Roche CEO to Step Down in March 2008, First-Half Profit Rises
Roche Holding said Thursday its CEO will step down next March as the pharmaceutical company separates that job from the chairman's position. It also posted a 24% increase in first-half net profit.
Chief Executive Franz Humer, who had led the company since 1998, will remain chairman of the board. Next July he also will become chairman of drinks company Diageo.
Humer will be succeeded by Severin Schwan, 40, who had been the head of Roche's diagnostics division since last January.
Roche's board decided to separate the two jobs "in view of the increasing complexity of the tasks involved," Humer said in a statement. Humer said separately that he looked forward to assuming broader responsibilities at Diageo, where he became a non-executive board member in 2005.
Basel-based Roche also reported that first-half net profit rose to 4.92 billion Swiss francs ($4.1 billion) from 3.97 billion francs in the same period a year earlier. That beat analysts' expectations.
Sales rose 15% to 22.83 billion francs ($19.0 billion), with sales of prescription drugs up 17% to 18.27 billion francs ($15.2 billion). Cancer medicines were up 22%.
Diagnostics sales rose 7% to 4.56 billion francs ($3.8 billion).
"Sales are in line with expectations, but operating profit is higher and that trickles down all the way to the bottom line," said Karl-Heinz Koch, a pharmaceutical analyst for Zurich-based private bank Vontobel.
Roche shares rose 2.9% to 220.60 francs ($183.83) in Zurich.
Drug Sales to Rise
The company reiterated that it expects group and prescription drug sales to rise at least 10% in local currencies.
"We have positioned ourselves even more strongly for future growth through good progress in our R&D projects and a number of strategic acquisitions," Humer said.
Roche's results contrast with those from Pfizer, which posted a 48% drop in second-quarter profit on Wednesday because of lagging sales of cholesterol drug Lipitor and generic competition for other drugs. Swiss rival Novartis AG posted an 18 percent rise in second-quarter earnings on Tuesday
Sales of cancer drugs MabThera, Herceptin and Avastin were a bit below what analysts had expected, but Roche benefited from better-than-expected sales of its flu treatment Tamiflu, which rose 39% to 1.32 billion francs ($1.1 billion).
Tamiflu continues to benefit as governments stockpile the drug in case the bird flu virus that has ravaged poultry stocks in Asia mutates into a form that can be easily transmitted among humans, sparking an influenza pandemic.
Sales of MabThera, the company's best-selling drug, rose 16% to 2.7 billion francs ($2.25 billion). Sales of breast cancer drug Herceptin soared 30% to 2.38 billion francs ($1.98 billion). Avastin, which treats tumors, had sales of 1.91 billion francs ($1.59 billion), up 40%.