Roche annual profits grow but 2010 sales dip

Swiss pharmaceutical giant Roche yesterday posted an 11 per cent increase in its annual net profit attributable to shareholders last year, signalling a “challenging” outlook as its sales dipped.

The figure of 8.7 billion Swiss francs ($9.2 billion) was below the 10.1 billion franc mark forecast by analysts polled by business news agency AWP.

Roche also said that overall annual net income had grown just four percent to 8.9 billion francs, while overall sales fell by three per cent in 2010 to 47.5 billion francs, dampened by the strength of the Swiss currency.

“The group results are solid despite an increasingly challenging market environment,” chief executive Severin Schwan said in a statement.

The pharmaceutical company last November announced 4,800 job cuts in an attempt to generate savings of 1.8 billion francs this year.

Roche has confirmed that the restructuring until 2012 would cost 2.7 billion francs.

The group reported only a “mild” increase in sales of five percent in local currency terms, but excluding its anti viral and first line palliative flu drug Tamiflu.

Roche had already reported a “significant decline” in sales of the drug as they tailed off with the end of A(H1N1) flu pandemic and a halt to mass government stockpiling last year.

The Swiss group is also facing a battle in the United States after the US Food and Drug Administration said in December that the company’s key anti cancer drug Avastin was neither safe nor effective against breast cancer.

The group recommended a 10 per cent increase in its dividend payment to 6.6 francs per share and forecast a “more challenging environment” next year.

“In 2011, Group and Pharmaceuticals sales (excluding Tamiflu) are expected to grow at low single-digit rates in local currencies, reflecting the impact of US healthcare reform and European austerity measures,” the company added, mirroring concerns raised by Swiss rival Novartis.