Roche Backs 2021 Outlook Despite Lackluster Q1 Performance In Pharmaceuticals Division

Roche Holdings AG RHHBY posted Q1 sales of CHF 14.9 billion, up 3% Y/Y on a constant currency basis and down 1% on a reported basis.
Sales in the Pharmaceuticals Division decreased 9% to CHF 10.6 billion, hit by biosimilars competition, which cut CHF 1.6 billion from revenue.
The pandemic continued to negatively impact Pharmaceuticals sales, especially for medicines where regular visits to hospitals or health practices are needed.
It was partly offset by a 22% increase in Actemra/RoActemra sales used for treating patients with severe COVID-19-associated pneumonia.
The company posted a 55% increase to CHF 4.3 billion in diagnostic sales in Q1 thanks to strong demand for COVID-19 tests, including a new product to monitor virus mutations.
Roche affirmed its 2021 outlook, forecasting an increase in sales in the low-to-mid single-digit range, with core EPS growing roughly in line with sales. The company intends to increase its dividend.
Roche has cut some of its experimental lung drugs from its pipeline, including two mid-stage COVID-19 candidates, the company said in its Q1 Earnings Presentation.
The first drug, an Amgen-licensed anti-ST2 antibody RG6149, where the trial was started last year and slated to end in January; presumably, the results were not good, and it has been “removed from phase 2.”
Another COVID-19 asset, RG7880, was also “removed from phase 2.” Both were hoping to stop disease progression in patients with severe pneumonia from COVID.
The company did have better news on a different antiviral approach, with a phase 3 test of its oral COVID-19 antiviral AT-527 slated to start in Q2.
It also cut two Phase 1 asthma prospects: RG6151 and RG6244.
Price Action: RHHBY shares closed 0.6% lower at $42.02 on Tuesday.

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