(Bloomberg) -- Roche Holding AG said growth momentum for its Covid-19 testing business will probably abate in coming months, signaling a leveling off of the jackpot that fueled sales lately.
Roche’s diagnostics unit swiftly developed a wide array of tests in response to the pandemic, buoying sales and making up for a more difficult time at the pharmaceuticals division, where aging cancer medicines face competition.
The company said Thursday the test growth will probably slow in the second half of the year although it won’t melt away entirely. The stock fell as much as 1.8% in Zurich trading.
“This virus will stay with us,” Chief Executive Officer Severin Schwan said on a conference call. “It will continue to mutate, and as such there will be a continued need for vaccines, for new vaccines and boosters, as well as tests and medicines.”
Much of the testing slowdown Roche anticipates is due to the comparison with last year’s sales, Schwan said in a television interview. The company developed Covid diagnostic tools in the first half of 2020 and sales took off in the second half, creating a much higher base for comparison going forward.
The comments on tests came as the company reported first-half profit that beat estimates. Earnings per share rose to 10.56 Swiss francs from 10.44 francs excluding some items, the Basel, Switzerland-based company said in a statement. Analysts expected 10.18 francs a share in a survey.
The company is “very confident” about meeting its full-year forecast. It estimates that sales and earnings excluding some items will grow by a low- to mid-single-digit percentage.
Two medicines in Roche’s pipeline of experimental drugs are attracting scrutiny: a pill for Covid and a new Alzheimer’s disease treatment.
The Covid antiviral is in the second stage of testing and the results from the third -- and final -- level of trials should be available by the end of the year, Schwan said.
On Roche’s plans for gantenerumab, the experimental therapy being studied for Alzheimer’s disease, the company will hold discussions with the U.S. Food and Drug Administration about accelerating approval while it completes an ongoing clinical trial, according to Schwan.
The Alzheimer’s landscape shifted after the U.S.’s controversial approval last month of Biogen Inc.’s drug Aduhelm, which was seen as a positive sign for the Roche medicine despite recent setbacks.
Roche’s pharma unit showed signs of a turnaround in recent months, although competition from biosimilar copies of the company’s older cancer medicines continued to weigh on sales growth. Sales of the oncology drug Avastin dropped 40% in the first half.
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