Roche's Q1 Performance Increases by 10%, And Total Revenue for the Year May Slow Down Due to COVID-19, Biosimilar Competition

On April 25, Roche announced that the company's sales rose 10% in the first quarter. But Roche CEO Severin Schwan recently predicted that the company's sales in 2022 may be in line with its 2021 sales performance due to the gradual slowdown in revenue growth from its COVID-19 products and the growing challenge of biosimilars.

According to the financial report, Roche’s revenue in the first quarter of 2022 reached 16.4 billion Swiss francs ($17.2 billion), an increase of 10% year-on-year at constant exchange rates. However, it should be noted that its COVID-19 products contributed a large part of the growth in the first quarter, and it is difficult to maintain the current market demand for COVID-19 products in the future. As a result, Roche expects sales of its COVID-19 business, which includes diagnostic tests and therapeutics, to decline rapidly from the second quarter of 2022, while also expecting slower overall growth for the rest of the year. In response, Roche expects losses related to COVID-19 drugs and diagnostics to be between $200 million and $5 billion in 2022.

In addition, the company's sales in pharmaceuticals increased 6%, including multiple sclerosis drug Ocrevus (over $1.5 billion in sales), hemophilia drug Hemlibra (nearly $900 million in revenue), breast cancer drug Phesgo, spinal cord Evrysdi, a muscle wasting drug, and Ronapreve-19, a COVID-19 drug sold mainly in Japan. In addition, due to the increasing competition for biosimilars, the related performance loss is expected to reach 2.6 billion US dollars, which specifically mentions the anti-cancer drugs Avastin, Rituxan and Herceptin. Total sales of the three drugs have fallen by nearly $595 million, and they will also face more intense competition from biosimilars in the Chinese mainland market in the future, Roche said. In this regard, Roche expects biosimilars to cost more than 2.5 billion Swiss francs in 2022.

Although Roche's oncology pipeline has been a strong performance supporter, it failed two clinical trials in the first quarter. In the phase III SKYSCRAPER-02 study, the investigational anti-TIGIT immunotherapy tiragolumab in combination with Tecentriq and chemotherapy failed to meet the primary endpoint of progression-free survival in patients with extensive-stage small cell lung cancer (ES-SCLC). Roche also announced that the Phase II acelERA trial evaluating its oral selective estrogen receptor degrader (SERD) giredestrant failed to meet its primary endpoint of progression-free survival in patients with advanced breast cancer.

However, Roche pointed to several new drugs expected to be approved in Europe in the future as well as new indication applications for existing drugs as potential new drivers of sales performance. In the first quarter of this year, the European CHMP recommended approval of mosunetuzumab as a treatment for follicular lymphoma and expanded the approval of Tecentriq for the treatment of early-stage non-small cell lung cancer. In addition, mosunetuzumab is also expected to be the first CD20xCD3 T cell-binding bispecific antibody that can be used to treat follicular lymphoma. Just a few weeks ago, the CHMP recommended approval of Polivy for the treatment of untreated diffuse large B-cell lymphoma.

Overall, Roche expects full-year 2022 sales to remain stable or grow by no more than 5% at constant exchange rates. A surge in COVID-19 infections this winter could boost the company's sales, but it may not happen, Schwan said.