Roche Raises Earnings Guidance After Results Beat Market Expectations — Update

By Helena Smolak

Roche Holding raised its profit outlook for the year after first-half sales and earnings rose, beating analysts' expectations, on growth in its pharmaceuticals and diagnostics businesses.

The Swiss pharmaceutical giant said Thursday that strong growth of its eye drug Vabysmo lifted pharma sales, while a recovery in its diagnostics business picked up pace due to the lack of a significant impact from waning demand for Covid-19 products. Meanwhile, the company continues to work to develop obesity drug candidates it acquired as part of its $3 billion-plus deal for Carmot Therapeutics.

Roche now expects this year's core earnings per share to grow by a high single-digit percentage at constant currencies when excluding the impact from tax disputes in 2023, having previously guided for mid-single-digit growth. The guidance lift was due to sales growth and cost discipline, Roche's Chief Executive Thomas Schinecker said on a call with reporters.

The company continues to expect sales growth in the mid-single-digit range at constant exchange rates in 2024.

Sales for the first six months of the year rose to 29.85 billion Swiss francs ($33.72 billion) from CHF29.78 billion a year earlier. Second-quarter sales rose 9% to CHF15.45 billion, as group sales were no longer hurt by the decline in Covid-19 sales, it said.

First-half sales in the pharmaceutical and diagnostics divisions both rose 5% at constant currencies to CHF22.64 billion and CHF7.21 billion, respectively. New product launches from hemophilia injection Hemlibra, multiple sclerosis treatment Ocrevus and cancer drug Tecentriq more than offset declines of rheumatoid arthritis treatment Actemra and its eye drug Lucentis after their patents expired in the U.S., it said. Actemra lost patent protection in the European Union as well.

Core earnings per share rose to CHF10.23 from CHF10.10.

Analysts polled by Visible Alpha had expected first-half sales of CHF29.38 billion and core EPS of CHF9.24.

Net profit for the half year was CHF6.26 billion, down from CHF7.14 billion.

Roche has halted 25% of the existing projects in its pipeline since the second quarter of last year, while adding seven external assets, including the GLP-1 drug candidates it acquired as part of its Carmot purchase.

Sales of blockbuster eye drug Vabysmo beat expectations, Schinecker said. The drug's sales nearly doubled to CHF1.79 billion in the first half, the company said. Analysts had been concerned that Vabysmo could face greater competition.

Roche said it expects to further increase its dividend.

Write to Helena Smolak at helena.smolak@wsj.com

(END) Dow Jones Newswires

July 25, 2024 03:14 ET (07:14 GMT)

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