On February 4, 2021 Hoffmann-La Roche reported that solid results in 2020 (Press release, Hoffmann-La Roche, FEB 4, 2021, View Source [SID1234574595])
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Group sales increase 1%1 at constant exchange rates (CER); 5% decline in Swiss francs, as a result of continued appreciation of the Swiss franc against most currencies
Pharmaceuticals Division sales decline 2%; continued strong sales growth of newly launched medicines (+32%2, including Tecentriq, Hemlibra, Ocrevus, Perjeta and Kadcyla) largely offsets the impact of competition from biosimilars (CHF -5.1 billion at CER3), but not the additional COVID-19-related impact from missed medical appointments
Diagnostics Division sales grow 14% for the full year (+28% in the fourth quarter) due to COVID-19 diagnostics; more than offsetting a decline in routine testing due to COVID-19
Roche’s contributions to the fight against the COVID-19 pandemic:
Launch of 15 new diagnostic solutions for COVID-19
Key tests launched in the fourth quarter:
USA: Elecsys Anti-SARS-CoV-2 S antibody test, which can play a critical role in measuring a person’s vaccine-induced immune response
Europe: Elecsys SARS-CoV-2 Antigen test to support high-volume testing of suspected COVID-19 patients
Production capacity for SARS-CoV-2 tests and COVID-19-related medicines ramped up significantly at unprecedented speed; substantial funds committed to further expand supply chain capacities (>CHF 800 million)
Major partnerships: With Regeneron to increase global supply of investigational antiviral antibody combination (August), with Atea to develop a potential oral COVID-19 treatment (October), and with Moderna to include our recently launched antibody test in their ongoing vaccine trials (December)
Approvals for medicines in the fourth quarter:
USA: Gavreto (thyroid cancer); Xofluza (influenza); Xolair (nasal polyps)
Europe: Tecentriq plus Avastin (liver cancer), Phesgo (breast cancer), Xofluza (influenza)4
Strong pipeline: record number of 19 new compounds in phase III trials or filed for approval; investment in research and development further increased by 8% to CHF 12.2 billion
Core earnings per share (EPS) grow ahead of sales at 4% (-5% in CHF)
IFRS net income of CHF 15.1 billion, increasing 17% (7% in CHF), mainly due to the lower goodwill write-offs compared to the previous year
Board proposes dividend to increase to CHF 9.10. Subject to shareholder approval, this would be the 34th consecutive dividend increase)
Outlook for 2021: Despite the continued strong impact of biosimilars, sales are expected to grow in the low- to mid-single digit range, at constant exchange rates. Core earnings per share are targeted to grow broadly in line with sales, at constant exchange rates. Roche expects to increase its dividend in Swiss francs further.
Commenting on the Group’s results, Roche CEO Severin Schwan said: "Roche continues to make important contributions to fighting the COVID-19 pandemic. We developed in record time a comprehensive portfolio of diagnostic solutions and entered new partnerships to develop and produce effective COVID-19 medicines. The demand for our new medicines which benefit people living with serious conditions, such as cancer, multiple sclerosis, haemophilia and spinal muscular atrophy, remains high. Based on our rejuvenated portfolio and the significant progress made in developing our product pipeline, Roche is strongly positioned for future growth."
Group results
In 2020, Group sales rose 1% (-5% in CHF) to CHF 58.3 billion. The core operating profit increased 4% (-4% in CHF), reflecting the underlying business performance, and core EPS grew 4% (-5% in CHF), ahead of sales. The appreciation of the Swiss franc against almost all currencies had a significant adverse net impact on the results expressed in Swiss francs compared to constant exchange rates.
The IFRS net income increased 17% (7% in CHF). This increase is mainly due to the lower goodwill write-offs compared to the previous year.
Sales in the Pharmaceuticals Division decreased 2% to CHF 44.5 billion, mainly due to stronger than expected biosimilars competition and the COVID-19 pandemic. The new medicines (launched since 2012) continued their strong growth (+32%, or +CHF 4.7 billion). In 2020, they generated sales of CHF 18.4 billion, thus already contributing more than 40% to the division’s total sales.
While sales of the new medicines grew strongly, the impact of the competition from biosimilars for the established medicines Herceptin, Avastin and MabThera/Rituxan was significant, with an estimated combined CHF 5.1 billion of sales reduction in the US, Europe and Japan.