E Back In Red Ink

Today is a terrible Thursday with many reporting companies. It is also back in red ink over SARS-2 and its likely impact on global economies. Moreover Washington is back in deadlock over whether or not President Trump will survive the impeachment farce and whether or not a lefty gets to run against him for the Democrats..

A medical student in Wuhan, China, was diagnosed with SARS-2 (Coronavirus) in Kerala, India today. The US now has a patient-to-patient transmission case.The World Heatlh Organization declared a global emergency.

So as they say (but so far don't do) in France, au boulot, to work.


*Swiss drugmaker Roche reported its 2019 results which were good enough to make RHHBY one of the few stocks rising today. In Swiss francs its revenues rose 8.1% to 61.466 bn ($63.2 bn). Its pharma sales rose 10.3% to francs 48.516 bn.

Net income was francs 13.497 bn, and EPS was francs 15.62. [I am using the term francs without all the Swiss ID because Switzerland is the only European country using the currency. You are perfectly aware that we are not writing about CFA francs! And the dollar conversion rate is very easy right now!]

Non-GAAP EPS was higher at francs 17,416 bn or 20.16/sh. Cash flow from operations was up 12% to Fr 22.385 bn. By drugs the results were very mixed depending on whether or not there is generic competition to RHHBY's main cancer drugs. Herceptin sales were down 12% but still over Fr 6 bn, and it is being challenged along with MabTher/rituxin down 4% but still getting sales of fr6,477 bn; old drug Avastin up 4% at fr7.07 bn; and Xolair up 1% to fr 1.969 bn. Th

Meanwhile Perjetasold fr3.22 mn, up 29%; Ocrevus against multiple sclerosis fr3.71 bn up 57%; Actemra fr2.311 bn, up 8%; Lucentis fr1.826 bn up 8% also; Tecentriq fr1.875 bn up 143% and Kadcyla fr1.393 bn up 45%. Hemlibra for hemophilia also grew but not to over fr 1 bn. And its new gene therapy arm acquired last year by buying Spark is also garnering sales but they were not broken out.

Roche expects sales this year to grow in low to mid single digits—in francs—despite further generic and biosimilar competition. It also said it has developed a test for Corona virus which may boost flat sales for its diagnostics arm, whose sales barely budged last year. It is having problems getting the test into China where it is needed. It also hopes for research into Alzheimer's disease today on which results are due to be announced in March, alongside those for a rival drug from Eli Lilly at Washington U in St Louis, MO.

Roche proposed to up its dividend to 9 francs but we will get our payout at $1.07/sh in March or early April after the 35% Swiss withholding tax. ADR owners who can get the tax back under Swiss rules then get a second payout covering the tax. Our current dividend (before tax) is $1.07. The new tax has to be passed by the board. RHHBY stock gained ~1.6% today.

*Teva fell back 2.5% in premarket trading today to $10.13. Thursdays are bad for TEVA because Tel Aviv is shut Fridays for the Muslim Sabbath but open Sundays. So intermediaries exit.

"The EU Competition Authority is backing Britain's Competition and Market Authority in calling for fines against drug companies that “pay for delay” , as practiced by GlaxoSmithKline. There still has to be a final judgment if GSK appeals.JP Morgan now rates GSK neutral.

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