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Drug firm: no to deals
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February 28, 2001: 10:41 a.m. ET
Roche shies from big mergers even as core drug sales barely rise
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LONDON (CNN) - Roche Holdings squelched talk the Swiss drugs maker may need to strike deals on Wednesday as it reported a 14 percent rise in 2000 profits.
Chief Executive Franz Humer told Reuters that he sees no pressure for a big-scale merger or acquisition despite slow growth in drug sales: "If I look at what we have in the product pipeline, and what we have licensed in, I maintain our stance that we can manage with organic growth."
"I maintain the belief that it is not that easy or productive or value-creating going for a mega-merger," Humer told the news service, adding that Roche is still looking to buy products or product lines which fit its portfolio.
Many other leading healthcare firms have sought strength in cooperation recently, joining forces to create huge firms such as GlaxoSmithKline (GSK) and the recent purchase by Pfizer (PFE: Research, Estimates) of U.S. rival Warner-Lambert.
Lagging the market in drug sales
The assurances came as Roche, one of Europe's biggest drugs makers, reported operating profit on an adjusted basis rose to 5 billion Swiss francs ($3 billion), up from pro forma 4.4 billion Swiss francs in 1999. The pro forma figure takes into account Genentech, which Roche bought in June 1999.
Revenues rose 4 percent to 28.7 billion Swiss francs. But its core drugs segment didn't match up to expectations.
"The figures for last year also show lower than expected growth for our Pharmaceuticals division's prescription medicines," Fritz Gerber, Roche's chairman, said in a statement.
Sales in the pharmaceuticals segment rose 2 percent, when competitors were racking up double-digit growth rates last year.
Humer said Roche's pharma sales should pick up in the second half of this year and that diagnostic sales should see double-digit growth, while vitamin sales should grow modestly.
Shares of Roche fell 2.5 percent to 17,550 Swiss francs in Zurich.
-- from staff and wire reports 
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