Original from: Genomeweb
Roche on Thursday reported a 29 percent year-over-year increase in sales in its diagnostics division for full-year 2021, driven by momentum in the base business and continued demand for COVID-19 testing.
Overall, Roche reported CHF 62.80 billion ($68.09 billion) in revenues for the year, up 8 percent from CHF 58.32 billion in 2020 and up 9 percent at constant exchange rates, the firm said.
Roche CEO Severin Schwan said on a conference call to discuss the firm's financial results that there was an "enormous impact" on revenues due to COVID-19 but noted that there was also "solid growth" in the base business that should continue into next year as the company gets back to a more stable rhythm.
He added that the current demand for COVID-19 diagnostics is "incredibly high" and that the company expects a strong first quarter in COVID-19 testing.
The pharmaceuticals division had CHF 45.04 billion in 2021 revenues, up 3 percent from CHF 44.53 billion in 2020.
Meanwhile, Roche Diagnostics had sales of CHF 17.76 billion in 2021, up 29 percent from CHF 13.79 billion in 2020. For the fourth quarter, diagnostics sales increased 8 percent to CHF 4.46 billion from CHF 4.13 billion in the same quarter in 2020.
Within the diagnostics division, Molecular Lab revenues grew 28 percent to CHF 4.81 billion in 2021 from CHF 3.76 billion in 2020.
Core Lab revenues rose 21 percent in 2021 to CHF 7.47 billion from CHF 6.19 billion in 2020, contributing 42 percent to diagnostics sales. Revenues were driven by the immunodiagnostics business, specifically infectious disease and cardiac tests, and by sales in the Asia Pacific and Europe, Middle East, and Africa regions, Roche said.
Molecular Lab sales grew 28 percent to CHF 4.81 billion from CHF 3.76 billion in the previous year, contributing 27 percent to diagnostics sales. That growth was driven by the virology business, as Roche said the Delta variant pushed increases in COVID-19 testing, particularly high-throughput PCR testing. Roche Diagnostics CEO Thomas Schinecker said on the call that the molecular business growth was largely driven by COVID-19, but not entirely.
Point of Care revenues more than doubled during the year to CHF 2.58 billion from CHF 1.08 billion in the previous year and contributed nearly 15 percent to diagnostics division sales. The sharp increase was largely due to the rollout of the firm's SARS-CoV-2 Rapid Antigen test, Roche said. Schinecker noted that the firm got CE marking for its combination SARS-CoV-2 and influenza rapid antigen test and that it was working with the US Food and Drug Administration to get it approved for the US market.
Schinecker also said that Roche has delivered more than 1.2 billion COVID-19 tests since the start of the pandemic. He noted that future demand will depend on multiple factors, including the length of the current surge related to the Omicron variant, the emergence of new variants or re-emergence of previous variants, and the effectiveness of vaccines.
He said that the company has a capacity for antigen tests of more than 100 million per month but expects demand for antigen tests to drop sharply as summer nears, since the majority of antigen test orders are from governments and those orders fluctuate as surges come and go. As the respiratory season wanes, the antigen orders will see a "drastic drop," he said.
Schinecker also said that Roche has the capacity to produce between 50 million and 60 million COVID-19 PCR tests per month and currently has some safety stock in place, which is benefitting the company as it sees significant demand due to Omicron.
Schinecker provided an update on the progress of Roche's acquisition of GenMark Diagnostics as well, saying that the GenMark sales team has been integrated into Roche's US organization.
Diabetes Care sales rose 1 percent in 2021 to CHF 1.69 billion, from CHF 1.67 billion in 2020, contributing 10 percent to diagnostics sales, and Pathology Lab revenues grew 10 percent to CHF 1.20 billion last year from 1.09 billion in 2020 and contributed 7 percent to diagnostics sales, largely thanks to the advanced staining business.
Roche's 2021 net income was CHF 14.94 billion, with core EPS of CHF 19.81 per share, compared to CHF 15.01 billion, with core EPS of CHF 19.16 per share, in 2020.
As of Dec. 31, 2021, Roche had CHF 6.85 billion in cash and cash equivalents. In December, Roche completed a CHF 19.0 billion repurchase of its shares held by Novartis.
For 2022, the company expects sales to be stable or grow in the low single digits at constant exchange rates. Core earnings per share are targeted to grow in the low- to mid-single digit range, also at constant exchange rates.
Roche expects 2022 sales of COVID-19 medicines and diagnostics to decrease by approximately CHF 2 billion to about CHF 5 billion and sales losses to biosimilars in 2022 to be around CHF 2.5 billion. Excluding both of those effects, the firm anticipates sales growing in the high single digits.
Schwan said that the company is predicting very moderate growth for the year and sees two potential scenarios for COVID-19: one where the most recent Omicron surge is the last and the pandemic becomes endemic, with COVID-19 sales slowing starting in the second quarter of 2022; and one where the pandemic remains steady, with another wave or outbreak occurring. The company based its guidance on the former scenario, forecasting a slowdown in COVID-19 testing and medicines in Q2 2022.
