ZURICH (Reuters) - Roche said on Thursday strong sales of new medicines like cancer immunotherapy drug Tecentriq would help to sustain the company’s growth as patents on older drugs start to expire.
Chief Executive Severin Schwan is betting he can stay ahead of the sales erosion with new medicines that include five launched in 2016 alone.
“That is an unprecedented number of launches of new medicines in a short period of time,” Schwan said on a conference call after Roche reported third-quarter sales figures. “Our product pipeline is developing very well.”
The Swiss drugmaker’s three established cancer blockbusters Rituxan, Herceptin and Avastin, which account for annual sales of nearly 20 billion Swiss francs ($21 billion), all face biosimilar competition by the end of the decade.
But so far this year, Tecentriq has won approval for bladder and lung cancer, Alecensa for lung cancer, Cotellic for skin cancer and Venclaxta for chronic lymphocytic leukaemia. Roche’s multiple sclerosis drug Ocrevus is slated for U.S. approval before the year is over.
Tecentriq has brought in 77 million Swiss francs ($78 million) since its U.S. approval in May for bladder cancer. That revenue is due to accelerate after the U.S. Food and Drug Administration this week gave the a green light for the drug to be used against lung cancer.
Analysts are counting on it, too, as revenue growth from broad-based cancer drug Avastin, Rituxan for blood cancer, and breast cancer therapy Herceptin begins to slow.
All three missed analyst expectations in the third quarter, and Avastin in particular, which fell 3 percent in the third quarter, led by a decline in the United States.
Overall, quarterly sales at the world’s biggest maker of cancer drugs rose 3 percent to 12.48 billion francs, missing the average estimate of 12.68 billion in a Reuters poll of analysts.
“The momentum seems weakening in the haematology and breast cancer franchises in the U.S. and Japanese territories,” Bruno Bulic, an analyst at Baader Helvea, said. “We see the entry of Tecentriq coming timely.” He has a “buy” recommendation on Roche’s shares.
They fell 0.2 percent by 0930 GMT, in line with the decline of the European health care sector index.
Schwan still expected Roche’s 2016 sales to grow by a low- to mid-single digit percentage rate at constant exchange rates, with core earnings rising faster than sales. The company also confirmed its full-year outlook.
He declined to comment on Novartis’s efforts to sell its $14 billion stake in Roche, saying any disposal was a matter for his cross-town rival to resolve. Novartis Chief Executive Joe Jimenez has said he may sell the stake without demanding a premium.
($1 = 0.9889 Swiss francs)
Editing by Michael Shields and Jane Merriman