Roche posts 8% rise in Q4 prescription drug sales as new launches offset biosimilar competition

Headline results for the fourth quarter:

Pharmaceuticals division sales

CHF 12 billion ($12.4 billion)

+8%

Overall revenue

CHF 15.4 billion ($15.9 billion)

+6%

Note: All changes are versus the prior-year period on a constant exchange rate basis unless otherwise stated

What the company said:

"In 2019, Roche achieved excellent operating results," remarked CEO Severin Schwan, adding "for 2020 we expect sales growth in the low- to mid-single digit range in spite of the even greater impact of the competition from biosimilars."

Other results:

  • Pharmaceuticals division sales in US: CHF 6.7 billion ($6.9 billion), up 11%
  • Pharmaceuticals division in international markets, including China: CHF 2.1 billion ($2.2 billion), up 2%
  • Pharmaceuticals division sales in Europe: CHF 2.1 billion ($2.2 billion), up 6%
  • Avastin: CHF 1.6 billion ($1.6 billion), down 6%, impacted by the first biosimilar launch in July last year
  • MabThera/Rituxan: CHF 1.5 billion ($1.5 billion), down 6%, negatively affected by biosimilar competition in Europe and Japan
  • Herceptin: CHF 1.2 billion ($1.2 billion), down 24%, hit by biosimilar launches in Europe, Japan and the US, with the latter market also affected  by the switch to Kadcyla in the adjuvant setting
  • Ocrevus: CHF 1 billion ($1 billion), up 55%, with increases in the US and "strong initial uptake" in international markets, including Germany, Italy, Spain and the UK
  • Perjeta: CHF 857 million ($882 million), up 16%, as sales grew "strongly" in all regions
  • Tecentriq: CHF 578 million ($595 million), up 136%, with strong sales growth in all regions
  • Hemlibra: CHF 459 million ($472 million), up 313%, driven by "very strong" uptake in the US, Japan and Europe
  • Kadcyla: CHF 388 million ($399 million), up 57%, with growth in the US and international regions boosted by use in patients with residual disease after surgery
  • Alecensa: CHF 220 million ($226 million), up 11%, with Europe and the international region being the main drivers
  • Full-year revenue: CHF 61.5 billion ($63.3 billion), up 8% on a reported basis
  • Full-year profit: CHF 14.1 billion ($14.5 billion), up 30% on a reported basis

Looking ahead:

Roche expects sales in 2020 to grow in the low- to mid-single digits at constant exchange rates, while core earnings per share growth is forecast to be "broadly in line" with this.

"For 2020, we see our newer products growing with the same dynamic, though we expect to have a bigger hit from biosimilars in the [US]," Schwan said, suggesting that the impact of biosimilars will likely be CHF 4 billion ($4.1 billion), up from about CHF 1.5 billion ($1.5 billion) in 2019. "But our newer products are selling very well and we expect to be able to more than compensate for the biosimilar impact," the executive remarked.

What analysts said:

Andrew Baum at Citi noted that revenue in the pharmaceuticals unit came in 1% below expectations in the second half of the year, although Hemlibra, Ocrevus and Tecentriq had all delivered above-consensus sales. Meanwhile, Zuercher Kantonalbank analyst Michael Nawrath said "the spectre of biosimilars has lost its terror, the market can once again concentrate fully on the innovative developments."

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