Another in-line quarter but it appears that the markets expected more!

Q3 sales met the consensus estimates, although the fact that the management maintained its 2023 guidance perhaps disappointed investors. Barring biosimilar erosion for off-patent drugs, all therapeutic areas performed well, however falling COVID-19-related demand weighed on Diagnostics’ sales. While Roche’s shares have fallen out of favour of late, largely owing to near-medium term growth concerns, the management needs to flex its robust balance sheet to address these issues, so that Roche’s att

In-line Q2; acquisitive instincts could trigger share price revival

The Q2 results met the consensus expectations as strong momentum across the therapeutic areas and a healthy performance from the Diagnostics base business compensated for biosimilar erosion and falling sales of COVID-19 tests. Consequently, the 2023 guidance remained unchanged. Overall, despite the key patent expiries in recent years, Roche continues to benefit from enviable w.r.t profit margins, stakeholder returns and a market-leading position in key therapeutic areas. Moreover, a boost in the

Good start to the year, strong upside reflects intact virtues

Q1 sales, marginally ahead of street estimates, were impacted by the declining demand for COVID-19 testing, as expected. However, excluding COVID-19, both Pharmaceuticals and Diagnostics performed well and 2023 guidance remained unchanged. Overall, we expect the recent sentiment revival for Roche’s shares to extend further and our strong upside is backed by its dominance in most target markets, healthy pipeline execution ability and a robust balance sheet. Important late-stage readouts during th

In line Q4; opportune time to capitalise the Swiss giant’s sell-off

Q4 sales met expectations, with both Pharmaceuticals and Diagnostics witnessing healthy growth, excluding receding COVID-19 testing tailwinds. In Oncology, newer drugs largely compensated for sustained biosimilar erosion for off-patent drugs. Other areas, including Neuroscience and Haemophilia, also contributed healthily. However, 2023 guidance was weak, because of the declining COVID-19 business contribution. Now all eyes are on recently-approved drugs and late-stage pipeline candidates. Overal

Soft Q3 no reason to worry

After many quarters of performance beats, Roche’s Q3 22 sales missed the street and AV expectations, mainly due to biosimilars-induced headwinds and a decline in COVID-19-related sales. However, the newer oncology portfolio, other pharma franchises and routine testing extended their good run, which also helps explain why the 2022 outlook was maintained. Overall, we remain confident of Roche’s capabilities and cushion to withstand market uncertainties, with all eyes now on the Alzheimer’s candida

BIC22 takeaways

During BIC22, Roche confirmed the solid (recovery) momentum in Core Pharmas, along with ample support from less severe biosimilar headwinds and COVID-19 business’s moderation, confidence with respect to Alzheimer’s drug and promising dynamics in Diagnostics. Although, near-term margins are likely to be restrained by R&D ambitions. Also, an inclination towards smaller acquisitions was reiterated. Overall, the Swiss giant remains on the right track to make-up for the (R&D and/or operational) disap

Another quarterly beat but full-year guidance is maintained

Roche reported decent results, with a recovery in oncology and routine testing and strong shows by other key pharma franchises helping to more than offset the declining contribution from COVID-19 business initiatives. Although, the full-year outlook has been maintained, possibly due to the ongoing macro-economic mess. Also, on a separate note, a CEO change was announced, which was surprising but shouldn’t be a game-changer. Nevertheless, our positive stance on the group is reiterated due to the

Full-year outlook maintained despite Q1 beat

2022 began on a mixed note, with COVID-19 testing sales again making up for slowly recovering Pharmas – continue to be impacted by biosimilar erosion and pandemic, and the weakness in some core drugs. While its COVID-19 solutions are expected to take a severe hit in the coming months, it should be offset by the expected recovery in the core businesses. Moreover, the unchanged long-term potential of innovative offerings in Pharmas, supports our positive recommendation on the Swiss giant.

Healthy 2021; expected recovery in core areas overshadows ‘seemingly’ soft 2022 outlook

Roche ended 2021 on a healthy note, with strong top-line growth in Q4 (+12%) ‘again’ being driven by Diagnostics, gains from COVID-19 treatment initiatives, and well-complemented by recovering core pharmas. However, profitability (quite understandably) came in slightly lower due to the higher contribution from low-margin COVID-19 offerings. While the 2022 outlook was also below market expectations, the recovery dynamics in core pharmas is a critical takeaway and, hence, the recent sell-off shoul

Healthy Q3; all set for recovery in core areas

Roche reported healthy Q3 sales numbers (8% CER growth), with the robust performance in Diagnostics being complemented by a strong contribution from COVID-19 treatment initiatives, and recovering core pharma offerings. Although, the pandemic and biosimilars-induced headwinds could still have some near-term impact, the group is possibly hurt the worst on both fronts. Further valuable cushion comes from Roche’s innovation supremacy – evident in the post-pandemic testing times and which is here to

Sales growth overshadowed by biosimilar and pandemic concerns

Q2 sales growth was healthy, with a strong performance in Diagnostics being complemented by some recovery in Pharmaceuticals. However, sustained headwinds (pandemic + biosimilars) in the lynchpin oncology franchise (and partly in other areas as well) has resulted in a ‘surprise’ margin deterioration. Moreover, resurfacing COVID-19 risks are expected to keep the Swiss giant on the hook. While near-term Pharmaceutical normalcy seems difficult, one should find confidence from growing Diagnostics do

Roche’s recent revival of fortunes

Recently, there has been a turnaround in Roche’s fortunes, with its share price outperforming peers. While, fundamentally, Roche had always been a solid business, the revival in sentiment can be attributed to moderating COVID-19 risk(s) in the US – a key end market. This could be an inflection point for heavily US reliant innovative pharmas. Whereas, for Roche, its positioning as a sector bellwether is now likely to be better appreciated.

Not bad Q1 21, but patience is still warranted

2021 began on an encouraging note, with Diagnostics again lending support to the lynchpin Pharmas division – continued to be impacted by biosimilar erosion and/or pandemic disruption. While the group’s near-term outlook still remains jittery – amid the current backdrop of resurfacing COVID-19 risks, growing Diagnostics dominance – backed by near-term tailwinds and long-term potential of innovative offerings in Pharmas – lend ample support to our investment case.

Takeaways from 2021 ‘Diagnostics’ Investors Day

Roche has provided a re-assuring update for its Diagnostics division. Besides leveraging the COVID-19 testing opportunity, the group is well-positioned to capitalise the pandemic-driven emphasis on testing and investment in healthcare infrastructure. These are soothing developments, especially at a time when the core Pharma division may take some quarters before witnessing a complete recovery/normalisation. Moreover, with the group recently resorting to inorganic growth in diagnostics, we believ

Weak 2020-end + uninspiring guidance warrants patience

Roche ended 2020 on a disappointing note, with biosimilar erosion and pandemic disruption taking their toll on the lynchpin Pharmaceuticals division. Although some meaningful support, as expected, surfaced from Diagnostics – a major pandemic beneficiary. While the near term remains uncertain, there’s apt balance-sheet strength to pass this phase with minimal negative implications for growth plans and shareholder rewards. And, on top, with the innovations under-development, Roche remains amongst

SkinBioTherapeutics - FY23 results

SkinBioTherapeutics has published results for the 12-months to June 2023, reporting AxisBiotix-Ps revenues up 77% YoY to £132k and an improved gross margin of 65% (FY22A: 61%). Operating costs were stable and the operating loss was flat YoY at £3.0m. Cash at the year-end was £1.3m and subsequently the company raised c£3.3m gross via a placing and retail offer. We have introduced FY24 forecasts with this report, expecting continued growth in AxisBiotix-Ps revenues supported by territory expansion

Mixed interims; placing forecasts Under Review

Wynnstay Group+ (WYN, House Stock, 430p) - Tough H2 –FY23F downgrades - FY24F recovery

Morning Note – 1 December 2023

RUA Life Sciences - Billion-dollar markets

RUA Life Sciences is developing products targeting billion-dollar global healthcare markets, which, if successfully commercialised it will generate significant value for the company. The current raise will support the business as it seeks to deliver the growth opportunities within its Contract Manufacturing business unit and commercialise and partner its lead vascular graft products and its heart valve leaflet composite material. We believe the company offers an attractive combination of establi

ReNeuron Group - H124 results reaffirm focus on CustomEX

ReNeuron has announced its H124 results (to end-September 2023), reaffirming its commitment to advance CustomEX(TM), its proprietary stem cell-derived exosome delivery platform. The key operational update from the period included in vivo data, marking a crucial step towards validating CustomEX(TM) and distinguishing it from peers in the exosome delivery space due to its cellular and tissue-targeting capabilities. As of 30 September 2023, ReNeuron had a cash balance of £5.1m, which we estimate sh

Trading Update

RUA have released a trading update ahead of its December interim results announcement. In contrast to the previous year, revenues have been weighted to the second half and while this has suppressed first half revenue growth, October’s and November’s revenues have largely caught up to align with management’s budget expectations. RUA’s recent strategy update and its trading update have several common themes. The reliance on partnerships to fund the development of RUA’s products in RUA Structural

Cambridge Nutritional Sciences - H1 2024 interims: Executing a newly focussed st

Cambridge Nutritional Sciences (CNS) has published its H1 2024 results to end September 2023. Group revenues grew 44% to £4.9m and gross profits increased by 63% to £3.1m, with the company benefitting from newfound operational efficiencies. With its now streamlined strategy focussing on the core Health & Nutrition business and the initial signs of an encouraging uptick in sales momentum, we believe the company is well positioned for growth that will help create future value for shareholders. We

Hardman & Co Research: Tissue Regenix (TRX) - Continuing postive momentum 1H'23

TRX is focused on the development and commercialisation of two proprietary processing technologies for the repair of soft tissue (dCELL®) and bone (BioRinse®). It has a broad portfolio of regenerative medicine products for the biosurgery, orthopaedics and dental markets. 1H’23 results highlighted the benefits and efficiencies being derived from investment and reorganisation in manufacturing capacity, with the first underlying EBITDA-positive reporting period. With further strong growth forecast

Creo Medical - Potential UltraSlim upside with swift EU pathway

Creo Medical has announced that its EU notified body has guided for an accelerated clinical pathway for its Speedboat UltraSlim device, the slimmest Speedboat Inject version that is compatible with most endoscopes. The reduced regulatory path will enable the company to launch the versatile product in Europe in early 2024, roughly 18 months earlier than planned. As the FDA application was submitted for this device in February 2023 (management expects clearance in Q423), UltraSlim is now projected

Morning Note – 13 September 2023

Fundraising looks well supported

RUA have announced, subject to shareholder approval at a General Meeting, the intention to raise equity via the combination of an institutional placing of shares, a subscription by certain directors and a retail offer. While the minimum gross proceeds are expected to be at least £4.1m, the full amount raised will be fluid until after the retail offer and shareholder approval. The final proceeds raised should be known after the outcome of the Retail Offer is announced on 8 December, and sharehold

Arecor Therapeutics: Appreciating a well-executed development strategy

Arecor is leveraging its Arestat formulation expertise to create an attractive and well-balanced pipeline of in-house and partnered products. These are novel formulations of existing drugs that offer clinically significant benefits, carry lower development risk, and have faster regulatory pathways to market. Investor attention is, rightly, focused on the attractive diabetes assets (the ultra-rapid insulins AT278 and AT247), but the Specialty Hospital products tend to be overlooked. This is under

Creo Medical - Entering phase of accelerating growth inflection

FY22 was a key inflection period for Creo with significant traction in the adoption of Speedboat Inject (its flagship electrosurgical device) and its proprietary CROMA technology platform, reflected in major robotic deals with Intuitive Surgical and CMR Surgical. Total revenue growth (8% y-o-y to £27.2m) was in line with consensus (£27m) and was primarily driven by Creo’s core technology business. Operating losses rose to £30.8m, affected by increased personnel and R&D expenses, although managem

Expert view on Creo's tech

In a well-attended Capital Markets Day on Nov 7, Creo made no new announcements but showed qualitatively how the next few years are likely to evolve with insights from three enthusiastic medical users. We took on board three important qualitative observations from the event.Firstly, the importance