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Roche 1H Dx Revenues Flat, Hit by Currency Exchange

NEW YORK (GenomeWeb) — Roche reported today that first half revenues for its Diagnostics division were essentially flat year over year as its molecular diagnostics business sales dropped 2 percent due to the negative effects of currency exchange.

At constant exchange rates, sales for the Diagnostics Division were up 6 percent at CHF 5.14 billion ($5.7 billion), while the MDx business was up 4 percent at CHF 762 million in the first half of 2014. However, the company noted that excluding sequencing solutions, underlying molecular diagnostics growth was 6 percent CER in the first half. Roche said in October that it would be closing down its 454 Life Sciences sequencing operations by 2016, although it has recently re-invested in sequencing technology with its June acquisition of nanopore sequencing firm Genia Technologies and strategic investment in nanopore sequencing startup Stratos Genomics.

Roche said that its molecular diagnostics growth was driven primarily by HPV tests for cervical cancer screening, which grew 59 percent compared to the first half of 2013. Also contributing to molecular diagnostics growth were viral infection tests with 5 percent growth, blood screening with 7 percent growth, and nucleic acid purification/qPCR reagents with 4 percent growth.

During the first half of the year the US Food and Drug Administration approved Roche's cobas HPV Test for use as a first-line primary screening test for cervical cancer in women aged 25 and older. The test also received approval for this purpose in Canada.

"A real highlight for the first half was the approval by the FDA of our HPV test for primary screening, with a recommendation also for the age group 25 and above," Roland Diggelman, chief operating officer of Roche Diagnostics, said during a conference call recapping the company's 1H earnings. "This … enlarges the age group, and at the same time this is the first and only FDA-approved HPV test for cervical [cancer] screening. We will work with the authorities and associations in translating this into medical guidelines … and we continue to work with governments and authorities across the world to … promote the inception of primary screening for HPV."

Diggelman also highlighted the fact that the molecular diagnostics group is currently preparing to launch new molecular diagnostic platforms, the cobas 6800 and 8800 for "mid- and very-high-throughput" testing, respectively. He added that the platforms will complement the company's existing cobas 4800 platform, will have "the highest automation [and] highest throughput capabilities," and that Roche Diagnostics believes it will "be able to move the standards of molecular testing going forward."

The company plans to launch these instruments for blood screening applications in the third quarter of this year, and for virology testing in the fourth quarter of this year. "[We're] very excited to continue to penetrate the markets in 2015 and beyond with these two new instrument families," Diggelman said.

Elsewhere in the Diagnostics division, professional diagnostics sales, the largest contributor to the division, were up 9 percent in the first half at CHF 2.9 billion at CER, including a 12 percent spike in immunodiagnostics revenues. Meantime, diabetes care diagnostics was essentially flat year over year at CHF 1.14 billion at CER, and tissue diagnostics sales increased 9 percent to CHF 334 million at CER.

Overall, Roche reported first half Group sales of CHF 22.97 billion down 1 percent from CHF 23.30 billion for 1H 2013, but up 5 percent at CER.

Sales for the firm's Pharmaceuticals Division were down 2 percent at CHF 17.83 billion, but up 4 percent at CER.

Roche reiterated that it expects FY 2014 revenue growth in the low- to mid-single digits at CER.