Original from: Genomeweb

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Roche said on Wednesday that its diagnostics division revenues grew 38 percent year over year, or 39 percent at constant exchange rates, in the first nine months of 2021, due to high demand for COVID-19 tests, recovery in the base business, and the launch of new diagnostic platforms. 

For the first nine months of 2021, the Basel, Switzerland-based company's total revenues grew 6 percent to CHF 46.68 billion ($50.60 billion) from CHF 43.98 billion during the same period in 2020. At CER, total revenues for the period rose 8 percent.

Its diagnostics revenues grew to CHF 13.31 billion compared to CHF 9.66 billion last year, while pharmaceuticals division revenues stayed mostly flat at CHF 33.38 billion compared to CHF 34.32 billion for the first nine months of 2020. 

Roche CEO Severin Schwan said on a conference call to discuss the financial results that the firm's sales were supported by the strong demand for Roche's COVID-19 testing portfolio, as well as a strong recovery for the base business.

For the third quarter of 2021, Roche Diagnostics reported that its revenues rose 18 percent year over year at CER to CHF 4.26 billion from CHF 3.58 billion. 

Within the diagnostics division, Roche's core lab business revenues rose 26 percent on a reported basis to CHF 5.61 billion from CHF 4.49 billion a year ago for the first nine months of the year. Its molecular diagnostics business revenues were up 36 percent to CHF 3.45 billion from CHF 2.58 billion, while its pathology lab revenues were up 14 percent to CHF 889 million compared to CHF 795 million a year ago. 

Sales for Roche's core lab business grew due to its immunodiagnostics segment, with infectious disease and cardiovascular tests as main contributors. Sales in the business grew mainly in Asia-Pacific and Europe, Middle East, and Africa (EMEA).

Regional sales in diagnostics grew in every range, up 18 percent in North America. Asia-Pacific was up 35 percent, and Latin America was up 63 percent, while EMEA growth increased 54 percent compared to 2020.

Growth in the company's molecular diagnostics business was driven by the virology business. Demand for COVID-19 testing continued due to the Delta variant, and sales were led by Asia-Pacific and North America. 

Roche Diagnostics CEO Thomas Schinecker said on the conference call that much of the molecular business was driven by PCR-based COVID-19 testing, which was the majority of COVID testing in the third quarter. 

He added that PCR test orders were "rather stable" with few spikes, but that antigen test orders were more variable, since governments are more likely to buy large amounts of antigen tests at one time.

Meanwhile, pathology lab sales were driven by growth in the advanced staining business.  

Schinecker said the firm has seen COVID-19 testing sales of $3.5 billion so far this year, with expectations that demand will continue into the fourth quarter. He noted that there will be a higher base effect in Q4, due to the high volume of COVID-19 testing sales in 2020. COVID-19 testing sales were $1 billion in the third quarter.

Both Schinecker and Schwan said that the future demand for COVID-19 testing is difficult to predict. Schinecker said the demand will "depend very much on the progress of vaccinations and their efficacy against new variants."

Schinecker added that the "virus has thrown us a couple of curveballs" with mutations and said the Delta variant is "probably not the last curveball that we'll see." The biggest impact on the diagnostic business is the issue of "sterile immunity," or the fact that vaccinated people can still carry the virus and infect others, he said. The lack of sterile immunity supports the need for testing, he continued.

Schwan said that there will be "at least some remaining business" as the "virus will stay with us," and that there will be a need for testing, although it's "very difficult for us to predict what exactly it will be."

The firm's diabetes care business revenues rose 4 percent to CHF 1.29 billion from CHF 1.26 billion, while point-of-care business revenues more than tripled to CHF 2.06 billion from CHF 541 million year over year. The main growth driver in the point-of-care business was Roche's SARS-CoV-2 Rapid Antigen test, particularly in EMEA, the company said.

During the third quarter, Roche launched three molecular respiratory pathogen panels that can be combined depending on the need of the patient, the firm said. Schinecker said that the panels can also be combined with the company's molecular SARS-CoV-2 panel. 

The firm's Elecsys GAAD Algorithm for diagnosis of hepatocellular carcinoma also received CE marking in the quarter.

Roche also entered a share purchase agreement to acquire the infectious disease diagnostic company TIB Molbiol Group during the quarter.

Roche raised its full-year 2021 guidance, expecting sales to grow in the mid-single digit range at constant exchange rates. It previously forecasted sales growth in the low- to mid-single digit range. Core earnings per share are targeted to grow broadly in line with sales at constant exchange rates. Roche also said it expects to increase its dividend in Swiss francs further.

Schwan added that in the first half of the year, the company expected the demand for COVID-19 testing would decline, but four weeks later saw a surge in testing as a result of the Delta variant. That surge was "part of the reason why we raised the outlook for the full year," Schwan said.

Source: Roche Diagnostic Revenues Grow 38 Percent in First Nine Months of 2021 on Strong POC Test Sales