BASEL, Switzerland (Reuters) - Roche Holding AG missed full-year profit forecasts due to disappointing sales of key cancer drugs and gave a Lackluster outlook for 2010, pointing up the wider challenges facing global drugmakers.
Roche has focused on developing promising new drugs rather than cutting costs as a way to combat looming patent losses, but still faces some of the same problems as rivals, which also include the impact of U.S. healthcare reform.
"Results clearly disappoint and 2010 guidance is no trigger for a positive sentiment either," said Kepler Capital Markets analyst Martin Voegtli.
"We will cut our short-term earnings forecasts slightly but remain clearly positive for the mid-to-long term outlook."
The world's largest maker of cancer drugs confirmed its 2010 profit forecast on Wednesday and said sales would rise at a mid-single-digit rate, which Bernstein analysts said was disappointing.
Its core earnings per share rose 10 percent in 2009 to 12.19 Swiss francs ($11.52), just behind the average forecast of 12.33 in a Reuters poll after big sellers Avastin, MabThera and Herceptin netted less than expected.
Roche said its $47 billion buyout of U.S. biotech partner Genentech meant customers had run down their stocks of the companies' drugs in the fourth quarter, cutting surpluses, but that this process had finished by the end of 2009.
Its stock fell 2.2 percent to 176.00 francs by 0850 GMT, underperforming the DJ Stoxx European healthcare index, which was down 1.0 percent.
Sector investors will now look to earnings from U.S. group Pfizer Inc, due later in the session, for more clues on how drugmakers hope to overcome tough industry fundamentals.
Roche trades at about 12 times forecast 2011 earnings, a similar multiple to local Swiss rival Novartis AG, reflecting their more impressive drug development, and more expensive than GlaxoSmithKline, Sanofi-Aventis SA and AstraZeneca.
It has had a boost from sales of antiviral Tamiflu thanks to the H1N1 swine flu pandemic, but sees that revenue stream falling from 3.2 billion francs to 1.2 billion this year. Roche hopes renewed fast growth of its cancer portfolio and arthritis medicine Actemra will compensate in 2010.
The group proposed a higher dividend than expected, at 6.00 francs per share, and said it would progressively reduce debt from its Genentech buyout, return to a net cash position by 2015 and continue to increase its dividend pay out ratio.
(Editing by David Cowell)
($1=1.058 Swiss Franc)