Company Reports

We think Roche's drug portfolio and industry-leading diagnostics conspire to create maintainable competitive advantages. As the market leader in both biotech and diagnostics, this Swiss healthcare giant is uniquely positioned to guide global healthcare toward a safer, more personalized, and more cost-effective future. Strong information sharing continues between Genentech and Roche researchers, boosting research and development productivity and personalized medicine offerings that leverage Roche's diagnostic expertise and leadership in artificial intelligence.

Roche saw 5% constant currency sales growth in the second quarter (6% pharma, 4% diagnostics), and management maintained 2026 guidance for mid-single-digit top-line and high-single-digit core EPS growth. Shares rose intraday on July 23 by roughly 4%.

Roche reported a 5% decline in first-quarter sales, with constant currency growth of 6% driven by pharmaceuticals (7%) and diagnostics (3%). Management maintained 2026 constant currency guidance for mid-single-digit top-line and high-single-digit core EPS growth. Shares rose 3% intraday April 23.

We think Roche's drug portfolio and industry-leading diagnostics conspire to create maintainable competitive advantages. As the market leader in both biotech and diagnostics, this Swiss healthcare giant is in a unique position to guide global health care into a safer, more personalized, and more cost-effective endeavor. Strong information sharing continues between Genentech and Roche researchers, boosting research and development productivity and personalized medicine offerings that take advantage of Roche's diagnostic expertise and artificial intelligence leadership.

Roche saw 7% sales growth at constant exchange rates in 2025 (2% as reported), with core earnings per share growth of 11% (4% as reported). Management guided to mid-single-digit sales growth and high-single-digit core EPS growth in 2026 at constant currencies. The ADRs rose 5% intraday on Jan. 29.

Roche announced that its breast cancer drug candidate, giredestrant, improved invasive disease-free survival versus standard treatment in early-stage patients in an interim analysis of the lidERA study, and shares rose 10% on Nov 18.

Roche's portfolio saw 7% sales growth at constant currencies for the first nine months of 2025, with 9% pharma growth and 1% diagnostics growth. Reported sales growth was 2% due to the strengthening Swiss franc. Management maintained mid-single-digit sales growth guidance for 2025.

We think Roche's drug portfolio and industry-leading diagnostics conspire to create maintainable competitive advantages. As the market leader in both biotech and diagnostics, this Swiss healthcare giant is in a unique position to guide global health care into a safer, more personalized, and more cost-effective endeavor. Strong information sharing continues between Genentech and Roche researchers, boosting research and development productivity and personalized medicine offerings that take advantage of Roche's diagnostic expertise.

Roche saw 7% constant-currency sales growth in the first half, reflecting 10% pharmaceutical and 0% diagnostics growth, and core earnings per share grew 12%. Management maintained its outlook for mid-single-digit sales growth and high-single-digit core EPS growth at constant currencies.

President Trump released an executive order on May 12 calling for a 30-day negotiation period between the Department of Health and Human Services and the biopharma industry, with the threat of a rule from the Centers for Medicare and Medicaid Services to lower US drug prices if no deal is reached.

Roche reported top-line growth of 7% (6% constant currency) in the first quarter, stemming from 9% pharmaceuticals growth and flat diagnostics sales. Management maintained its outlook for mid-single-digit top-line growth and high-single-digit core EPS growth at constant currencies.

Roche and Zealand Pharma have formed a potential $5.3 billion collaboration to bring amylin analog petrelintide to market as an obesity treatment, both on its own and in combination with Roche's GLP-1/GIP combination drug CT-388. Both candidates are currently in separate phase 2b programs.

Roche reported 3% top-line growth for the full year, with constant currency growth of 7% on the top line, and 14% for operating profit. Management guided to mid-single-digit sales growth and high-single-digit core earnings per share growth for 2025.

We think Roche's drug portfolio and industry-leading diagnostics conspire to create maintainable competitive advantages. As the market leader in both biotech and diagnostics, this Swiss healthcare giant is in a unique position to guide global health care into a safer, more personalized, and more cost-effective endeavor. Strong information sharing continues between Genentech and Roche researchers, boosting research and development productivity and personalized medicine offerings that take advantage of Roche's diagnostic expertise.

Following President-elect Donald Trump’s Nov. 14 announcement of the nomination of Robert F. Kennedy Jr. as secretary of the US Department of Health and Human Services, there have seen several more nominations for leadership in the 13 HHS divisions, including Dr. Mehmet Oz (Centers for Medicare and Medicaid Services) on Nov. 19, Dr. Marty Makary (US Food and Drug Administration) and Dr. Dave Weldon (Centers for Disease Control and Prevention) on Nov. 22, and Dr. Jay Bhattacharya (National Institutes of Health) on Nov. 26. Overall, we think these selections show a consistent theme of introducing potential disruptive forces to US healthcare, although their lack of experience and the power of career staffers in these agencies could serve to blunt any significant proposed changes. We continue to see obesity drugs and vaccines as areas of potential scrutiny, although without any clarity on proposals, we’re not making any changes to our fair value estimates following these announcements.

We're maintaining our CHF 379/$55 fair value estimates for Roche's nonvoting shares following news of an oncology trial failure as well as a cell therapy acquisition. Roche announced that the Skyscraper-01 trial studying TIGIT antibody tiragolumab in combination with Roche's approved oncology drug Tecentriq in patients with PD-L1 positive non-small cell lung cancer did not meet its endpoint of improved overall survival versus Tecentriq alone. This was the final analysis of a long-running trial that first failed on a progression-free survival endpoint back in 2022 but showed a trend toward an overall survival benefit in 2023. We have already removed tiragolumab from our forecast based on prior failures, so we're not making any changes to our valuation based on this news. We expect that Roche could reevaluate some of its ongoing tiragolumab trials in areas like earlier-stage lung cancer, liver cancer, esophageal cancer, and head and neck cancer, although the firm's investment has already been dialed back in lung cancer, given failures and discontinuations in other lung cancer studies. We continue to see strong potential for the remainder of Roche's oncology portfolio and pipeline, adding support to its wide moat.

President-elect Donald Trump announced on Nov. 14 that he is nominating Robert F. Kennedy Jr. to be secretary of the Department of Health and Human Services under his new administration in 2025. RFK Jr. has strong views on public health and, if confirmed, could use his position to make changes at several of the 13 HHS divisions. In our Nov. 8 note, we discussed the potential tailwinds of a Trump administration, including possible repeal of the Medicare negotiation provision in the Inflation Reduction Act, less Federal Trade Commission scrutiny of acquisitions, and a likely continuation of lower corporate taxes. However, if RFK’s nomination is confirmed, we expect more “wild card” headwinds to the industry will come to fruition. As the HHS covers the US Food and Drug Administration and the Centers for Disease Control and Prevention, an HHS secretary skeptical of vaccine and obesity drug benefits could work to erode public trust, put up roadblocks for approval of new vaccines, and prevent the CDC from recommending any vaccines that make it through the approval process. With less federal guidance, we think it is possible certain states could waver in support of broad mandates for childhood vaccines. All of these could weigh on sales of vaccines in the US, including covid vaccine makers Moderna and BioNTech and big biopharma vaccine makers like GSK (we model 14% of GSK revenue from US vaccine sales in 2024), Pfizer (12%), Merck (9%), and Sanofi (6%).

We think that President-elect Donald Trump brings a mix of potential headwinds and tailwinds to the biopharma industry, and we’re not making any adjustments to our fair value estimates at this time. We had previously assumed that the most likely case was split control of the presidency and Congress by Democrats and Republicans. However, with Republicans locking in control of the Senate and holding a lead in elections in the House, we think it looks increasingly likely that Trump and his party could have control across both branches of government, making any potential policy priorities more likely to be implemented.

We are maintaining our CHF 379/$55 fair value estimates for Roche’s nonvoting shares following third-quarter sales results that were in line with our expectations. Roche reported 6% revenue growth (9% at constant currencies,) as foreign exchange headwinds continued to weigh on results. With growth headwinds from prior covid-19 diagnostic sales largely in the past (with the exception of a CHF 300 million rapid antigen test order in the fourth quarter of 2023 that will make comparisons more difficult in the fourth quarter) and limited biosimilar competition (Actemra biosimilars launching in the fourth quarter and Xolair biosimilars launching beyond 2025 will be focused on drugs only representing 8% of our 2024 revenue forecast), we think wide-moat Roche is in a good position to see 5% annualized growth through 2030. The firm’s biggest growth driver, ophthalmology drug Vabysmo, grew at 56% in the quarter, despite already breaking through CHF 1 billion in quarterly sales. We’re bullish about what we see as lower-risk opportunities for extending sales growth in multiple sclerosis (subcutaneous Ocrevus expands reach to patients who did not have access to infusions) and hemophilia (NXT007 could further improve on Hemlibra’s profile, with phase 2 data expected in 2025). We see progress in breast cancer, with the approval of Itovebi (inavolisib), upcoming data in 2025 for giredestrant, and the newly licensed phase 1 CDK drug RGT-419B. Among higher-risk programs, we think oral multiple sclerosis drug fenebrutinib (phase 3 data in 2025), COPD drug astegolimab (phase 3 data in 2025), and Alzheimer’s drug trontinemab (decision on phase 3 start coming in early 2025) all have the potential to bring more investor focus to Roche. However, we’re more bearish on pipeline updates coming later this year like lung cancer survival data for tiragolumab and motor deterioration data for Parkinson’s therapy prasinezumab; we see more potential for shares after the tiragolumab overhang ends.

We’re maintaining our CHF 379/$55 fair value estimate for Roche’s nonvoting shares and ADRs following further details surrounding phase 1 data for obesity pipeline programs acquired earlier this year as part of the $2.7 billion Carmot Therapeutics acquisition. Now in a phase 2 study, we think weekly injectable GLP-1/GIP CT-388—which generated 18.8% placebo-adjusted weight loss at the highest dose in phase 1—could enter phase 3 as early as 2025, making a 2028 launch possible. We think daily oral GLP-1 CT-996—which led to 6.1% placebo-adjusted weight loss after just four weeks of treatment—is poised to enter phase 2 in 2025 and could launch as a differentiated oral by 2029. We continue to include a combined CHF 5.3 billion in probability-adjusted sales for Roche by 2033 in obesity. We think investor concerns on tolerability of Roche’s obesity molecules (high rates of mild nausea and vomiting in both studies) are misplaced. Roche’s phase 1 studies were meant to stress test the safety profile of these molecules to ensure they warranted expensive, late-stage clinical studies, and data was in-line with other drugs in this class at this stage of development. We think Roche’s drug portfolio and pipeline and leading diagnostics business continue to support a wide moat, with novel programs like these mid-stage obesity drug candidates adding support to its intangible assets. Given our estimate that the global obesity drug market could reach $100 billion by 2031, we see upside to our estimates if Roche can differentiate on at least one of multiple levels. We think 996’s once-daily oral profile and ease of manufacturing as a small molecule are the likeliest differentiators.