Followed by Roche by Bordier


The performance of the Diagnostics division (+ 6% at tcc) shows a sequential acceleration.

Roche again posts excellent sales for the third quarter, up 13% at constant exchange rates (cc) to CHF 15,597 million, up 3.6% above expectations. The quarter is surprising due to the limited impact of Avastin and Herceptin biosimilars in the US. The performance since the beginning of the year amounts to 9% postponed and 10% to tcc. Management is revising its targets in 2019 and is now expecting growth of between 7% and 9% of its sales and EPS (vs + 5% previously).

The activity remains driven by the Pharmaceuticals division (+ 15% at tcc), which continues to surprise favorably (+ 4.3% vs. consensus). To note, the continuation of a good dynamics in the USA (+ 14%) and internationally (+ 27% – mainly in China). Europe returned to positive territory (+ 5%) after a drop in previous quarters (bio-similar competition). The impact of the arrival of Avastin and Herceptin biosimilars in the US is at this stage more limited than expected, with sales of Avastin increasing in the region. Tecentriq's surges (immuno-oncology – benefiting from indications extensions in lung cancer and triple-negative breast cancer) and Hemlibra (hemophilia) exceed expectations and bode well for medium-term growth.

The performance of the Diagnostics division (+ 6% at tcc) shows a sequential acceleration (+ 1% in Q1 and + 4% in Q2). The first part of the year was impacted by a destocking in the Centralised and Point of Care Solutions segment.

We confirm Roche in Core Holding. The company has surprised the market for over a year with a cautious consensus. If the impact of biosimilars will intensify over the coming months, the new growth drivers and an expanded pipeline should nevertheless allow the group to continue its medium-term expansion, albeit more moderate but solid. Prior to publication, we were expecting EPS growth from c. 4% in average / year over 2019-2021 (of which + 2.5% in average / year over 2020-2021). Our fundamental value is 370 francs.

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