ZURICH (Reuters) – Surging demand globally for COVID-19 tests boosted third quarter revenues at Swiss drug company Roche’s ROG.S diagnostics business, helping to offset declining drug sales and keeping the group on track to meet 2020 targets.
Roche diagnostics head Thomas Schinecker said rising coronavirus infections in many countries were driving a shift in demand towards cheaper antigen tests since so-called PCR tests, the pandemic mainstay, remain in short supply.
Though the less-accurate $5-6 antigen tests — made by Roche, as well as rivals including Abbott Laboratories ABT.N, Becton Dickinson BDX.N and Siemens Healthineers SHLG.DE — identify fewer infected people than PCR tests, Schinecker said they were good enough for use in many situations.
“Since the world is still in shortages (of) PCR tests, we strongly believe the antigen tests are a significant contribution … because you’re going to identify most of the people that are actually spreading the infections,” Schinecker said.
PCR tests detect genetic material in the virus while antigen tests detect proteins on the virus’s surface, though both are meant to pick up active infections.
The United States, Germany and Britain are among countries ordering millions of these tests as they face a second COVID-19 wave.
Some experts have said PCR tests remain the gold standard and that less-accurate tests should be deployed when others are not available.
Third-quarter Roche diagnostics sales rose 18% to 3.6 billion Swiss francs ($4 billion).
Drugs revenue slipped 4% to 11.1 billion francs, with off-patent cancer medicines Avastin, Herceptin and Rituxan losing ground to rival products – known as biosimilars. Roche predicted competition from biosimilars would mean a 4.7 billion franc sales hit in 2020.
Roche shares fell 3.2% at 0915 GMT, as analysts said the drug sales figure missed expectations.
In China, continuing limits on people going to hospital for treatment during the pandemic have hit drug sales, Roche said, as its Asia sales fell 4% after they had risen some 50% last year.
Barclays analysts said this had scuttled Roche’s plan to offset price cuts it made last year in the world’s second-largest economy with higher volumes.
Roche confirmed its 2020 outlook for low- to mid-single-digit percentage sales growth, as Chief Executive Severin Schwan said a drugs-business recovery, driven by newer medicines including Ocrevus for multiple sclerosis and Hemlibra for haemophila, would augment an accelerating diagnostics boom.
“We expect this trend to continue,” Schwan said.
($1 = 0.9127 Swiss francs)
Reporting by John Miller; Editing by Michael Shields and Jane Merriman