Demand for pharmaceutical giant Roche’s COVID-19 tests helped to offset a decline in its core drugs business, the company said on Wednesday, as it reported sales for the first quarter of 2021 and confirmed its outlook for the year.
Shares in the Basel, Switzerland-based pharmaceutical titan, which is a leading provider of cancer treatments, rose 1.5% in Zurich trading.
Roche ROG, +1.69% reported sales of 14.9 billion Swiss francs ($16.2 billion) across the group in the first quarter of 2020. The sales figures represent a 1% fall in revenue from CHF15.1 billion francs in the same period last year, but a 3% rise at constant exchange rates — reflecting the relative strength of the franc against other currencies.
In a statement, Roche said that relative sales weakness in the first quarter was due to the comparable period in 2020 being largely unaffected by the pandemic. COVID-19 only started to have a significant impact on the company as of April 2020, the group said.
Roche’s mainstay drugs business was hampered by the pandemic because lockdowns led to a decline in demand for medicines that require regular visits to medical centers, such as for infusions. This was, in small part, balanced by additional sales of drugs used to treat COVID-19, such as treatments for coronavirus-associated pneumonia.
Sales in Roche’s pharmaceuticals division, which contributes to more than two-thirds of group revenue, fell 9% at constant currencies from 2020 levels to CHF10.6 billion. While new medicines experienced strong growth, the division took a CHF1.6 billion sales hit from competition from cancer biosimilars, which are rival versions of its off-patent drugs.
The smaller diagnostics business was more fortunate, with sales up 55% from 2020 levels to CHF4.3 billion. Growth was driven by the company’s diverse portfolio of COVID-19 tests, including products to test for coronavirus mutations, as well as a general rise in routine diagnostic testing.
“The uptake of our recently introduced diagnostic tests and medicines remains strong, while we continue to see the expected impact from biosimilars on sales of our established medicines,” said Roche Chief Executive Severin Schwan. “The upcoming acquisition of GenMark underlines our commitment to help control infectious diseases and antibiotic resistance.”
In March, the group agreed to buy U.S.-based diagnostic test maker GenMark GNMK, +0.12% in a $1.8 billion deal. Expected to close in the second quarter of 2021, the acquisition would give Roche access to molecular tests that can detect multiple pathogens from a single patient’s sample, speeding up the treatment process. GenMark would also add more COVID-19 tests to Roche’s roster.
The company also confirmed its outlook for 2021 on Wednesday, saying that sales are expected to grow in the low-to-mid-single-digit range at constant currencies, with core earnings per share projected to grow in line with sales. The group doesn’t report profits on a quarterly basis.