Roche Shares Trade Lower After Sales Decline
October 15 2020 - 5:25AM
Dow Jones News
By Cecilia Butini
Roche Holding AG shares fell on Thursday after the company
reported an on-year decline in sales in the first nine months.
The Swiss pharmaceutical major said sales from January to
September came in at 43.98 billion Swiss francs ($48.15 billion),
down from CHF46.07 billion the year prior.
After a dip in the second quarter due to the coronavirus
pandemic, sales stabilized in the third quarter, the company
said.
A boost in sales was particularly noticeable in the diagnostics
division, thanks mainly to PCR tests for Covid-19, Roche said.
However, the pharmaceutical division still reported a decline in
sales despite some signs of recovery in the third quarter.
At 0845 GMT, Roche shares traded 3.2% lower at CHF309.15.
According to Bryan Garnier, a decline in sales of blockbuster
oncology drugs Herceptin, Rituxan and Avastin--which was partly
fueled by the commercialization of biosimilars--resulted in Roche
missing market expectations.
"We could argue that Roche warned in 2Q already about a
larger-than-initially anticipated impact on sales from biosimilars
and Covid-19 impacts all together. There is actually more than
this," the investment bank said. It said a downturn in the
international region, which includes China, was stronger than
expected.
Bryan Garnier analysts expect this trend to reverse in the
fourth quarter, however.
Analysts at Citi anticipate that the recovery in the Chinese
market "will be slow, extending well into 2021 and proving a
continued drag on revenue growth."
The bank says slumped volume in China, predominantly of Rituxan,
Herceptin and Avastin, was driven by travel restrictions due to the
coronavirus pandemic, which prevented people from traveling to
receive their infusions and lowered hospital turnover.
Roche's decision to lower prices in China to secure access to
the National Reimbursement Drug List also had an impact on figures,
according to the company and Citi analysts.
Roche reiterated its 2020 guidance, saying that it expects sales
to grow in the low-to-mid-single digit range. It also said that it
plans to further increase its dividend in 2020.
Write to Cecilia Butini at cecilia.butini@wsj.com
(END) Dow Jones Newswires
October 15, 2020 05:10 ET (09:10 GMT)
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