Product Sales, Pipeline & Biosimilar Timelines Key Themes For Roche 1Q
Executive Summary
Investors during Roche’s first-quarter update Wednesday will be looking for clues on looming biosimilar competition and timelines for the emergence of promising pipeline assets.
New products are forecasted to have boosted first-quarter sales growth at Roche, as the Swiss pharma continues to shrug off the effects of biosimilar competition to its cancer franchise in Europe.
But investors listening to the group's investor update on April 17 will be most keen to hear how Roche expects its late-stage pipeline and recently-launched products to off-set the arrival of biosimilars in the US during the second half of the year.
The world's biggest maker of cancer drugs has already said the impact of biosimilar competition will deepen later in 2019.
Attention is therefore focused on the US, where aging blockbusters Rituxan, Herceptin and Avastin are likely to face biosimilar competition in the second half, but leaving the full impact for 2020.
Still, Roche is also delivering stronger-than-anticipated growth on the innovation side, with many more products expected to offset this biosimilar impact.
Some products are already achieving higher-than-forecast levels of sales. These include multiple sclerosis drug Ocrevus (ocrelizumab), hemophilia product Hemlibra, (emicizumab), Perjeta (pertuzumab), Tecentriq (atezolizumab) and Alecensa (alectinib).
Roche's early pipeline is also thought to contain more possibilities, like RG6042 in Huntington’s disease. A Phase I/II study suggested the drug can significantly reduce levels of the disease-causing mutant huntingtin protein, making it the first product to show disease-modifying potential in the progressive brain disorder.
The Swiss group’s 2019 guidance is currently for low-to-mid-single digit growth for both top-line and EPS (earnings per share).
Deutsche Bank analysts expect Roche to report solid first-quarter sales “at the top end of its guidance range for the full year, with strong new product launches more than offsetting pressures on the legacy portfolio.”
Deutsche Bank in a note said another theme of interest would be the performance of the legacy portfolio in China and ex-US generally, which has been partially offsetting biosimilar erosion.
Expectations for possible presentations at this year's upcoming American Society of Clinical Oncology (ASCO ) medical meeting will also be a focus.
Questions will doubtless be asked by analysts about Roche's M&A plans.
On April 3, Roche extended the tender offer for US-based gene therapy company Spark Therapeutics Inc. until early May from an original deadline of midnight that day in a surprise holdup to the union. (Also see "Roche $4.8bn Buy Sparks Hemophilia Gene Therapy Race " - Scrip, 25 Feb, 2019.)
The reason given by Roche was that US financial regulators have not been quick at reviewing it’s multi-billion-dollar acquisition of the gene therapy biotech, but it is still on track for completion in the first half of 2019.