Benzinga | Apr 21, 2021 06:32AM EDT

Roche Backs 2021 Outlook Despite Lackluster Q1 Performance In Pharmaceuticals Division

* Roche Holdings AG (OCTMKTS: RHHBY) posted Q1 sales of CHF 14.9 billion, up 3% Y/Y on a constant currency basis and down 1% on a reported basis.

* Sales in the Pharmaceuticals Division decreased 9% to CHF 10.6 billion, hit by biosimilars competition, which cut CHF 1.6 billion from revenue.

* The pandemic continued to negatively impact Pharmaceuticals sales, especially for medicines where regular visits to hospitals or health practices are needed.

* It was partly offset by a 22% increase in Actemra/RoActemra sales used for treating patients with severe COVID-19-associated pneumonia.

* The company posted a 55% increase to CHF 4.3 billion in diagnostic sales in Q1 thanks to strong demand for COVID-19 tests, including a new product to monitor virus mutations.

* Roche affirmed its 2021 outlook, forecasting an increase in sales in the low-to-mid single-digit range, with core EPS growing roughly in line with sales. The company intends to increase its dividend.

* Roche has cut some of its experimental lung drugs from its pipeline, including two mid-stage COVID-19 candidates, the company said in its Q1 Earnings Presentation.

* The first drug, an Amgen-licensed anti-ST2 antibody RG6149, where the trial was started last year and slated to end in January; presumably, the results were not good, and it has been "removed from phase 2."

* Another COVID-19 asset, RG7880, was also "removed from phase 2." Both were hoping to stop disease progression in patients with severe pneumonia from COVID.

* The company did have better news on a different antiviral approach, with a phase 3 test of its oral COVID-19 antiviral AT-527 slated to start in Q2.

* It also cut two Phase 1 asthma prospects: RG6151 and RG6244.

* Price Action: RHHBY shares closed 0.6% lower at $42.02 on Tuesday.