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A Performance Update on Roche’s Pharmaceuticals Segment in August

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Revenue trends

Roche’s (RHHBY) Pharmaceuticals division reported revenues of 21.8 billion Swiss francs in the first half compared to 20.5 billion Swiss francs in the first half of 2017, reflecting ~7% YoY growth. Roche’s Pharmaceuticals division comprises oncology, immunology, neurosciences, ophthalmology, infectious diseases, and other therapeutic areas.

In Roche’s Pharmaceuticals division, its oncology business generated revenues of 13.1 billion Swiss francs in the first half compared to 13.0 billion Swiss francs in the first half of 2017, reflecting ~1.0% YoY growth at CER (constant exchange rates). Roche’s oncology business accounted for 60.3% of the company’s net revenues from the Pharmaceuticals division.

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In the first half, in Roche’s Pharmaceuticals division, the immunology and neuroscience segments generated revenues of 3.9 billion Swiss francs and 1.4 billion Swiss francs, respectively. This compared to 3.7 billion Swiss francs and 526.0 million Swiss francs in the first half of 2017, respectively, reflecting ~6.0% and ~164.0% YoY growth at CER.

In the first half, in Roche’s Pharmaceuticals division, ophthalmology and infectious diseases segments reported revenues of 818.0 million Swiss francs and 684.0 million Swiss francs, respectively. This compared with 727.0 million Swiss francs and 779.0 million Swiss francs in the first half of 2017, respectively, reflecting ~16.0% growth and an ~13.0% decline on a YoY basis at CER.

In the first half, Roche’s Pharmaceuticals division reported a core operating profit and margin of 10.3 billion Swiss francs and 47.2%, respectively, compared to 9.3 billion Swiss francs and 45.1% in the first half of 2017.

Expense trends

Roche’s Pharmaceuticals division reported the cost of sales of 4.5 billion Swiss francs in the first half compared to 4.2 billion Swiss francs in the first half of 2017, reflecting ~7.0% YoY growth at CER.

In the first half, Roche’s Pharmaceuticals division reported M&D (marketing and distribution), R&D (research and development), and G&A (general and administration) expenses of 3.1 billion Swiss francs, 4.6 billion Swiss francs, and 725.0 million Swiss francs, respectively. This compared with 3.1 billion Swiss francs, 4.4 billion Swiss francs, and 709.0 million Swiss francs, respectively, in the first half of 2017.

Among Roche’s peers in the pharmaceuticals market, Celgene (CELG), Amgen (AMGN), and Merck (MRK) reported revenues of $3.8 billion, $6.1 billion, and $10.5 billion, respectively, in the second quarter.

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