Roche sales boosted by North American demand for Covid tests

Roche’s quarterly sales rose by a tenth, boosted by North American demand for rapid coronavirus tests, but the Swiss pharmaceuticals group predicted that revenue generated from Covid-19 treatments would decline this year.

Total first-quarter sales rose 11 per cent to SFr16.4bn ($17.1bn), on a constant currency basis, with the diagnostics division generating a 24 per cent gain in revenue from a year earlier to SFr5.3bn. That includes SFr1.9bn for Covid-19 rapid antigen and PCR tests. Sales of diagnostics in North America, which covers all tests carried out at home or in a healthcare setting rather than a lab, rose 59 per cent year-on-year.

The pharmaceuticals division sells Covid-19 antibody treatment Ronapreve in some markets, including Japan where sales soared, and the immunosuppressive drug Actemra, which is used to treat patients with severe Covid-19.

But Roche warned that it expected sales of Covid-19 medicines and diagnostics to decrease by about SFr2bn to SFr5bn this year.

Severin Schwan, chief executive, said this forecast did not include the possibility of a winter wave of the virus, which would drive higher sales of Covid-19 products in the fourth quarter.

Shares in the group declined nearly 2 per cent in early trading on Monday. They have shed more than 4 per cent this year.

Analysts have predicted that the coronavirus pandemic could expand the market for diagnostics. Thomas Schinecker, who leads that unit at Roche, said the Covid-19 pandemic had helped the company expand sales to labs of its devices used for molecular tests, which are now being used to detect other diseases.

Sales of molecular lab equipment rose 21 per cent year on year at constant exchange rates.

“You already see that the business is growing extremely strongly, because these systems are being utilised for other diseases”, such as certain cancers, hepatitis and HIV, Schinecker said. “So we do believe there will be an impact in the long term.”

Roche expects to lose about SFr2.5bn to biosimilars, generic versions of biologic drugs, with significant impact in China.

Overall, Roche confirmed its 2022 outlook, forecasting group sales would be stable or would grow in the low single digits at constant exchange rates. It has targeted an increase in core earnings per share in the low to mid single-digit range and expected to increase its dividend.

Roche needs to find new sites to enrol patients in neurological disorders, such as multiple sclerosis clinical trials, after war in Ukraine disrupted recruitment there and in Russia. Some 20 to 30 per cent of trial patients came from the two countries, which have historically been significant participants in neuroscience trials.

Bill Anderson, chief executive of Roche Pharmaceuticals, said the company was trying to keep Ukrainian patients already enrolled in the trials.

“We’ve been working very closely with the investigators in Ukraine to try to locate the patients, if they’re still in Ukraine, to make sure that they can get access to therapy,” he said.

For those who have left the war-torn country, he added, the trials sought to provide “a point of continuity through investigators at sites outside Ukraine”.

The company said it was not seeing any impact on trials that were due to publish data this year.