Unlike other pharmaceutical companies that have been ravaged by patent losses, Roche has yet to face a challenge to its older biotech drugs by makers of copycat treatments and has launched a string of new, expensive cancer medicines.

The Basel-based firm hopes these so-called follow-on drugs will help it defend sales in its breast and blood cancer businesses once generic competition arrives.

Its strategy looked sound after first-half sales of Perjeta, which targets the same protein found on some cancer cells as Roche's older blockbuster Herceptin, surged 276 percent to 388 million Swiss francs (252 million pound).

Another breast cancer drug Kadcyla notched up 227 million in sales, compared to 83 million a year earlier.

Roche also won approval for Gazyva, a follow-on to its top-seller MabThera in the United States last November. The drug chalked up sales of 18 million in the first half.

A strong performance in its professional diagnostics business, where sales rose 9 percent, also helped to offset flat sales in its diabetes care unit.

First-half sales fell 1 percent to 22.97 billion Swiss francs ($25.5 billion), generating "core" earnings per share of 7.57 francs. Excluding the impact of currencies, including a weak U.S. dollar in particular, sales rose 5 percent.

Analysts in a Reuters poll had forecast sales to decline 1 percent to 22.98 billion francs and core earnings per share of 7.50 francs.

Roche confirmed guidance for low-to-mid single-digits sales growth this year, while expecting core earnings per share (EPS) to grow ahead of sales. It also plans to raise its dividend from 7.80 Swiss francs per share in 2013.

Berenberg analyst Alistair Campbell, who has a 'buy' rating on the stock, described the results as "solid" and said Roche was well on track to meet its full-year goals. Last week, cross-town rival Novartis reported second-quarter results that fell slightly shy of forecasts.

Shares in Roche, which have lagged those of Novartis so far this year, rose 2.1 percent in early trading.

PRICE PRESSURE?

Chief Executive Severin Schwan acknowledged pressure on healthcare authorities to rein in costs, but said Roche's highly-targeted cancer medicines had been spared the brunt of price pressure. He said prices for Roche had fallen 1 percent worldwide, less than for the overall market.

Still, budget-conscious healthcare authorities have already started to take measures to try and recoup some healthcare costs.

Italy is seeking 1.2 billion euros ($1.6 billion) in damages from Roche and Novartis for allegedly colluding to try and stop cancer drug Avastin from being used to treat wet age-related macular degeneration (AMD).

France has gone a step further and approved an amendment to the social security budget to allow the use of Roche's Avastin as a cheap alternative treatment for the eye disease.

Schwan said the two drugs had been developed for different purposes and Roche believed that Lucentis remained the right drug to treat the disease.

(Editing by Sophie Walker)

By Caroline Copley