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Roche’s Q3 sales down 3% on currency headwinds, drop in COVID sales
Global Banking & Finance Review®
Company
By Ludwig Burger and Oliver Hirt
(Reuters) -Quarterly sales at Switzerland’s Roche slipped 3% as a slump in COVID-19 product sales and a strong Swiss franc overshadowed the launch of a drug against blindness, with an underwhelming guidance weighing on its shares.
Third-quarter sales came in at 14.3 billion Swiss francs ($15.9 billion), the Swiss drugs and diagnostics maker said in a statement, broadly in line with analyst estimates.
Revenues from new drug Vabysmo, against a common form of blindness in the elderly, which won approval early last year, came in better-than-expected at 656 million francs.
Roche is marketing the drug as a treatment option that can be given at longer intervals than the regimen of established Eylea by Bayer and partner Regeneron.
A high-dose version of Eylea for less frequent injections won U.S. approval in August, creating market doubts about Vabysmo’s longer-term growth.
CEO Thomas Schinecker – who is keen to restore Roche’s battered drug development record – said he was looking to acquire drug assets in all stages of development but that there was no rush.
He pointed to 10% sales growth during the quarter, when excluding currency headwinds and the slump in COVID sales. “Our young portfolio is doing very well,” he told reporters.
Roche said it was still expecting a currency-adjusted drop in group sales and core earnings per share at a “low single-digit” percentage in 2023.
But the stock fell as much as 5% and was down 3.2% at 0916 GMT on disappointment that the guidance was not raised, reflecting scepticism about any near-term development highlights.
“That is simply not enough to attract buyers in a market environment dominated by fear,” said Stephan Sola, a fund manager at Swiss wealth manager Plutos.
“Some investors think that they are not missing out on much at Roche in the near future and are selling,” he added.
Schinecker, at the helm since March, has said that Roche needs to become better at picking drug candidates in mid-stage development to advance to the final and most expensive phase of clinical testing, after major late-stage trial setbacks in the areas of Alzheimer’s and cancer immunotherapy last year.
Roche predicted a decline in 2023 sales of COVID-19 products of about 4.5 billion Swiss francs, down from a previous estimate of 5 billion francs.
(Reporting by Ludwig Burger in Frankfurt and Oliver Hirt in Zurich, Editing by Friederike Heine, Elaine Hardcastle and Tomasz Janowski)
Currency hedging is a financial strategy used to protect against potential losses due to fluctuations in exchange rates. It involves using financial instruments like options or futures to offset risks.
Corporate earnings refer to the profit a company makes after all expenses are deducted from its revenue. It is a key indicator of a company's financial performance.
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