The advent of frequent COVID-19 testing, amplified by variants and vaccine hesitancy, has put Swiss drug-making company Roche in a financial position that easily eclipses its relatively lackluster start to the year. While Roche is grateful for the upturn, its management is setting realistic expectations for an eventual deceleration in testing metrics - which depends on the future of our touch-and-go pandemic.
The first half of 2021 saw overall sales and core earnings swell by 8% and 6%, respectively, which exceeded analyst expectations. Routine testing avenues were beneficial to Roche’s bottom line; sales were driven up for the diagnostics division, which had made up for pharmaceutical transactions declining by 3% in the first half of the year. A potential appropriation of its Gantenerumab drug for Alzheimer’s treatment, which is currently being negotiated with U.S. authorities, could help clinch a favorable market future for the company and restore drug production as a core of Roche’s market value.
Despite indications of bolstered financial performance and a stated dividend increase projection, Roche is moving forward with its 2021 sales forecast of low to mid-single-digit growth at constant exchange rates. Core earnings per share are expected to increase on a parallel scale. JPMorgan analysts have called this prognosis conservative, considering the company’s stellar first-half market showing.