Roche sales hit by lockdowns, despite COVID-19 test boost

ZURICH: A surge in demand for Roche's COVID-19 tests, as some governments even sent military jets to pick up supplies, failed to offset the hit to other parts of the healthcare company's business from the COVID-19 pandemic, it said on Thursday.

Shares in the Swiss group slipped 1.5pc in early trading after it reported a 10pc drop in second-quarter revenue to 14.1 billion Swiss francs ($15.2 billion). Factoring out the strong Swiss franc, revenue fell 4pc.

Roche joined Swiss rival Novartis in reporting patients skipped hospital or doctor visits, instead hunkering down at home amid COVID-29 lockdowns.

Roche's multiple sclerosis drug Ocrevus, haemophilia treatment Hemlibra, eye drug Lucentis and blood cancer treatment Rituxan all took a beating, as the pandemic "continues to pose an enormous challenge worldwide," CEO Severin Schwan said.

COVID-19 diagnostics demand skyrocketed, with Roche testing head Thomas Schinecker saying orders for equipment soared to record levels.

"The orders we've gotten are as high as what we would normally sell in four to five years," he said. "We even had governments that flew in with military planes to pick up instruments."

Roche said several countries offered to send planes, but didn't name them.

First-half net income fell 5pc year on year to 8.5 billion francs, while sales slipped 4pc to 29.3 billion francs.

The Basel-based company stuck to its 2020, outlook, saying an uptick in revenue that started in June bolstered confidence that full-year sales would grow in the low- to mid-single-digit percentage range at constant exchange rates, with core earnings per share growth roughly matching that.

Roche still expects to be able to hike its dividend.

"Even though treatments were delayed, as of June, we've seen a strong recovery," Schwan said. "It's really based on this recovery that we feel confident to also confirm the initial outlook.