Chugai's 1st-qtr profit falls 50% to $63.7M

Chugai, the Japanese unit of Swiss drug major Roche, says first-quarter 2008 profit fell 50% year-on-year to 6.7 billion yen ($63.7 million), largely due to weak sales of its antiviral Tamiflu (oseltamivir), which is considered the best option for use against a possible pandemic of avian flu.

Tamiflu sales plummetted 93% to 1.6 billion yen, on lower government stockpiling, while income from its anemia drug Epogin (epoetin beta) fell 15% to 10.2 billion yen due to competition from Nesp (darbepoietin alpha), which was co-developed by the diversified Japanese firm Kirin Brewery and US biotechnology major Amgen.

On April 22, Chugai shares jumped 8.9% after it revised up full-year earnings predictions because Japanese price cuts on drugs were not as severe as expected. The National Health Insurance price of prescription medicines was lowered by 5.2% on average (Marketletter passim), while the firm had feared cuts as high as 7%. Its new guidance stipulates full-year 2008 net income of 29.0 billion yen versus 40.1 billion, an improvement on the 17.0 billion yen guidance it issued at the start of the year.