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Roche FY Net Profit Down 22 Percent on Genentech Costs

Roche FY Net Profit Down 22 Percent on Genentech Costs

From Associated Press (February 3, 2010)

GENEVA--Drug maker Roche Holding AG on Wednesday reported a 22 percent drop in full-year net profit to 8.51 billion Swiss francs ($8.06 billion), citing costs linked to the takeover of California-based Genentech.

Discounting one-off expenses, net profit attributable to Roche shareholders would have fallen 9 percent to 9.8 billion francs, it said.

"In a turbulent external environment Roche performed extraordinarily well," said Chief Executive Severin Schwan.

Roche lagged behind Novartis, which posted a full-year net profit of $10.27 billion last month, but once again edged out its cross-town rival on sales, which rose 8 percent to 49.05 billion francs ($46.44 billion) compared with $44.27 billion at Novartis.

Core earnings per Roche share were up 10 percent to 12.19 francs. The Basel-based company plans to raise its dividend per share by 20 percent to 6 francs.

Schwan said the integration of Genentech, which cost Roche some 2.4 billion francs in restructuring expenses last year, was "a major step." Roche completed its $46.8 billion takeover in March after overcoming strong opposition from a skeptical Genentech board. The move helped boost Roche's income from cancer drugs Avastin and Rituxan, which were both developed by the South San Francisco biotech firm.

Roche expects mid-single digit growth in the coming year and Schwan said the company has 10 new products in late-stage development.

Sales of its best-selling antiviral drug Tamiflu, which soared last year due to the swine flu pandemic, are predicted to fall to 1.2 billion francs from 3.2 billion francs in 2009, Roche said. Tamiflu has proven effective in treating swine flu cases.


Posted: February 2010