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Roche (RHHBY) Posts Solid 2017 Sales on Tecentriq & Alecensa
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Roche Holding AG's (RHHBY - Free Report) reported sales of CHF13.8 billion in the fourth quarter of 2017, up 5% from the year-ago period.
Roche’s stock has moved up 7.7% in the last twelve months compared with industry’s gain of 24.7%.
The company reports results under two divisions: Pharmaceuticals and Diagnostics. All growth rates mentioned below are on a year-over-year basis and at constant exchange rates.
Sales in 2017 came in at CHF 53.3 billion, up 5%. Earnings per share came in at CHF 15.34 in 2017, up from CHF 14.53 in 2016. Sales at the Pharmaceuticals division increased 5% driven by strong growth in Tecentriq, Ocrevus, Alecensa and Perjeta. Diagnostics division sales climbed 5% primarily on the back of strong immunodiagnostic business.
Results in Detail
Herceptin sales improved 3% due to increasing demand in the United States and Brazil. Perjeta sales grew 19% following increased demand in the neoadjuvant and metastatic settings. Sales of Kadcyla (+10%) were driven by increasing demand in the international markets.
Meanwhile, sales of Avastin decreased due to increasing use of cancer immunotherapy medicines in lung cancer.
Sales of Rituxan/MabThera (1%) were driven by growth in the immunology segments. Growth in Gazyva/Gazyvaro (41%) was strong despite increasing competition in chronic lymphocytic leukemia.
Recently launched drugs, Tecentriq and Alecensa for lung cancer are off to a strong start. Tecentriq, Ocrevus and Alecensa contributed CHF1.4 billion of new sales.
Performance of the immunology franchise was driven by increased sales of Actemra/RoActemra (14%), and strong uptake of Esbriet (13%) and Xolair (16%). Increasing use of Actemra/RoActemra in the subcutaneous formulation drove sales.
However, sales of Tarceva declined (18%) due to growing use of other therapeutic options. Sales of Xeloda (10%) continue to be hit by generic competition. Sales of Tamiflu also declined 33%.
Revenues at the Diagnostics division climbed 5% on the back of solid performance of the Centralised and Point of Care Solutions (7%) unit, which was in turn, propelled by Immunodiagnostics (13%). Tissue Diagnostics (13%) and Molecular Diagnostics (11%) also performed impressively.
However, Diabetes Care sales declined 4% as sales continue to be impacted by challenging market conditions, particularly in North America.
2018 Outlook
Roche now expect sales to remain stable or grow in low-single digits. The company expects core earnings to grow in high-single digits. The company intends to further increase its dividend in 2017 in local currency.
Pipeline Progress
The company won FDA approvals for two new drugs in 2017 — Ocrevus for the treatment of relapsing and primary progressive forms of multiple sclerosis and Hemlibra for haemophlia A with factor VIII inhibitors.
The company continues to expand the label for its existing drugs — Perjeta for adjuvant (after surgery) treatment of HER2-positive early breast cancer at high risk of recurrence, in combination with Herceptin and chemotherapy as well as full approval of Perjeta for neoadjuvant use.
During the fourth quarter, Roche obtained FDA approval of a label expansion of a few drugs —Alecensa for first-line treatment in ALK-positive non-small cell lung cancer (“NSCLC”), Zelboraf in Erdheim-Chester disease, Gazyva for untreated advanced follicular lymphoma and Avastin for glioblastoma in adult patients whose cancer has progressed after prior treatment.
Alecensa was also approved as a monotherapy for the first-line treatment of adult patients with anaplastic lymphoma kinase (ALK)-positive, advanced NSCLC in Europe. In January 2018, EMA approved Ocrevus for the treatment of both the relapsing and the primary progressive forms of multiple sclerosis and Hemlibra was granted a positive opinion by the CHMP.
Meanwhile, Tecentriq in combination with Avastin showed positive study results in lung cancer and kidney cancer.
On the diagnostics front, Roche entered into a strategic, long-term partnership with GE Healthcare to jointly develop and co-market digital clinical decision support solutions.
Our Take
Roche performance in 2017 was strong driven by contribution from newly launched drugs. The label expansion of key drugs, Perjeta, Tecentriq and Alecensa will further drive growth. Ocrevus and Hemlibra have been successfully launched. However, sales of Avastin and Tarceva continue to decline.
Approval of new drugs and a potential label expansion of existing drugs bode well for Roche as its legacy drugs like Herceptin, MabThera are facing competition from biosimilars.
Novartis AG (NVS - Free Report) has already launched its biosimilar version of Rituxan/ MabThera in Europe. Amgen (AMGN - Free Report) also obtained FDA approval for a biosimilar version of Avastin for treatment of five types of cancers including lung cancer, colorectal cancer, glioblastoma, renal cell carcinoma and cervix cancer.
Exelixis’ earnings per share estimates have moved up from 72 cents to 77 cents for 2018 over the last 60 days. The company delivered a positive earnings surprise in the last four quarters, with an average beat of 572.92%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Roche (RHHBY) Posts Solid 2017 Sales on Tecentriq & Alecensa
Roche Holding AG's (RHHBY - Free Report) reported sales of CHF13.8 billion in the fourth quarter of 2017, up 5% from the year-ago period.
Roche’s stock has moved up 7.7% in the last twelve months compared with industry’s gain of 24.7%.
The company reports results under two divisions: Pharmaceuticals and Diagnostics. All growth rates mentioned below are on a year-over-year basis and at constant exchange rates.
Sales in 2017 came in at CHF 53.3 billion, up 5%. Earnings per share came in at CHF 15.34 in 2017, up from CHF 14.53 in 2016. Sales at the Pharmaceuticals division increased 5% driven by strong growth in Tecentriq, Ocrevus, Alecensa and Perjeta. Diagnostics division sales climbed 5% primarily on the back of strong immunodiagnostic business.
Results in Detail
Herceptin sales improved 3% due to increasing demand in the United States and Brazil. Perjeta sales grew 19% following increased demand in the neoadjuvant and metastatic settings. Sales of Kadcyla (+10%) were driven by increasing demand in the international markets.
Meanwhile, sales of Avastin decreased due to increasing use of cancer immunotherapy medicines in lung cancer.
Sales of Rituxan/MabThera (1%) were driven by growth in the immunology segments. Growth in Gazyva/Gazyvaro (41%) was strong despite increasing competition in chronic lymphocytic leukemia.
Recently launched drugs, Tecentriq and Alecensa for lung cancer are off to a strong start. Tecentriq, Ocrevus and Alecensa contributed CHF1.4 billion of new sales.
Performance of the immunology franchise was driven by increased sales of Actemra/RoActemra (14%), and strong uptake of Esbriet (13%) and Xolair (16%). Increasing use of Actemra/RoActemra in the subcutaneous formulation drove sales.
However, sales of Tarceva declined (18%) due to growing use of other therapeutic options. Sales of Xeloda (10%) continue to be hit by generic competition. Sales of Tamiflu also declined 33%.
Revenues at the Diagnostics division climbed 5% on the back of solid performance of the Centralised and Point of Care Solutions (7%) unit, which was in turn, propelled by Immunodiagnostics (13%). Tissue Diagnostics (13%) and Molecular Diagnostics (11%) also performed impressively.
However, Diabetes Care sales declined 4% as sales continue to be impacted by challenging market conditions, particularly in North America.
2018 Outlook
Roche now expect sales to remain stable or grow in low-single digits. The company expects core earnings to grow in high-single digits. The company intends to further increase its dividend in 2017 in local currency.
Pipeline Progress
The company won FDA approvals for two new drugs in 2017 — Ocrevus for the treatment of relapsing and primary progressive forms of multiple sclerosis and Hemlibra for haemophlia A with factor VIII inhibitors.
The company continues to expand the label for its existing drugs — Perjeta for adjuvant (after surgery) treatment of HER2-positive early breast cancer at high risk of recurrence, in combination with Herceptin and chemotherapy as well as full approval of Perjeta for neoadjuvant use.
During the fourth quarter, Roche obtained FDA approval of a label expansion of a few drugs —Alecensa for first-line treatment in ALK-positive non-small cell lung cancer (“NSCLC”), Zelboraf in Erdheim-Chester disease, Gazyva for untreated advanced follicular lymphoma and Avastin for glioblastoma in adult patients whose cancer has progressed after prior treatment.
Alecensa was also approved as a monotherapy for the first-line treatment of adult patients with anaplastic lymphoma kinase (ALK)-positive, advanced NSCLC in Europe. In January 2018, EMA approved Ocrevus for the treatment of both the relapsing and the primary progressive forms of multiple sclerosis and Hemlibra was granted a positive opinion by the CHMP.
Meanwhile, Tecentriq in combination with Avastin showed positive study results in lung cancer and kidney cancer.
On the diagnostics front, Roche entered into a strategic, long-term partnership with GE Healthcare to jointly develop and co-market digital clinical decision support solutions.
Our Take
Roche performance in 2017 was strong driven by contribution from newly launched drugs. The label expansion of key drugs, Perjeta, Tecentriq and Alecensa will further drive growth. Ocrevus and Hemlibra have been successfully launched. However, sales of Avastin and Tarceva continue to decline.
Approval of new drugs and a potential label expansion of existing drugs bode well for Roche as its legacy drugs like Herceptin, MabThera are facing competition from biosimilars.
Novartis AG (NVS - Free Report) has already launched its biosimilar version of Rituxan/ MabThera in Europe. Amgen (AMGN - Free Report) also obtained FDA approval for a biosimilar version of Avastin for treatment of five types of cancers including lung cancer, colorectal cancer, glioblastoma, renal cell carcinoma and cervix cancer.
Zacks Rank & Key Pick
Roche carries a Zacks Rank #3 (Hold).
A better-ranked stock in the healthcare sector is Exelixis (EXEL - Free Report) with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..
Exelixis’ earnings per share estimates have moved up from 72 cents to 77 cents for 2018 over the last 60 days. The company delivered a positive earnings surprise in the last four quarters, with an average beat of 572.92%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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