We hardly ever say "sorry" in response to friends' bad news. In fact, we only say "sorry" when we are responsible for our own faults. So, although your response can be literally translated into Chinese as "真的是太~糟糕了,听到这个消息我表示抱歉。", but the Chinese version sounds wired to most natives. "真的是太~糟糕了,听到这个消息我很难过。" is a better expression.