Swiss pharma giant Roche’s stock (OTCMKTS: RHHBY) was up 6% in yesterday’s trading session. This can be attributed to Biogen’s success with its Alzheimer’s treatment – Lecanemab – in late-stage clinical trials. Lecanemab removed built-up plaque in the brain called beta amyloid, resulting in a cognitive benefit for patients with early-stage Alzheimer’s disease.  Now, Roche is also testing an Alzheimer’s treatment with a similar objective to cut down on beta amyloid levels in the brain. While Biogen’s share rose a stellar 40% yesterday, the development helped some other pharmaceutical stocks with Alzheimer’s treatments in the pipeline, including Roche, Eli Lilly, and Prothena.
Despite yesterday’s move, Roche stock is down 24% this year, in line with the decline in the broader S&P500 index. The company’s diagnostics business, which led the revenue growth since the beginning of the pandemic due to high demand for Covid-19 testing, is expected to see a decline in sales in the near term. For perspective, Diagnostics sales surged 49% between 2019 and 2021. Roche also sells Ronapreve – a treatment for Covid-19, developed by Regeneron and distributed by Roche outside the U.S. The Covid-19-related products accounted for $7 billion of the $72 billion sales for Roche in 2021. There have been rising concerns over the future growth drivers for Roche, given that its Covid-19-related products will see a fall in sales in the near term. A sell-off in broader markets due to higher inflation and rising interest rates slowing the economic growth isn’t helping Roche stock either.
That said, Roche’s pharmaceutical business is seeing a steady rise in sales, benefiting from the continued uptick of its relatively new drugs, including Perjeta, Kadcyla, Alecensa, Tecentriq, Actemra, Hemlibra, and Ocrevus, a trend expected to continue going forward. See our dashboard on Roche Revenue for an overview of Roche’s business model and how its revenues are likely to trend.
|S&P 500 Return||-6%||-22%||66%|
|Trefis Multi-Strategy Portfolio||-9%||-23%||203%|
 Month-to-date and year-to-date as of 9/29/2022
 Cumulative total returns since the end of 2016