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TMFHelical (98.71)

No Love For Roche

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January 03, 2007 – Comments (1)

Roche is one of those odd-ball pharma companies. It is hard to fit it into a mold. The Swiss (Basel, Switzerland) firm does not have an ADR, so it is difficult for US investors to have a stake. There are pink sheet options to investing in Roche, in particular RHHBY.pk. This appears to be available to CAPS, but no one has selected it to date.

I have a pending entry on this which should have opened today, but I noted that yahoo showed zero shares traded for most of the day. When (if?) yahoo posts the open and close data for the day, I'll send the CAPS team a note.

As for the company, they make most of their profit in pharmaceuticals, and the rest in medical and clinical diagnostics. Its about 4 to 1 in sales in favor of pharmaceuticals. But wait, of the pharma content, a little more than one third is actually based on Roche owning ~55% of Genetech (DNA) and >50% ownership of Chugai (Japan).

Take a look here and lets break it down some, it is a presentation of Q3 data:

http://www.roche.com/irp3q06e.pdf

I am particularly interested in YTD data (The 2005 annual is available as well, but we are well into 2006 and presentations are easier).

Note that Pharma is growing faster than diagnostics, lead products are Herceptin, Avastin, and Rituxan. Note that Genetech has a hand in each one, but Roche continues to derive income from them and it's ownership stake in Genetech. None are top 10 blockbusters, but none face near term generic competition either, being Mab drugs (note there is a recent concern with Rituxan regarding PML - the bane of tysabri).

But I like that Roche is a diagnostic leader, the diagnostic leader in fact. Diagnostics continues to be positioned for great future growth (most would say overdue). I like that Roche was the partner of choice for Affy's gene trip to evaluate cyps - drug metabolizing liver enzymes. Right now diagnostics is led (as one would expect) by diabetes evaluation - a somewhat crowded market. But I feel Roche is ideally positioned for the future in this niche.

1 Comments – Post Your Own

#1) On January 04, 2007 at 7:41 PM, TMFHelical (98.71) wrote:

Note:

Roche was not available for CAPS due to data feed issues. Shame that it is so tough to invest in this promising company.

Zz

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