Pandemic and currency headwinds hurt Roche in first half

Roche has announced half-year results showing the COVID-19 pandemic affected sales of its key products, with currency headwinds also weighing on revenues.

The Swiss pharma’s figures came shortly after its arch-rival Novartis conceded that it had hit similar problems as the pandemic meant fewer patients started new courses of its drugs.

Four of the company’s key drugs Hemlibra for haemophilia, Ocrevus for multiple sclerosis, and breast cancer drugs Kadcyla and Perjeta were all below analysts’ expectations.

However there was a better than expected performance from the company’s anti-inflammatory drug Actemra, which has been used in trials to counter some of the symptoms of COVID-19.

Group sales were just shy of 29.3 billion Swiss francs ($26.8 billion), which according to an analysis by Jeffries equity research was below analysts’ consensus of around 30.2 billion Swiss francs ($32 billion).

The company’s pharma division brought in sales of 23.2 billion Swiss francs ($24.6 billion), below a consensus prediction of around 24 billion Swiss francs ($25.5 billion).

Aside from the impact of the pandemic, the figures were also affected by currency fluctuations – although group sales were increased by 1% in constant exchange rates, they declined 4% in Swiss francs as a result of its continued appreciation against most currencies.

Management is still targeting low-mid single digit growth for both sales and earnings per share for the year.

CEO Severin Schwan said that the company was maintaining its outlook for the year, after signs of a recovery in June.

He said: “Roche’s regular business was significantly impacted by the pandemic in the second quarter. But we now see clear signs of recovery. Furthermore, the uptake of our recently introduced medicines and diagnostic tests continues to be strong.”

Jefferies noted the strength of the company’s pipeline, which includes phase 3 trials for Huntington’s and Alzheimer’s drugs.

But Roche earlier this year ended development of its balovaptan for paediatric autism, a drug predicted to produce peak sales of around $3 billion if it had been approved.