GENEVA (AFP) - Swiss pharmaceutical giant Roche said Thursday its first quarter sales fell four percent on a Swiss franc basis due to a drop in its key flu drug Tamiflu.

Overall group sales fell to 10.85 billion Swiss francs (6.8 billion euros, 10.8 billion dollars) from 11.35 billion francs the previous year.

Excluding Tamiflu, group sales rose two percent to 10.81 billion Swiss francs, the company said in a statement.

Roche confirmed its full year target of high single-digit sales growth on the basis of the first quarter figures.

“Despite considerably lower Tamiflu pandemic sales and significantly higher R&D spending, Roche is aiming for 2008 core EPS (earnings per share) at constant exchange rates to remain at least in line with the record level achieved in 2007,” it said.

Chief executive officer Severin Schwan said that Tamiflu sales had reached almost 750 million Swiss francs in the “strong first quarter benchmark” set in 2007.

Despite lower Tamiflu sales in the current quarter, “Roche is off to a very good start in 2008,” Schwan said.

“Excluding pandemic sales of Tamiflu, both divisions achieved above-market sales growth. This means we are on track to achieve the goals we announced for 2008,” he added.

Schwan said that Roche’s sales results had been heavily influenced by the recent decline in the US dollar vis-a-vis the Swiss franc, but that the company was partly hedged against this drop because it has substantial research and production facilities in the United States.

“We remain very confident to reach our initial guidance” for the full year, he told reporters on a conference call.

Regarding acquisitions, Schwan said Roche “has always shied away from mega-mergers” but was constantly on the look-out for smaller and medium-sized acquisitions, particularly in the diagnostics and biotech industries.

Roche said Tuesday it would buy British pharmaceutical company Piramed Limited for 160 million dollars, a move it said would boost its oncology and inflammatory disease activities.