Roche cannot get rid of its brake pads
Published: Wednesday, Apr 24th 2024, 11:50
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At the start of 2024, the pharmaceutical company Roche had to contend with various obstacles. These make the figures for the first quarter look pale in comparison.
After Novartis, the competitor from the other side of the Rhine, shone just the day before with double-digit percentage growth rates and an improved outlook, Roche looks like a wallflower.
After all, the loss of coronavirus sales is likely to have had its last impact in the first quarter of 2024. However, the Swiss franc continues to weigh on the pharmaceutical company.
The pharmaceutical company reported sales of 14.4 billion Swiss francs between January and March, as it announced on Wednesday. This corresponds to a decline of 6 percent. At constant exchange rates, sales increased by 2 percent and were thus in line with Roche management's target.
The strong demand for newer medicines as well as diagnostics and tests more than compensated for the expected decline in Covid-19 sales and the erosion of sales due to generic products for long-established billion-dollar medicines, the press release states. Excluding Covid-19 products, Group sales increased by 7 percent.
Swiss franc remains a burden
The strong Swiss franc has clearly had a negative impact. It is also likely to leave its mark for the year as a whole, but not as clearly as in the first three months, the Group announced. It is difficult for a company like Roche to predict exchange rate fluctuations in geopolitically uncertain times like the current ones, explained CEO Thomas Schinecker in an interview with journalists.
Revenue in Swiss francs fell by 6% in both the Pharmaceuticals and Diagnostics divisions. As a result, pharmaceutical sales amounted to 10.9 billion Swiss francs and diagnostics sales to 3.5 billion Swiss francs. Roche traditionally does not publish profit figures after three months.
Cautious outlook confirmed
Roche is maintaining its cautious outlook for 2024 as a whole. The Group continues to expect a mid-single-digit percentage increase in sales at constant exchange rates. Core earnings per share are also expected to increase by a mid-single-digit percentage. In addition, the Group remains committed to increasing the dividend in Swiss francs.
Both investors and analysts are finding it somewhat difficult to assess the figures, as the current fall in the share price of more than 2% shows. Both the figures and the turnover are without any major surprises.
Superordinate image in focus
At Roche, it is rather the overarching picture that is the focus, according to a commentary. Last year, for example, the Group undertook a kind of fitness cure. The pipeline is being reviewed in order to concentrate in future on those candidates and therapeutic areas where Roche is most likely to excel.
"Since the third quarter of 2023, we have discontinued around 20 percent of our pipeline projects," said Schinecker. This optimization will continue. The Group is also in the process of optimizing its network of production sites.
In fact, the measures are somewhat reminiscent of those of the competitor from the other side of the Rhine. In recent years, Novartis has gradually transformed itself into a focused pharmaceutical group. This has recently brought the Group strong growth rates.
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