UPDATE 4-Lacklustre cancer drug sales hit Roche profit

* Roche 2009 core EPS 12.19 Sfr vs forecast 12.33

* Confirms profit guidance for 2010

* Proposes 2009 dividend of 6.00 Sfr vs forecast 5.68

* Says talk Novartis may sell stake "pure speculation"

* Stock falls 1.8 pct

(Adds graphic, updates stock, adds comment)

By Katie Reid and Sam Cage

BASEL, Switzerland, Feb 3 (Reuters) - Roche Holding AG (ROG.VX) missed full-year profit forecasts due to disappointing sales of key cancer drugs and gave a lacklustre outlook for 2010, pointing to wider challenges facing global drugmakers.

Roche has focused on developing promising new drugs rather than cutting costs as a way to combat looming patent losses, but still faces some of the same problems as rivals, which also include the impact of U.S. healthcare reform.

"Results clearly disappoint and 2010 guidance is no trigger for a positive sentiment either," said Kepler Capital Markets analyst Martin Voegtli.

"We will cut our short-term earnings forecasts slightly but remain clearly positive for the mid-to-long term outlook."

The world's largest maker of cancer drugs confirmed its 2010 profit forecast on Wednesday and said sales would rise at a mid-single-digit rate, which Bernstein analysts said was disappointing.

Its core earnings per share rose 10 percent in 2009 to 12.19 Swiss francs ($11.52), just behind the average forecast of 12.33 in a Reuters poll after big sellers Avastin, MabThera and Herceptin netted less than expected. [ID:nLDE60S1B0]

Roche said its $47 billion buyout of U.S. biotech partner Genentech meant customers had run down their stocks of the companies' drugs in the fourth quarter, cutting surpluses, but that this process had finished by the end of 2009.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic on sales of key Roche cancer drugs: here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Its stock fell 1.8 percent to 177.30 francs by 1013 GMT, underperforming the DJ Stoxx European healthcare index .SXDP, which was down 0.37 percent.

Some analysts said that drop represented a good buying opportunity for a company which still has good growth prospects, and Morgan Stanley said Roche remained their top pick among big European drugmakers.

"In 2010 we expect management will increasingly justify pipeline investments to the street and focus on greater cost management, especially on R&D," they said in a note.

Roche Chief Executive Severin Schwan dismissed speculation Novartis AG (NOVN.VX) could sell its stake in its rival to help pay for acquiring eyecare group Alcon Inc ACL.N, telling CNBC the talk was "pure speculation". [ID:nLDE6111VC]

TOUGH BUSINESS

Sector investors will now look to earnings from U.S. group Pfizer Inc (PFE.N), due later in the session, for more clues on how drugmakers hope to overcome tough industry fundamentals.

AstraZeneca Plc (AZN.L) last week cut another 8,000 jobs and gave a downbeat forecast for the next few years and newspapers have reported GlaxoSmithKline Plc (GSK.L) also plans to cut several thousand jobs. [ID:nLDE60U0ED]

Roche trades at about 12 times forecast 2011 earnings, a similar multiple to local Swiss rival Novartis, reflecting their more impressive drug development, and more expensive than GlaxoSmithKline, Sanofi-Aventis SA (SASY.PA) and AstraZeneca.

It has had a boost from sales of antiviral Tamiflu thanks to the H1N1 swine flu pandemic, but sees that revenue stream falling from 3.2 billion francs to 1.2 billion this year. Roche hopes renewed fast growth of its cancer portfolio and arthritis medicine Actemra will compensate in 2010.

The group proposed a higher dividend than expected, at 6.00 francs per share, and said it would progressively reduce debt from its Genentech buyout, return to a net cash position by 2015 and continue to increase its dividend pay out ratio. (Editing by David Cowell and Sharon Lindores) ($1=1.058 Swiss Franc)