ALEXANDER G. HIGGINS Associated Press Writer GENEVA (AP) — Pharmaceuticals maker Roche Holding AG on Thursday posted a 29 percent drop in six-month net profit because of costs related to the takeover of California-based Genentech. However, sales were strong, helped by the popularity of antiviral Tamiflu in the face of the swine flu pandemic. Sales of anticancer drugs also fed the profit of 4.1 billion Swiss francs ($3.84 billion), which compares with 5.7 billion francs in the year-earlier period, Roche said. Excluding exceptional items, net income attributable to Roche shareholders was up 11 percent at 5.2 billion francs ($4.9 billion). Roche reports its profit figures only for six months instead of quarterly. The profit came in below analysts’ expectations of 4.9 billion francs. But Geneva broker Helvea said by other measures profits were strong, with operating profit before exceptional outlays 8 percent higher than consensus expectations. Roche shares closed up 3.2 percent to 159.40 francs ($149.33) on the Zurich exchange as investors focused on robust sales figures. Group sales were up 2 billion to 24 billion francs ($22.5 billion), an increase of 9 percent in Swiss francs, the Basel-based company said. Analysts at Zuercher Kantonalbank said, “Roche stands out as one of the very few drug companies with a high growth in sales, which significantly beats the 3-4 percent average of the pharmaceutical industry.” “I am especially pleased about the excellent progress we’ve made in integrating Roche and Genentech,” CEO Severin Schwan said. “Work at Genentech’s research and early development center in South San Francisco has continued seamlessly with the existing management team.” Schwan said the company would be realizing synergies from the merger sooner than originally anticipated because of the consolidation of the manufacturing network and streamlining administrative functions. The company said total one-time integration costs would be approximately 3 billion francs. The acquisition strengthens Roche’s ability to deliver on innovation in its core pharmaceuticals and diagnostics businesses, Schwan said. “The combined company has one of the strongest development portfolios in the industry, with 10 new molecular entities in ongoing or planned late-stage clinical development,” Schwan said. Roche completed its $46.8 billion takeover of Genentech in March. It said Thursday it will have largely finished the integration by the end of the year. The company said sales of Tamiflu accounted for 4 percentage points of sales growth in the pharmaceuticals division. Total Tamiflu production capacity, including other manufacturers, will be expanded to 400 million packs annually by the start of 2010, Roche said. The antiviral drug has been bought by governments building up stockpiles as one of the most effective ways to counter the flu pandemic pending the delivery of a swine flu vaccine. Also driving the 11 percent sales growth of the pharma division were leading oncology medications, Pegasys for hepatitis and Lucentis for ophthalmology, Roche said. It said Avastin, for advanced colorectal, breast, lung and kidney cancer, as well as relapsed glioblastoma, a type of brain tumor, was continuing strong sales growth in all regions.
