Roche posts sustained double-digit sales growth for the first nine months of 2008
Full-year outlook confirmed
* Group sales up 10% in local currencies to 33.2 billion Swiss francs, excluding Tamiflu pandemic sales
* Including Tamiflu pandemic sales, Group sales total 33.3 billion francs, an increase of 6% in local currencies and 13% in US dollars, and a decline of 2% in Swiss francs
* Roche confirms full-year outlook
* Roche reaffirms commitment to Genentech offer
* Sales advance 10% in local currencies* — twice the global market growth rate
* Growth driven by key products in oncology, autoimmune, virology, metabolism/bone and transplantation portfolios
* Promising launch of Actemra for rheumatoid arthritis in Japan, Roche continuing to work with FDA following receipt of complete response letter in September
* Divisional sales again outpace the market, increasing 11% in local currencies
* Professional Diagnostics and Applied Science continue to drive growth
* Diabetes Care posts solid growth in Latin America, Asia–Pacific and Japan, more than offsetting lower US sales
* Ventana continues to exceed expectations as integration nears successful completion
Unless otherwise stated, all growth rates are in local currencies
* Excluding Tamiflu pandemic sales
Commenting on the Group’s sales performance in the first nine months of 2008, Roche CEO Severin Schwan said: ‘The Roche Group maintained its strong growth in the third quarter. Sales by both the Pharmaceuticals and Diagnostics divisions1 advanced at double-digit rates in local currencies, clearly outgrowing their respective markets. Based on this performance, we again expect a good full-year result and confirm our outlook for 2008. We are also pleased that the newly acquired Ventana business continues to exceed expectations and that the integration process is well advanced.’
Sales by the Roche Group in the first nine months of 2008 increased by 6% in local currencies (-2% in Swiss francs; 13% in US dollars)2 to 33.3 billion Swiss francs. Excluding Tamiflu pandemic sales to governments and corporations, sales rose 10% (2% in Swiss francs; 17% in US dollars). The rise in the Swiss franc against most currencies, particularly against the US dollar, resulted in Swiss franc growth being eight percentage points lower than growth in local currencies.
2008 full-year outlook confirmed
Barring unforeseen events, based on the sustained strong sales growth over the first nine months, Roche confirms its targets for full-year 2008. Excluding Tamiflu pandemic sales to governments and corporations, Roche anticipates a high single-digit increase in Group sales, with above-market sales growth in both divisions. Despite considerably lower Tamiflu pandemic sales and significantly higher R&D spending, Roche is aiming for 2008 Core EPS at constant exchange rates to remain at least in line with the record level achieved in 2007.
Strong underlying sales growth maintained
Despite the predicted sharp decline in Tamiflu pandemic sales versus the same period last year, Pharmaceuticals Division sales increased 4% in local currencies (-3% in Swiss francs; 11% in US dollars) to 26.2 billion Swiss francs. Excluding pandemic sales of Tamiflu, sales by the Pharmaceuticals Division grew 10% in local currencies — or twice the global market growth rate — driven primarily by the division’s oncology, autoimmune disease, virology, metabolism/bone and transplant portfolios. Excluding pandemic Tamiflu, the division’s growth rate in the third quarter was 10%. On the same basis, nine-month sales advanced 11% in North America (compared with 1% market growth)3 , 9% in Western Europe (vs 5% market growth), 11% in the CEMAI4 countries (vs 11% market growth) and 3% in Japan (vs 3% market growth).
Oncology – all key products post solid double-digit growth
Oncology continues to be a key driver of growth for Roche. Combined sales of the division’s oncology medicines advanced 15% to over 14 billion Swiss francs in the first nine months, with key products Avastin, MabThera/Rituxan, Herceptin, Tarceva and Xeloda recording sustained double-digit growth in all three quarters.
In the first nine months of 2008 overall sales (oncology and autoimmune diseases) of MabThera/Rituxan (rituximab), the leading treatment for patients with non-Hodgkin’s lymphoma, grew 16% versus the prior-year period to 4.3 billion Swiss francs, with third-quarter sales advancing 15%. Sales of the product for cancer indications increased strongly. Growth in oncology is being driven by increasing use of MabThera/Rituxan for maintenance therapy of relapsed follicular lymphoma, increased adoption of optimal dosing regimens, and improved access in key emerging markets for all approved indications. In July Roche filed an application with the EU authorities for approval of MabThera as a first-line treatment of chronic lymphocytic leukemia (CLL), the most common form of adult leukemia. The filing was based on results from a major phase III trial (CLL8), which showed that combined treatment with MabThera and the current standard chemotherapy achieved significantly better outcomes than chemotherapy alone. In October Roche announced that a separate clinical trial of MabThera/Rituxan in patients with relapsed or refractory CLL (REACH) has met its primary end-point; patients treated with MabThera combined with the current standard chemotherapy showed a significant improvement in progression-free survival compared with patients who received chemotherapy alone. Full results of the study will be submitted for presentation at an upcoming medical meeting.
Sales of Herceptin (trastuzumab), for early and advanced HER2-positive breast cancer, increased 12% to 3.8 billion francs in the first nine months, with double-digit growth continuing in the third quarter (+14%). Growth is particularly strong in Japan due to continuing uptake of Herceptin for early breast cancer, an indication approved last February. Solid sales growth was also seen in Europe/Rest of World (RoW) , with strong gains recorded in key emerging markets.
Worldwide sales of Avastin (bevacizumab), for advanced colorectal, lung, breast and kidney cancer, grew 37% to 3.7 billion francs overall (+37% in the third quarter). The main growth is coming from Western Europe, driven primarily by increased use of the product for metastatic colorectal and breast cancer. Sales in Europe are also benefitting from the rollout of new indications and increasing uptake for non-small cell lung cancer and renal cell carcinoma. Genentech’s rollout of the metastatic breast cancer indication in the US has further strengthened the product’s position in that market. Sales in Japan continue to progress well. In September Genentech filed a supplementary application with the US Food and Drug Administration (FDA) for approval of Avastin in combination with interferon alfa to treat advanced renal cell carcinoma.
Data presented at the Congress of the European Society for Medical Oncology (ESMO) in September confirmed that Avastin in combination with chemotherapy is the only biologic that provides a statistically significant overall survival benefit to patients receiving first-line or second-line treatment for metastatic colorectal cancer. In addition, Avastin remains the only biologic offering a progression-free survival benefit in metastatic colorectal cancer, regardless of mutations in the K-Ras gene, and also the only biologic with a statistically significant overall survival benefit in K-Ras wild-type patients.
In October Roche announced topline results from a phase III study (BeTa Lung) investigating the addition of Avastin to Tarceva for the second-line treatment of patients with advanced non-small cell lung cancer. The data showed that, while the primary overall survival endpoint for the combination was not met, there was clear evidence of clinical activity, with improvements in the secondary endpoints of progression-free survival and response rate when Avastin was added to Tarceva. Further analyses, including post-progression therapy, are being conducted to explore the potential impact on the overall survival endpoint. No new safety signals for Avastin or Tarceva were reported, and the results do not affect the approved indications for Avastin and Tarceva. At the beginning of October the EU authorities approved a pediatric investigation plan for Avastin. The studies included in the plan will eventually provide physicians with new data on dosing and safety that can improve clinical outcomes specifically for children.
Sales of Tarceva (erlotinib), the only epidermal growth factor receptor (EGFR) inhibitor with proven survival benefits in the treatment of patients with advanced non-small cell lung cancer and pancreatic cancer, increased 24% to 885 million francs. Growth is being driven primarily by Western Europe, particularly France, Germany and Spain, and uptake is also strong in Japan and China. Increased volume and market penetration resulted in steady growth in the US. Expanding uptake in all regions reflects doctors’ growing experience with the product.
Worldwide sales of Xeloda (capecitabine), an oral chemotherapy medicine for gastrointestinal and breast cancer, were up 14% to 880 million francs. Growth in Japan remained particularly strong for the third successive quarter, with solid gains also recorded in Europe/RoW and the United States. Xeloda is generating consistent double-digit sales growth in China following its approval there earlier this year for advanced stomach cancer.
Anemia – NeoRecormon holding up well in a highly competitive market
Combined sales of Roche’s NeoRecormon and Chugai’s Epogin (epoetin beta), for anemia, declined 14% to 1.3 billion Swiss francs, reflecting the highly competitive market environment. In Europe, despite the market entry of several biosimilar versions of epoetin alfa in the past 12 months, the market share of NeoRecormon has dropped only slightly, with sales down 12% in the first nine months. In Japan, where Epogin remains the market leader, sales declined 19% due primarily to sustained pricing pressure.
Mircera (methoxy polyethylene glycol-epoetin beta), for the treatment of symptomatic anemia associated with chronic kidney disease, is now approved in 66 countries worldwide and has been launched in 28 so far, including several major EU markets. Physician feedback from the early launch markets is positive, and sales are progressing as Roche wins more contracts.
Transplantation – CellCept continues to record double-digit growth
CellCept (mycophenolate mofetil), the world’s most widely used immunosuppressant medication, recorded worldwide sales of 1.5 billion Swiss francs in the nine months to 30 September, an increase of 14% over the year-earlier period.
Virology – Pegasys continues to expand market share in major markets
Sales of Pegasys (peginterferon alfa-2a), the world’s leading pegylated interferon, for the treatment of hepatitis B and C, totalled 1.2 billion francs in the first nine months of 2008, a rise of 6% over the same period last year. Sales were driven by strong growth in Japan (+62%) and key emerging markets. Pegasys continues to expand its market share in all mature markets, including the US and major EU countries.
Global sales of Tamiflu (oseltamivir), for the treatment and prevention of influenza, declined 69% to 428 million Swiss francs in the first nine months of 2008. The decline is due to the expected sharp fall-off in pandemic stockpiling sales of the product (down 1.3 billion francs for the period versus 2007), which substantially outweighed the increase in seasonal sales recorded earlier in the year. No significant additional pandemic orders were received in the first nine months. The US, Canadian, South Korean and Hong Kong authorities have extended the shelf life of government stockpiles of Tamiflu to seven years, and data have been filed to support similar extensions in other countries.
Combined sales of Valcyte (valgancyclovir) and Cymevene (ganciclovir), the standard of care for the treatment of cytomegalovirus disease in transplant patients and people with HIV/AIDS, maintained their robust growth into the third quarter and advanced 11% to 404 million Swiss francs overall in the first nine months of 2008. In July the FDA granted pediatric exclusivity for Valcyte in the United States until September 2015.
Autoimmune diseases – MabThera/Rituxan continues to gain ground in rheumatoid arthritis
Worldwide uptake of MabThera/Rituxan (rituximab) for the treatment of rheumatoid arthritis (RA) was strong throughout the first nine months of 2008. MabThera/Rituxan, the first and only selective B cell therapy approved for RA, is now established as a proven choice for patients with inadequate response to tumour necrosis factor (TNF) inhibitor therapy. Observational data showing the superiority of MabThera/Rituxan over sequential use of TNF inhibitors and the product’s increasingly positive long-term efficacy and safety profile are convincing more and more rheumatologists to switch patients to MabThera/Rituxan following inadequate response to their first TNF inhibitor.
Actemra (tocilizumab) represents a new approach to the treatment of rheumatoid arthritis. Following the medicine’s approval in Japan for RA and related pediatric indications earlier this year, uptake has been very encouraging. In September, in a complete response letter to Roche’s US marketing application for Actemra, the Food and Drug Administration (FDA) requested additional documentation related to the product’s manufacturing and certain other components such as final labelling. The FDA has not requested any additional clinical studies. Roche is continuing to work with the FDA to promptly address the agency’s requests.
Metabolic Diseases – Bonviva/Boniva posts strong sales growth
Global sales of Bonviva/Boniva (ibandronic acid), for the treatment of postmenopausal osteoporosis, grew 41% to 775 million Swiss francs in the first nine months of 2008. Market-share gains are supporting robust growth in Europe/RoW and the United States despite the entry of generic versions of competitor products in the US and Europe.
Development – major projects on track
As of 30 September 2008, the Pharmaceuticals Division’s R&D pipeline (phase I to III/registration) included 65 new molecular entities (NMEs) and 54 additional indications (AIs). During the third quarter four projects entered phase I and another entered phase III development. One phase II project was discontinued; no phase III projects were discontinued. Since the beginning of 2008 the division has initiated ten major phase III clinical programmes.
Pertuzumab, a HER dimerisation inhibitor, is being developed by Roche and Genentech as a potential treatment for breast cancer. Recruitment of patients for a phase III study of pertuzumab combined with Herceptin and docetaxel in HER2-positive metastatic breast cancer (CLEOPATRA) is proceeding according to plan. Patients are also being enrolled in a phase II study of neoadjuvant (presurgical) treatment with pertuzumab plus Herceptin in early HER2-positive breast cancer (NEOSPHERE).
Ocrelizumab is a humanised anti-CD20 monoclonal antibody being developed by Roche, Genentech and Chugai for the treatment of autoimmune diseases. An extensive phase III programme involving 3000 patients with rheumatoid arthritis is ongoing, while recruitment for a phase III trial in lupus nephritis is continuing as planned. In addition, a phase IIb trial of the drug in relapsing-remitting multiple sclerosis started in July 2008 and is currently enrolling patients.
Recruitment of patients for a phase III clinical trial of the cholesteryl ester transfer protein (CETP) inhibitor dalcetrapib (R1658, JTT-705) is proceeding according to plan. Dalcetrapib increases levels of high-density lipoprotein cholesterol (HDLC, or ‘good’ cholesterol), thereby potentially reducing the risk of cardiovascular disease and death in high-risk patients.
Phase III testing of taspoglutide (R1583, BIM 51077), a long-acting glucagon-like peptide-1 (GLP-1) analogue being developed for the treatment of type 2 diabetes, commenced in July.
Development of R1626, a polymerase inhibitor being investigated as a treatment for infection with hepatitis C virus (HCV), was terminated in the third quarter due to new and unexpected safety findings from a phase IIb study. Roche’s pipeline of direct antiviral agents for HCV remains robust, with another polymerase inhibitor, R7128 (collaboration with Pharmasset), and a protease inhibitor, R7227 (collaboration with InterMune) in clinical development. Both agents are being investigated in combination with Pegasys and Copegus (ribavirin).
Professional Diagnostics and Applied Science continue to drive sales growth
In the first nine months of 2008 Roche’s Diagnostics Division recorded sales of 7.1 billion Swiss francs, an increase of 11% in local currencies (4% in Swiss francs, 20% in US dollars). Divisional sales again grew ahead of or in line with the market in all regions, making especially strong gains in Latin America, Asia–Pacific and Japan. All five business areas increased their sales for the period, with the biggest contributions to growth again coming from the Professional Diagnostics and Applied Science units. Ventana, the tissue diagnostics business acquired in February, posted sales of 261 million Swiss francs in the eight months to 30 September 2008, accounting for 4% of the division’s nine-month revenues.
Professional Diagnostics — further market share gains for immunodiagnostics
Roche Professional Diagnostics’ nine-month sales rose 9% to 3,270 million Swiss francs. Sales of serum work area (clinical chemistry and immunochemistry) systems grew 10% for the period, well above the estimated market growth rate (4%).6 Immunochemistry gained further market share on sales growth of 19%. New placements of cobas 6000 instruments helped drive this growth, as did strong uptake of the anti-HCV assay (diagnosis of hepatitis C) launched for all cobas and Elecsys systems in the first half of 2008. Clinical chemistry sales grew 2% amid continuing price erosion in this more established market.
The US Food and Drug Administration (FDA) approved three new immunoassays for the cobas, Elecsys and Modular Analytics platforms, including a fully automated anti-TSH receptor assay (diagnosis of Grave’s disease) and an assay for anti-CCP antibodies (highly specific test for the diagnosis of rheumatoid arthritis), both launched in ex-US markets earlier this year. An assay for Toxo IgG (determination of toxoplasmosis status) was also approved. The launch (ex US) in July of the cobas c 311 — a stand-alone clinical chemistry analyser — rounds out Roche’s offerings for the low-volume testing segment.
Hematology sales were up strongly in the EMEA region (Europe, Middle East and Africa), Asia-Pacific and Latin America. Growth was driven mainly by placements of the Sysmex XS 1000i, one of a new line of compact, fully automated analysers.
Point-of-care cardiac assays posted solid double-digit sales growth, fuelled by increased uptake of the Roche Cardiac proBNP assay and the cobas h 232 portable cardiac testing device. Placements of Accu-Chek Inform II, the first wireless-enabled hospital blood glucose meter, were also a growth driver. Coagulation monitoring sales again showed strong double-digit growth, driven mainly by the CoaguChek XS monitor for professional use and patient self-testing.
Diabetes Care — strong growth of new product sales continues
Roche Diabetes Care’s sales rose 2% to 2,207 million Swiss francs in the first nine months of 2008. Solid mid-single-digit growth in Japan and double-digit gains in Asia-Pacific, Latin America and the agency business more than offset lower nine-month US sales. Following a strong second quarter, US sales fell in the third quarter as a result of a significant decrease in sales of older monitoring products, strong competition in insulin delivery systems and price declines.
Sales of the Accu-Chek Aviva, now Roche Diabetes Care’s top-selling blood glucose monitoring system, showed strong double-digit growth for the period. The rollout of the Accu-Chek Performa system also continues to drive growth, particularly in emerging markets. Uptake of the new Accu-Chek Compact Plus meter has been very strong, helping to revitalise Accu-Chek Compact strip sales, which grew at a combined double-digit rate in those countries where the device was launched in the fourth quarter of 2007. The global rollout of the Accu-Chek Compact Plus will be completed in November.
Molecular Diagnostics — growth in core business continues, preparing for new markets
Roche Molecular Diagnostics’ nine-month sales advanced 4% to 828 million Swiss francs. Virology sales grew 4%, driven by continued placements of automated platforms for HIV and hepatitis B and C (HBV, HCV) testing in Asia-Pacific, EMEA and the US. Blood screening sales declined 2% for the period, with new contracts offset by pricing pressures and the ongoing effect of accounts lost in 2007.
In September the FDA approved the Cobas TaqMan HBV Test. This is the first quantitative test for hepatitis B DNA to be approved in the US, offering a significantly wider dynamic range than any other HBV monitoring test currently on the US market. The hepatitis C viral load test for the automated Cobas AmpliPrep/Cobas TaqMan platform is currently under FDA review. These tests, which complement the automated HIV-1 viral load test launched in 2007, are expected to play an important role in meeting US needs for automated hepatitis testing. Roche’s automated viral load tests are also available in ex-US markets.
The cobas TaqScreen MPX Test, a multiplex blood screening assay for simultaneous detection of HIV-1 (groups M&O), HIV-2, HCV and HBV, is in the final stages of FDA review. The test will run in the US on the fully automated cobas s 201 system. Since September the Japanese Red Cross has been using the MPX Test on the fully integrated cobas s 401 system to screen 100% of the Japanese blood supply.
Most European markets have completed the transition to the Cobas TaqMan CT Test v2.0, which received CE Mark certification in June. This dual target test, now launched in Europe, Asia-Pacific and Latin America, enables reliable screening of all known strains of Chlamydia trachomatis, the cause of the most commonly reported bacterial sexually transmitted disease.
Recruitment continues for the study initiated earlier this year to support US filings for Roche’s HPV (human papillomavirus) detection and genotyping tests. These tests are designed to support improved cervical cancer screening.
Applied Science — further strong growth in genomics
Roche Applied Science posted nine-month sales of 546 million Swiss francs. This was an increase of 19% for the period, or roughly three times the estimated market growth rate. Sales of sequencing products, led once again by the ultra-fast Genome Sequencer FLX, nearly doubled despite increased pressure from competitors. Products for real-time quantitative PCR (qPCR) analysis, particularly the LightCycler 480 instruments, delivered strong double-digit growth. Roche NimbleGen microarrays also contributed to sales.
In late September RAS launched its GS FLX Titanium series of next-generation sequencing products (including new reagents and software). Compared with standard FLX sequencing, Titanium increases throughput by a factor of five. Roche NimbleGen’s SeqCap arrays are now available worldwide. Other major launches included MagNa Pure 2.0, a redesigned and improved instrument for automated qPCR sample preparation, and the first of a new family of pre-plated, ready-to-use qPCR assays called RealTime ready.
Tissue Diagnostics — strong double-digit growth continues
Ventana, the US-based leader in tissue diagnostics acquired in February, continues to perform even more strongly than expected during the post-merger integration phase. Commercial operations outside North America have now largely been integrated into Roche, and efforts are well under way to expand the business into new markets in Europe and Latin America.
Roche’s consolidated nine-month results include Ventana sales totalling 261 million Swiss francs, representing sales from the date of acquisition to 30 September 2008. These additional sales contributed four percentage points to the Diagnostics Division’s local-currency sales growth. On a stand-alone basis, Ventana’s sales for the entire nine-month period reached 270 million US dollars, an increase of 24% in local currencies (27% in US dollars) over the same period in 2007. This was well above market growth.
Advanced staining (immunohistochemistry and in situ hybridisation) remained the biggest growth driver, delivering robust reagent sales and an even stronger than expected rise in instrument sales. BenchMark Ultra, enabling continuous and random access for expedited diagnosis, was launched in the US in early September. It is expected to have a significant positive impact on sales and market share for Ventana’s core advanced staining business. US placements of the Symphony primary (hematoxylin and eosin) staining instrument accelerated in the third quarter, helped by the July launch of enhancements further improving system reliability and staining interpretation. The Vantage workflow solution, launched in the US in May 2008, also contributed to sales growth. Vantage is the first complete workflow information management system for the anatomical pathology laboratory, providing tracking capabilities that streamline and integrate lab work and information flows for greater productivity and patient safety.
Headquartered in Basel, Switzerland, Roche is one of the world’s leading research-focused healthcare groups in the fields of pharmaceuticals and diagnostics. As the world’s biggest biotech company and an innovator of products and services for the early detection, prevention, diagnosis and treatment of diseases, the Group contributes on a broad range of fronts to improving people’s health and quality of life. Roche is the world leader in in-vitro diagnostics and drugs for cancer and transplantation, and is a market leader in virology. It is also active in other major therapeutic areas such as autoimmune diseases, inflammatory and metabolic disorders and diseases of the central nervous system. In 2007 sales by the Pharmaceuticals Division totalled 36.8 billion Swiss francs, and the Diagnostics Division posted sales of 9.3 billion francs. Roche has R&D agreements and strategic alliances with numerous partners, including majority ownership interests in Genentech and Chugai, and invested over 8 billion Swiss francs in R&D in 2007. Worldwide, the Group employs about 80,000 people. Additional information is available on the Internet at www.roche.com.
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Full-year results 2008: 4 February 2009 (tentative date)
1) Excluding Tamiflu pandemic sales
2) Unless otherwise stated, all growth rates are in local currencies
3) Market growth here and elsewhere according to IMS (to end of June 2008)
4) Central and Eastern Europe, Middle East, Africa, Central Asia, Indian Subcontinent
5) Roche defines Europe/Rest of World as covering Europe and all other countries except Japan and the United States
6) Diagnostics market growth according to company estimates and various industry reports
Disclaimer: Cautionary statement regarding forward-looking statements
This document contains certain forward-looking statements. These forward-looking statements may be identified by words such as ‘believes’, ‘expects’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’, ‘seeks’, ‘estimates’, ‘future’ or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Various factors may cause actual results to differ materially in the future from those reflected in forward-looking statements contained in this document, among others: (1) pricing and product initiatives of competitors; (2) legislative and regulatory developments and economic conditions; (3) delay or inability in obtaining regulatory approvals or bringing products to market; (4) fluctuations in currency exchange rates and general financial market conditions; (5) uncertainties in the discovery, development or marketing of new products or new uses of existing products, including without limitation negative results of clinical trials or research projects, unexpected side-effects of pipeline or marketed products; (6) increased government pricing pressures; (7) interruptions in production; (8) loss of or inability to obtain adequate protection for intellectual property rights; (9) litigation; (10) loss of key executives or other employees; and (11) adverse publicity and news coverage. The statement regarding earnings per share growth is not a profit forecast and should not be interpreted to mean that Roche’s earnings or earnings per share for any current or future period will necessarily match or exceed the historical published earnings or earnings per share of Roche.
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