Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Roche expects higher 2021 sales as Delta spurs COVID-19 tests

Published 10/20/2021, 01:20 AM
Updated 10/20/2021, 05:01 AM
© Reuters. FILE PHOTO: A logo of Swiss pharmaceutical company Roche in Rotkreuz, Switzerland, April 12, 2012.    REUTERS/Michael Buholzer

By Pushkala Aripaka

(Reuters) -Roche raised its 2021 sales forecast on Wednesday after demand for COVID-19 tests and medicines was boosted by the highly contagious Delta variant and the wider business performed well, helping the Swiss drugmaker beat revenue expectations.

The company now predicts overall 2021 sales will grow in the mid-single digit range at constant exchange rates, having previously expected them to rise in the low to mid-single digit percentage range.

"The demand for coronavirus tests remained high in the third quarter due to the Delta variant," Chief Executive Severin Schwan said.

Roche in July had flagged an expected slowdown in demand for the tests in the second half of the year, but management was more confident this time.

"(COVID-19) testing is likely to continue into the fourth quarter, and likely into next year. The question is the level of testing," said Thomas Schinecker, head of Roche's diagnostics business.

That would depend on several factors, including the pace of vaccination, Schinecker added on a media call.

Group sales in the three months to September rose 8% to 15.97 billion Swiss francs ($17.29 billion), the company said, as diagnostics division revenues jumped 18%.

Analysts on average were expecting sales of 15.48 billion francs, according to Jefferies (NYSE:JEF).

"The quality of the beat is somewhat worse than we wished for - key growth drivers underperformed," Vontobel analysts said in a note, adding that the beat comes from Actemra, which profits from the pandemic, and a slower erosion of key oncology drugs.

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

Shares in the company were down 0.3% by 0848 GMT, compared to a near 1% rise in the wider European pharmaceuticals index.

Roche, whose medicines RoActemra/Actemra and Ronapreve have been critical to COVID-19 treatment in several countries, said supply of biological ingredients for those drugs was improving after the situation had been tight.

There have also been signs of recovery in the pharmaceuticals unit since the summer, the company said, after the pandemic hurt sales.

A plethora of new launches, including an Alzheimer's treatment if approved by U.S. authorities, are expected to bolster future sales at Roche as it faces increasing competition for older drugs.

Final data from a study of its experimental COVID-19 antiviral pill, which Roche is working on with Atea, will be submitted to a peer-reviewed publication and the partners will continue to analyse data, the company said.

The pill had failed to help patients with mild and moderate COVID-19 in a small study of mostly low-risk patients, delivering a major setback to the firms.

($1 = 0.9238 Swiss francs)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.