RHHBY Roche Holdings Ltd AG (QX)

By Denise Roland 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 23, 2020).

Demand for coronavirus testing and a potential treatment for patients with severe Covid-19 buoyed Roche Holding AG in the first quarter, even as the pandemic hit health-care provision in other disease areas.

The Swiss company launched a diagnostic test for Covid-19 in mid-March. It also produces reagents that are used by laboratories to run their own tests for the virus, and said it had ramped up manufacturing of those products by a factor of 10 over the first quarter. Roche said Wednesday that those efforts offset declines in other parts of its diagnostics business, due to hospitals conducting fewer routine tests.

The health-care giant also benefited from soaring sales of an arthritis drug that some small independent studies have suggested could help patients with severe Covid-19 by damping down a potentially fatal immune overreaction to the virus. Sales of the drug, Actemra, surged 30% at constant exchange rates to 666 million Swiss Francs ($677 million) in the first three months of the year.

Most of that growth was likely due to hospitals using it to treat Covid-19 patients, said Bill Anderson, head of Roche's pharmaceuticals division. Roche is now running larger scale clinical trials to determine whether Actemra is effective in severe Covid-19 patients.

Roche said overall sales for its drugs weren't noticeably affected by the pandemic in the first quarter, rising 7% at constant exchange rates to 12.3 billion francs. The company stuck with its full-year guidance, saying it continued to expect full-year revenue to grow in the low-to-mid single digit range at constant exchange rates and for core earnings per share to grow broadly in line with sales.

Roche's business resulting from the pandemic could grow further, with the company planning to launch an antibody test next month. Such tests search for antibodies -- or tailor-made proteins produced by the body in response to new infections -- in the blood for signs that someone has been infected in the past. Chief Executive Severin Schwan said he was confident that the Roche test wouldn't suffer from the same reliability problems that have dogged many of the dozens of antibody tests launched so far.

"It's very easy to develop an antibody test, but not so easy to develop a precise, reliable antibody test," he said. "That's why you see the more serious competitors who have a reputation to lose are only now launching, because they have now validated tests."

Mr. Schwan added that in some countries testing was limited not by the supply of testing kits or supplies, but by the availability of the laboratory equipment and expertise needed to run the tests. "We have many customers where we are able to increase their capacity and provide more instruments, and they are not able to ramp up because they don't have know-how," he said.

Countries like Singapore, South Korea, Germany and Switzerland, which had invested in their testing infrastructure over the last few decades, now have a "huge advantage" because they were able to ramp up testing in response to the pandemic, he said.

Write to Denise Roland at Denise.Roland@wsj.com

(END) Dow Jones Newswires

April 23, 2020 02:47 ET (06:47 GMT)

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