(Bloomberg) -- Roche Holding AG raised its 2024 profit forecast as new drugs like Vabysmo for eye disease drove revenue for the latest quarter and first half of the year.
Adjusted earnings per share for 2024 will increase in a high-single-digit percentage range at constant exchange rates, the drugmaker said Thursday in a statement. Roche had earlier forecast a mid-single-digit percentage increase.
Chief Executive Officer Thomas Schinecker has pledged to speed up innovation and cut costs after a series of trial failures in cancer and Alzheimer’s disease. The drugmaker pared 25% of its pipeline drug programs over the last year in an effort to streamline research efforts, and remains open to purchasing an external asset in the hot obesity market.
“We are moving the money where it has the biggest impact to deliver new medicines,” Schinecker said in a conference call with journalists.
What Bloomberg Intelligence Says:
Roche’s raised full-year earnings guidance will probably require consensus to lift core EPS estimates by 3%-4%, yet investor focus is likely to remain on pipeline progress, notably early-stage obesity assets and a pending readout for cancer drug tiragolumab. Notable pipeline progress, as opposed to earnings upgrades, is more likely to trigger any upward stock re-rating, we believe.
— John Murphy, BI pharma analyst. Read the research here.
The shares rose as much as 4.4% in early trading after gaining 12% this year through Wednesday’s close.
Along with Vabysmo, Roche’s breast cancer drug Phesgo, multiple sclerosis medicine Ocrevus, blood cancer drug Polivy and spinal muscular atrophy medicine Evrysdi fueled the revenue boost. The five medicines had first-half sales of 7.3 billion Swiss francs ($8.3 billion), an increase of about a third.
Overall revenue for the half was 29.8 billion francs, beating analysts’ estimates. Roche left its estimate for 2024 sales untouched.
“We believe that growth momentum we have is sustainable this year, but will carry us into next year as well,” Schinecker said in an interview with Bloomberg TV. Growth is coming from both pharmaceuticals and diagnostics, he said.
Roche delivered an incremental win last week when its experimental obesity pill showed meaningful weight reduction in a small study. While the oral medication, CT-996, is still in an early stage of development, investors have been enthused by companies that show signs of joining Novo Nordisk A/S and Eli Lilly & Co. in a weight-loss market estimated to hit $130 billion by the end of the decade.
--With assistance from Levin Stamm.
(Updates with CEO, analyst comments starting in fourth paragraph.)
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