Falling demand for COVID-19 tests caused Roche’s diagnostics revenues to fall 17% in the second quarter despite the growth of its base business.
Roche was one of the many diagnostic developers that generated significant sales from COVID-19 tests. Demand for tests remained high in the first half of last year as the Omicron variant drove a spike in cases, but has since fallen and dragged Roche’s revenues down with it. In the first quarter, Roche’s diagnostics sales fell 28% despite 4% growth in the base business.
The situation was somewhat better in Roche’s most recent financial results, in part because demand had already begun to fall in the second quarter of 2022, making the year-on-year comparison better. Roche also benefited from accelerating growth for its base business, which posted an 8% rise in revenues.
Comparisons to the previous year will get easier as Roche moves through 2023. Talking to investors on a second-quarter results conference call, Roche CEO Thomas Schinecker said that the impact of the pandemic on sales “will get smaller and smaller throughout the remainder of the year and overall, the impact from COVID-19 will be done for both divisions by [the] end of Q1 2024.”
Roche is forecasting mid- to high single-digit growth of its base business in the second half of the year and continuing declines in COVID-19 test revenues. The point-of-care test and molecular lab businesses are the most affected by the loss of COVID-19 diagnostic business.
Matthew Sause, CEO of Roche Diagnostics, named core lab as the “main driver” of his business segment. Sales increased by more than 10% on the back of demand for immunodiagnostic and clinical chemistry products. Diabetes revenues fell again, declining 5% on a constant currency basis over the first half of the year, as Roche contended with the shift to continuous glucose monitoring.
“We are continuing to look into continuous glucose monitoring and diabetes care as a key part of our overall strategy. Diabetes is a major health burden worldwide and it represents an attractive market for us to be in,” Schinecker said.