Stock Watch: Oncology Heritage Impedes Roche's Growth

When Roche Holding AG reiterated in its third-quarter financial results announcement its guidance for a fall in full-year 2023 sales, the press release headline paradoxically mentioned “good sales growth.” Understandably, Roche’s stock price opened weakly and despite some volatility over the day, finished down by over 3%, or about 1% lower than the NYSE Arca Pharmaceutical Index’s same day performance. Like many companies that developed drugs, vaccines or diagnostics to address the pandemic, 2023 is proving to be a year of difficult comparisons as sales of those products recede. Roche was upfront with its “decline in demand for COVID-19 products” with reported diagnostic sales – which comprised 23% of its third-quarter total – falling by nearly 15% on the same quarter of 2022. Roche’s diagnostic sales also missed analysts’ consensus estimates by about 3% while total group and pharmaceutical sales were broadly in line with analysts’ estimates.