Roche Holding (RHHBY) reported sales of $13.7 billion (CHF12.4 billion), easily beating the Zacks Consensus Estimate of $12.9 billion. Sales were up 5% year over year in local currency. Growth was driven primarily by pharmaceutical sales in the U.S. and strong demand for immunodiagnostic products. The company reports results under two divisions: Pharmaceuticals and Diagnostics. All growth rates mentioned below are on a year-over-year basis and at constant exchange rates. Results in Detail Sales at the Pharmaceuticals division increased 4% to CHF9.8 billion driven by growth in the European region. Sales of the HER2 breast cancer franchise (+9%) were driven by strong demand for Herceptin, Perjeta and Kadcyla. Sales of Herceptin grew 4% on the back of higher demand due to a longer duration of treatment in combination with Perjeta, while the subcutaneous formulation of Herceptin is being increasingly adopted across Europe. Sales of Perjeta were strong in both Europe and the U.S. Sales of Avastin were up 4% due to increased demand in the ovarian, colorectal, lung and cervical cancer indications, following its launch in Europe and emerging markets. Strong sales of Rituxan/MabThera (+3%) also contributed significantly to the top line. Sales of the immunology franchise were driven by strong uptake of Esbriet, (+96%) and increased sales of Actemra/RoActemra (+14%) and Xolair (+22). The new subcutaneous formulation of Actemra, along with its use as a single agent, boosted sales. Strong demand, thanks to favorable clinical data and expanding patient access, drove Esbriet sales. Uptake of new launches -- Cotellic in skin cancer and Alecensa in lung cancer -- were also encouraging. However, sales of Pegasys (-50%) were hurt by competition from a new generation of treatments, while Valcyte/Cymevene (-21%) and Xeloda (-17%) faced generic competition. Sales of Tamiflu and Lucentis also declined in the U.S. Revenues at the Diagnostics division were CHF2.6 billion, up 5% driven by solid performance of the professional diagnostics (+7%) unit, which was in turn, fueled by the immunodiagnostics business (+12%). Tissue diagnostics (+13%) and Molecular Diagnostics (+11%) also performed impressively. However, sales of diabetes care tanked 11% due to the continued spill-over of Medicare prices to commercial plans for the blood glucose monitoring portfolio in the U.S. 2016 Outlook Roche expects sales to increase in low-to-mid single digits. The company expects core earnings to grow at a higher rate than sales. Moreover, Roche intends to increase its dividend further in 2016. Pipeline Update Roche's lead cancer immunotherapy drug, atezolizumab, was granted priority review by the FDA for advanced bladder cancer and non-small cell lung cancer (NSCLC). Atezolizumab is being investigated in a broad phase III clinical program in solid and hematologic cancers. In addition, the FDA granted breakthrough therapy designation to ocrelizumab for primary progressive multiple sclerosis in Feb 2016. The company plans to file the candidate for both relapsing and primary progressive multiple sclerosis in the first half of 2016. Roche conducted two identical phase III studies on lebrikizumab in patients with severe asthma. In Mar 2016, the company announced that one study met its primary clinical endpoint, while the second failed to achieve statistical significance. Hence, Roche is currently evaluating its future course of action for the asthma program. Last week, Roche, along with its partner AbbVie Inc. (ABBV), announced that the FDA has granted accelerated approval to Venclexta (venetoclax) for the treatment of patients suffering from previously treated chronic lymphocytic leukemia (CLL) with a 17p deletion. In Feb 2016, the FDA approved Gazyva for the treatment of relapsed or rituximabrefractory follicular lymphoma, the most common type of indolent non-Hodgkin lymphoma (NHL). Roche expects an approval in Europe later this year. We note that Gazyva is being evaluated in a large clinical program in NHL. Data from the phase III studies in diffuse large B cell lymphoma is expected later in 2016. Our Take Roche currently carries a Zacks Rank #3 (Hold). Sales in the first quarter were better than expected driven by broad based demand. New drug approvals such as those of Cotellic and Alecensa, also boosted sales. Oncology drugs were impacted by buying patterns in the U.S., which, however, will ease out as the year progresses. Tamiflu was impacted by a weak flu season. Headwinds in the form of currency volatility, along with generic competition for Xeloda and Valcyte, may continue to hurt sales. Going forward, we expect investors to focus on new drug approvals, as the top line could be marred by the entry of biosimilars (expected in the second half of 2017 in Europe) for key drugs like MabThera and Herceptin. Nevertheless, we are impressed by the company's efforts to grow its portfolio beyond oncology and foray into new avenues such as multiple sclerosis and asthma. Investors interested in the health care sector may consider Novo Nordisk A/S (NVO) and Johnson & Johnson (JNJ). Both stocks carry a Zacks Rank #2 (Buy). (We are reissuing this article to correct a mistake. The original article, issued yesterday, April 20, 2016, should no longer be relied upon.)Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ROCHE HLDG LTD (RHHBY): Free Stock Analysis Report NOVO-NORDISK AS (NVO): Free Stock Analysis Report JOHNSON & JOHNS (JNJ): Free Stock Analysis Report ABBVIE INC (ABBV): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research