# Roche (RHHBY) Sector: Pharmaceuticals & diagnostics | Field | Value | |---|---| | Price | $56.95 | | Fair value (Analysts) | $60.00 | | Discount to fair value | 5.1% | | Fair value uncertainty (Analysts) | Low | | Economic moat (Analysts) | Wide | | LSEG analyst rating (1 strong buy to 5 strong sell) | 2.14 | | Data as of | 2026-10-15 | | Next earnings | 2026-10-22 (confirmed) | ## In short The market doubts that Roche's new medicines can replace sales lost to biosimilars, and good launches such as giredestrant over the next four quarters can close the gap. ## Themes and gap - Themes: Regulation and courts (regulation-legal), Weight-loss drugs (weight-loss-drugs) - Gap type: Can close (closable) - Why: The October 22, 2026 sales, the giredestrant decision on November 30, 2026 and the 2027 outlook give dated checks on whether new medicines replace lost sales. ## About Roche is a Swiss healthcare company based in Basel, with two divisions. The Pharmaceuticals Division, which includes Genentech in the US and a majority stake in Chugai in Japan, makes medicines for cancer, multiple sclerosis, hemophilia, eye diseases, allergy and other conditions. Its largest growth drivers are Xolair, Hemlibra, Ocrevus, Phesgo and Vabysmo. The Diagnostics Division sells instruments and tests to laboratories and hospitals, and it earns most of its revenue from the tests that run on those instruments. In the first half of 2026, Pharmaceuticals gave CHF 23.6 billion and Diagnostics CHF 6.7 billion of sales. Roche makes money from patent-protected medicines and from recurring diagnostics sales, and it spends about a fifth of sales on research. Roche reports in Swiss francs. ## Thesis The market prices Roche below the analysts' value because of three doubts. First, patents end on large medicines. At its Pharma Day on September 28, 2026, Roche showed a biosimilar gap of CHF 6.2 billion of sales from 2025 to 2030, mostly from Xolair and Actemra. Second, the strong Swiss franc cut reported growth: first-half 2026 sales grew 6% at constant exchange rates but fell 2% in francs, and Core EPS fell 2% in francs. Third, much of the long-term value depends on new medicines in obesity and Alzheimer's disease, where results come only in 2027 and later. For the gap to close, the new medicines must replace the lost sales. The checks are clear. Sales must grow in the mid single digits at constant exchange rates in 2026, with Core EPS growth in the high single digits, as guided. The FDA must approve giredestrant in early breast cancer by its date of November 30, 2026. Fenebrutinib must win approval in multiple sclerosis after the FDA accepted the filing under priority review in September 2026. Obesity drugs such as enicepatide must move into phase III with good data. The first evidence comes with the nine-month sales on October 22, 2026, then the giredestrant decision on November 30, 2026 and the full-year results in early 2027. If these checks pass, the gap can close within the next four quarters. A weak launch, a failed trial or new US drug price rules would delay it. ## Checkpoints - Oct 22, 2026: Nine-month sales 2026: growth at constant rates. Status: Pending. Watch: Group sales growth in the mid single digits at constant rates and a confirmed 2026 outlook pass; slower growth or a lower outlook fails. - Nov 30, 2026: FDA decision on giredestrant in early breast cancer. Status: Pending. Watch: FDA approval by the November 30, 2026 date passes; a delay or a rejection fails. - Feb 2027 (estimate): Full-year 2026 results and 2027 outlook. Status: Pending. Watch: Core EPS growth in the high single digits at constant rates for 2026 and a 2027 outlook with growth despite biosimilars pass; a weaker outlook fails. ## Balance sheet - Cash: CHF 9.7B - Debt: CHF 31.8B - Net debt: CHF 22.1B - Interest cover: 16× - Debt due within 12 months: CHF 6.6B - Ratings: S&P AA, Moody's Aa2, Fitch AA Roche funds itself with bonds and notes in US dollars, euros and Swiss francs, and with US commercial paper. Cash is cash and cash equivalents of CHF 5.4 billion plus marketable securities of CHF 4.3 billion at June 30, 2026. Debt is long-term debt of CHF 25.2 billion plus short-term debt of CHF 6.6 billion; short-term debt includes USD 3.0 billion of commercial paper. Net debt rose from CHF 16.2 billion at December 31, 2025, because Roche paid CHF 8.3 billion of dividends, against CHF 4.2 billion of free cash flow in the first half. Roche issued no new debt in the first half and repaid CHF 1.7 billion of notes. Bonds of about CHF 3.1 billion are due in 2027 and CHF 3.3 billion in 2028. A committed USD 7.5 billion credit line backs the commercial paper. Interest cover is IFRS operating profit of CHF 9.7 billion divided by financing costs of about CHF 0.6 billion for the first half of 2026. Free cash flow was CHF 11.8 billion in 2025. As of 2026-06-30. Sources: - https://assets.roche.com/f/176343/x/8a0b362d66/hy26e.pdf - https://www.roche.com/media/releases/med-cor-2026-07-23 - https://assets.roche.com/f/176343/x/51deda2587/20260928_final_pharma-day-2026-publish-1.pdf ## Recent events - 2026-10-01: The New England Journal of Medicine published the phase III evERA results. Giredestrant with everolimus improved progression-free survival compared with standard endocrine therapy with everolimus in ER-positive advanced breast cancer. - 2026-09-30: The FDA accepted Roche's application for fenebrutinib in relapsing and primary progressive multiple sclerosis under priority review. It is the first BTK inhibitor with a filing accepted for both forms of the disease. - 2026-09-28: At its Pharma Day, Roche showed a biosimilar gap of CHF 6.2 billion of sales from 2025 to 2030, mostly from Xolair (CHF 3.1 billion) and Actemra (CHF 2.5 billion). It said that its on-market and new medicines will more than offset this loss and that it has no patent cliff ahead. - 2026-09-23: Interim phase III data showed that sefaxersen reduced proteinuria significantly against placebo in IgA nephropathy, a kidney disease. On the same day, Roche proposed Christophe Weber, former CEO of Takeda, for its board at the annual meeting on March 9, 2027. - 2026-09-22: Roche reported positive phase II results for enicepatide, its weekly GLP-1/GIP drug, in people with type 2 diabetes and overweight or obesity. At the highest dose, HbA1c fell by 2.65 percentage points after 48 weeks. - 2026-09-17: The phase III CELESTIMO study of Lunsumio with lenalidomide in relapsed or refractory follicular lymphoma met its primary endpoint of progression-free survival. - 2026-08-20: Genentech said that it will invest about $750 million in a new device fill-finish plant in Hillsboro, Oregon, with operations from 2031. - 2026-07-23: Roche reported first-half 2026 sales of CHF 30.4 billion, up 6% at constant exchange rates and down 2% in Swiss francs. Core operating profit grew 10% at constant rates, and Core EPS grew 9% at constant rates to CHF 10.85. Roche confirmed its 2026 outlook: mid single digit sales growth and high single digit Core EPS growth at constant rates, and a higher dividend in francs. ## Risks - Medium: Biosimilars will take sales from older medicines. Roche expects a gap of CHF 6.2 billion of sales from 2025 to 2030, mostly from Xolair and Actemra. Sales of products with expired patents fell 8% at constant rates in the first half of 2026. - Medium: Much of the future growth depends on trials in new areas such as obesity, Alzheimer's disease and inflammatory bowel disease, with major results from 2027 to 2030. Roche stopped some compounds in 2026 and wrote down CHF 1.0 billion of intangible assets in the first half. - Medium: US drug pricing policy and US tariffs can lower prices or raise costs. The US is Roche's largest market, and US tariffs already raised costs in Diagnostics in the first half of 2026. - Low: The strong Swiss franc lowers reported results. In the first half of 2026, currency effects cut reported sales growth by 8 percentage points. Pricing reforms in China also reduced Diagnostics sales in Asia-Pacific. ## Links - Page: https://picks.kamadorueda.com/company/RHHBY/ - History of changes: https://picks.kamadorueda.com/company/RHHBY/history/ - JSON with full history: https://picks.kamadorueda.com/data/company/RHHBY.json > Picks is a personal record of stock picks. It gives information only, not financial, investment, tax or legal advice. Prices, fair values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.