GENEVA (AP) - Swiss drug maker Roche Holding AG blamed Switzerland's strong currency for a 14 percent drop in year-on-year sales for the first nine months of 2011.
The Basel-based manufacturer of cancer-fighting drugs said Thursday that sales over the three quarters - including those of its anti-influenza drug Tamiflu - fell to 24.4 billion Swiss francs from $28.4 billion in the same time period last year.
But it noted that in terms of U.S. dollars its sales rose 4 percent. Excluding Tamiflu, Roche said in a statement posted on its website, the drop was 13 percent in francs - but an increase of 6 percent when measured in dollars.
Tamiflu was a major source of income for the company during the swine flu outbreak, when governments stocked up on the drug to protect their citizens against a severe pandemic. But when the outbreak proved weaker than feared, sales dropped, resulting in a sharp year-on-year decline in sales.
In the third quarter alone, Roche said sales dropped 14.5 percent to 9.82 billion francs. The July-September sales were below market expectations of at least 10.2 billion francs.
The results sent Roche shares tumbling on the Zurich exchange. The company's stock lost 3.9 percent of its value and stood at 141.80 francs ($157.90) in mid-morning trading.
Roche, which is the biggest producer of anti-cancer medications, said Herceptin and MabThera - known in the U.S. and Canada as Rituxan - had become its "major drivers" along with eye medication Lucentis, rheumatoid arthritis medicine Actemra and its professional diagnostics business. It also cited the successful U.S. launch of targeted skin cancer medication Zelboraf.
The company saw sales of its best-selling drug Avastin decline, however, after a U.S. Food and Drug Administration panel ruled breast cancer patients should no longer use it. But it noted that an EU expert panel has recommended approval of Avastin as front-line therapy for ovarian cancer.
Analysts at Zuercher Kantonalbank said a final FDA decision could yet result in a positive surprise for Roche, if the independent agency's commissioner goes against the panel ruling. The analysts also noted Roche's strong product pipeline.
Roche CEO Severin Schwan called the company's third-quarter performance "solid" and in line with its expectations for sales excluding Tamiflu to grow at low single-digit rates, based on constant exchange rates.
"We're on track to achieve our targets for 2011," he said.
The company also has been pushing through a cost-savings program to raise its full-year earnings target in local currencies. Roche previously announced it would cut almost 5,000 jobs by the end of 2012.
The Swiss franc has hurt exporters this year by a run-up in its value that has made goods appear more expensive to foreign buyers. Goods sold at stable prices in foreign currencies have by turn earned less revenue in Swiss francs.
But the Swiss central bank has moved to limit the franc's strength to protect Swiss companies - and the nation's relatively strong, stable economy - by setting a ceiling on the value of the currency against euros.
Frank Jordans contributed to this report.