In a difficult first quarter for Roche, the company’s pharmaceuticals division’s core drugs fared well below Wall Street expectations. But the soaring Swiss franc is only part of the reason for the disappointing sales figures.
Sales at Roche’s pharmaceuticals business in the first quarter rose 7% year-on-year at constant exchange rates to CHF 11.5 billion ($14.6 billion). However, this confirms a different picture, as on a reported basis the division’s sales fell by 4%, implying a significant negative impact of 11 points due to foreign exchange.
But the overall currency gap of 11 points, or the Swiss franc’s 14-point disadvantage against the US dollar, does not explain the more than 20% drop in sales of some of the company’s core products, including its top-selling multiple sclerosis antibody Ocrevus, the hot new eye drug Babismo, the immuno-oncology cornerstone Tecentriq, and the blockbuster immunotherapy drug Xolair. According to ODDO BHF, first quarter sales for these medicines were 22%, 20%, 21% and 23% below analyst consensus, respectively.
Additionally, sales of Hemlibra, Roche’s second-best-selling drug, were 15% below analyst expectations, while sales of Perjeta, Phesgo and Polyvy were 19%, 16% and 17% below analyst expectations.
Some of these drugs are still seeing sales growth, but clearly not as fast as investors would expect. For example, Vabysmo saw a 13% increase in sales at constant exchange rates to CHF 1.02 billion.
Still recovering from a decline in the overall market for branded biologics, Roche Pharmaceuticals CEO Teresa Graham said on an investor call Thursday that Babismo “returned to growth” in the U.S. in the first quarter with low-double-digit volume growth “among steady market share gains.”
For now, she said, they are “only the first signs” of market recovery.
Xolair was a key growth driver for Roche’s immunology franchise, with US sales increasing 26% to $708 million at constant exchange rates. Mr Graham said growth was driven by a “very strong uptake” of food allergies and the continued expansion of chronic urticaria.
Despite the expected entry of biosimilars in the second half of the year, Roche still expects sales of Xolair to increase by about 20% this year.
Meanwhile, both Ocrevus and Hemlibra are facing competitive pressure from Novartis’ Kesimpta and Sanofi/Sobi’s Artuvio.
To counter the home-administered benefits of Kesimpta, Roche recently launched a subcutaneous version of Ocrevus that is administered by a medical professional. As a result, Roche has updated its peak sales forecast for Ocrevus to CHF 9 billion by 2029, which also includes incremental sales of CHF 2 billion from the subcutaneous formulation.
Commenting on the drug’s first-quarter performance, Graham cited the negative impact in the U.S. due to typical payer trends and fewer days on the market compared to a year ago.
A growing contributor to Roche’s immunology portfolio is Gaziva, a blood cancer drug until the FDA announced approval for lupus nephritis in October.
Sales of anti-CD20 antibodies were CHF 247 million in the first quarter, an increase of 10% at constant currencies. Graham said AstraZeneca’s launch of a fixed-duration combination of Calquence and Venclexta as a first-line treatment for chronic lymphocytic leukemia caused sales of the drug to decline in the U.S. and EU. But when it comes to lupus, Roche executives emphasized “positive feedback from physicians and patients, including awareness, treatment intent, and treatment satisfaction.”
Given the different market dynamics, Roche will report sales of Gaziva separately for each indication, and Graham stressed that the company remains confident that Gaziva can add CHF 2 billion to peak annual sales across immunology indications.
Regarding Hemlibra, Graham noted that about 30% of patients who received Sanofi/Sobi’s extended half-life factor VIII therapy returned to the Roche drug.
“I think the bottom line is that patients taking Hemlibra have incredibly high satisfaction rates with their treatment,” Graham said.
That said, Roche expects competition to increase later this year. And the company is investing in a Phase 3 Hemlibra direct trial of its next-generation NXT007.
All told, assuming exchange rates remain stable for the remainder of 2026, Roche expects currency to be a 4% drag on Roche’s full-year sales. However, the Swiss drugmaker on Thursday confirmed its full-year outlook for group-wide sales growth of mid-single digits, accounting for currency fluctuations.
Roche shares were up 3.5% at midday Thursday.
