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Roche Diagnostics Revenues Rise 7 Percent in 2018

This article has been updated with information from Roche's earnings call.

NEW YORK (GenomeWeb) – Roche today reported a 7 percent increase in sales of its diagnostics division in 2018, driven by high demand for immunodiagnostic solutions, which are part of its Centralized and Point of Care Solutions business.

Overall, Roche reported CHF 56.85 billion ($57.21 billion) in revenues for the year, up 7 percent from CHF 53.3 billion in 2017.

Roche Diagnostics had sales of CHF 12.88 billion in 2018, up 7 percent from CHF 12.08 billion in 2017. For the fourth quarter, diagnostics sales totaled CHF 3.5 billion, up 10 percent from CHF 3.28 billion in Q4 of 2017. The pharmaceuticals division had CHF 43.97 billion in 2018 revenues, up 7 percent from CHF 41.22 billion in 2017.

During a conference call to discuss the company's earnings, Michael Heuer, the new CEO of Roche Diagnostics, said that 2018 "was probably one of the best years we've ever had" in that division.

Within diagnostics, Molecular Diagnostics revenues grew 6 percent in Q4 of 2018 to CHF 551 million, from CHF 532 million in Q4 of 2017. Centralized and Point of Care Solutions grew 12 percent to CHF 2.14 billion in the quarter from CHF 1.97 billion the previous year. Diabetes Care sales grew 5 percent to CHF 496 million in Q4 from CHF 501 million the year before. Tissue Diagnostics revenues grew 13 percent to CHF 311 million from CHF 280 million in Q4 of 2017.

For full-year 2018, Molecular Diagnostics revenues grew 5 percent to CHF 2.02 billion from CHF 1.92 billion in 2017 and contributed 16 percent to 2018 diagnostics sales. In particular, point-of-care molecular diagnostics grew 162 percent. Virology sales were up 4 percent with strong growth in HIV monitoring. Blood screening grew 9 percent, and human papillomavirus (HPV) screening grew 8 percent, while biochemical reagents, qPCR, and nucleic acid purification systems decreased 1 percent. In addition, Roche saw high demand for tests running on the Cobas Liat, its molecular point-of-care testing system. Heuer said that the point-of-care PCR system, first launched in the US, did very well last year, in particular for flu testing.

Centralized and Point of Care Solutions revenues increased 8 percent to CHF 7.77 billion in 2018 from CHF 7.18 billion in 2017, contributing 60 percent to overall diagnostics revenues. The main growth drivers for this segment were Serum Work Area solutions, consisting of immunodiagnostics, which grew 11 percent, and clinical chemistry, which grew 7 percent. Heuer pointed out that the immunodiagnostics business did very well despite the fact that "key competitors" had launched their own new platforms last year.

The Cobas e 801 instrument "was a great success story," he said, with 1,000 placements in 2018 and 2,000 placements total so far. Roche also launched the instrument in China last year, "a major market for us," he added.

Roche also launched the Cobas pro in December, which Heuer said "is a major product for us" that will be targeting medium-to-large laboratories. He added that the company already has 15,000 Cobas 6000 and 5,000 Cobas 8000 instruments in the market. The Cobas pro, he said, "will be helping us to protect our installed base but at the same time win new customers."

Diabetes Care sales grew 1 percent (2 percent at constant exchange rates) in 2018 to CHF 1.98 billion, from CHF 1.97 billion in 2017, contributing 16 percent to diagnostics sales. Blood glucose monitoring grew 2 percent, while insulin delivery systems sales decreased 6 percent. Growth in this segment was mainly driven by the Accu-Chek Guide and the Accu-Chek instant blood glucose monitoring systems. Roche said it received "encouraging customer feedback" for its new Accu-Chek Solo micropump, which it has launched in pilot markets. Heuer said the diabetes care segment has reached "a certain level of stabilization" after not performing well in the past.

Tissue Diagnostics revenues increased 10 percent to CHF 1.11 billion last year from 1.02 billion in 2017 and contributed 8 percent to diagnostics sales. In particular, the advanced staining business grew 10 percent, the primary staining portfolio grew 13 percent, and companion diagnostics grew 9 percent.

R&D spending by the diagnostics division increased 7 percent to CHF 1.46 billion in 2018. Heuer said the company is investing into a variety of new systems and technologies, in particular to provide a complete product portfolio to laboratories. Roche has 13 "key launches" in diagnostics planned for 2019, including the Cobas prime instrument, a pre-analytical platform to support the Cobas 6800/8800; four new assays; and five software solutions, including several Navify oncology software products.

Roche's 2018 net income increased to CHF 10.87 billion, or CHF 18.14 per share, from CHF 8.83 billion, or CHF 15.34 per share, in 2017.

As of Dec. 31, 2018, Roche had CHF 6.68 billion in cash or cash equivalents.

For 2019, the company expects low- to mid-single-digit growth in sales and core EPS growth "broadly in line with sales."