Shrinking demand for tests and medicines to treat Covid-19 has left its mark on Roche's annual results. The bottom line saw net income fall six percent to 13.5 billion Swiss francs from 14.9 billion a year earlier. The Swiss pharmaceutical group posted sales of 63.3 billion Swiss francs in 2022. This represents an increase of two percent. The Pharmaceuticals Division contributed the largest share, 72 percent of total sales.
Sales in the Pharmaceuticals Division of Roche increased slightly by two percent to 45.6 billion Swiss francs. Newer medicines to treat serious diseases and an ophthalmic medicine not launched until early 2022 continued their strong growth. Sales of Covid-19 medicines had a negative impact. Demand had declined as expected. The impact of generic products on sales of established cancer medicines also continued to decline. Sales in the USA and Europe declined slightly by one and two percent, respectively, mainly due to lower sales of Covid 19 medicines. Sales in Japan increased strongly by 26 percent. This was driven in part by deliveries of a Covid 19 drug to the government. This more than offset the impact from biosimilars and government price cuts. Sales in the International region, which includes China, increased by one percent.
The Diagnostics business increased sales by three percent to 17.7 billion Swiss francs. The division's underlying business performed well over the year and across all regions, with sales up seven percent. The main growth drivers came from immunodiagnostics. Roche's portfolio of Covid 19 tests generated total sales of 4.1 billion Swiss francs in 2022 compared to 4.7 billion Swiss francs in the previous year. Sales in Asia-Pacific and North America increased 23 percent and 13 percent, respectively. The 16 percent decline in sales in EMEA was primarily due to lower demand for Covid 19 tests.
Commenting on the results, Severin Schwan, CEO of Roche, said: “We achieved good results in 2022, even though the demand for COVID-19 products declined, as expected. The diagnostics base business and our newer medicines continued their strong growth. While we had pipeline setbacks in 2022, I am particularly pleased that we brought two new medicines to patients." He added: "For the current year we expect solid underlying growth in both divisions, which will largely compensate for the further significant drop in sales of roughly five billion Swiss francs in COVID-19 products.”
Schwan will step down as CEO in March 2023 and stand for election to the board of directors in April. Thomas Schinecker will take over as chief executive of the pharmaceutical group as his internal successor. The two business units, Pharmaceuticals and Diagnostics, will also get new executives. Teresa Graham, currently Head of Global Product Strategy at Roche Pharmaceuticals, will take up the position of Chief Executive Officer of Roche Pharmaceuticals in March 2023, becoming a member of the Corporate Executive Committee based in Basel. Matt Sause also joins from within Roche, succeeding Schinecker as CEO of the diagnostics division.
Roche expects a low-single-digit decline in Group sales due to the sharp drop in Covid-19 sales of around five billion Swiss francs. Excluding these Covid-19 sales, the pharmaceutical company expects solid sales growth in both divisions.
