Dive Brief:

• Roche has reported 28% growth in fourth quarter sales at its diagnostics division, continuing the momentum it built up earlier in the year as COVID-19 products began to compensate for the downturn in routine testing.

• The molecular diagnostics subdivision led the way again, growing 125% to beat even the triple-digit surge it experienced in the third quarter. Centralized and point of care solutions returned to growth due to demand for antigen tests after three quarters of falling sales.

• Roche expects demand for diagnostics to remain elevated in 2021, particularly in the first half of the year, leading it to forecast “strong sales growth” for the division.

Dive Insight:

Roche’s diagnostic revenues grew just 2% in the second quarter as the pandemic drove down routine testing. The situation has improved since June, when routine diagnostics began to recover and sales of COVID-19 diagnostics kicked into gear. Diagnostic sales grew 18% in the third quarter and 28% in the fourth as a second wave of COVID-19 cases in key markets drove up demand for testing. 

The 28% growth masks considerable unit-to-unit variation. Explosive molecular diagnostics growth driven by demand for virology products and LightMix Systems was offset by a 14% drop in revenue at the diabetes unit, which contracted for the third time in 2020 after briefly returning to growth in the third quarter. 

With centralized and point of care solutions growing 16% and tissue diagnostics up 3%, diabetes care was the one area of falling sales in the fourth quarter. Thomas Schinecker, CEO of Roche Diagnostics, told investors the downturn in diabetes care was due to COVID-19 and the continued adoption of competing technologies.

Drilling down still further, immunodiagnostics drove the recovery of the centralized and point of care solutions unit in the fourth quarter. Point of care sales grew 212% for the full year, driven by a 667% surge in immunodiagnostics revenues. Roche attributed the triple-digit growth to its COVID-19 antigen test, a product that was only available for the final two months of the year. “In that regard, having 212% growth for the year is really significant,” Schinecker said.

Like other companies involved in COVID-19 testing, Roche expects its diagnostics division to make a strong start to 2021. The picture could change in the second half of the year as vaccines reduce the need for testing and Roche’s quarterly results are compared to its COVID-19-enhanced performance from late in 2020. 

“I think the first half year is very clear. This is where we have most of our ... COVID sales for 2021. And then in the second half year, we'll see how certain things develop,” Schinecker said. Schinecker said Roche’s decision to assume limited COVID-19 sales in the second half of the year creates the potential for upside if demand continues. 

Roche expects certain COVID-19-related tailwinds to persist, and in some cases intensify, as the vaccination programs drive down cases. Specifically, Roche identified antibody testing, population surveillance, screening and flu-COVID-19 diagnosis as activities that will drive continued demand. With PCR, antigen, antibody and IL-6 tests, Roche has products across the COVID-19 market.