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Chugai shares continue decline

Shares in Rocheís Japanese subsidiary, Chugai, fall to a two-year low over concerns that the company may not meet earnings and sales targets

Shares in Swiss-headquartered Rocheís Japanese subsidiary, Chugai, have fallen to a two-year low on the Tokyo Stock Exchange, over concerns that the company may not meet earnings and sales targets.

Shares in Chugai fell 3.7 per cent (JPY 68) to bottom out at JPY 1,750, the lowest since July 2005. Since July 2007, the shares have fallen 15 per cent, when the company admitted that it would probably not reach revenue or operating profit targets for FY10.

JPMorgan analysts were quoted as saying that investors might desert the stock and sell, as the company may cut its targets as early as January 2008. According to Bloomberg, the analysts have rated Chugaiís stock as "Overweight".

On 1 August, Chugai blamed severe sales competition for poorer sales of its anaemia medicine Epogin (epoetin alfa), as well as US safety concerns for the anaemia drug class as a whole. The company also cited the end of a drug-marketing agreement with France-headquartered sanofi-aventis.

Chugaiís 2010 targets include JPY 450bn (USD 3.9bn) in revenue and JPY 100bn (USD 866.8m) in operating profit. The firm says it has no immediate plans to change these forecasts, but might release new targets when it reports FY07 earnings early in 2008, according to a company spokesperson.

30th September 2008

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