Tuesday, June 17, 2014

The Motley Fool: Is Roche's Dividend In Danger?

Swiss giant Roche (NASDAQOTH: RHHBY  ) swims in treacherous waters. The pharmaceutical industry can be a challenging place to operate, as companies must spend $1 billion or more to develop a new drug and a majority of those that are put into development will fail to reach the market. Even if a company can beat the odds and get a drug to market, it will almost certainly face multiple competitors and a limited time of patent protection before generic manufacturers can sell knock-offs. 

Even with that backdrop, Roche looks like a good bet to continue paying a healthy dividend. Roche has established itself as the leading player in biologic drugs and oncology, and a rich pipeline (backed by spending nearly 20% of sales dollars on R&D) bodes well for the future. Biosimilars are a threat to the company's established products and emerging areas like immuno-oncology have no shortage of would-be rivals, but Roche pursues a good balance of risk and reward with its pipeline and steady debt reduction efforts should free up even more capital in the coming years.

Continue reading here:
Is Roche's Dividend In Danger?

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