NEW YORK (GenomeWeb) – Roche reported on Thursday a 5 percent increase in its Diagnostics division revenues for the first half of 2017, driven by strong growth in tissue diagnostics and centralized and point-of-care solutions.
For the first half ended June 30, the Swiss pharmaceuticals and diagnostics company reported sales of CHF 26.34 billion ($27.61 billion), up 5 percent from CHF 25.02 billion in the first half of 2016.
Roche Diagnostics' revenues were CHF 5.82 billion in the first half compared to CHF 5.56 billion a year ago. For the second quarter of 2016, diagnostics revenues rose 4 percent to CHF 3.06 billion from CHF 2.95 billion in the prior-year quarter.
In the first half of 2017, molecular diagnostics revenues rose 2 percent, or 1 percent on a constant exchange rate basis, to CHF 920 million from CHF 903 million and contributed 16 percent to half-year diagnostics sales. Centralized and Point-of-Care Solutions revenues increased 7 percent to CHF 3.46 billion from CHF 3.23 billion and contributed 59 percent to sales. Diabetes Care fell 4 percent to CHF 962 million from CHF 998 million and contributed 17 percent to diagnostic product sales. Tissue Diagnostics rose 13 percent to 485 million from 428 million and contributed 8 percent to diagnostic product sales.
On a conference call with analysts to present the results, Roland Diggelmann, global CEO of Roche Diagnostics, said that the firm's clinical lab applications that include centralized and point-of-care solutions, molecular diagnostics products, and tissue diagnostics products grew at a combined rate of 7 percent, "which is a very good result."
"Immunoassays continued to contribute strongly and we've now had 19 years in a row of double-digit growth, driven by a comprehensive and broad menu coupled with…a strong automated workflow approach to efficiencies in the lab," he said.
He noted that within emerging markets, the firm experienced high growth across the board in diagnostics, and it "saw good growth and continued good performance in Europe and North America, excluding diabetes care."
Within Diagnostics, Centralized and Point of Care Solutions grew 8 percent on a constant exchange rate basis and was the largest contributor to the division's sales performance. Within this segment of diagnostics, integrated serum work area solutions were the main drivers of growth. They consisted of immunodiagnostics, up 13 percent, and clinical chemistry, up 3 percent, both on a constant exchange rate basis. In the US, the firm launched the Cobas e 801 module for immunodiagnostics. The Cobas e 801 is a core element of the integrated laboratory. It doubles the currently available immunochemistry testing capacity over the same floor space, requires low sample volume, and delivers fast results, the firm said, adding that the system "has been very well received by customers." Point-of-care product sales rose 3 percent year over year.
Although Roche's "underlying" molecular business had sales growth of 2 percent at constant exchange rates, the firm experienced a decrease in its sequencing business. North America and EMEA drove regional growth in this segment, the firm said. Blood screening revenues grew 3 percent and HPV screening revenues grew 2 percent, respectively. In virology, which includes Roche’s portfolio for diagnosis and monitoring of hepatitis B, hepatitis C, and HIV, sales declined 1 percent and revenue growth was impacted by a base effect from strong prior-year HCV sales. Within the molecular segment, the firm has seen "continued good growth" in HIV testing and blood screening, Diggelmann said.
Tissue Diagnostics sales growth in the first half of the year was driven by strong sales in North America and EMEA. Within the segment, advanced staining product sales were up 9 percent and primary staining product sales were up 15 percent on a constant exchange rate basis, Roche said. Also within tissue diagnostics, Roche's companion diagnostics business grew 40 percent. Its CINtec Histology and CINtec Plus Cytology tests recorded 18 percent revenue growth, which was supported by the recent launch of the 510(k)-cleared CINtec Histology product in the US.
Revenues for Roche's Diabetes Care business decreased 4 percent, and were impacted by challenging market conditions in North America where sales were down 18 percent year over year. Within the segment, Roche acquired mySugr, a patient-centered digital health service, for its portfolio of digital diabetes management products. The service uses the firm's existing Accu-Chek tools in making therapy decisions while improving communication between healthcare providers and patients. Within diabetes care, Roche experienced pressure on reimbursement pricing, particularly in the US, and a shift among diabetes patients to using continuous testing via sensor-based technologies versus test strips, Diggelmann said.
Roche's first-half 2017 revenues in Europe, Middle East, and Africa rose 1 percent to CHF 2.33 billion year over year; in North America sales rose 3 percent to CHF 1.50 billion; in Asia-Pacific sales rose 13 percent to CHF 1.34 billion; in Latin America sales were up 13 percent to CHF 425 million; and in Japan they were up 2 percent to CHF 220 million. Sales growth in the E7 countries — which are Brazil, China, India, Mexico, Russia, South Korea, and Turkey — grew at 16 percent, with sales in Brazil, Turkey, and China each growing greater than 20 percent, Diggelman said.
The company presented highlights of new-generation diagnostic products for the first half of 2017. In Q2, the firm launched the Cobas MRSA/SA nucleic acid test for point-of-care use on the Cobas Liat System for the qualitative detection and differentiation of methicillin-resistant Staphylococcus aureus (MRSA) and Staphylococcus aureus (SA), which became available in countries accepting the CE mark. It's the first real-time PCR test that simultaneously detects MRSA and SA with one sample in less than 30 minutes, Roche said.
The firm also introduced its Avenio circulating tumor DNA analysis kits for oncology research, which are among the first blood-based distributed oncology tests, according to Roche. The kits provide insights into different stages and types of cancer, the firm said. They consist of three NGS liquid biopsy assays for oncology research — within the Avenio ctDNA Targeted Kit, Expanded Kit, and Surveillance Kit. The kits include reagents, bioinformatics, and software to make ctDNA-testing accessible to NGS laboratories.
In the US and countries accepting the CE mark, Roche launched the Avenio Millisect System, which employs an automated, digitally assisted process to isolate clinically relevant cells from tissue biopsies for diagnostic testing. The system enables efficient tissue dissection and maximizes medical value for all molecular downstream applications, the firm said.
In the first half of the year, the US Food and Drug Administration cleared the Elecsys HIV combi PT assay, which expands Roche's testing menu for infectious diseases in the US. With the addition of this assay, laboratories will be able to screen for common co-infections, such as hepatitis C and syphilis, and test simultaneously for HIV, reducing the need for sample splitting and additional analyzers, Roche said.
The FDA also cleared the Cobas cytomegalovirus test for use on Roche's automated Cobas 6800 and Cobas 8800 systems. Healthcare professionals use the CMV test to assess how transplant patients on therapy are responding to treatment.
Within the diagnostics business in the first half of the year, Roche's R&D spending was down 1 percent to CHF 642 million. However, that compared with strong R&D spending in the first half of 2016, and R&D expenses are likely to grow in the second half of the year, Diggelmann said. It's marketing and distribution expenses were up 5 percent to CHF 1.34 billion and its general and administration expenses were up 70 percent to CHF 225 million.
Overall, the firm's net income rose 2 percent to CHF 5.58 billion, or CHF 6.37 per share, in the first half of 2017 compared to CHF 5.47 billion in the prior-year period.
Roche said that for full-year 2017 it expects sales to grow revenues in the mid-single digits at constant exchange rates. Core earnings per share are expected to grow broadly in line with sales, at constant exchange rates, the firm said.