Roche reported a decline in sales in the first three months of the year, with the strength of the Swiss franc and generic competition for some older drugs weighing on the company.
First quarter sales were CHF 14.7 billion ($18.7 billion), down 5% year-on-year but up 6% on a constant currency basis.
Roche said the appreciation of the Swiss franc against most currencies, particularly the US dollar, had a material impact on the results reported in Swiss francs compared to fixed exchange rates.
The Swiss franc will depreciate by 12% against the US dollar in 2025, and has depreciated by a further 1% so far this year.
Chief Executive Thomas Schinecker defended the company’s quarterly results, saying it was “a matter of how you look at the report” and that while the Swiss franc was strengthening, sales reported in US dollars rose 9%.
“We spend most of our money in the US, most of our debt is in the US, and we just recently acquired another company in the US,” he told Squawk Box Europe.
“We’re going to continue to invest in the U.S., but we don’t see that as a major issue.”
Shares rose 3% on Thursday, marking the first 12-month gain of 18%.
Performance of European pharmaceutical stocks over the past 12 months.
Roche, through its U.S. subsidiary Genentech, is among the drug companies that struck a deal with the Trump administration last year to lower drug prices for Americans.
In return, the companies agreed to a three-year grace period in which their products would not be subject to President Trump’s planned drug-specific tariffs, provided the companies invest more in U.S. manufacturing.
Last April, Roche announced it would invest $50 billion in the United States over the next five years, creating 1,000 jobs at the company and an additional 11,000 jobs to support new U.S. manufacturing capacity.
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This comes as big drug companies are under pressure as they face an imminent loss of exclusivity in the field by the end of this decade, when older medicines begin to face competition from generics.
Like many of its peers, Roche is looking beyond developing its own drugs to making acquisitions to boost future sales.
Results so far have been mixed. An experimental pill to treat multiple sclerosis cut the number of relapses by roughly half in two late-stage trials, the company announced Wednesday. However, safety concerns remained, as more patients who took the drug died than those who received a placebo.
Roche plans to submit the drug for approval to the U.S. Food and Drug Administration by the middle of this year, and analysts at Barclays said they saw “upside risks” despite safety concerns.
Roche is also betting big on entering the potentially lucrative weight loss market, with its experimental drug CT-388 aiming to be in the top three. novo nordisk and Eli Lilly, What currently dominates the market.
Chief Executive Officer Schinecker told Germany’s Handelsblatt newspaper last month that Roche was aiming for double-digit market share in weight loss.
Schinecker said the weight loss market is still in its infancy. “If you look at what percentage of people are actually using these drugs, it’s still a pretty small percentage, and there’s still a lot of opportunity to help people deal with weight,” he said, also noting that even at low doses, GLP-1 drugs not only help people lose weight, but also have a wide range of health benefits.
In the United States, Roche’s most important market, sales rose 5% at constant currency, driven by the growth of asthma treatment Xolair and the continued uptake of hemophilia treatment Hemlibra and blood cancer treatment Polvy.
The company said demand was strong in both the pharmaceutical and diagnostic segments, which grew by 7% and 3%, respectively.
The company maintains its full-year outlook, targeting mid-single-digit sales growth in 2026. The company expects core earnings per share to be in the high single digits at constant exchange rates.
