(Bloomberg) -- Roche Holding AG fell the most in almost a year on Thursday after failing to deliver the forecast upgrade investors had hoped to get.

The stock declined as much as 5.1% in Zurich trading after the Swiss drugmaker reported declining quarterly revenue. Demand for Roche’s new medicines grew, but not enough to offset slumping sales of tests and medicines for Covid-19. 

Chief Executive Officer Thomas Schinecker faces a two-pronged challenge: the loss of billions of dollars of pandemic-linked revenue even as some clinical trial stumbles have left some investors questioning the company’s ability to deliver on the highest-profile projects. 

“Doubts around R&D productivity both from investors and internally will take time to lift,” Peter Welford and colleagues at Jefferies wrote in a note to clients. 

The reiterated outlook “may disappoint,” the analysts wrote, especially after the company said the erosion from Covid tests and cheaper versions of some of its top cancer drugs may be less than anticipated this year. 

Roche expects sales to drop in the low single-digit range at constant exchange rates this year, with core earnings per share falling in line with revenue. Sales of Covid products will fall by about 4.5 billion Swiss francs ($5 billion), about 500 million francs less than previously expected. The company will deliver sales and profit at the upper end of its forecast this year, Schinecker said on a conference call in answer to reporters’ questions. 

Schinecker has pledged to improve the drugmaker’s research and development productivity. He may also seek deals, although Roche believes transactions are “not a must” and that its existing pipeline and portfolio will be able to fuel growth.

“For us it’s important if we look at early-stage deals or late-stage deals that it make sense from a scientific perspective and it has to make sense from a financial perspective,” Schinecker said in an interview with Bloomberg Television. 

Last quarter, revenue dropped 3.2% to 14.3 billion francs, broadly in line with analysts’ estimates. Demand for a new eye drug, Vabysmo, buoyed results, with sales 21% above analysts’ expectations. Treatments for breast cancer, lung tumors and hemophilia fell short of estimates.

Roche shares have underperformed those of peers this year. 

--With assistance from Anna Edwards.

(Updates with shares in first paragraph)

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