Roche sees slower 2022 sales growth as COVID tests demand eases

A box of material for rapid COVID-19 antigenic tests made by Swiss drugmaker Roche is pictured at the University Hospital (CHUV) during the coronavirus disease (COVID-19) outbreak, in Lausanne, Switzerland, November 13, 2020. REUTERS/Denis Balibouse/

Feb 3 (Reuters) - Swiss drugmaker Roche said on Thursday sales growth would slow this year as it braces for less demand for its COVID-19 medicines and tests, expecting immunity against the novel coronavirus to prevail in the population from about April.

In an earnings statement, the company said it expected currency-adjusted 2022 sales to be flat or grow in the low-single digits, below last year's 9% gain.

Roche anticipates sales of COVID-19 medicines and diagnostics to decrease by about 2 billion Swiss francs ($2.17 billion) to around 5 billion francs, it added.

It proposed raising its 2021 dividend to 9.30 francs per share but its stock fell 2.6% on the outlook.

Group earnings edged higher in 2021 as brisk demand for COVID-19 diagnostic tools and new prescriptions for drugs such as Hemlibra against haemophilia and cancer immunotherapy Tecentriq offset a sales decline in older cancer drugs.

For now, demand for its rapid antigen tests as well as lab-processed PCR tests remained strong, but Roche Chief Executive Severin Schwan told journalists on a call he was preparing for the pandemic to slow from the April-to-June quarter.

He said the diagnostics unit's high-throughput processing machines provided a competitive advantage. "There is just not enough qualified lab personnel... here we have a big advantage because our platforms are the most automated."

He cautioned his predictions on the pandemic's end had been wrong before but relief from the second quarter was his best assumption.

The company added the 2022 COVID-19 dynamics would depend on the as-yet unknown duration of immunity acquired from vaccination and past infections. Reflecting the uncertainty, Roche said those people could start contracting the disease again from mid-year or retain immunity for four years or longer.

Roche, primarily a maker of targeted cancer drugs, pivoted to also become a key supplier of coronavirus tests thanks to its diagnostics unit that mainly offers kits that guide individual cancer therapy.

Core operating profit, or earnings before interest and tax, adjusted for one-off items, rose 2% to 21.9 billion Swiss francs in 2021, in line with Refinitiv's smart estimate analyst poll.

It is aiming for next year's core earnings per share to grow in the "low to mid-single digit" percentage range at constant exchange rates, including the accretive effect of the recent repurchase of shares previously held by rival Novartis (NOVN.S).

Late last year, its Ronapreve COVID-19 antibody treatment, made in a partnership with Regeneron (REGN.O), was shown to have lost its neutralising activity against the Omicron variant.

($1 = 0.9204 Swiss francs)

Reporting by Ludwig Burger; Editing by Michael Shields and Emelia Sithole-Matarise

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