Roche Holdings Ltd.’s (RHHBY) recently reported sales results for the first quarter of 2012. Revenues climbed 2% from the year-ago period, driven by growth in both the segments – Pharmaceuticals Division and Diagnostics Division.
Sales for the Pharmaceuticals Division climbed 2%, driven by strong sales of Pegasys (up 32%), MabThera/Rituxan (up 7%), Herceptin (up 7%) and Xeloda (up 15%). Continued uptake of Actemra/RoActemra (up 46%), as well as recently launched Zelboraf also added to the segment’s revenues.
These factors were offset by the reduction in sales of Tamiflu (down 24%) and Avastin (down 1%); decline in CellCept (down 19%), Boniva (down 31%) and NeoRecormon/Epogin franchise (down 28%) sales.
Revenues from the Diagnostics Division went up 4%, attributable primarily to an 18% increase in the Tissue Diagnostics segment, 9% rise in the Professional Diagnostics segment and an 8% jump in the Molecular Diagnostics segment.
Outlook for 2012
The company reiterated its forecast for 2012. Roche continues to expect total revenue and revenue from the Pharmaceuticals Division to grow in low to mid-single-digits in 2012. Sales from the Diagnostics segment are expected to surpass market growth. Performance of the Pharmaceuticals segment should be driven by new product launches and Roche’s diversified product portfolio.
Moreover, the company anticipates earnings to experience high single-digit growth in 2012.
Update on Illumina Acquisition
Roche has issued another letter to the shareholders of Illumina Inc. (ILMN), where, among other proposals, it requested the latter to elect Roche’s independent director nominees to Illumina’s Board of Directors at the annual meeting scheduled on April 18, 2012.
Roche has offered to acquire all the shares of Illumina for $51.00 per share (aggregate value $6.7 billion) in cash, up from the earlier offer price of $44.50. The offer is scheduled to expire on April 20, 2012.
Roche believes that this acquisition will strengthen its position in the sequencing and microarrays market. Moreover, it will help address the growing demand for genetic/genomic solutions.
We currently have a Zacks #3 Rank (short-term Hold rating) on Roche.
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