Roche fourth-quarter sales helped by Covid-19 test business

Swiss drugmaker Roche got a fourth-quarter lift from its Covid-19 test business, where higher sales offset a decline at its drugs unit whose revenue was dragged down by the pandemic and patent-expired cancer drugs that lost ground to rivals.

Fourth-quarter sales rose 1 per cent at constant exchange rates to 14.3 billion Swiss francs (€13.2 billion). Pharmaceuticals sales fell 7 per cent to 10.2 billion francs, while diagnostics revenue, including from the Covid tests, rose 28 per cent to 4.1 billion francs.

For the full year, net profit rose to 15.1 billion francs from 14.1 billion in 2019. Sales were 58.3 billion francs, down 5 per cent from 61.5 billion a year ago as the strong Swiss franc weighed on revenue but 1 per cent higher at constant currency rates.

Roche’s three big cancer drugs – Mabthera, Herceptin and Avastin – are all under pressure from rivals’ cheaper biosimilar copies after going off patent and lost 5.1 billion francs in revenue during the full year. Meanwhile, sales of diagnostics rose, powered by a near-doubling of revenue for molecular tests like the PCR assays used worldwide to diagnose active Covid-19 infections.

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For this year, Roche expects sales to grow in the low-to mid-single digit range at constant exchange rates, as newer drugs help offset the hit from biosimilar copies. Core earnings per share are targeted to grow broadly in line with sales.

The company plans to boost its dividend to 9.10 francs per share. – Reuters