Roche: Positive Growth Trends
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Website: roche.com
Best-Selling Rx Products
| PRODUCT | 2013 SALES | 2012 SALES |
|---|---|---|
| Rituxan/MabThera | $7,499 | $7,236 |
| Avastin | $6,747 | $6,219 |
| Herceptin | $6,558 | $6,353 |
| Lucentis | $1,822 | $1,598 |
| Xeloda | $1,628 | $1,643 |
| Tarceva | $1,445 | $1,418 |
| Pegasys | $1,415 | $1,779 |
| Actemra/RoActemra | $1,119 | $908 |
| CellCept | $943 | $981 |
| Xolair | $852 | $761 |
| Valcyte, Cymevene | $748 | $688 |
| Activase, TNKase | $737 | $630 |
| Tamiflu | $685 | $604 |
| Pulmozyme | $617 | $579 |
| NeoRecormon/Epogin | $561 | $727 |
All sales are in millions of dollars and were translated using the Federal Reserve Board’s average rate of exchange in 2013: SFr0.9269.
Financial Performance
| 2013 | 2012 | |
|---|---|---|
| Revenue | $50,469 | $49,087 |
| Net income | $12,270 | $10,422 |
| EPS | $13.95 | $11.90 |
| R&D expense | $9,386 | $9,143 |
| 1H14 | 1H13 | |
|---|---|---|
| Revenue | $24,786 | $25,132 |
| Net income | $6,086 | $6,524 |
| EPS | $6.92 | $7.42 |
| R&D expense | $4,815 | $4,894 |
All sales are in millions of dollars except EPS and were translated using the Federal Reserve Board’s average rate of exchange in 2013: SFr0.9269.
Increasing demand for its medicines and diagnostics is reflected in the company’s strong operating results as the Roche Group exceeded management’s financial goals in 2013. Leadership is confident that Roche’s full-year targets for 2014 will be met after reporting a productive first-half performance.
Executives say Roche produced strong 2013 results. Group sales advanced 6 percent at constant exchange rates and 3 percent in Swiss francs to SFr46.78 billion ($50.47 billion). Overall net income rose sharply, improving 22 percent (+18 percent in Swiss francs) to SFr11.37 billion ($12.27 billion).
Heading into 2014, Roche leaders expected sales growth at constant exchange rates and targeted core EPS to grow at constant exchange rates, ahead of sales. Management additionally expected to further increase Roche’s dividend. For the first six months of 2014, Group sales increased 5 percent at constant exchange rates and core EPS improved 7 percent at constant exchange rates. Additionally, the full-year outlook was confirmed by Roche executives.
Switzerland-based Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world’s largest biotech company, with innovative medicines in the areas of oncology, immunology, infectious diseases, ophthalmology and neuroscience. Roche is additionally No. 1 globally for in vitro diagnostics and tissue-based cancer diagnostics, as well as a frontrunner in diabetes management. According to management, the company’s personalized healthcare strategy aims at providing medicines and diagnostics that enable tangible improvements in the health, quality of life and survival of patients.
“There is increasing demand for our medicines and diagnostic tests, especially the five new cancer treatments we launched over the last two years; and our pipelines are amongst the strongest in the industry,” remarks Roche leadership. “The 2013 results reaffirm the Roche strategy of focusing on innovation in medicines and diagnostics – and the resulting competitive advantage from developing medically differentiated products.”
As an innovation-driven business, Roche during 2013 spent SFr8.7 billion ($9.39 billion) on R&D to produce state-of-the-art medicines and diagnostic tests that provide significant medical benefit. Roche invested more dollars on research and development during the year than all health-care companies except Johnson & Johnson. Roche has 65-plus new molecular entities in the product pipeline, including about 15 late-stage projects. Roughly two-thirds of the company’s late-stage compounds are being developed with a companion diagnostic, demonstrating the company’s commitment to personalized healthcare.
Research is focused on the areas of oncology, immunology, infectious diseases, ophthalmology and neuroscience. Based on promising mid-stage data, Roche chose eight NMEs for late-stage development in 2013: six compounds in oncology, one in immunology and one in ophthalmology.
As of early 2014, there were 24 Roche medicines included in the World Health Organization’s (WHO) Essential Medicines list. Twenty two of those are off-patent and are freely available at very low cost, according to Roche.
Key events for Roche in the past two years included announced plans to invest SFr800 million ($863 million) in the company’s worldwide biologic medicine manufacturing network to meet growing demand. Also, Roche inked deals with 160 partners throughout 2013 across many areas, including immunotherapy for cancer, antibiotics for multi-resistant bacteria and technologies for new diagnostic tests.
In terms of corporate sustainability, in September 2014 Roche was recognized by the Dow Jones Sustainability Indices (DJSI) for the sixth consecutive year as the Group Leader in sustainability within the pharma, biotech and life-sciences industry. Additionally, since the first Roche Children’s Walk during 2003, Roche employees around the globe have generated over SFr11 million ($11.9 million) to support vulnerable children in Malawi and the rest of the world. Also, Roche and the Medicines Patent Pool reached a deal to increase access to Valcyte to treat CMV infection in HIV patients, which is a major cause of blindness. In addition, Roche reached a total of 20.7 percent women in key positions during 2013, one year ahead of its 2014 diversity goal of 20 percent.
At the 2014 AGM, the Board of Directors recommended a 6 percent increase in dividend to SFr7.80, which marks the 27th increase in as many years. With approval, over half of Roche’s net income is distributed to shareholders as dividends.
On March 4, 2014, Franz Humer stepped down as chairman of Roche. Mr. Humer worked in the pharma industry for 40 years, half of which were with Roche as head of the Pharmaceuticals Division, CEO and chairman.
Company Performance
The Roche Group exceeding all of management’s financial goals for 2013. Group sales rose 6 percent to SFr46.78 billion ($50.47 billion), reflecting positive demand for Roche’s oncology medicines – particularly HER2 cancer drugs and Avastin – as well as for the instruments and tests of the Professional Diagnostics business.
Pharmaceuticals sales advanced 7 percent and Diagnostics sales improved 4 percent versus their 2012 results. The United States and emerging markets were the primary regional growth drivers, with Europe performing well despite challenging market conditions. Roche’s core operating profit went up 8 percent to SFr17.9 billion ($19.31 billion) for 2013, and core EPS improved 10 percent at constant exchange rates (+6 percent in Swiss francs) compared to 2012. The Swiss franc rose against a number of currencies during 2013, primarily the Japanese yen and U.S. dollar, resulting in a negative impact on results reported in Swiss francs.
The 7 percent sales improvement for the Pharmaceuticals Division during 2013 boosted sales to SFr36.3 billion ($39.16 billion). This result was based on strong demand for products within the HER2 breast cancer franchise; the cancer medicines Avastin and Rituxan/MabThera; the rheumatoid arthritis drug Actemra/RoActemra, andthe eye-care product Lucentis. The results of key growth medicines more than compensated for pricing and competitive pressure on mature products, including the hepatitis drug Pegasys. This strong sales result contributed to 7 percent growth in core operating profit to SFr16.11 billion ($17.38 billion).
Cancer medicines accounted for the majority of 2013 Pharmaceutical sales (62 percent), of which almost one-third derived from products to treat HER2-positive breast cancer. Sales from the HER2 franchise – which now consists of Herceptin and the recently launched medicines Perjeta and Kadcyla – rose 14 percent over 2012. The performance reflected good uptake for Perjeta and Kadcyla, as well as growing use of Herceptin in key emerging markets such as China and Brazil.
Avastin, which is used to treat several different forms of cancer, was a significant growth driver, with 2013 sales improving 13 percent. This performance was largely due to strong sales for the treatment of ovarian cancer in Europe as well as increased use in colorectal cancer in Europe and the United States. The blood cancer and rheumatoid arthritis medicine Rituxan/MabThera again significantly contributed to growth, with a 6 percent sales improvement for 2013.
In addition to oncology products, the Pharmaceuticals Division was bolstered by sales of Lucentis (up 15 percent) and Actemra/RoActemra (up 30 percent), which topped SFr1 billion annually for the first time.
The primary regional sales growth drivers in 2013 were the United States and key emerging markets. The United States generated a 10 percent rise over 2012 sales. Sales increased 12 percent in key emerging markets, with demand particularly strong in China (+21 percent) and Brazil (+9 percent). European sales in 2013 increased 2 percent despite continuing pricing pressure, led by very strong sales in Avastin. In Japan, sales rose 2 percent compared to 2012 in spite of the termination of a join-marketing deal for the osteoporosis medicine Evista. Excluding that impact, 2013 sales growth in Japan came in at 7 percent.
The Diagnostics Division in 2013 again grew ahead of the global in vitro diagnostics market. Sales rose 4 percent year-over-year to SFr10.48 billion ($11.3 billion). This growth was mainly fueled by sales of the Professional Diagnostics business area (+8 percent), which bolstered the Division’s position as market leader. Core operating profit in the Diagnostics Division increased 4 percent to SFr2.18 billion ($2.35 billion). The Division’s core operating profit margin reportedly remained stable at 20.8 percent.
The Division’s portfolio includes immunoassays, diabetes, clinical chemistry, PCR tests, and tissue cancer tests. The strategy of the Diagnostics business is built on two pillars: testing efficiency and medical value. Best sellers in 2013 were the immunodiagnostic cobase602, the blood glucose meters Accu-Chek Nano SmartView, cobas c502 for clinical chemistry, BenchMark Ultra for tissue diagnosis, and cobasAmpliPrep for virology.
Professional Diagnostics, which is the Division’s largest business area, benefited from strong growth in its immunoassay business. Sales of blood glucose monitoring products declined 3 percent in 2013 due to reimbursement cuts in key markets, including the United States. As a result, the Diabetes Care business unit continued to implement restructuring measures to promote long-term profitability. The Molecular Diagnostics business area improved 2 percent in 2013 via 6 percent growth in the underlying business. This area also maintained its position as market leader with strong growth in the blood screening business and tests for the human papilloma virus (HPV). Sales of Tissue Diagnostics, particularly advanced staining products, advanced 7 percent over the 2012 amount.
All regions contributed to the Diagnostics Division’s growth in 2013, with Asia-Pacific and Latin America rising at double-digit rates. Sales climbed up 14 percent in Asia-Pacific (27 percent in China) and 13 percent in Latin America. The Europe, Middle East and Africa (EMEA) region, which represented almost half of the Division’s business, improved 2 percent over 2012. In North America, 2013 sales rose 1 percent as strong sales growth in the Professional Diagnostics business was offset by sales decreases in Diabetes Care. In Japan, 2013 sales improved 2 percent.
For the first half of 2014, HER2 breast cancer medicines helped drive Pharmaceuticals Division growth. Total Group sales rose 5 percent to SFr22.97 billion ($24.78 billion), with strong growth produced by the HER2-positive breast cancer medicines Herceptin, Perjeta and Kadcyla; other oncology medicines Avastin and Rituxan/MabThera; and Actemra/RoActemra. Sales of the chemotherapy drug Xeloda, which is no longer patent-protected, decreased due to generic competition in various markets. In Diagnostics, demand for Professional Diagnostics’ products for clinical laboratories remained strong, and Diabetes Care sales did not change.
Reported sales in Swiss francs came in at 1 percent lower than during first six months of 2013, as the U.S. dollar – along with a number of Latin American currencies and the Japanese yen – weakened against the Swiss franc.
Pharmaceuticals Division sales increased 4 percent during the first six months of 2014. U.S. growth of 5 percent was spurred by sales of HER2-positive breast cancer products, which rose 30 percent, and Avastin for treating colorectal and lung cancer. Sales of Xolair, which was approved for a new indication to treat chronic skin hives, increased as did sales of Lucentis compared to January-June 2013. Xeloda sales decreased during first-half 2014 due to generic competition.
Sales in Europe advanced 3 percent for first-half 2014, fueled by HER2 breast cancer medicines, the anti-cancer agents Rituxan/MabThera and Avastin; and Tamiflu in the United Kingdom.
First-half 2014 sales in Japan rose 7 percent in January-June 2014 due to strong growth of HER2 breast cancer medicines, increased demand for Avastin in breast and lung cancer, and Actemra/RoActemra.
In the International Region, 2 percent sales growth was spurred by Latin America (+11 percent), in particular Brazil, Argentina and Venezuela; however, political unrest had a negative impact on sales in the Middle East. First-half 2014 sales in China declined 1 percent compared to the first two quarters of 2013, primarily as a result of lower Tamiflu sales. Sales of HER2 breast cancer medicines,Rituxan/MabThera, Avastin and Actemra/RoActemra remained solid in China.
The oncology portfolio continued to drive growth in all regions in January-June 2014. Sales of HER2 breast cancer medicines advanced 20 percent year-over-year, with strong demand for new products Perjeta and Kadcyla, as well as for Herceptin in combination with Perjeta. Avastin (+6 percent) generated solid growth across the regions, particularly for the treatment of colorectal and ovarian cancers. Rituxan/MabThera, which is now available in a subcutaneous formulation in Europe, delivered 4 percent first-half 2014 growth in most regions. Immunology and ophthalmology also performed well, according to Roche.
Actemra/RoActemra sales jumped up 22 percent, rising significantly in all major markets during the first half of 2014. Roche reported good uptake of the new subcutaneous form of the medicine in the United States, and this version has also been approved in Europe. U.S. sales of Lucentis rose +6 percent compared to first-half 2013, which continued to grow with increased adoption in the treatment of diabetic macular edema.
On the diagnostics front, the division continued to generate growth (6 percent) with first-half 2014 sales of SFr5.14 billion ($5.55 billion). Professional Diagnostics, with 9 percent sales growth compared to 1H 2013, was the primary contributor led by the immunodiagnostics business (+12 percent). Molecular Diagnostics sales were up 4 percent year-over-year. Diabetes Care sales for January-June 2014 were stable as management said this unit continues to operate within a challenging and volatile market environment. Tissue Diagnostics sales improved 9 percent over the first-half 2013 results.
All Diagnostics Division regions contributed to growth in the first six months of 2014, primarily driven by Asia-Pacific (+15 percent) and North America (+6 percent). In the EMEA region, the division’s largest market, sales advanced 2 percent. Latin America increased 11 percent and Japan grew 4 percent during the 2014 first half. Professional Diagnostics was the primary contributor to sales increases in each region.
“We had a good first half, driven mainly by our cancer medicines, especially the new breast cancer medicines, Perjeta and Kadcyla, as well as by Diagnostics,” commented Roche CEO Severin Schwan. “We made significant progress in our product pipeline, as the FDA granted Breakthrough Therapy Designation for our cancer immunotherapy candidate anti-PDL1, as well as priority reviews for Avastin in two new indications and fast-track designation for a promising new antibiotic. In Diagnostics, we also gained an important FDA approval for use of our HPV test in primary screening for cervical cancer. Based on our half-year performance, I am confident that we will meet our full-year targets.”
For full-year 2014, management expects low- to mid-single digit growth in Group sales at constant exchange rates. Core EPS is targeted to increased ahead of sales. Roche leadership anticipates further increasing its dividend.
Acquisitions
Roche entered into a definitive merger agreement with InterMune Inc. in August 2014 at a price of $74 per share in an all-cash transaction. This corresponds to a total deal value of $8.3 billion on a fully diluted basis. The agreement is expected to be neutral to core EPS during 2015 and accretive from 2016 onwards.
Located in Brisbane, Calif., InterMune is a biotech company concentrated on the R&D and commercialization of innovative therapies in pulmonology and fibrotic diseases. This transaction will enable Roche to broaden and strengthen its respiratory portfolio worldwide. InterMune’s lead product pirfenidone is approved for idiopathic pulmonary fibrosis in the EU and Canada, and is undergoing FDA review. Roche markets Pulmozyme (dornasealfa) and Xolair in the United States and has other novel therapeutic products targeting respiratory diseases in its drug pipeline.
Roche in early July 2014 announced its intent to acquire a 100 percent controlling interest in Seragon Pharmaceuticals Inc. Seragon is a U.S. private company located in San Diego. The transaction was completed in third-quarter 2014. The purchase consideration amounted to $725 million in cash and up to $1 billion from a contingent consideration arrangement.
Roche acquired rights to Seragon’s entire portfolio of selective estrogen receptor degraders (SERDs) for the potential treatment of hormone receptor-positive cancers. The lead product candidate ARN-810 is a next-generation SERD undergoing Phase I studies for patients who have hormone receptor-positive breast cancer and have failed current hormonal agents.
A deal was reached for Roche to acquire Santaris Pharma A/S in August 2014 to expand discovery and development of RNA-targeting medicines. Santaris is a privately held biopharma company based near Copenhagen, Denmark. Santaris has pioneered its proprietary Locked Nucleic Acid (LNA) platform that has contributed to an emerging era of RNA-targeting therapeutics, according to Roche. This new class of medicines has the potential to address hard-to-treat diseases in various therapeutic areas. Roche intends to maintain Santaris’ operations in Denmark, where the existing location will be renamed Roche Innovation Center Copenhagen. Roche made an upfront cash payment of $250 million to Santaris shareholders and owes additional contingent payments of up to $200 million based on the achievement of certain predetermined milestones.
The Diagnostics business also has been busy in the acquisitions arena in the past two years. For example, Roche during 2013 acquired Constitution Medical Investor Inc., which has designed an innovative hematology testing system. This system is developed to provide faster and more accurate diagnosis of blood-related diseases.
In first-half 2014 Roche acquired IQuum Inc., which is concentrated on developing point-of-care products for the molecular diagnostics market. Another acquisition was Genia Technologies Inc. Genia is developing a new generation of sequencing technology: a single-molecule, semi-conductor based DNA sequencing platform using nanopore technology.
Product Performance
The best-selling medicines of 2013 and first-half 2014 for Roche were Rituxan/MabThera, Avastin, Herceptin, and Lucentis.
As Roche’s best-selling medicine, Rituxan/MabThera (rituximab) is the standard of care for NHL and CLL. Non-Hodgkin’s lymphoma is the most common cancer of the lymphatic system, and chronic lymphocytic leukemia is one of the most common forms of blood cancer. Rituxan/MabThera is also approved for rheumatoid arthritis as well as for treating granulomatosis with polyangiitis (GPA) and microscopic polyangiitis (MPA), which are two forms of ANCA (anti-neutrophil cytoplasmic antibody) associated vasculitis.
Introduced during 1997, the medicine has been used to treat more than 3 million cancer patients. Rituxan/MabThera 2013 sales increased 6 percent to SFr6.95 billion ($7.5 billion). First-half 2014 sales were up 4 percent CER to SFr3.36 billion ($3.62 billion). The product performed strongly during 1H 2014 in Europe (+7 percent), where sales were led by increased market share in follicular lymphoma as well as first-line treatment for CLL. First-half 2014 sales in International regions increased 5 percent, driven by Latin America. The subcutaneous form of MabThera in NHL was approved in Europe and Australia.
Avastin is marketed for colorectal, breast, lung, kidney and ovarian cancer as well as for the brain tumor glioblastoma. Avastin (bevacizumab) works by starving tumors of their blood supply. Sales growth of 13 percent to SFr6.25 billion ($6.75 billion) in 2013 was largely due to strong sales for treating ovarian cancer in Europe and increased use in colorectal cancer in Europe and the United States. First-half 2014 sales were up 6 percent CER to SFr3.1 billion ($3.34 billion), with sales increasing in all regions. U.S. growth of 6 percent was spurred by expanded use in colorectal and lung cancer. January-June 2014 sales in Europe rose 5 percent due to rising demand in ovarian cancer. International region growth of 8 percent was spurred by launches for ovarian cancer and colorectal cancer. Sales in Japan sales went up 10 percent versus 1H 2013, with strong demand for use in treating lung and breast cancer.
Avastin sales should continue to grow with more indications being developed in the pipeline. U.S. regulators granted Avastinfilings priority review in treating cervical cancer and platinum-resistant ovarian cancer.
Introduced to the marketplace during 1998, Herceptin (trastuzumab) is another blockbuster medicine in the Roche oncology portfolio. The product is available for HER2-positive breast cancer, one of the most aggressive forms of breast cancer, affecting roughly 20 percent of patients diagnosed with the disease. Herceptin is additionally marketed for treating HER2-positive gastric cancer.
2013 sales for Herceptin came in at SFr6.08 billion ($6.56 billion), up 6 percent versus its prior-year result. The total for first-half 2014 grew 6 percent CER to SFr3.08 billion ($3.33 billion). Herceptin sales in 1H 2014 rose primarily in the United States (+10 percent) and in the International region (+6 percent). U.S. growth stemmed from increased usage in treating breast cancer in combination with Perjeta. The International region performance improved for the first six months of 2014 in all sub-regions. Growth in Latin America was due to increased demand in the public sector compared to the first six months of 2013. Asia-Pacific sales rose because of improving patient access. European sales grew 3 percent, with good uptake for the Herceptin subcutaneous formulation that is available in at least 20 markets, including Germany and the UK. Sales in Japan for first-half 2014 climbed up 4 percent because of increased usage in combination with Perjeta.
Perjeta sales in the first two quarters of 2014 amounted to SFr388 million ($419 million). The new medicine is available in combination with Herceptin to treat first-line metastatic HER2-positive breast cancer and is FDA-approved for neo-adjuvant (pre-surgical) treatment in breast cancer. U.S. demand remains high in each setting. In Europe, 1H 2014 uptake was strong in first-line metastatic breast cancer, particularly in Germany, France and the United Kingdom.
Kadcyla sales for the first six months of 2014 reached SFr227 million ($245 million). The antibody-drug conjugate attaches to HER2-positive cancer cells and delivers chemotherapy directly to them, resulting in a highly potent treatment with fewer adverse side effects. Kadcyla has been cleared for marketing in many major countries including the United States and Europe, where adoption of Kadcyla is high and demand remains strong. Reimbursement has been agreed in Japan and Brazil, following their respective approvals during late 2013 and early 2014.
Lucentis is marketed for wet age-related macular degeneration, macular edema following retinal vein occlusion, and diabetic macular edema. These diseases can result in severe eye damage. Sales for Lucentis during 2013 totaled SFr1.69 billion ($1.82 billion), rising 15 percent compared to the previous calendar term. The product’s sales for January-June 2014 advanced 6 percent to SFr828 million ($893 million). Roche markets Lucentis in the United States, where first-half 2014 sales rose largely because of increased adoption in treating diabetic macular edema.
The billion-dollar brand Xeloda (capecitabine) is marketed for colorectal, colon and breast cancer. Unlike many other chemotherapy cancer treatments that have to be administered intravenously, Xeloda is available in pill form. The drug stops cancer cells from growing and decreases tumor size.
Tarceva (erlotinib) is available as a treatment for advanced-stage non-small cell lung cancer and advanced-stage pancreatic cancer. Tarceva sales for 2013 advanced 4 percent to SFr1.34 billion ($1.44 billion), aided by FDA approval during the year with a companion diagnostic test for first-line therapy in lung cancer. First-half 2014 sales edged down 1 percent CER to SFr651 million ($702 million). Tarceva is undergoing Phase III studies in combination with onartuzumab for non-small cell lung cancer.
The hepatitis B and C medicine Pegasys suffered decreased sales in 2013, falling 19 year-over-year to SFr1.31 billion ($1.42 billion). The sales decline continued in the first six months of 2014, dropping 15 percent to SFr582 million ($628 million). Pegasys is in EU Phase III studies for chronic hepatitis C in children 5 years of age and older.
The humanized anti-interleukin 6 receptor antagonist monoclonal antibody Actemra/RoActemra is on the market for rheumatoid arthritis, systemic juvenile idiopathic arthritis and polyarticular juvenile idiopathic arthritis. A new subcutaneous version of the biological treatment was introduced in the United States during late 2013. This formulation was subsequently given the green light in Europe and Canada, with initial uptake reported as positive. EU approval was granted during September 2014 for use in patients with early rheumatoid arthritis.
Actemra/RoActemra sales in 2013 advanced 30 percent year-over-year to SFr1.04 billion ($1.12 billion), marking the product’s first year of blockbuster status. Sales of Actemra/RoActemra (tocilizumab) in the first two quarters of 2014 improved 22 percent. Sales growth during that period was strong in each major market (United States +26 percent; Europe +20 percent; International region +15 percent; Japan +24 percent), paced by strong demand for monotherapy in rheumatoid arthritis.
The asthma drug Xolair generated 2013 sales of SFr790 million ($852 million), increasing 13 percent over the 2012 performance. January-June 2014 sales totaled SFr437 million ($471 million), increasing 19 percent versus the prior year’s first half. During first-quarter 2014, Xolair (omalizumab) was FDA-approved for treating chronic idiopathic urticaria, a form of chronic skin hives. In Phase III clinical studies, Xolair met its primary endpoint in patients with moderate-to-severe chronic idiopathic urticaria who remained symptomatic despite treatment with approved H1 antihistamine doses.
Zelboraf (vemurafenib) continued to be a significant growth contributor for Roche in 2013. Sales increased 52 percent to SFr354 million ($382 million) compared to 2012. Approved in more than 80 countries and launched during 2011, the medicine has been receiving increasing reimbursement coverage. Zelboraf has been established as the standard of care for BRAF mutation-positive metastatic melanoma in key markets including the United States (2013 sales rose 11 percent), France (+33 percent), Germany (+23 percent) and the UK (+25 percent).
Sales for Zelboraf declined during the first two quarters of 2014 though, falling 5 percent year-over-year to SFr155 million ($167 million). The product has been facing significant competition from an alternative combination therapy in the United States (-43 percent), though sales in Europe increased 10 percent versus 1H 2013.
Zelboraf is being evaluated in Phase III trials in combination with the MEK inhibitor cobimetinib for BRAF V600 mutation-positive metastatic melanoma. Top-line results from the pivotal study coBRIM were announced in July and it met the primary endpoints.
Gazyva (obinutuzumab) is marketed in the United States for front-line treatment of chronic lymphocytic leukemia. The product was filed for approval with U.S. regulators during April 2013, and in the following month FDA granted the drug Breakthrough Therapy Designation and Priority Review. The Gazyva launch initially was scheduled for June 2014, but U.S. marketing clearance (Nov. 1, 2013) arrived eight months earlier than originally anticipated. Gazyva was made available to patients one working day after FDA approval came through.
Gazyva/Gazyvaro, for frontline treatment of chronic lymphocytic leukemia, produced first-half 2014 sales totaling SFr18 million ($19 million). During May 2014, the EU’s advisory committee CHMP recommended that Gazyvaro be approved for CLL in Europe in patients who cannot tolerate aggressive chemotherapy. The medicine is approved in Switzerland and was anticipated to be cleared in various key markets later in 2014.
New Pharmaceutical Products In 2013
Roche strengthened the outlook for its HER2 and hematology product franchises during 2013 with important launches of Perjeta and Kadcyla in HER2-positive breast cancer, and the U.S. market introduction of Gazyva in chronic lymphocytic leukemia. CLL is one of the most common types of blood cancer.
Perjeta was approved by EU regulators in March 2013 for advanced HER2-positive breast cancer. U.S. clearance to treat HER2-positive breast cancer before surgery was granted in September. Perjeta, in combination with Herceptin, is the first FDA-approved pre-surgical breast cancer treatment. According to Roche, Perjeta and Herceptin significantly improve survival rates in women with HER2-positive breast cancer.
Regulatory approval was received for Kadcyla in the United States, Europe and Japan during 2013. Kadcyla is the first antibody–drug conjugate (ADC) available for treating treat advanced HER2-positive breast cancer. An ADC is a targeted cancer drug that can attach to certain types of cancer cells and deliver chemotherapy directly to them, resulting in a highly potent treatment with fewer adverse side effects.
European approval was secured during 2013 for a subcutaneous formulation of Herceptin. This new version helps to significantly reduce the administration time and related treatment costs associated with the traditional intravenous method of administration.
Gazyva was the recipient of U.S. regulatory approval in November 2013 after FDA awarded Breakthrough Therapy Designation for the product. This designation was granted due to the strength of the data from a late-stage study as well as the serious and life-threatening nature of CLL. Late-stage studies investigating Gazyva in non-Hodgkin’s lymphoma, the most common cancer of the lymphatic system, and diffuse large B-cell lymphoma are under way.
New Diagnostic Products In 2013
The Diagnostics Division spent SFr1.08 billion ($1.17 billion) on R&D for diagnostic instruments and tests during 2013. Roche introduced 11 major products throughout the year, including instruments that further advance lab automation, new devices for diabetes management, and additions to test menus on existing instruments. Four new cancer tests – for screening or diagnosing breast, cervical, lung, or thyroid cancer – were introduced in 2013.
One of the key launches was the cobas 8100 pre-and post-analytics instrument. This fully automated workflow series automates routine laboratory tasks, increases cost-efficiency in the lab and reduces manual handling of samples.
Next-generation blood glucose meters – Accu-Chek Active and Accu-Chek Aviva/Performa – were introduced in several markets. Also, the Accu-Chek Aviva Expert system received FDA approval in 2013.
Molecular Diagnostics in 2013 received label expansion in tests for sexually transmitted diseases (CT/NG) for the U.S. arena and gained market clearance in Europe for several microbiology tests (MRSA, MSSA and HSV 1 and 2). In late 2013, Roche received market clearance in Europe for its fully automated cell-based CINtec PLUS Cytology test used in cervical cancer screening. With the cobas HPV test for screening, the CINtec p16 Histology test, and CINtec PLUS Cytology test, Roche possesses the most complete cervical cancer screening and diagnosis product portfolio. According to the company, this portfolio can identify cervical cancer early and identify cases that have been missed with Pap smear screening alone.
Product + Device Approvals/Launches And Pipeline Updates In 2014
During the first half of 2014, Roche presented data on 27 different medicines at the 50th American Society of Clinical Oncology meeting. According to the company, most notably were the results of a Phase I study demonstrating that the investigational cancer immunotherapy anti-PDL1 (MPDL3280A) shrank tumors in advanced bladder cancer. The drug compound has been granted Breakthrough Therapy Designation by U.S. regulators. Anti-PDL1 advanced into Phase III for lung cancer in 2014 and a broad program of development for other indications and combinations is under way.
Roche reported positive regulatory news flow throughout the first six months of 2014, with the subcutaneous formulations of Rituxan/MabThera for blood cancer and Actemra/RoActemra for rheumatoid arthritis approved in the European Union. The CHMP recommended that Gazyvaro be approved for treating CLL and Avastin be cleared for platinum-resistant recurrent ovarian cancer (and EU approval was subsequently granted for each drug in late July and early August, respectively). FDA granted Avastin filings priority review for the treatment of cervical cancer and platinum-resistant ovarian cancer. Also, U.S. regulators granted fast-track designation for LptD, a new antibiotic undergoing Phase II development. In Japan, Alecensa (alectinib) was approved in July 2014 for treating ALK-positive non-small cell lung cancer based on a Japanese study.
Breakthrough Therapy Designation was granted by FDA for alectinib, and worldwide studies are in progress. The U.S. regulatory agency cleared a new indication for Xolair for treating chronic idiopathic urticaria. Phase II data for the investigational drug lebrikizumab for severe asthma demonstrated positive results for a sub-group of patients who can be identified using a companion diagnostic test.
Another experimental medicine, cobimetinib, also demonstrated positive top-line results in advanced melanoma in combination with Zelboraf. According to Roche, the Phase III coBRIM study could potentially pave the way for a new standard of care.
Avastin was cleared by FDA in August 2014 in combination with paclitaxel and cisplatin or paclitaxel and topotecan for treating women with persistent, recurrent or metastatic carcinoma of the cervix. With this approval, Avastin is FDA-approved to treat five distinct tumor types. The approval in advanced cervical cancer was based on the GOG-0240 clinical trial.
Roche discontinued development activities for aleglitazar after a Phase III study review. The promising drug compound was intended to treat a diabetes-related heart condition.
Six key products in the Diagnostics Division were introduced during first-half 2014. Sales of companion tests for personalized healthcare and revenue from external development deals for such tests rose strongly, according to Roche.
FDA approved the cobas HPV Test (human papilloma virus) for use as a first-line primary screening test for cervical cancer in women aged 25 and older. This is the first HPV test in the United States available for first-line primary screening. Approval for this usage was additionally received in Canada. The cobas HPV Test for cervical cancer screening was the recipient of the Prix Galien Greece 2013 award as the best diagnostic tool. The Prix Galien awards are regarded as the equivalent of Nobel Prizes by the scientific community.
Roche launched the Elecsys Anti-Müllerian Hormone (AMH) blood test in September 2014. This represents the first fully automated AMH test for assessing a woman’s ovarian reserve.
In early September 2014, Roche announced the EU launch of new fully automated molecular diagnostic systems that offer the fastest time to results with the highest testing capacity. The cobas 6800/8800 Systems provide advanced performance with next-generation donor screening assays.
