Roche Sales Beat Forecasts Despite Pricing Pressure
The launch of new cancer medicines and a strong flu season in the U.S. helped Roche post a six percent rise in first quarter sales, Daniel O'Day, chief operating officer of the company's pharmaceuticals division told CNBC on Thursday.
"We had a very good start to 2013 with the overall group sales rising by 6 percent, clearly the key events for the quarter were the launch of two new key cancer medicines," O'Day told CNBC on Thursday.
Sales rose to 11.59 billion Swiss francs ($12.44 billion) in the first quarter, compared with the average analysts forecast in a Reuters poll of 11.45 billion francs.
The diagnostics division, however, underperformed with sales rising just one percent, while diabetes care sales were down five percent, mainly due to pricing pressure, O'Day told CNBC.
The Basel-based company said that the sales increases were also due to an 84 percent increase in demand for its flu drug Tamiflu. O'Day said Roche's pharma division in the U.S. had grown 13 percent as a result.
He said he was excited about the portfolio of new drugs coming into the market in 2013.
The company said it expected to raise its dividend in 2013 and was the first of the major drugmakers to report first quarter results. Roche shares were down 0.62 percent on Thursday morning.
Andrew Weiss , head of Pharma & Biotech Research at Vontobel, told CNBC Europe's "Squawk Box", who has a buy recommendation on Roche's stock, said the pharmaceutical sector had outperformed other sectors this year because of "cheap capital."
"The general performance of the health sector has been driven [by the premise] that the tide lifts all of the boats," he said on Thursday.
"We have cheap capital around, capital is chasing cheap ideas and these companies are defensives and in terms of dividends are rich paying companies, their valuations compared to other defensives such as consumer goods, are at a discount," Weiss said.
"Once investors get a bit more skittish and want to take money and put it into more aggressive growth I think Roche should remain safe as that is the one that will remain in positive territory in terms of growth…and catalysts," he said.
"With other companies where patent expirations and some weakness in the pipeline [could cause a pullback]," Weiss added.