Roche posts good half year results

The Roche GroupThe Roche Group posted strong operating results in the first half of 2010. Group sales grew by 5% in local currencies (3% in Swiss francs; 7% in US dollars) to 24.6 billion Swiss francs. The Pharmaceuticals Division increased its sales by 4% in local currencies (1% in Swiss francs; 6% in US dollars) to 19.4 billion Swiss francs. Demand for the cancer drugs Avastin, MabThera/Rituxan, Herceptin, Xeloda and Tarceva continued to show strong growth. Overall sales of oncology products rose 9% in local currencies in the first half year, enabling Roche to solidify its leading market position in this segment. Other major growth drivers in the Pharmaceuticals Division included Lucentis in ophthalmology, Actemra/RoActemra for rheumatoid arthritis and Mircera for anemia. These positive factors more than offset the expected significant decline in Tamiflu sales. Excluding Tamiflu, sales growth was 6% in local currencies, again ahead of market growth. The Diagnostics Division expanded its market leadership as sales reached 5.3 billion Swiss francs in the first six months of 2010, a 9% growth rate in local currencies (7% in Swiss francs; 12% in US dollars).

This strong growth was led by the Professional Diagnostics unit’s immunoassay business and Diabetes Care's Accu-Chek Aviva, Accu-Chek Performa and newly launched Accu-Chek Mobile blood glucose monitoring systems, followed by Applied Science with strong growth in the cell analysis segment.

The Group's operating profit before exceptional items increased significantly by 11% in local currencies (10% in Swiss francs), again substantially above sales growth. This rise was driven by the growth in sales and by further productivity improvements. The Pharmaceuticals Division improved its operating profit (before exceptional items) by 9% in local currencies and 7% in Swiss francs to 8.0 billion Swiss francs, due primarily to higher sales and cost synergies from the Genentech integration. The Diagnostics Division’s operating profit grew substantially, advancing 45% in local currencies and 47% in Swiss francs to 947 million Swiss francs, due mainly to strong sales growth and ongoing programmes to increase operational efficiency.

Group net income increased 37% to 5.6 billion Swiss francs, primarily as a result of the much lower exceptional charges incurred in respect of the Genentech transaction in the first half of 2010 compared with 2009. Excluding exceptional items, Group net income attributable to Roche shareholders rose 8% in Swiss francs. Core earnings per share, which does not include exceptional items or amortisation and impairment of intangible assets, increased 11% in local currencies (9% in Swiss francs).

The Group's operating free cash flow remained very solid at 6.4 billion Swiss francs. Roche is accelerating repayment of the 48.2 billion Swiss francs borrowed on the capital market to finance the acquisition of all outstanding shares of Genentech in the first half of 2009. On 30 June 2010, 27% of the notes and bonds had already been repaid. Furthermore, in the second half of 2010 Roche will also repay, ahead of schedule, the 2.5 billion US dollar note due 1 March 2012. By the end of 2010 Roche will thus have repaid one third of the debt incurred to finance the Genentech transaction.

About Roche
Headquartered in Basel, Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world's largest biotech company with truly differentiated medicines in oncology, virology, inflammation, metabolism and CNS. Roche is also the world leader in in-vitro diagnostics, tissue-based cancer diagnostics and a pioneer in diabetes management. Roche's personalised healthcare strategy aims at providing medicines and diagnostic tools that enable tangible improvements in the health, quality of life and survival of patients. In 2009, Roche had over 80'€™000 employees worldwide and invested almost 10 billion Swiss francs in R&D. The Group posted sales of 49.1 billion Swiss francs. Genentech, United States, is a wholly owned member of the Roche Group. Roche has a majority stake in Chugai Pharmaceutical, Japan. For more information: www.roche.com.

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