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Roche Holding AG’s (RHHBY - Free Report) performance in the first half was good on the back of continued strong demand for its diagnostics base business and new drugs to treat hemophilia, cancer and neurological disorders.
The company reported total sales of CHF 15.8 billion in the second quarter of 2022, flat year over year.
Sales in the first half of 2022 came in at CHF 32.3 billion, up 5% from a year ago. Core earnings per share totaled CHF 11.76 in the year, up from CHF 10.56 in the first half of 2021.
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 22.3 billion in the first half, up 3%. Strong demand for new drugs, namely Hemlibra (hemophilia), Ocrevus (multiple sclerosis), Evrysdi (spinal muscular atrophy), Phesgo (cancer) and Tecentriq (cancer) drove growth for this division.
The impact of competition from biosimilars for established cancer medicines like Avastin, MabThera/Rituxan and Herceptin has slowed down as expected.
The Diagnostics division’s revenues came in at CHF 9.9 billion, up 10%, as the base business recorded continued strong growth in all regions (+6%), with immunodiagnostics products, particularly cardiac tests, as the main contributors.
The Swiss pharma giant’s stock has lost 18.4% in the year so far compared with the industry’s growth of 9%.
Image Source: Zacks Investment Research
Results in Detail
Sales of Ocrevus, used to treat two forms of multiple sclerosis, increased 17% to CHF 2.9 billion as demand in both indications (relapsing and primary progressive forms of multiple sclerosis) remained strong, mainly in the United States.
Perjeta’s sales grew 5% to CHF 2.1 billion due to continued high demand in the International region.
Sales of Hemlibra surged 30% to CHF 1.8 billion, fueled by strong uptake in the United States, the International region and Europe.
Immuno-oncology drug, Tecentriq (for advanced lung cancer, urothelial cancer and breast cancer) recorded an 11% year-over-year sales growth to CHF 1.8 billion as sales increased due to high demand in the United States and Europe.
Arthritis drug Actemra/RoActemra recorded sales of CHF 1.5 billion, down 10% due to fewer hospitalized patients with severe COVID-19 pneumonia.
Herceptin sales came in at CHF 1.2 billion, down 16% due to biosimilar uptake in various countries.
Sales of Avastin, approved for multiple oncology indications, were down 29% to CHF 1.1 billion due to biosimilar competition.
Sales of Rituxan/MabThera (blood cancer and rheumatoid arthritis) declined 21% to CHF 1.1 billion due to biosimilar erosion.
Kadcyla sales soared 14% to CHF 1.1 billion.
Asthma drug Xolair raked in sales of CHF 1 billion, up 11% as sales grew in the chronic spontaneous urticaria indication.
Sales of lung cancer drug, Alecensa, rose 19% to CHF 745 million 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 609 million, up 11% as sales growth in Japan was partly offset by the sales decline in Europe. Roche and partner Regeneron (REGN - Free Report) have collaborated on 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.
Sales of ophthalmology drug Lucentis declined 17% to CHF 572 million, primarily due to competitive pressure. The first biosimilar version of Lucentis (with a restricted label) has come to market in the United States at the beginning of the third quarter of 2022.
Esbriet, indicated for idiopathic pulmonary fibrosis, declined 14% to CHF 457 million due to a reduced share of new patient prescriptions. The first generic versions were launched in the United States in the second quarter of 2022.
The spinal muscular atrophy drug, Evrysdi, generated sales of CHF 500 million on the back of strong uptake across all regions.
Phesgo sales came in at CHF 325 million, up 241% as sales continued to show a considerable uptake, especially in Europe and the United States.
Revenues in the Diagnostics division increased 10%. The Point of Care businesses recorded strong growth (+45) with COVID-19 testing.
2022 Guidance Reiterated
Sales are projected to remain stable or grow in the low-single digits (at constant exchange rates). Core earnings per share are estimated to grow in the low- to mid-single-digit range.
For 2022, Roche expects sales of COVID-19 medicines and diagnostics to decrease CHF 2 billion to CHF 5 billion. It expects sales to decline roughly CHF 2.5 billion due to biosimilars. Excluding the impact of these, sales are expected to grow in the high-single-digit range.
Our Take
Roche’s performance in the first half was good. The pharmaceuticals business remained stable and newer drugs continue to offset the decline in sales of legacy drugs. However, demand for COVID-19 tests is expected to decline in the second half of the year and this will impact the Diagnostics division which recorded solid growth in the last year due to the outbreak.
ALKS’ loss estimates for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed earnings in all the trailing four quarters, the average being 350.48%.
Sarepta’s loss per share estimates for 2022 have narrowed by 61 cents in the past 90 days. SRPT’s earnings have surpassed expectations in all of the trailing four quarters, the average surprise being 21.45%.
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Roche (RHHBY) 1H22 Earnings, Sales Grow, View Disappoints
Roche Holding AG’s (RHHBY - Free Report) performance in the first half was good on the back of continued strong demand for its diagnostics base business and new drugs to treat hemophilia, cancer and neurological disorders.
The company reported total sales of CHF 15.8 billion in the second quarter of 2022, flat year over year.
Sales in the first half of 2022 came in at CHF 32.3 billion, up 5% from a year ago. Core earnings per share totaled CHF 11.76 in the year, up from CHF 10.56 in the first half of 2021.
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 22.3 billion in the first half, up 3%. Strong demand for new drugs, namely Hemlibra (hemophilia), Ocrevus (multiple sclerosis), Evrysdi (spinal muscular atrophy), Phesgo (cancer) and Tecentriq (cancer) drove growth for this division.
The impact of competition from biosimilars for established cancer medicines like Avastin, MabThera/Rituxan and Herceptin has slowed down as expected.
The Diagnostics division’s revenues came in at CHF 9.9 billion, up 10%, as the base business recorded continued strong growth in all regions (+6%), with immunodiagnostics products, particularly cardiac tests, as the main contributors.
The Swiss pharma giant’s stock has lost 18.4% in the year so far compared with the industry’s growth of 9%.
Image Source: Zacks Investment Research
Results in Detail
Sales of Ocrevus, used to treat two forms of multiple sclerosis, increased 17% to CHF 2.9 billion as demand in both indications (relapsing and primary progressive forms of multiple sclerosis) remained strong, mainly in the United States.
Perjeta’s sales grew 5% to CHF 2.1 billion due to continued high demand in the International region.
Sales of Hemlibra surged 30% to CHF 1.8 billion, fueled by strong uptake in the United States, the International region and Europe.
Immuno-oncology drug, Tecentriq (for advanced lung cancer, urothelial cancer and breast cancer) recorded an 11% year-over-year sales growth to CHF 1.8 billion as sales increased due to high demand in the United States and Europe.
Arthritis drug Actemra/RoActemra recorded sales of CHF 1.5 billion, down 10% due to fewer hospitalized patients with severe COVID-19 pneumonia.
Herceptin sales came in at CHF 1.2 billion, down 16% due to biosimilar uptake in various countries.
Sales of Avastin, approved for multiple oncology indications, were down 29% to CHF 1.1 billion due to biosimilar competition.
Sales of Rituxan/MabThera (blood cancer and rheumatoid arthritis) declined 21% to CHF 1.1 billion due to biosimilar erosion.
Kadcyla sales soared 14% to CHF 1.1 billion.
Asthma drug Xolair raked in sales of CHF 1 billion, up 11% as sales grew in the chronic spontaneous urticaria indication.
Sales of lung cancer drug, Alecensa, rose 19% to CHF 745 million 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 609 million, up 11% as sales growth in Japan was partly offset by the sales decline in Europe. Roche and partner Regeneron (REGN - Free Report) have collaborated on 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.
Sales of ophthalmology drug Lucentis declined 17% to CHF 572 million, primarily due to competitive pressure. The first biosimilar version of Lucentis (with a restricted label) has come to market in the United States at the beginning of the third quarter of 2022.
Esbriet, indicated for idiopathic pulmonary fibrosis, declined 14% to CHF 457 million due to a reduced share of new patient prescriptions. The first generic versions were launched in the United States in the second quarter of 2022.
The spinal muscular atrophy drug, Evrysdi, generated sales of CHF 500 million on the back of strong uptake across all regions.
Phesgo sales came in at CHF 325 million, up 241% as sales continued to show a considerable uptake, especially in Europe and the United States.
Revenues in the Diagnostics division increased 10%. The Point of Care businesses recorded strong growth (+45) with COVID-19 testing.
2022 Guidance Reiterated
Sales are projected to remain stable or grow in the low-single digits (at constant exchange rates). Core earnings per share are estimated to grow in the low- to mid-single-digit range.
For 2022, Roche expects sales of COVID-19 medicines and diagnostics to decrease CHF 2 billion to CHF 5 billion. It expects sales to decline roughly CHF 2.5 billion due to biosimilars. Excluding the impact of these, sales are expected to grow in the high-single-digit range.
Our Take
Roche’s performance in the first half was good. The pharmaceuticals business remained stable and newer drugs continue to offset the decline in sales of legacy drugs. However, demand for COVID-19 tests is expected to decline in the second half of the year and this will impact the Diagnostics division which recorded solid growth in the last year due to the outbreak.
Roche currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks are Alkermes (ALKS - Free Report) and Sarepta (SRPT - Free Report) . While Alkermes sports a Zacks Rank #1 (Strong Buy), Sarepta has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
ALKS’ loss estimates for 2022 have narrowed to 3 cents from a loss of 14 cents in the past 60 days. Alkermes surpassed earnings in all the trailing four quarters, the average being 350.48%.
Sarepta’s loss per share estimates for 2022 have narrowed by 61 cents in the past 90 days. SRPT’s earnings have surpassed expectations in all of the trailing four quarters, the average surprise being 21.45%.