Roche rarely dominates headlines like the GLP‑1 frontrunners, yet the Swiss pharma-and-diagnostics giant is quietly rewriting its growth story. Oncology and neurology blockbusters are holding up better than skeptics expected, ophthalmology is expanding rapidly, and the diagnostics arm is stabilizing after the post‑COVID comedown and China’s aggressive price resets. With a credible new leg in metabolic disease through the Carmot acquisition, Roche now looks like a mispriced compounder hiding in plain sight.

The Pharma Engine

For years, investors doubted whether “new Roche” could outrun the drag of biosimilar erosion in Avastin, Herceptin and Rituxan, or the normalization of COVID testing. The company’s recent results suggest it has decisively turned the corner. Pharma is growing at high single digits in constant currencies, anchored by a set of durable franchises that are evolving faster than anticipated.

Ocrevus continues to dominate the multiple sclerosis space, not just maintaining share but expanding into progressive forms of the disease where competitors have little to offer. Its successor, fenebrutinib, a reversible BTK inhibitor, is moving through Phase 3 trials and could extend Roche’s dominance into oral, progression‑modifying therapy, a category with significant unmet need. If successful, Roche would own both the injectable standard and the oral frontier in MS, creating a defensive moat for years to come.

In ophthalmology, Vabysmo has carved out a leadership role by combining efficacy with superior dosing flexibility. The drug is now one of the fastest‑growing assets in Roche’s portfolio, reshaping the company’s image from oncology‑only to a diversified innovator. The re‑launch of the Contivue port‑delivery system in Europe adds a controlled‑release platform that could become a standard in retina care, reducing clinic burden and further entrenching Roche’s market share. Together, Vabysmo and Contivue could secure a multi‑billion franchise in an area with high barriers to entry.

The company’s hem/oncology arsenal is also rejuvenating. Polivy is beginning to displace R‑CHOP in front‑line diffuse large B‑cell lymphoma, an entrenched standard for decades, while Lunsumio and Columvi provide bispecific antibody options that can be used in fixed‑duration regimens. This shift toward chemo‑free, targeted therapies plays directly to Roche’s strengths in immuno‑oncology. Though regulatory hurdles remain—one Columvi combo application recently received a Complete Response Letter—the trajectory is clear: Roche’s lymphoma franchise is broadening, with greater duration of therapy and earlier line use.

Hemlibra, the company’s breakthrough therapy in hemophilia A, continues to expand globally and serves as a high‑quality annuity with limited competition. Crovalimab, an anti‑C5 antibody, is being rolled out in paroxysmal nocturnal hemoglobinuria and has potential across a range of complement‑driven diseases. These products, along with Evrysdi for spinal muscular atrophy, form a resilient base that ensures the company has cash to reinvest into riskier bets.

The Carmot acquisition has provided Roche with an entirely new platform in metabolic disease. The crown jewel is CT‑996, a once‑daily oral GLP‑1 small molecule that has shown striking early weight‑loss efficacy with a potentially differentiated tolerability profile. If Phase 2 confirms these findings, CT‑996 could become a category‑expanding asset, shifting Roche into a leadership role in a market still dominated by injectables. CT‑388, a weekly injectable dual GLP‑1/GIP, offers another competitive shot, while CT‑868 targets niches in insulin‑treated diabetes. Taken together, these assets give Roche credible exposure to a market projected to exceed $100 billion annually within a decade.

Beyond metabolic disease, Roche’s neurology pipeline holds high‑risk, high‑reward opportunities. Fenebrutinib could expand the MS franchise further, while prasinezumab, developed with Prothena, is moving into Phase 3 for early Parkinson’s disease. While not yet de‑risked, it represents one of the few shots on goal for a disease‑modifying therapy in Parkinson’s. Tominersen for Huntington’s disease, though battered by prior failures, has been redesigned for earlier patient populations and lower, less frequent dosing schedules, giving Roche a chance to salvage value in an area with no effective treatments.

Roche is also probing other frontier areas. Zilebesiran, an RNAi therapeutic targeting angiotensinogen, is being developed for hypertension and represents a first‑in‑class approach with potential for durable blood pressure control. Though still early, it aligns with Roche’s strategy of building out cardiometabolic exposure beyond obesity. Trontinemab, an experimental bispecific antibody engineered to cross the blood‑brain barrier, offers promise in Alzheimers by enhancing CNS delivery, potentially redefining how biologics can be used in the brain. Meanwhile, TL1A, an emerging target in immunology linked to inflammatory bowel disease, represents another high‑risk but strategically compelling program inlicensed from Roivant. If Roche can capture even a sliver of success across these frontier therapies, it would add meaningful optionality on top of its already rich pipeline.

From a commercial vantage point, these programs move the needle. On Alzheimer’s disease, trontinemab’s low‑dose, brain‑shuttle design and early safety profile translate into an estimated peak sales opportunity of roughly CHF 6 billion, with a plausible band between CHF 3 and 9 billion depending on how quickly infusion and monitoring infrastructure scales and how restrictive payer criteria remain. In hypertension, zilebesiran’s twice‑yearly RNAi approach could command about CHF 3 billion at peak, with a CHF 1.5 to 5 billion range tied to outcomes data, adherence benefits and the severity mix payers are willing to reimburse. In immunology, Roche’s TL1A franchise (RVT‑3101, where Roche controls the U.S. and Japan) looks like a future pillar: ulcerative colitis first and Crohn’s to follow support a base‑case peak near CHF 5½ billion and a reasonable corridor between CHF 3 and 8 billion, contingent on Phase 3 replication of the maintenance remission signal and class positioning versus larger rivals.

Neurology offers another durable wedge. If fenebrutinib can deliver a progression‑slowing story in PPMS while capturing oral‑therapy share in RMS, a CHF 4 billion peak is achievable, with a downside of roughly CHF 2 billion if PPMS underwhelms and an upside toward CHF 7 billion if efficacy and safety land cleanly and payer friction eases.

The Carmot assets shape the outer edge of Roche’s upside. The once‑daily oral GLP‑1, CT‑996, is the swing factor: a best‑in‑class tolerability and efficacy profile in Phase 2 could sustain around CHF 7 billion at peak, within a broad CHF 3 to 12 billion envelope given how sensitive the oral class will be to GI side‑effect management and long‑term adherence. The weekly injectable dual incretin, CT‑388, looks like a CHF 4½ billion opportunity at maturity, with a 2 to 8 billion range set by head‑to‑head competitiveness versus incumbent injectables and manufacturing scale. CT‑868, aimed at narrower diabetes adjacencies, adds a measured CHF 700 million base case and a 200 million to 1½ billion range. Taken together, the Carmot portfolio can reasonably support more than CHF 12 billion of peak sales on our base case, acknowledging wide cones of uncertainty in a fast‑moving market.

Diagnostics as a Stabilizer

The diagnostics business has long been Roche’s other half, often underappreciated but providing stability when pharma hits air pockets. It remains the global leader across core lab testing, molecular diagnostics, pathology and near‑patient solutions. After the COVID testing surge and subsequent collapse, and despite heavy price pressure in China from volume‑based procurement, the business is stabilizing. The scale of its installed base guarantees recurring reagent revenues, while menu expansion supports steady organic growth.

Digital pathology and molecular diagnostics are running at mid‑to‑high single‑digit growth, adding incremental profitability and future proofing the business. Near‑patient offerings like the LIAT point‑of‑care system and new ventures in continuous glucose monitoring with the Accu‑Chek SmartGuide extend Roche’s reach into adjacent markets. With margins consistently in the high twenties and strong cash conversion, Diagnostics functions as both a stabilizer and a source of optional growth. In essence, it is a high‑quality business that provides the ballast needed to support Roche’s risk‑taking in pharma.

Valuation and the Case for a Buy

Valuing Roche on an EV/EBITDA basis provides a clearer view of the company’s relative attractiveness. In 2024, group EBITDA stood at approximately CHF 28 billion, split between about CHF 22 billion from pharma and CHF 6 billion from diagnostics. Applying a 13 times multiple for pharma, consistent with European large-cap peers such as Novartis, Sanofi and AstraZeneca, yields an implied enterprise value of roughly CHF 286 billion. For diagnostics, applying a 16 times multiple in line with Agilent, Danaher and Thermo Fisher produces an implied enterprise value of CHF 96 billion. Combined, this gives a group enterprise value of CHF 382 billion. Subtracting net debt of CHF 17 billion at year‑end 2024 produces an equity value of about CHF 365 billion.

At current market values in the low‑to‑mid CHF 200 billions, the implied upside remains between 40 and 60 percent. Importantly, this calculation assigns only modest value to the obesity pipeline and none to high‑risk neurology bets. If the oral GLP‑1 program or fenebrutinib succeed, Roche’s equity value could expand further.

The political backdrop is noisy, with Washington accelerating drug price reforms and Beijing pushing volume‑based procurement. But Roche’s geographic diversification, the complexity of its biologics portfolio, and its investments in U.S. manufacturing mitigate the worst outcomes. Policy risks are real, but they are manageable and reflected in our conservative multiples.

The broader story is that Roche has three compounding engines: a resilient base of marketed blockbusters, genuine pipeline shots with asymmetric upside, and a diagnostics franchise that throws off reliable cash. Shares currently trade as if diagnostics will remain permanently depressed and the pipeline will stumble. The sum-of-the-parts analysis shows otherwise. With substantial upside even under conservative assumptions, Roche is a buy for us.