Strong Swiss franc takes toll on Roche

City A.M. Reporter
Roche expects the strong Swiss franc to shave 14 per cent off its full-year earnings, the Swiss drugmaker said yesterday after the red-hot currency took a hefty chunk out of its third-quarter sales.

Quarterly sales at the world’s biggest maker of cancer drugs slumped 14.5 per cent to SFr9.82bn (£7bn), falling short of estimates as sales of its key drugs also trailed expectations.

Roche, which has been grappling with declining sales of cancer medicine Avastin and the effects of cuts in global healthcare spending throughout the year, said the full-year impact from the franc on core earnings per share would be 14 per cent if it remains stable.

Full-year sales are expected to take a 12 per cent hit, a slight improvement from the 15.7 per cent impact in the third quarter.

“The results are weak and suggest Roche will require continued underlying cost savings in order to achieve guidance,” Deutsche Bank analysts said.

The Basel-based drugmaker is sticking to its full-year guidance of core earnings per share growth of around 10 per cent in local currencies, as well as its target of low single-digit sales growth in local currencies, excluding Tamiflu, a pill to treat flu.

Stripping out the currency impact, third-quarter sales rose two per cent, excluding Tamiflu, underscoring the hit from the franc.