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Roche's (RHHBY) 2021 Earnings, Sales Grow on COVID-19 Tests
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Swiss pharma giant Roche Holding AG’s (RHHBY - Free Report) performance in the fourth quarter and 2021 was solid, driven by strong demand for coronavirus tests, recently launched drugs and diagnostics platforms.
Roche’s stock has gained 12.8% in the past year compared with the industry’s growth of 18.7%.
Image Source: Zacks Investment Research
The company reported total sales of CHF 16.1 billion in the fourth quarter of 2021, up 12% from the year-ago period.
Sales in 2021 came in at CHF 62.8 billion, up 8% from last year. Earnings per share totaled CHF 19.81 in the year, up from CHF 19.16 in 2020.
The company reports results under two divisions — Pharmaceuticals and Diagnostics. All growth rates mentioned below are on a year-over-year basis and at constant exchange rates.
Sales at the Pharmaceuticals division were CHF 45 billion in 2021, up 3%. Strong demand for newly launched medicines, namely Hemlibra (hemophilia), Ocrevus (multiple sclerosis), Tecentriq (cancer), Evrysdi (spinal muscular atrophy) and Phesgo (cancer) drove growth for this division. Additionally, medicines for the treatment of COVID-19 contributed to sales growth (Ronapreve for high-risk COVID-19 patients and Actemra/RoActemra for severe COVID-19 pneumonia). The impact of competition from biosimilars for oncology drugs Avastin, Herceptin and MabThera/Rituxan slowed down, and the second half of the year saw signs of recovery from the COVID-19 pandemic.
The Diagnostics division’s revenues came in at CHF 17.8 billion, up 29% on strong momentum in base business and continued high demand for COVID-19 tests.
Annual Results in Detail
Performance of the immunology franchise was driven by 27% growth in arthritis drug Actemra/RoActemra sales, which totaled CHF 3.6 billion, as several countries included this medicine in their treatment guidelines for severe COVID-19-associated pneumonia.
Sales of Avastin, approved for multiple oncology indications, were down 37% to CHF 3.1 billion due to biosimilar competition in the United States and Europe. Herceptin sales fell 28% to CHF 2.7 billion due to biosimilar competition across all regions. Sales of Rituxan/MabThera (blood cancer and rheumatoid arthritis) declined 38% to CHF 2.6 billion due to biosimilar erosion and COVID-19 pandemic restrictions.
Sales of asthma drug, Xolair, increased 5% to CHF 1.9 billion.
Perjeta’s sales grew 4% to CHF 4 billion due to high demand in China in both early and metastatic breast cancer settings. Kadcyla sales soared 16% to CHF 2 billion.
Sales of Ocrevus, used to treat two forms of multiple sclerosis, increased 19% to CHF 5.1 billion as demand in both indications (relapsing and primary progressive forms of multiple sclerosis) remained strong, mainly in the United States, while the pandemic still had a certain negative impact.
Immuno-oncology drug, Tecentriq (for advanced lung cancer, urothelial cancer and breast cancer), recorded 24% year-over-year sales growth to CHF 3.3 billion as sales increased in all regions, mainly in Japan, primarily due to the growth in the treatment of hepatocellular carcinoma (HCC).
Sales of Hemlibra surged 41% to CHF 3 billion, fueled by strong uptake in the United States and Europe.
Sales of lung cancer drug, Alecensa, rose 18% on solid growth across all regions.
Ronapreve, the antibody cocktail of casirivimab and imdevimab, for the treatment of recently diagnosed high-risk patients with mild to moderate COVID-19, generated sales of CHF 1.6 billion. Roche and partner Regeneron (REGN - Free Report) have collaborated for the development and manufacture of the cocktail.
Roche is responsible for distribution in Europe and other countries outside the United States, Regeneron is responsible for the United States.
Gazyva sales came in at CHF 678 million, up 9%.
Esbriet, indicated for idiopathic pulmonary fibrosis, declined 5% to CHF 1 billion. The recently approved spinal muscular atrophy drug, Evrysdi, generated sales of CHF 602 million.
Revenues in the Diagnostics division increased 29%, mainly due to Roche’s comprehensive and growing portfolio of COVID-19 tests. The Point of Care and Molecular Lab businesses recorded strong growth (138% and 29%, respectively) with COVID-19 testing.
2022 Guidance
Sales are projected to remain stable or grow in the low-single digits (at constant exchange rates). Core earnings per share are targeted to grow in the low- to mid-single-digit range. In 2022, Roche expects sales of COVID-19 medicines and diagnostics to decrease approximately CHF 2 billion to around CHF 5 billion. It expects a decline in sales due to biosimilars to be roughly CHF 2.5 billion.
Pipeline Progress
In November, the European Commission approved Gavreto for the treatment of adults with RET fusion-positive advanced non-small cell lung cancer (NSCLC). In October, Roche launched Susvimo in the United States, a first-in-kind therapeutic approach for neovascular or “wet” age-related macular degeneration (nAMD).
In January 2022, the FDA approved Vabysmo for the treatment of nAMD and diabetic macular edema (DME).
In November, Ronapreve was approved in Europe to treat non-hospitalized COVID-19 patients and for prophylaxis of the disease.
In December, the European Commission extended the marketing authorization for Actemra/RoActemra to include the treatment of COVID-19 in adults who are receiving systemic corticosteroids and require supplemental oxygen or mechanical ventilation.
Other Updates
In December, Roche completed the CHF 19.0 billion repurchase of its shares held by Novartis (NVS - Free Report) .
With the repurchase of shares from Novartis, Roche gains full strategic flexibility. NVS has been a shareholder of Roche since May 2001.
Our Take
Roche’s performance in 2021 was impressive on the back of the diagnostics division, which maintained its stellar performance on strong demand for COVID-19 tests. The pharmaceuticals business also recovered from COVID-19 disruptions.
Roche Holding AG Price, Consensus and EPS Surprise
However, the outlook indicated that sales will slow down in 2022 compared to 2021 due to reduced demand for its COVID-19 medicines and diagnostics. The uncertainty around the pandemic and development of immunity among the general population will impact demand.
Image: Bigstock
Roche's (RHHBY) 2021 Earnings, Sales Grow on COVID-19 Tests
Swiss pharma giant Roche Holding AG’s (RHHBY - Free Report) performance in the fourth quarter and 2021 was solid, driven by strong demand for coronavirus tests, recently launched drugs and diagnostics platforms.
Roche’s stock has gained 12.8% in the past year compared with the industry’s growth of 18.7%.
The company reported total sales of CHF 16.1 billion in the fourth quarter of 2021, up 12% from the year-ago period.
Sales in 2021 came in at CHF 62.8 billion, up 8% from last year. Earnings per share totaled CHF 19.81 in the year, up from CHF 19.16 in 2020.
The company reports results under two divisions — Pharmaceuticals and Diagnostics. All growth rates mentioned below are on a year-over-year basis and at constant exchange rates.
Sales at the Pharmaceuticals division were CHF 45 billion in 2021, up 3%. Strong demand for newly launched medicines, namely Hemlibra (hemophilia), Ocrevus (multiple sclerosis), Tecentriq (cancer), Evrysdi (spinal muscular atrophy) and Phesgo (cancer) drove growth for this division. Additionally, medicines for the treatment of COVID-19 contributed to sales growth (Ronapreve for high-risk COVID-19 patients and Actemra/RoActemra for severe COVID-19 pneumonia). The impact of competition from biosimilars for oncology drugs Avastin, Herceptin and MabThera/Rituxan slowed down, and the second half of the year saw signs of recovery from the COVID-19 pandemic.
The Diagnostics division’s revenues came in at CHF 17.8 billion, up 29% on strong momentum in base business and continued high demand for COVID-19 tests.
Annual Results in Detail
Performance of the immunology franchise was driven by 27% growth in arthritis drug Actemra/RoActemra sales, which totaled CHF 3.6 billion, as several countries included this medicine in their treatment guidelines for severe COVID-19-associated pneumonia.
Sales of Avastin, approved for multiple oncology indications, were down 37% to CHF 3.1 billion due to biosimilar competition in the United States and Europe.
Herceptin sales fell 28% to CHF 2.7 billion due to biosimilar competition across all regions. Sales of Rituxan/MabThera (blood cancer and rheumatoid arthritis) declined 38% to CHF 2.6 billion due to biosimilar erosion and COVID-19 pandemic restrictions.
Sales of asthma drug, Xolair, increased 5% to CHF 1.9 billion.
Perjeta’s sales grew 4% to CHF 4 billion due to high demand in China in both early and metastatic breast cancer settings. Kadcyla sales soared 16% to CHF 2 billion.
Sales of Ocrevus, used to treat two forms of multiple sclerosis, increased 19% to CHF 5.1 billion as demand in both indications (relapsing and primary progressive forms of multiple sclerosis) remained strong, mainly in the United States, while the pandemic still had a certain negative impact.
Immuno-oncology drug, Tecentriq (for advanced lung cancer, urothelial cancer and breast cancer), recorded 24% year-over-year sales growth to CHF 3.3 billion as sales increased in all regions, mainly in Japan, primarily due to the growth in the treatment of hepatocellular carcinoma (HCC).
Sales of Hemlibra surged 41% to CHF 3 billion, fueled by strong uptake in the United States and Europe.
Sales of lung cancer drug, Alecensa, rose 18% on solid growth across all regions.
Ronapreve, the antibody cocktail of casirivimab and imdevimab, for the treatment of recently diagnosed high-risk patients with mild to moderate COVID-19, generated sales of CHF 1.6 billion. Roche and partner Regeneron (REGN - Free Report) have collaborated for the development and manufacture of the cocktail.
Roche is responsible for distribution in Europe and other countries outside the United States, Regeneron is responsible for the United States.
Gazyva sales came in at CHF 678 million, up 9%.
Esbriet, indicated for idiopathic pulmonary fibrosis, declined 5% to CHF 1 billion. The recently approved spinal muscular atrophy drug, Evrysdi, generated sales of CHF 602 million.
Revenues in the Diagnostics division increased 29%, mainly due to Roche’s comprehensive and growing portfolio of COVID-19 tests. The Point of Care and Molecular Lab businesses recorded strong growth (138% and 29%, respectively) with COVID-19 testing.
2022 Guidance
Sales are projected to remain stable or grow in the low-single digits (at constant exchange rates). Core earnings per share are targeted to grow in the low- to mid-single-digit range. In 2022, Roche expects sales of COVID-19 medicines and diagnostics to decrease approximately CHF 2 billion to around CHF 5 billion. It expects a decline in sales due to biosimilars to be roughly CHF 2.5 billion.
Pipeline Progress
In November, the European Commission approved Gavreto for the treatment of adults with RET fusion-positive advanced non-small cell lung cancer (NSCLC).
In October, Roche launched Susvimo in the United States, a first-in-kind therapeutic approach for neovascular or “wet” age-related macular degeneration (nAMD).
In January 2022, the FDA approved Vabysmo for the treatment of nAMD and diabetic macular edema (DME).
In November, Ronapreve was approved in Europe to treat non-hospitalized COVID-19 patients and for prophylaxis of the disease.
In December, the European Commission extended the marketing authorization for Actemra/RoActemra to include the treatment of COVID-19 in adults who are receiving systemic corticosteroids and require supplemental oxygen or mechanical ventilation.
Other Updates
In December, Roche completed the CHF 19.0 billion repurchase of its shares held by Novartis (NVS - Free Report) .
With the repurchase of shares from Novartis, Roche gains full strategic flexibility. NVS has been a shareholder of Roche since May 2001.
Our Take
Roche’s performance in 2021 was impressive on the back of the diagnostics division, which maintained its stellar performance on strong demand for COVID-19 tests. The pharmaceuticals business also recovered from COVID-19 disruptions.
Roche Holding AG Price, Consensus and EPS Surprise
Roche Holding AG price-consensus-eps-surprise-chart | Roche Holding AG Quote
However, the outlook indicated that sales will slow down in 2022 compared to 2021 due to reduced demand for its COVID-19 medicines and diagnostics. The uncertainty around the pandemic and development of immunity among the general population will impact demand.
Roche currently carries a Zacks Rank #1 (Strong Buy). Another top-ranked stock in the large-cap pharmaceutical sector is Pfizer (PFE - Free Report) , which carries the same rank as Roche. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pfizer’s earnings estimates for 2022 for gone up from $4.59 to $6.14 over the past 60 days. PFE stock has risen 54.6% in the past year.