Basel: Pharmaceuticals maker Roche Holding AG posted a 29% drop in net income for the first six months because of costs related to the takeover of California-based Genentech, but results were boosted by sales of the antiviral Tamiflu in the face of the swine flu pandemic.
The profit of 4.1 billion Swiss francs ($3.84 billion) compares with 5.7 billion francs in the year-earlier period, Roche said. Excluding exceptional items, net income attributable to Roche shareholders was up 11% at 5.2 billion francs ($4.9 billion).
Group sales were up 2 billion to 24 billion francs ($22.5 billion), an increase of 9% in Swiss francs.
“I am especially pleased about the excellent progress we’ve made in integrating Roche and Genentech,” said chief executive Severin Schwan. “Work at Genentech’s research and early development center in South San Francisco has continued seamlessly with the existing management team.”
Schwan said the company would be realizing synergies from the merger sooner than originally anticipated because of the consolidation of the manufacturing network and streamlining administrative functions.
The company said total one-time integration costs would be approximately 3 billion francs.
The acquisition strengthens Roche’s ability to deliver on innovation in its core pharmaceuticals and diagnostics businesses, Schwan said.
“The combined company has one of the strongest development portfolios in the industry, with 10 new molecular entities in ongoing or planned late-stage clinical development,” Schwan said.
Roche completed its $46.8 billion takeover of Genentech in March, and has said it plans to finish the integration by the end of the year.
The company said sales of Tamiflu accounted for 4 percentage points of sales growth in the pharmaceuticals division.
Total Tamiflu production capacity, including other manufacturers, will be expanded to 400 million packs annually by start of 2010, Roche said. The antiviral drug has been bought by governments building up stockpiles as one of the most effective ways to counter the flu pandemic pending the delivery of a swine flu vaccine.
Also driving the 11% sales growth of the pharma division were leading oncology medications, Pegasys for hepatitis and Lucentis for ophthalmology, Roche said.