GENEVA (AP) -- Swiss drug maker Roche Holding AG blamed the strength of the franc Thursday for a 9 percent year-on-year drop in first quarter sales, but also felt the impact of regulatory concerns over its Avastin cancer medicine and an expected drop in Tamiflu orders.
The company said sales fell to 11.12 billion Swiss francs ($12.4 billion) from 12.25 billion francs a year earlier when counting the weakness of the dollar and euro. Adjusting for the currency shifts, sales were stable.
Analysts had expected slightly better results and Roche shares dipped 1 percent to 131.80 francs ($147.481) on the Zurich exchange.
"In the pharma division the 16 percent reduction in revenue from Avastin due to uncertainty about reimbursement for the treatment of breast cancer in the United States had the biggest impact," noted analysts at Zuercher Kantonalbank.
The U.S. Food and Drug Administration recently ruled that Avastin is ineffective for treating metastatic breast tumors. Roche has been granted a first-of-a-kind public hearing to defend the drug's effectiveness in June.
Avastin is also approved for several types of colon, lung, kidney and brain cancer. Those uses have not been questioned by the FDA.
Orders for Roche's anti-influenza drug Tamiflu halved to 252 million francs as predicted, due to lower demand from governments as the perceived threat of swine flu ebbed.
Overall, the pharmaceuticals division reported a 10 percent drop in turnover to 8.71 billion francs, with Rituxan overtaking Avastin as the top-selling drug. Sales of diagnostics dipped 4 percent to 2.41 billion francs.
The Basel-based company, which reports earnings only every six months, sounded an upbeat note to investors who might be disappointed at the first quarter's figures.
"Based on our first-quarter sales, we are on track to achieve our targets for the full year," Roche chief executive Severin Schwan was quoted as saying in a statement. Excluding Tamiflu, the company is aiming for low-single digit growth in local currencies for 2011.
Schwan also cited promising trials for new drugs to complement its aging portfolio, which relies heavily on anti-cancer drugs Avastin, Rituxan and Herceptin.
"Since the beginning of the year we have already announced positive results from seven key phase II or III clinical trials, further underscoring our growth prospects for the coming years," Schwan said.