Roche’s Q1 Sales Surge on Strong Performances from Phesgo and Vabysmo

Roche’s first-quarter 2025 results delivered a clear message: its newer therapies are propelling growth even as legacy drugs face headwinds. Total sales rose 7% year-over-year to CHF 15.44 billion ($18.58 billion), with the Pharmaceuticals Division leading the charge with an 8% sales increase to CHF 11.95 billion. Two key drivers—Phesgo (breast cancer) and Vabysmo (severe eye diseases)—accounted for a combined CHF 1.61 billion in sales, cementing their roles as cornerstones of Roche’s strategy to offset patent losses and biosimilar competition.

Phesgo: A Global Growth Machine

Phesgo, a combination therapy for breast cancer, posted Q1 sales of CHF 593 million, a 52% jump at constant exchange rates (CER) compared to 2024. The drug’s expansion is striking across regions:
- China: Sales surged 142% in the International region (primarily China), where Roche has navigated pricing reforms effectively.
- U.S. and Europe: Grew 38% and 18%, respectively, reflecting broad adoption in major markets.

Phesgo’s success is critical as Roche battles declines in older drugs like Herceptin and Avastin, which face biosimilar erosion. Its rapid uptake in emerging markets like China positions it as a long-term growth engine.

Vabysmo: Dominating Ophthalmology Markets

Vabysmo, Roche’s blockbuster eye drug for conditions like diabetic macular edema (DME) and neovascular AMD, delivered CHF 1.018 billion in Q1 sales, up 18% at CER. Its performance underscores its dominance:
- U.S.: Generated CHF 718 million, leveraging the recent FDA approval of Susvimo, a continuous-delivery formulation for DME.
- Europe: Sales jumped 42%, while the International region saw a 101% surge, highlighting its global appeal.

Vabysmo now ranks as Roche’s third-largest pharmaceutical product, trailing only Ocrevus and Hemlibra. Its approval for Susvimo adds a strategic edge, reducing the need for frequent injections and expanding its addressable market.

Regional Breakdown: Where the Growth Is

• International Region (Asia-Pacific, Middle East, Africa): Sales rose 18% to CHF 2.73 billion, driven by Phesgo and Vabysmo’s strong performance in China.
• Europe: Vabysmo’s 42% sales growth offset declines in legacy products like Perjeta.
• U.S.: Combined Phesgo and Vabysmo sales hit CHF 897 million, contributing to a 6% rise in U.S. pharmaceutical sales to CHF 6.22 billion.

Strategic Offset to Declines

The top five growth drivers—Phesgo, Vabysmo, Xolair, Hemlibra, and Xofluza—generated CHF 3.6 billion in sales, a CHF 700 million increase over Q1 2024. This growth helped counteract a CHF 200 million decline in sales from older, patent-expired drugs, demonstrating Roche’s pipeline resilience.

Investment Implications: Growth vs. Challenges

While Roche’s Pharmaceuticals Division shines, the Diagnostics Division reported flat sales (CHF 3.49 billion) due to pricing pressures in China. However, the company reaffirmed its full-year outlook of mid-single-digit sales growth for Pharmaceuticals and high-single-digit EPS growth, underpinned by Vabysmo and Phesgo’s momentum.

Conclusion: A Pipeline-Powered Future

Roche’s Q1 results are a testament to its ability to transition from legacy drugs to next-generation therapies. Phesgo and Vabysmo are not just mitigating patent losses but driving top-line growth. With Vabysmo’s Susvimo approval and Phesgo’s China traction, both drugs are primed to deliver further gains.

The Pharmaceuticals Division’s 8% growth versus the group’s 7% sales rise highlights its strategic importance. Even as diagnostics face headwinds, Roche’s focus on oncology and ophthalmology—backed by a CHF 50 billion R&D commitment—positions it to sustain growth. Investors should take note: this is a company leveraging innovation to navigate a competitive landscape, and the Q1 results confirm its path is on track.

Final Takeaway: Roche’s dual growth engines—Phesgo and Vabysmo—are proving their mettle. With strong regional adoption and regulatory wins, they’re key to sustaining the 7% sales growth trajectory. For long-term investors, this is a story of resilience and reinvention.