Roche Stock Up On Higher Q1 Sales At Constant Rates; Backs FY21 OutlookApril 28, 2021
Shares of Roche were gaining around 2 percent in Swiss trading after the drug major reported Wednesday a 3 percent rise in first-quarter sales at constant currency basis mainly driven by strong growth in Diagnostics Division. Sales, on a reported basis, edged down 1 percent mainly with significant impact from biosimilars.
Looking ahead for fiscal 2021, the company continues to expect sales to grow in the low- to mid-single digit range, at constant exchange rates, despite the continued strong impact of biosimilars.
Core earnings per share are still targeted to grow broadly in line with sales, at constant exchange rates.
Roche expects to increase its dividend in Swiss francs further.
Roche CEO Severin Schwan said, “The uptake of our recently introduced diagnostic tests and medicines remains strong, while we continue to see the expected impact from biosimilars on sales of our established medicines. ..I am particularly pleased about the highly encouraging study results of our immunotherapy Tecentriq in early lung cancer and of faricimab in ophthalmology.”
Regarding its proposed $1.8 billion acquisition of GenMark Diagnostics, the company said the deal would give it access to a novel technology that can test a wide range of pathogens with one patient sample. It will broaden Roche’s molecular lab portfolio, including tests for COVID-19. The transaction is expected to close in the second quarter of 2021.
Group sales for the first quarter were 14.93 billion Swiss francs, compared to 15.14 billion francs a year ago.
Sales in the Pharmaceuticals Division were 10.60 billion francs, down 14 percent on a reported basis and down 9 percent at constant rates, mainly because of the continued biosimilars competition and the COVID-19 pandemic. The new medicines, launched since 2012, grew 20 percent and generated sales of 5.2 billion francs.
The company noted that the impact of biosimilars on sales of the established cancer medicines MabThera/Rituxan, Avastin and Herceptin remained significant, especially in the US. These medicines caused a combined sales reduction of 1.6 billion francs.
All regions recorded weak Pharmaceuticals sales in the quarter. Sales in United States fell 20 percent to 5.29 billion francs, Europe sales fell 4 percent, Japan sales declined 10 percent, and sales in international region dropped 6 percent. At constant rates, international sales were flat.
However, Diagnostics Division sales were 4.33 billion, a strong growth of 50 percent on a reported basis and 55 percent at constant rates, mainly due to Roche’s comprehensive and growing portfolio of COVID-19 tests.
The Point of Care and Molecular Lab businesses made the largest contributions with COVID-19 testing. All regions reported very strong sales growth.
In Switzerland, Roche shares were trading at 331.20 francs, up 1.97 percent.
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