Roche First-Quarter Sales up 16%, Raises Outlook

Fast-selling cancer drugs boosted first-quarter sales at Roche Holding by 16% to 11.4 billion Swiss francs ($9.41 billion), the Swiss drugmaker said, raising its outlook for the full year.

Sales in its all-important pharmaceutical division rose by 18% to 9.14 billion francs, the world's largest maker of cancer drugs said on Wednesday, driven by new uses of its top cancer treatments Avastin, Herceptin, Xeloda and MabThera.

"Based on the successful first three months we raise the outlook for 2007 and expect core earnings per share to grow above group sales," Chief Executive Officer Franz Humer said in a statement.

The group had previously said core earnings per share would grow in line with sales. The company left its sales outlook for 2007 unchanged, forecasting double-digit growth for group and pharma sales in 2007, above market sales growth.

Roche certificates, its most commonly traded form of equity, have lost 6% since its full-year results on worries over earlier cautious 2007 guidance and future margin growth at the company, which trades at a premium compared to the sector.

The first-quarter numbers were just above the average expectations in a Reuters poll of 20 analysts. These were for group sales to rise to 11.12 billion francs, while pharma sales were pencilled in at 8.9 billion.

Sales of Roche's Tamiflu flu drug were boosted by further stockpiling by governments, as countries across the world brace themselves for a possible outbreak of a bird flu pandemic.

Roche also gave a positive outlook for its Actemra arthritis drug, one of the most promising drugs in its product pipeline, saying first Phase III trials had shown positive results.

In a separate statement, Roche also said its cancer drug Avastin had been approved in Japan for patients with inoperable advanced or recurrent colorectal cancer.

Roche has a strong portfolio of new drugs to fight cancer, the fastest-growing area of medical advances, substantial exposure to profitable biotech therapies and few generic challenges in the coming years.

Roche shares trade at around 20 times expected 2007 earnings, well above those of its rivals Novartis at 17 times and GlaxoSmithKline at 15 times, which some analysts say may limit the stock's upside potential.

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