Roche looks to cancer drug to offset strong franc
Swiss pharmaceuticals company Roche posted a rise in first-quarter sales but failed to meet market expectations as a strong Swiss franc hit results.
However, chief executive Severin Schwan told CNBC that while foreign exchange was a big risk for Roche, a new line of breast cancer treatment would help strengthen the company.
Group sales in the quarter rose 5 percent to 11.496 billion Swiss francs ($13.057 billion) the company said. This was below predictions in a Reuters poll of 11.887 billion Swiss francs.
Sales at its pharma unit also came in below expectations at 9.04 billion Swiss francs against an estimate for 9.375 billion Swiss francs.
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Roche said that the sales growth had been driven by demand for its cancer medicines as well as its treatments for rheumatoid arthritis. The company added that it had been hit by a strong Swiss franc.
Schwan told CNBC said the currency, which has strengthened against major currencies such as the U.S. dollar and the Japanese yen, was the biggest risk to the firm's growth this year, as it impacted the reported Swiss franc sales growth by 6 percentage points.
But he remained confident that a new line of breast cancer immunotherapy could help boost the share price this year, as the group will present findings surrounding a new compound later this year.
"It is certainly very exciting field which offers new hope for many patients," he said.
"Overall we are pleased with the share price development over the last year, I do believe our efforts in oncology in general specifically in onco-immunology are part of that. Having said that I do look forward to presenting the results," he said.
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Shares traded 1.4 percent higher shortly after market open.
Roche confirmed its outlook for the year, expecting low-to mid-single-digit growth in group sales at constant exchange rates, and predicted a further increase for its dividend.
Schwan also dismissed a recent report that questions the group's flu drug Tamilflu's efficacy, where analysis suggested the drug was no better than paracetamol at combating flu symptoms.
"We fully stand behind the quality and integrity of our data. There are other studies which come to a completely different conclusion," he said, pointing to another recent study that showed Tamiflu can reduce this risk of death by 19 percent.