Roche Reports Slight Sales Increase in Q3

Roche (SIX:ROG) announced a slight increase in sales for the third quarter, exceeding analyst expectations.

Key Growth Drivers

The sales growth was mainly attributed to the pharmaceutical segment, which saw a 3% increase, driven by Actemra that faced less erosion from biosimilars than anticipated.

UBS analysts noted, “3Q sales are a small positive, but we largely see the underlying growth drivers as in-line. The much stronger Actemra sales will be seen as a lower quality beat and is unlikely to be sustained beyond the short-term.”

Other Strong Performers

• Phesgo: Rose 6% against consensus estimates.
• Hemlibra: Increased by 5%.
• Vabysmo: Grew by 4%.

These gains partially offset a 5% decline in Tecentriq.

Overall Growth

The third quarter also saw an acceleration in underlying pharmaceutical growth, with a year-over-year increase of 10% when adjusted for constant exchange rates, representing an improvement from 9% in Q2 and 7% in Q1.

In contrast, the diagnostics segment saw a slight decline, with growth reported at 7%, down from 9% in the previous quarter.

Future Outlook

Roche maintained its 2024 guidance for mid-single-digit sales growth at constant exchange rates, aligning with UBS projections of 7.2%.

UBS anticipates significant data releases in Q4 for** trontinemab** and prasinezumab, which they believe could drive Roche forward.

The company projects a high single-digit increase in earnings per share, excluding tax dispute impacts, and UBS estimates suggest a 10.9% growth.

Pipeline Adjustments

Roche plans to discontinue several Phase 2 programs, including RG6341 for chronic cough and tobemstomig, a bispecific for solid tumors, returning rights for bepranemab to UCB.

However, challenges remain, such as competition for Vabysmo against Eylea and from new therapies for Ocrevus in multiple sclerosis. Despite this, Roche is looking for growth opportunities within its product offerings.