Roche Aims Big in Oncology - Analyst Blog

Roche (RHHBY) is looking to strengthen its presence in oncology and expand in other therapeutic areas like metabolism, inflammation and central nervous system (CNS). The company provided an update on its pipeline at a recently held investor conference.

 

The company has a strong final stage pipeline consisting of more than 35 additional indications for existing products. Moreover, 10 new molecular entities in the areas of cancer, metabolic, autoimmune diseases and CNS disorders are being studied.

 

Roche is one of the leading players in the oncology segment. In 2009, this segment accounted for 53% of total sales. Oncology portfolio revenues rose 8% to CHF 20.7 billion, led by Avastin and other drugs such as Herceptin, MabThera/Rituxan, Tarceva and Xeloda.

 

In order to further strengthen its presence in oncology, the company is developing several new drugs such as pertuzumab and T–DM1 for HER2-positive breast cancer, RG7204 for the treatment of malignant melanoma, GA101/RG7159 for chronic lymphocytic leukemia and non-Hodgkin’s lymphoma, and RG3616 for the treatment of advanced basal cell carcinoma and potentially other cancers such as colorectal cancer.

 

Results from these candidates are expected over the next two years with the first regulatory submission anticipated in 2011. Although we are pleased with the strong outlook provided by the company, it has had its share of pipeline setbacks in the recent past with its lead product, Avastin (bevacizumab). 

 

Avastin in combination with docetaxel chemotherapy and prednisone failed to meet its primary endpoint of extending overall survival compared to chemotherapy and prednisone alone in a phase III trial that was conducted in men suffering from late stage prostate cancer.

 

While Avastin is being studied for the treatment of 30 different tumor types, the setback in prostate cancer is a big blow to Roche. We are concerned about the safety issues as well. Severe adverse events including neutropenia and fatal infections were identified.

 

Last month, Roche suffered another setback with Avastin. The drug was being studied in a phase III trial in combination with Xeloda (capecitabine) or fluorouracil and cisplatin chemotherapy in patients with gastric cancer (stomach cancer). Here too, the study did not meet its primary endpoint of extending overall survival in patients.

 

Avastin is approved in the US and Europe for treating advanced colorectal, breast, non-small cell lung and kidney cancer. In 2009, the drug was approved in the US and 11 other countries for treating relapsed glioblastoma multiforme, the most aggressive type of advanced brain tumor. Being approved for several indications, Avastin recorded a 21% rise in 2009 sales to CHF6.2 billion.