Flat sales at Roche as Swiss franc strength, health spending cuts and Avastin take their toll

First of the drug majors to report financial results for the third quarter of 2011, Switzerland’s Roche (ROG: SIX) this morning posted disappointing figures, with sales for the three months down 14.5% to 9.82 billion Swiss francs ($10.7 billion), impacted by a downturn in cancer drug Avastin (bevacizumab), the effects of global health care spending curbs and the strength of the Swiss franc. This was below expectations of 10.2 billion francs of analysts polled by Reuters. The stock fell 3.7% to 142.10 francs by 9am today.

In the first nine months of 2011 group sales at constant exchange rates increased by 2% (-12% in Swiss francs, +7% in US dollars); this is excluding flu drug Tamiflu (oseltamivir), sales, which as expected were significantly lower than in the previous year. Group sales overall were stable (-13% in Swiss francs; +6% in US dollars) at 31.5 billion francs. Sales performance in both the Pharmaceuticals and the Diagnostics Division reflects the strength of the group’s business, as well as the impact of the strong appreciation of the Swiss franc against all currencies relevant for Roche, the company noted.