sharon sanders
Editor-in-Chief & President
Flu Drug Sales Falter For Roche
James McKeigue, 04.17.08, 12:45 PM ETLONDON - Prudent government preparation hurt Roche's first-quarter results.
Sales of the antiviral drug Tamiflu dropped sharply compared to the same quarter a year ago because most governments already have built up their stockpiles against a feared bird flu pandemic.
That sent <org>Roche<orgid idsrc="other otc" value="rhhby"></orgid></org> shares tumbling 4.4%, or 7.50 Swiss francs ($7.45) to 163.10 Swiss francs ($162.39) in Geneva late Thursday afternoon.
Roche's sales dropped 4% to 10.86 billion Swiss francs ($10.8 billion), below analysts' forecasts, which ranged between 10.91 billion Swiss francs ($10.86 billion) and 11.54 billion Swiss francs ($11.49 billion).
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.
"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."
Another factor in falling sales is the impact of the weak dollar. Roche, the world's second-biggest pharmaceutical by market capitalization, has a big presence in the U.S.--it owns 52% of Genentech and recently acquired Ventana Medical Systems for $3.4 billion. (See: "Roche Pays Up For Ventana") With the greenback's current slide, U.S. sales lose value when translated into Swiss francs. (See: "Dollars Descend As Gold Also Slides")
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 can be seen in its first-quarter diagnostics sales. In local currencies, diagnostics sales were up 9% year-on-year, growing ahead of the market, but when translated into Swiss francs, the division's sales growth became a meager 3%.
The group predicted high single-figure sales through the rest of the year.
"I think that is quite a realistic figure as Roche are generally quite conservative in their estimates," said Fellows. "I would also expect the recent bolt-on acquisition of Ventana to start contributing more to sales in the coming quarters."
Thomson Financial contributed to this article
http://www.forbes.com/2008/04/17/roche-tamiflu-dollar-markets-equity-cx_jm_0417markets15_print.html
James McKeigue, 04.17.08, 12:45 PM ETLONDON - Prudent government preparation hurt Roche's first-quarter results.
Sales of the antiviral drug Tamiflu dropped sharply compared to the same quarter a year ago because most governments already have built up their stockpiles against a feared bird flu pandemic.
That sent <org>Roche<orgid idsrc="other otc" value="rhhby"></orgid></org> shares tumbling 4.4%, or 7.50 Swiss francs ($7.45) to 163.10 Swiss francs ($162.39) in Geneva late Thursday afternoon.
Roche's sales dropped 4% to 10.86 billion Swiss francs ($10.8 billion), below analysts' forecasts, which ranged between 10.91 billion Swiss francs ($10.86 billion) and 11.54 billion Swiss francs ($11.49 billion).
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.
"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."
Another factor in falling sales is the impact of the weak dollar. Roche, the world's second-biggest pharmaceutical by market capitalization, has a big presence in the U.S.--it owns 52% of Genentech and recently acquired Ventana Medical Systems for $3.4 billion. (See: "Roche Pays Up For Ventana") With the greenback's current slide, U.S. sales lose value when translated into Swiss francs. (See: "Dollars Descend As Gold Also Slides")
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 can be seen in its first-quarter diagnostics sales. In local currencies, diagnostics sales were up 9% year-on-year, growing ahead of the market, but when translated into Swiss francs, the division's sales growth became a meager 3%.
The group predicted high single-figure sales through the rest of the year.
"I think that is quite a realistic figure as Roche are generally quite conservative in their estimates," said Fellows. "I would also expect the recent bolt-on acquisition of Ventana to start contributing more to sales in the coming quarters."
Thomson Financial contributed to this article
http://www.forbes.com/2008/04/17/roche-tamiflu-dollar-markets-equity-cx_jm_0417markets15_print.html
