Drug giant Roche posts 7% profit rise

Swiss drug maker Roche posted a seven percent rise in its 2011 net profit to 9.5 billion Swiss francs ($10.3 billion, 7.9 billion euros) on Wednesday, despite the impact of the strong currency against the dollar and euro. The performance was slightly up on analysts expectations who had predicted a figure of 9.3 billion francs, the AWP finance agency reported. Operating profit dropped nine percent to 15.1 billion francs due to the negative effect of the exchange rate but increased six percent at constant rates. Group sales went down 10 percent to 42.5 billion francs, the pharmaceutical giant said in a statement. The strengthening of the Swiss franc against the dollar and the euro had a "significant negative impact" on the results expressed in Swiss francs, the group said. "However the underlying currency translation exposure arising from non-Swiss franc revenues is significantly mitigated by the majority of the group’s cost base (80 percent) being located outside Switzerland," it said. "We achieved our sales and earnings targets for the year and also made significant progress with our pipeline," said chief executive Severin Schwan. The company head said Roche was continuing to build its business with new products, highlighting 17 "positive" advanced clinical trials last year. The board proposed a dividend increase of three percent to 6.80 Swiss francs. For 2012 Roche forecast low to mid single-digit growth in sales at constant exchange rates and a high single-digit increase in core earnings per share. Roche announced last week the launch of a $5.7 billion hostile takeover bid for Illumina, a US company specialising in gene sequencing. On Tuesday the firm said it intended to nominate a list of "highly-qualified, independent" candidates for election to Illumina's board to fill the seats of four departing directors. It also wants to increase the board's size from nine to 11 directors to give it a majority presence. Illumina president and chief executive Jay Flatley said the board would advise stockholders of its position regarding the takeover bid next week. "Our highly qualified board will continue to act independently and in the best interests of stockholders," said Flatley in a statement.