Roche's Cobas Liat Sales Plummet 20%, Slowing Diagnostics Division Growth to 3%
Roche (ROG.SW), a leader in the global in-vitro diagnostics (IVD) market, saw its diagnostics division report CHF 6.73 billion in revenue for the first half of 2026, representing a modest 3% growth on a constant currency basis. This is a decrease of 3% in Swiss francs, following the 2% growth rate in 2025, indicating a prolonged period of stagnation. This slowdown reflects Roche's struggle to secure new growth momentum after the explosive diagnostic demand during the COVID-19 pandemic subsided. The negative growth reported, amidst a challenging global interest rate environment and currency volatility, also poses a burden on Roche's stock performance and valuation.
The primary driver of this performance is China's large-scale centralized procurement (VBP) and price reform for medical devices. Due to pressure from Chinese regulators to forcibly lower prices for high-priced foreign medical equipment and reagents, the Asia-Pacific (APAC) region's diagnostics division revenue declined by 5% on a constant currency basis in the first half of the year. Although this is an improvement compared to the 12% decline in 2025, the downward pressure on prices in China, its largest emerging market, structurally erodes Roche's medium- to long-term profit margins. As a result, Roche is being forced to fundamentally restructure its business model, including strategies such as localizing production in China and strengthening its portfolio of lower-priced, China-specific products.
Looking at performance by business segment, the pathology lab division, focused on digital pathology and immunohistochemistry (IHC), grew by 11% on a constant currency basis, serving as the only key growth driver. In contrast, the near-patient care division declined by 5% on a constant currency basis, becoming a major drag on the overall diagnostics division's performance. In particular, sales of the 'cobas Liat System,' a small molecular point-of-care diagnostics platform, plummeted by 20%, recording a significant decline. The cobas Liat System has been known for its exceptional speed in PCR diagnostics for influenza A/B and COVID-19, but it appears to have been hit by the saturation of the installed base of respiratory diagnostic devices and the sharp decline in testing volume after the pandemic.
In the current point-of-care (POC) market, Abbott Laboratories (ABT)'s isothermal amplification platform 'ID NOW' and Cepheid's real-time PCR device 'GeneXpert Xpress,' a subsidiary of Danaher Corporation (DHR), are forming a strong competitive landscape. To overcome the decline in sales of its cobas Liat platform, which is focused on respiratory diagnostics, Roche plans to focus on expanding its multiplex diagnostic panels and diversifying its FDA-approved/CLIA-waived product portfolio. Furthermore, the success of the 'Axelios 1,' its next-generation sequencing (NGS) platform launched to compete with Illumina (ILMN), will be a key variable. In the global IVD market, which is projected to be worth approximately $108.6 billion in 2026, if Roche fails to successfully transition to a high-value-added molecular diagnostics portfolio, it may face difficulties in defending its market share in the long term.
Roche's diagnostics division's slowed revenue growth (3% on a constant currency basis) and the 20% decline in sales of its molecular point-of-care (POC) platform 'cobas Liat' in the first half of 2026 demonstrate the negative impact of the post-pandemic decline in the global respiratory diagnostics market and China's medical device centralized procurement (VBP) price reduction pressure on the performance of major healthcare companies. In the short term, this will intensify competition with leading platforms in the same market, such as Abbott (ABT)'s 'ID NOW' and Danaher (DHR)'s 'Cepheid,' in securing installed base, leading to difficulties in defending prices and margins. In the medium to long term, to maintain its dominance in the global IVD market, which is worth approximately $108.6 billion, Roche needs to rapidly diversify its portfolio with new, high-value-added pipelines, including non-respiratory and genetic analysis platforms, such as the 'Axelios 1' NGS device, which is currently in the marketing approval stage. Therefore, this performance suggests that the speed at which Roche reduces its dependence on point-of-care (POC) devices and transforms into a digital pathology and genomics analysis platform will be a key metric for re-evaluating the company's value in the future.