GENEVA — Swiss drug maker Roche Holding AG said Wednesday its full-year net profit rose 7 percent to 9.54 billion Swiss francs ($10.35 billion) in 2011, despite adverse exchange rates and falling sales.
Core earnings per share fell 4 percent to 12.30 francs from 12.78 francs, in line with analyst expectations.
The Basel-based company, which reported a net profit of 8.89 billion francs for 2010, is trying to complete a hostile takeover of U.S.-based DNA diagnostics firm Illumina Inc. for $5.7 billion. San Diego-based Illumina has rejected the offer and adopted a "poison pill" provision to prevent an unwanted takeover of the company.
"We achieved our sales and earnings targets for the year and also made significant progress with our pipeline," Severin Schwan, Roche's chief executive, said in a statement.
He cited 17 positive late-stage clinical trials in 2011 and several important regulatory filings. These include two potentially lucrative skin cancer drugs — Erivedge for advanced basal cell carcinoma and Zelboraf for metastatic melanoma.
"The planned acquisition of Illumina will strengthen our presence in the fast-growing sequencing market and enable the discovery of complex biomarkers for research and clinical use," said Schwan. Roche expects the market for DNA sequencing, where Illumina is a world leader, to grow to $2 billion in 2015 from $1 billion today.
"We think gene sequencing will be one of the really big technologies of the future," Schwan said.
Roche expects group sales to grow by a low to mid-single digit rate provided exchange rates remain stable.
The world's biggest manufacturer of cancer drugs, which reports earnings only every six months, has battled against the strength of the Swiss franc. Sales fell 10 percent to 42.53 billion francs partly as a result of the adverse exchange rate.
Healthcare reforms resulting from budget cuts, and a $600 million drop in sales of Avastin to treat breast cancer, also affected pharmaceutical sales last year. Revenue from Tamiflu also fell by about $500 million compared to the previous year, as governments ceased stockpiling the drug in preparation for a flu pandemic.
Sales growth was strongest in emerging countries, especially in China, while Europe and Japan lagged behind.
Analysts at Zuercher Kantonalbank said the annual results were encouraging, in particular Roche's pipeline of new drugs, the peer-beating growth projections and the proposed dividend increase of 3 percent to 6.80 francs.
Roche shares closed 1.5 percent lower at 153.40 francs ($168.09) on the Zurich exchange.