Roche's pharma sales up five per cent

Roche, the embattled Swiss drugs, vitamins and diagnostics group, has revealed first-half profits slightly ahead of analysts' expectations, and predicted that its full-year operating profits would match those of last year.

The trend is a marked reversal to the results reported by the German giants Bayer and BASF.

Playing down suggestions that Roche might be interested in Bayer's drugs division, after reports that company was looking to sell its drugs division, Franz Humer, Roche's chairman and chief executive, said, 'Organic growth remains the focus of our strategy.'

Roche surprised analysts by reporting a return to modest sales growth at the flagship pharmaceuticals division, where sales were up 5% at SFr9.3bn (US$5.46bn) and operating profits rose 2% to SFr1.8bn (US$1.05bn).

In the pharmaceuticals division, sales of well-established products, especially CellCept, and of new products, in particular in oncology, more than offset the loss of approximately SFr400m of sales.

These losses were due to the patent expiration of Versed/Dormicum in the US and the delisting of Draganon in Japan, both of which occurred in mid-2000.

Higher sales as well as early cost savings from the 'Re-shaping for Future Growth' initiative more than compensated for generic competition plus additional amortisation following the acquisition of Kytril and increased net operating expenses.

The pharmaceuticals division's initiative is said to be progressing as planned. The objectives are to restore growth and reduce the division's cost structure in order to improve its operating profit margin.