By Helena Smolak

Roche posted higher-than-expected first-quarter sales, driven by robust demand for its key drugs, as the company takes active steps to preempt looming U.S. import tariffs.

To strengthen its U.S. presence, Roche is building up inventory, ramping up production at three of its U.S. plants and relocating one manufacturing site to the U.S. through a technology transfer, its chief executive Thomas Schinecker said in a call with journalists.

According to Schinecker, four of Roche's medicines account for up to 92% of the company's potential exposure to U.S. tariffs, though he declined to name the specific products.

"We've always kept intellectual property in the U.S. and continue to be a major tax payer in the U.S., so we haven't shifted our operations to countries like Ireland in the past," Schinecker said. "There is an aim from the U.S. government that all the products that are needed by the U.S. are also produced in the U.S.," he said.

Roche's U.S. incentives shouldn't come at the expense of manufacturing capacities in other countries and it is also looking to expand its footprint in China, he said. "There is currently no plan to cut back on manufacturing in Europe or Asia."

Roche earlier this week said it plans to invest $50 billion in the U.S. over the next five years, the latest major spending commitment by a big drugmaker as the industry faces President Trump's tariff threats. Swiss peer Novartis said earlier this month that it would spend $23 billion in the U.S. Sanofi said Thursday alongside its earnings that it would weigh further investments into manufacturing in the U.S.

The Swiss pharmaceutical giant said Thursday that sales rose to 15.44 billion Swiss francs ($18.58 billion) for the first quarter from 14.39 billion francs in the same quarter a year prior.

Analysts had estimated sales at 15.33 billion francs, according to a Visible Alpha consensus. The company attributed the sales increase to higher demand for its key growth drivers: multiple sclerosis drug Ocrevus, hemophilia injection Hemlibra, new eye drug Vabysmo and Xolair for food allergies.

Sales in the pharmaceutical division rose 8% to 11.95 billion francs, whereas sales in its diagnostics division remained flat at 3.49 billion francs due to pricing reforms in China, the company said.

Roche backed its full-year guidance, forecasting mid-single-digit sales growth and high-single-digit core earnings per share growth at constant currencies.

Investors are closely watching a slate of clinical trials this year in chronic obstructive pulmonary disease, early-stage breast cancer and multiple sclerosis, which will be key in shaping Roche's future growth prospects, UBS and Barclays analysts said. The Swiss drugmaker said last month it would pay Danish biotechnology research company Zealand Pharma up to $5.3 billion to co-develop a weight-loss treatment as the company doubles down on efforts to cash in on the lucrative obesity market.

Write to Helena Smolak at helena.smolak@wsj.com

(END) Dow Jones Newswires

April 24, 2025 03:15 ET (07:15 GMT)

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