sales were up 10% in Molecular Diagnostics, 14% in Tissue Diagnostics and 1% in Diabetes Care.
The Swiss franc appreciated against a number of currencies, in particular the euro, after the Swiss National Bank lifted its exchange rate peg in January. The impact of the weaker euro was more than offset by the stronger US dollar. The Japanese yen continued to weaken against the Swiss franc, as did a number of Latin American and other European currencies. Overall, exchange rates had a negative impact of 2 percentage points on first quarter sales growth.
Product approvals and positive data from the pipeline
There were a number of key pipeline milestones in the quarter, notably very positive results from the phase III GADOLIN study of Gazyva/Gazyvaro in refractory indolent non-Hodgkin’s lymphoma. The study met its primary endpoint and was stopped early, having shown that the patients treated with Gazyva/Gazyvaro lived significantly longer without their disease worsening. In cancer immunotherapy, the FDA granted a second Breakthrough Therapy Designation for the investigational medicine anti-PDL1 in non-small cell lung cancer. Anti-PDL1 received its first Breakthrough Therapy Designation for bladder cancer in 2014. In addition, the FDA approved eye medicine Lucentis in a new indication, the treatment of diabetic retinopathy in people with diabetic macular edema. The FDA also granted Priority Review for cobimetinib, in combination with Zelboraf, for treatment of advanced BRAF-mutated melanoma. Avastin in combination with chemotherapy received EU approval for use in advanced cervical cancer.
Diagnostic product launches to strengthen key growth areas
Two new tests were launched in CE mark countries in the first quarter: the cobas DPX test, a real-time PCR duplex test for parvovirus B19 and hepatitis A virus in human plasma and the cobas HBV quantitative nucleic acid test. Both tests are for use on the cobas 6800/8800 systems, which were launched in 2014, and there was good uptake in the markets.
Building the portfolio with strategic acquisitions
Roche established a strategic partnership with Foundation Medicine in molecular information and genomic analysis. This collaboration aims to advance personalised healthcare, by making use of molecular information and genomic profiles to better target cancer tumours. The transaction was completed in April 2015. Roche also made a number of strategic acquisitions, including Ariosa Diagnostics to enter the non-invasive prenatal and cell-free DNA testing markets; Signature Diagnostics to advance translation research for next generation sequencing diagnostics; CAPP Medical which provides a technology to isolate circulating tumour DNA from blood for sequencing; and Trophos to expand into neuromuscular disease.
Outlook for 2015
In 2015, Roche continues to expect sales to grow low- to mid-single digit, at constant exchange rates. Core earnings per share are targeted to grow ahead of sales at constant exchange rates . Roche expects to further increase its dividend in Swiss francs.
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