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 email@example.com
(END) Dow Jones Newswires
October 15, 2020 05:10 ET (09:10 GMT)
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