Brexit will have a "limited" impact on Roche's business, the chief executive of the pharma giant told CNBC on Thursday, after the group confirmed its outlook for 2016 and reported sales for the first half of the year ahead of analyst expectations.
Sales came in at 25.0 billion Swiss francs ($25.4 billion) against a consensus forecast of 24.79 billion Swiss francs in a Reuters poll. This was up 5 percent on a constant exchange rate basis from the 23.5 billion Swiss francs recorded in the same period in 2015.
The pharmaceuticals division posted a 4 percent rise in sales to 19.5 billion Swiss francs, driven by oncology and immunology medicines, while the diagnostics division posted a 6 percent rise in sales to 5.6 billion Swiss francs.
Core earnings per share were up 5 percent to 7.74 Swiss francs, also ahead of the 7.52 francs forecast in a Reuters poll.
Roche said it continues to expect sales to grow low- to mid-single digit at constant exchange rates in 2016. The pharma giant also said that it expects to further increase its dividend in Swiss francs.
Roche has been aggressively trying to bring a number of new drugs onto the market. In April, it announced that the U.S. Food and Drug Administration (FDA) granted accelerated approval to Venclexta, a drug to treat people with chronic lymphocytic leukemia. And in May, the FDA granted approval for Roche's cancer drug Tecentriq. The company also has a number of upcoming medicines in the pipeline.
Severin Schwan, the chief executive of Roche, said that this "unprecedented" level of drug launches had made him feel more comfortable.
"We had a number of positive read-outs over the last 12 months and as a consequence … growth prospects have improved significantly and that's why I sleep better at night," Schwan told CNBC in a TV interview.
The CEO said that he expects a number of so-called "biosimilars" to enter the market in the second half of next year. These are medicines that have come out of patent protection and can now be made by other pharma firms. But Schwan said he was not worried about these as it's part of the business model and an "incentive to come up with better, new medicines".
Brexit impact 'limited'
The fallout from Brexit has been a key theme across the second-quarter earnings season, but Roche's boss said the impact will be "limited" given that only 3 percent of the company's sales come from the U.K.
Last month, the U.K. voted in a referendum to leave the European Union (EU), but Article 50 – the legal process to negotiate Britain's exit – has not yet been triggered. Uncertainty remains over the long-term effect of Brexit but Schwan said that Roche would not be pulling back investment from the U.K.
"The one element which I think is really critical is the regulatory process. The U.K. currently is part of the European regulatory process, actually the EMA (European Medicines Agency). The respective agency is located in London. It is expected that this agency will move to another EU member state. So it will be absolutely critical that the U.K. builds up early enough, a well-functioning regulatory system, to ensure access of innovative medicines for their citizens," Schwan told CNBC.
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