Roche Holding AG

Roche reported half-year 2026 sales growth of 6% at constant exchange rates, with pharma up 6% (to CHF 23.6 billion) and diagnostics up 3% (to CHF 6.7 billion); excluding China, diagnostics grew 6%. Core operating profit rose 10% and core operating margin increased by 1.7 percentage points; core EPS rose 9%, IFRS net income rose 6%, operating free cash flow rose 21%, and free cash flow rose 58% (all at constant exchange rates where stated). Management cited a roughly CHF 200 million flu-season impact on group results, roughly CHF 244 million in loss of exclusivity, about CHF 43 million in diagnostics U.S. tariffs, and said full-year 2026 LOE impact is now expected to be roughly CHF 600 million. Forward guidance was reiterated for mid-single-digit sales growth, high-single-digit core EPS growth, and further dividend increases in Swiss francs; diagnostics expects 2026 margin broadly stable versus 14.4% in 2025.

Thomas Schinecker struck a confident tone, saying Roche had a ‘strong performance’ with ‘significant portfolio progress’ and that growth came from both pharma and diagnostics. He emphasized the breadth of the portfolio, market share gains in brands like Vabysmo, Hemlibra, Tecentriq and Gazyva, and said Roche feels ‘comfortable’ with its momentum into the rest of 2026 and beyond. He also highlighted disciplined business development, saying Roche was not the highest bidder in its deals and is allocating capital carefully.

Alan Hippe focused on the financial bridge from sales to profit, pointing to cost discipline, favorable mix, and centralized SG&A as key drivers of the 10% core operating profit increase. He said other revenue rose by CHF 258 million, cost of sales increased 5%, R&D rose 1%, and SG&A rose 3%, while operating free cash flow rose 21% and net debt increased by CHF 5.9 billion mainly due to dividend payments and taxes/treasury effects. He also noted gross debt was stable at CHF 31.6 billion year-end and CHF 31.8 billion at half year, and that the full-year tax rate should be around 20%, perhaps a little lower.

The visible Q&A began with Citi’s Graham Glyn Parry asking about divarasib: whether the long Phase II PFS could lead to an earlier readout than the trial’s listed October 2028 primary completion date, and whether the asset’s peak-sales opportunity could be above the current 1-2 billion range given the strong data. Teresa Graham replied that Roche would give a broader update at Pharma Day, including on the whole development program. The transcript cuts off before a fuller answer, but management signaled the upcoming investor day would address pipeline and commercial questions in more depth.