UPDATE 4-Roche sales up 6 pct on cancer drugs, top forecasts

* Q1 sales 12.2 bln Swiss francs vs forecast 11.88 bln

* Confirms full-year guidance

* Cancer drug Avastin sales up 18 pct to 1.666 bln francs

* Plans to file T-DM1 for U.S. approval this year

* Stock rises over 2 pct, outperforms sector index

(Adds graphic, details, updates share price)

By Katie Reid

ZURICH, April 15 (BestGrowthStock) – Swiss drugmaker Roche Holding
AG (ROG.VX: ) beat first-quarter sales forecasts and confirmed its
full-year outlook as demand for key cancer drugs picked up after
destocking by wholesalers at the end of last year.

Roche, the world’s largest maker of cancer drugs, cemented
its position as the darling of the pharmaceuticals sector as
sales of Avastin, Rituxan and Herceptin outstripped expectations
in the first three months of the year.

“The important message is that the underlying growth trend
of key cancer drugs has been confirmed, which is important
following the low sales in Q4 2009 on inventory reduction across
the Roche group,” said Helvea analyst Karl-Heinz Koch.

The better-than-expected 6 percent rise in sales to 12.2
billion Swiss francs ($11.61 billion) boosted its stock, which
was trading 2.1 percent higher at 176.40 Swiss francs,
outperforming the Stoxx European healthcare index (.SXDP: ) at
1325 GMT. [ID:nLDE63C1M1]

Roche, which is the first major drugmaker to report
first-quarter results, enjoys a premium rating thanks to the
growth potential of top-seller Avastin.[ID:nLDE63B1XF]

The group’s strong growth trends in emerging markets also
bode well for the rest of the sector.

The group underlined the strength of its late-stage pipeline
by saying it planned to seek U.S. approval for breast cancer
medicine trastuzumab-DM1 this year — earlier than expected —
after strong phase II data in women who have not responded to
prior treatments.

The news is also a boost for ImmunoGen (IMGN.O: ) as the drug
comprises ImmunoGen’s DM1 cancer-cell killing agent linked to
the HER2-targeting antibody trastuzumab, or Herceptin, and would
be the first product developed by ImmunoGen filed for approval.

Roche said T-DM1 could get approval either late this year or
early next year.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic showing quarterly sales growth for key cancer drugs


Sales of Roche’s flu drug Tamiflu rose 32 percent to 517
million francs in the first three months of the year as the
company enjoyed additional demand due to the swine flu pandemic.

Roche stuck to its Tamiflu forecast for sales of 1.2 billion
francs this year after 3.2 billion in 2009, when governments
stockpiled the drug.

Other makers of flu drugs and vaccines, such as
GlaxoSmithKline Plc (GSK.L: ), Sanofi-Aventis SA (SASY.PA: ) and
Novartis AG (NOVN.VX: ), are also expected to enjoy a
first-quarter sales boost, despite recent government moves to
cut some vaccine orders due to excess supplies.

Roche — which does not give quarterly profit figures —
confirmed its full-year targets and is aiming for sales growth
in the mid-single digit range in local currencies for both the
group and the pharmaceuticals unit.

It also expects double-digit core earnings per share growth
at constant exchange rates.

Tim Race, an analyst at Deutsche Bank, said the results were
“a minor positive … but not game-changing” as they supported
the view that the previous quarter was artificially weak due to
inventory adjustments.

He said forthcoming newsflow on Roche drugs at medical
conferences this year — particularly data on Avastin’s use in
ovarian cancer due in June — would ultimately prove more
important for the share price.

Given Roche’s 20 percent premium to rivals, Deutsche has a
“neutral” rating on the stock.

Roche is trading at around 12 times expected 2011 earnings,
still at a premium to rival Novartis on 10, thanks to its
impressive drug development.

Roche also said on Thursday that U.S. healthcare reforms
would have a negative financial impact of around 200 million
francs this year.

Investment Advice

(Additional reporting by Ben Hirschler in London; editing by
Simon Jessop and David Cowell)
($1=1.051 Swiss Franc)

UPDATE 4-Roche sales up 6 pct on cancer drugs, top forecasts