Roche reports strong 2024 results with 7% sales growth; fourth quarter marks third straight quarter of 9% growth

Original from: Roche

·  Group sales grew by 7% at constant exchange rates (CER; 3% in CHF), driven by strong demand for both medicines and diagnostics.

·  Excluding COVID-19, Group sales increased by 9%. COVID-19 will not adversely impact our results from 2025 onwards.

·  The fourth quarter was the third consecutive quarter of 9% sales growth, highlighting the very positive momentum.

·  Pharmaceuticals Division sales rose by 8% (excluding COVID-19 medicine: 9%) on growing demand for newer medicines; top growth drivers were Vabysmo (severe eye diseases), Phesgo (breast cancer), Ocrevus (multiple sclerosis) and Hemlibra (haemophilia A).

·  Diagnostics Division sales increased by 4%, reflecting the base effect of the sales of COVID-19 tests in the prior-year period; strong momentum in the Diagnostics Division’s base business continued with an increase of 8% due to higher demand for immunodiagnostic, pathology and molecular solutions.

·  Core operating profit grew by 14% (8% in CHF), driven by higher sales, improved gross margin and effective cost management; core earnings per share rose by 7% (1% in CHF).

·  Core earnings per share excluding the impact of the resolution of tax disputes in 2023 rose by 12%, exceeding the guidance for 2024.

·  IFRS net income decreased by 19% (26% in CHF), mainly due to impairment charges to goodwill related to Flatiron Health and Spark Therapeutics.

·  Operating free cash flow increased by 34% (CER) to CHF 20.1 billion.

·  Highlights:

 - Launch of cobas Mass Spec, a transformative innovation in mass spectrometry

 - EU approval for Vabysmo prefilled syringe

 - US acceptance of supplemental Biologics License Application for Columvi combination

 - Positive data on blood cancer medicines Columvi, Lunsumio and Polivy, eye medicine Vabysmo, Duchenne muscular dystrophy medicine Elevidys and breast cancer therapy Itovebi

 - Acquisition of Poseida Therapeutics for a range of potentially first- and best-in-class cell therapies across oncology, immunology and neurology

 - CE mark for new and updated molecular cobas 6800/8800 systems for enhanced laboratory efficiency and testing capabilities

·  Board proposes dividend increase to CHF 9.70. If approved by shareholders, this would be the 38th consecutive dividend increase.

Outlook for 2025

Roche (SIX: RO, ROG; OTCQX: RHHBY) expects an increase in Group sales in the mid single digit range (CER). Core earnings per share are targeted to develop in the high single digit range (CER). Roche expects to further increase its dividend in Swiss francs.

Roche CEO Thomas Schinecker: “2024 was a strong year for Roche. In the fourth quarter, we continued our very positive momentum for the third consecutive quarter with Group sales growth of 9% (CER). Core earnings per share exceeded the guidance raised at half year.

We are proud to have made a positive impact on patients’ lives in 2024 with the launch of two new medicines – Itovebi for a hard-to-treat breast cancer and PiaSky for a serious blood disorder – as well as our new solution for continuous blood glucose monitoring and our innovative system for fully automated mass spectrometry.

Last year, we substantially strengthened our pipeline through the acceleration of internal key programmes and new partnerships and acquisitions such as Poseida Therapeutics for cell therapy in oncology and autoimmune diseases.

Roche is well positioned for future growth.”

Group results

In 2024, Roche achieved sales growth of 7% (3% in CHF) to CHF 60.5 billion.

Core earnings per share rose by 12%, excluding the base effect of the resolution of tax disputes in 2023. Including this impact, core earnings per share increased by 7%.

The appreciation of the Swiss franc against most currencies had a significant impact on the results reported in Swiss francs compared to constant exchange rates.

Strong demand for both pharmaceutical products and diagnostic solutions more than made up for the expected decline of CHF 1.1 billion in COVID-19-related sales and an impact of CHF 1.0 billion from the loss of exclusivity on Avastin (various types of cancer), Herceptin (breast and gastric cancer), MabThera/Rituxan (blood cancer, rheumatoid arthritis), Esbriet (lung disease), Lucentis (severe eye diseases) and Actemra/RoActemra (rheumatoid arthritis, COVID-19).

Core operating profit rose by 14% (8% in CHF) to CHF 20.8 billion, driven by higher sales, improved gross margin and effective cost management.

IFRS net income decreased by 19% (26% in CHF) to CHF 9.2 billion, mainly due to impairment charges to goodwill of CHF 3.2 billion related to Flatiron Health and Spark Therapeutics.

Sales in the Pharmaceuticals Division increased by 8% to CHF 46.2 billion, with newer medicines for severe diseases continuing their strong growth.

The top four growth drivers – Vabysmo, Phesgo, Ocrevus and Hemlibra – achieved total sales of CHF 16.9 billion. This represents a plus of CHF 3.3 billion at CER compared to 2023.

Vabysmo, launched in early 2022, continued to be a major growth driver, generating sales of CHF 3.9 billion on growing demand in all regions.

Sales of Avastin, Herceptin, MabThera/Rituxan, Esbriet, Lucentis and Actemra/RoActemra decreased by a combined CHF 1.0 billion (CER) due to the impact of loss of exclusivity. Sales of the COVID-19 medicine Ronapreve were minimal compared to sales in Japan of CHF 0.5 billion in 2023.

In the United States, sales rose by 9%. Vabysmo, Ocrevus, Xolair (allergies) and Polivy were the main growth drivers. This growth more than compensated for the decline in sales of Lucentis (severe eye diseases) and lower sales of medicines with expired patents.

Sales in Europe grew 8% as sales growth due to the continued rollout of Vabysmo and the uptake of Phesgo, Ocrevus, Hemlibra and Evrysdi (spinal muscular atrophy) more than compensated for the decline in sales of medicines with expired patents, the impact of biosimilar competition on Actemra/RoActemra sales and lower sales of Perjeta (breast cancer) due to ongoing conversion of patients to Phesgo.

In Japan, sales decreased by 16%, reflecting the base effect of Ronapreve sales in the first half of 2023 that did not reoccur in 2024. Excluding Ronapreve, sales in Japan fell by 2% as price cuts and biosimilar and generic erosion more than offset the growth in sales of Phesgo, Vabysmo and Hemlibra.

Sales in the International region grew by 17%, led by China, Canada and Brazil. In China, sales rose by 6%, driven by continued sales growth of Perjeta, Alecensa (early-stage lung cancer) and Avastin as well as higher sales of Xofluza (influenza) and the rollout of Polivy.

The Diagnostics Division’s base business sales increased by 8%, led by the increased demand for immunodiagnostic products and by higher sales of clinical chemistry tests, advanced staining solutions and companion diagnostics.

Overall, the Diagnostics Division reported sales growth of 4% to CHF 14.3 billion, reflecting the anticipated drop in demand for COVID-19-related products (sales of CHF 0.2 billion in 2024 compared to CHF 0.8 billion in 2023).

Sales in the Europe, Middle East and Africa (EMEA) region increased by 5%, driven by higher sales of immunodiagnostic products, clinical chemistry tests and advanced staining solutions. In North America, there was growth in the underlying base business across customer areas. Sales in Asia-Pacific decreased by 5% as higher sales of immunodiagnostic products were offset by the expected drop in demand for COVID-19-related tests.

Source: Roche reports strong 2024 results with 7% sales growth; fourth quarter marks third straight quarter of 9% growth