Full-year sales for Roche’s diagnostics division were up by just 2% as the Big Pharma deals with ongoing challenges in China.
While the unit posted 2% revenue growth at constant exchange rates last year, sales were down 3% when tallied in Roche's local Swiss currency. The division brought in 13.8 billion Swiss francs ($18 billion) for the full year, Roche said in its earnings materials Thursday.
A major issue for Roche for most of last year was China's healthcare pricing reforms. The country's new approach has changed how medical devices and certain diagnostic services are paid for in response to what officials there saw as high prices. Even still, China remains a key growth region for Roche.
In the company's full-year earnings release Jan. 29, Roche said diagnostic sales in the Asia-Pacific region decreased by 12%, while every other geographic region was up by mid-single-digit to low-double-digit percentages, showing the deep impact the reforms are having. In China specifically, full-year diagnostic sales were down 24%, Roche CEO Thomas Schinecker said on a call with reporters Thursday.
Summing up the performance, Roche said in its release that “growth in demand for pathology and molecular solutions more than offset the impact of healthcare pricing reforms in China.”
Roche's pathology lab services unit was the diagnostics division's biggest growth driver, growing sales 14% for the year and bringing in 1.7 billion francs. Growth drivers within this segment were Roche's companion diagnostics products, which grew sales 25%, and advanced staining, which grew by 10%, according to Roche's financial presentation (PDF).
Meanwhile, the company's molecular lab division was up 4% to 2.5 billion francs. This was boosted by Roche's blood screening work, which grew revenues 3% in the year.
Revenues from Roche's core lab were flat for the year at 7.6 billion francs. Immuno-diagnostics were the biggest drag here, falling 3%, while clinical chemistry sales were up 7%.
Posting a sales decline was Roche's near patient care unit, with its sales falling 4% to 1.9 billion francs last year. This unit was dragged down by Liat System molecular point-of-care diagnostics, which were down 5%, and blood glucose meters, which were down 2%.
Roche is, however, looking ahead for 2026. Schinecker made mention in his prepared statement that the company is “setting new standards in diagnostics: our next-generation sequencing technology, which will be launched this year, decoded an entire human genome in less than four hours.”
This is a new approach to genetic analysis Roche describes as sequencing-by-expansion—a proprietary method that pulls apart the DNA molecule and amplifies the signal of each individual base.,
Dubbed SBX, it’s the long-awaited fruit of two of Roche’s previous acquisitions: Stratos Genomics, the inventor of sequencing-by-expansion technology, purchased in 2020; and Genia Technologies, bought in 2014 for its massively parallel, single-molecule nanopore platform.
During the call with investors Thursday morning, Schinecker said the recent China and post-COVID headwinds shouldn’t be “a long-term effect” and that he sees the diagnostics division growing by a “mid-single-digit” percentage this year, with a return to a “mid-to-high single digit" percentage next year.