Biosimilar worries takes shine off Roche's guidance hike
Robust demand for new treatments such as Ocrevus for multiple sclerosis and Hemlibra for haemophilia A helped the world's biggest cancer drugs maker to nudge up its full-year sales and profit forecasts on Thursday.
However, an 8 percent drop in Rituxan sales, including a 44-percent plunge in Europe, rattled some analysts, particularly with a biosimilar copy of Roche's blockbuster breast cancer drug Herceptin expected later this year.
"The key focus for today looks likely to be the big hit from biosimilars versus the decent performance from Ocrevus and Hemlibra, with the former likely to dominate," Deutsche Bank analyst Tim Race said, calling Rituxan's drop in Europe "stunning".
Roche shares were flat at 1015 GMT, lagging a European blue-chip index <.FTEU3> up 0.4 percent.
Roche Chief Executive Severin Schwan remained upbeat.
"I am very confident that we can grow in spite of the entry of biosimilars," he told reporters.
First-quarter sales rose 6 percent to 13.6 billion Swiss francs (10 billion pounds), compared with analysts' average estimate of 13.3 billion francs in a Reuters poll.
The company now expects a low single-digit percentage rise in sales at constant exchange rates this year, after previously warning revenue could be flat. Core earnings per share should grow broadly in line with sales, it added.
Ocrevus sales easily topped estimates, hitting 479 million francs versus the 406 million expected in the Reuters poll.
Hemlibra, approved for haemophilia A late last year, came in at 23 million francs. Analysts said that was a good start as Roche moves in on rivals like Shire.
Sales of cancer drug Avastin fell 2 percent to 1.6 billion francs, while Herceptin, now Roche's top-selling drug, held its own, rising 2 percent to 1.8 billion francs.
Rituxan, Herceptin and Avastin currently produce $21 billion in annual sales, but their patents have expired or will soon.
Roche shares have fallen 11 percent in two years amid scepticism new drugs will be able to replace its ageing cancer drug portfolio.
Analysts also saw immunotherapy Tecentriq as a first-quarter blemish, with revenue of 139 million francs lagging the 154 million poll estimate and just above the 132 million of the fourth quarter.
Roche pharmaceuticals chief Dan O'Day remained confident ongoing Tecentriq trials against numerous cancers were reasons to believe the immunotherapy's best days are ahead, despite more-established medicines like Keytruda from Merck or Bristol-Myers Squibb's Opdivo.
(This version of the story corrects affiliation of analyst, paragraph 4)
(Reporting by John Miller; Editing by Michael Shields and Mark Potter)
By John Miller