Roche Q1 Sales Down, Confirms FY24 View; Stock Down

(RTTNews) - Shares of Roche Holding AG were losing around 3 percent in Switzerland after the drug major reported weak sales in its first quarter and confirmed fiscal 2024 outlook. Excluding COVID-19-related products, quarterly sales increasedy 7 percent.

For fiscal 2024, Roche continues to expect an increase in group sales in the mid single digit range at constant exchange rates. Core earnings per share are targeted to develop broadly in line with sales growth at constant exchange rates, excluding the impact from resolution of tax disputes in 2023. The company expects to further increase its dividend in Swiss francs.

Roche CEO Thomas Schinecker said, ": "We had a strong start into the year, with both our divisions reporting high single digit growth in their base business - excluding COVID-19 sales. After this quarter, the COVID-19-related impact on sales is largely behind us. The appreciation of the Swiss franc versus most currencies impacted sales reported in Swiss francs compared to the same period last year..... We are confident of growing our Group sales in the mid single digit range this year (at constant exchange rates) and therefore we confirm our outlook for 2024."

For the first quarter, group sales declined 6 percent to 14.40 billion Swiss francs from 15.32 billion francs last year.

At constant exchange rates, quarterly sales increased 2 percent. The company noted that strong demand for newer medicines as well as diagnostics products including immunodiagnostics, clinical chemistry tests and advanced staining solutions more than offset the anticipated decline in COVID-19-related sales and the impact of biosimilar/generic erosion.

After the latest quarter, the impact of the drop in COVID-19-related sales is largely over and there will be no further material impact on Group sales, the company noted.

Pharmaceuticals Division base business grew by 7 percent with strong global demand for newer medicines to treat severe diseases. Vabysmo for eye diseases, Phesgo for breast cancer, Ocrevus for multiple sclerosis, Polivy for blood cancer and Hemlibra for haemophilia A all recorded strong sales groqwth.

On a constant currency basis, Pharmaceuticals divisional sales increased 2 percent to 10.92 billion francs, reflecting the expected decline in sales of the COVID-19 medicine Ronapreve.

Diagnostics Division base business grew 8 percent, supported by growth across all regions because of demand for immunodiagnostic products, clinical chemistry tests and advanced staining solutions. Divisional sales grew 2 percent to 3.48 billion francs amid the lower demand for COVID-19 tests.

Sales in the United States increased 5 percent to 5.69 billion francs, driven by strong demand for newer medicines such as Vabysmo, Polivy, Ocrevus, Phesgo and Evrysdi, and Xolair.

In Europe, sales grew 11 percent 2.20 billion francs, while sales in Japan were down 45 percent to 649 million francs, reflecting the base effect of the supply of Ronapreve to the government in the first quarter of 2023.

Sales in the International region increased 12 percent to 2.38 billion francs, and in China, sales grew by 11 percent.

In Switzerland, Roche shares were trading at 223.60 Swiss Francs, down 2.7 percent.