Concerns over the impact on the pharma sector of the broad economic slowdown in China appear to have receded from the previous quarter, judging from the lack of questions on the issue at Roche's full-year results briefing in London.

The state of China, and indeed emerging markets in general, escaped analysts’ questions, which focused instead on other issues around the Swiss group’s overall financial figures and forecast.

This was in contrast to the third quarter, where the China slowdown was still a newer factor and when Roche addressed what it described as possible "evolutions and volatility" occurring in emerging markets ([A#28151025007]).

The company's total Pharmaceuticals Division sales rose by 5% at constant currencies (+2% in Swiss francs) to CHF48.14bn in the 12 months, driven by its main market the US, and pharma sales in Asia-Pacific rose by a comparable 4% at constant exchange rates (CER) to CHF3.19bn. The region accounted for 9% of the pharma total.

The Asia-Pacific growth in pharma sales remained on a par with the 4% logged in the nine-month period, assuaging fears of a slowdown in the full year.

In Roche's largest Asian market, Japan - which is broken out separately from the rest of the region - pharma sales were up by 6% at CER (but 2% lower in Swiss francs) to CHF3.22bn, making up a further 9% of global pharma sales.

"There was a really good launch of Alecensa in Japan, with a front-line label, which contributed to growth," Roche Pharmaceuticals' COO Daniel O'Day COO told the investor briefing.

Avastin (bevacizumab), the HER2 franchise products including Herceptin (trastuzumab), as well as Alecensa (alectinib) drove Japanese pharma sales. Alecensa, launched for ALK-positive non-small cell lung cancer in the country in September 2014, generated CHF64m in 2015, the company said.

But Avastin remained by far the top performer in Japan, sales surging by 14% to CHF746m, helped by increased use across all indications but particularly in breast and lung cancer.

Roche's pharma business in the country is conducted through majority owned affiliate Chugai Pharmaceutical Co. Ltd., and Japan accounted for around 10% of the drug's global sales, O'Day noted.

China Solid Again

Despite worries of a slowdown, China pharma sales in 2015 remained positive overall, moving up 4% at CER to CHF1.66bn. However, as part of the division's international region, in growth terms the country came in behind Brazil, which surged by 10%, albeit to a more modest CHF748m.

Avastin was also a keystone product in China, where a new indication for lung cancer pushed up sales by 22% (no actual figure was disclosed), and elsewhere in the oncology portfolio, Herceptin was up by 21%, aided by a patient access scheme ([A#28150915002]).

The granting of reimbursement in China for Rituxan (rituximab) also helped boost international sales of this product.

"I’m really pleased to see that China has returned to some solid growth, with our strategic products now picking up some steam…and also Avastin in lung cancer, which is a significant unmet medical need in China," O'Day commented.

Avastin in China will be "an important product for us going forward," he reiterated ([A#28150804004]).

Elsewhere in the Asian pharma business, sales in South Korea were CHF279m (+14% at CER) and CHF91m in India (-3%).

More widely across the E7 key emerging markets, total pharma sales grew by 7%, together accounting for 10% of the pharma total, with notably strong volume growth in Brazil, the company said.

China Diagnostics Growth

Strong Chinese growth in Professional Diagnostics, helped by government health care investments, aided Asia-Pacific Diagnostics Division sales up 15% to CHF2.24bn, while tissue diagnostics also grew well in China and pushed Asia-Pacific growth in this sector to 22%.

Total Diagnostics Division sales in China were CHF1.33bn at CER (+22%).

Overall, Roche's total group sales edged up by 1% in Swiss francs and by 5% at constant exchange rates to CHF48.15bn. IFRS net income was up 4% in constant currencies (-5% in CHF) to CHF9.06bn.

Roche Ends 2015 On Brighter Emerging Markets Note

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