Roche confirms 2020 outlook as COVID-19 diagnostics surge

The frantic global effort to test people for COVID-19 pushed Roche’s diagnostics division to record revenue, helping the Swiss drugmaker offset declining drug sales and keeping it on track to meet full-year 2020 targets.

Sales of diagnostics including tests for the new coronavirus, of which Roche offers several to both detect active and past infections, rose 2% through September to 9.7 billion Swiss francs ($10.6 billion), even when taking into account the Swiss franc’s strength that eroded revenue in the United States and Europe.

Revenue in the main drugs division, usually the Basel-based company’s workhorse, slipped 1% to 34.3 billion francs, as older cancer medicines Avastin, Herceptin and Rituxan lost ground to copies now that they are off patent and were only made up partially by the company’s newer medicines.

Roche shares were seen falling 1.9%, according to premarket indicators from Bank Julius Baer.

The diagnostics-buoyed report may foreshadow results from other COVID-19 testmakers including Abbott Laboratories, Becton Dickinson and Siemens Healthineers, which report results in coming weeks.

Roche confirmed its full-year 2020 outlook for sales to grow at a low- to mid-single-digit rate in constant currencies, with profit to rise roughly in line with sales, as Chief Executive Severin Schwan adds to his portfolio of COVID-19 tests later this year that have been in short supply amid the global pandemic.

“After the pandemic-related decline in the second quarter, sales stabilised in the third quarter due to continued strong demand for our new medicines and COVID-19 tests,” Schwan said in a statement. “Based on our current assessment, we confirm the outlook for the full year.”

Revenue through September slipped 5% to 44 billion Swiss francs as the rising value of the Swiss franc eroded reported revenue. Sales rose 1% in constant currencies. – Reuters