UPDATE 2-Roche expects 2018 profit to grow faster than sales on tax change

* CEO expects new drugs to offset biosimilar erosion

U.S. tax reform to lift earnings from 2018

* Charges dent 2017 net profit (Adds comment from CEO, details throughout)

By John Miller

BASEL, Switzerland, Feb 1 (Reuters) - Swiss drugmaker Roche forecast on Thursday that U.S. tax changes would mean its profit growth outstrips sales in 2018, while new drugs for multiple sclerosis and cancer will offset revenue declines from older medicines.

Roche said it expects sales to stay flat or grow at a low-single- digit rate. However, core earnings per share were targeted to grow at a high-single-digit pace, helped by U.S. tax reform that will reduce Roche's tax rate from 26.6 percent in 2017 to "the low twenties".

Tax changes under U.S. President Donald Trump have had a big impact on drugmakers' shareholder sentiment in recent weeks, with AbbVie stock rising after projected a big benefit, while Pfizer took a hit after investors were disappointed its tax rate would not be lower.

Excluding the tax changes, profit will grow in line with sales, Roche said, as its chief executive Severin Schwan confirmed the drugmaker expects to continue to boost sales and profit even as its $22.5 billion-per-year trio of Rituxan, Herceptin and Avastin faces increasing competition from cheaper copies following patent losses.

Schwan highlighted new medicines including Ocrevus for multiple sclerosis, cancer immunotherapy Tecentriq and lung cancer drug Alecensa, which together contributed 1.4 billion francs of new sales in 2017.

"While we are ... facing the entry of biosimilars for important medicines, the strength of our portfolio and the success of our recent launches makes us confident we can compensate for this impact," Schwan told reporters.

Sales increased in 2017 by 5 percent to 53.3 billion Swiss francs ($57 billion), hitting the 53.2 billion franc average estimate in a Reuters poll of analysts.

IFRS net income in 2017 dropped to 8.8 billion Swiss francs from 9.7 billion francs a year earlier as Roche took charges including for its lung medicine Esbriet, which was hit by sluggish sales in early indications.

Roche, whose impairments on intangible assets more than doubled to 3.5 billion francs, in 2014 spent $8.3 billion to buy InterMune, which sells Esbriet.

The Swiss company proposed raising its dividend to 8.30 francs per share, below the average of 8.45 francs in the poll. It said it aimed to raise it again this year.

Shares in Roche, whose Genentech unit in the United States is responsible for much of its sales and profit, rose about 1 percent in early trading in Zurich.

The Basel-based company's shares are flat over the last 12 months, trailing cross-town rival Novartis whose stock has gained 16 percent. ($1 = 0.9328 Swiss francs) (Editing by Michael Shields and Alexander Smith)