Uncertainty Hits as Roche is Dealt Multiple Clinical Trial Setbacks

July 19, 2017 (Last Updated: 3:40pm PT)
By Mark Terry, BioSpace.com Breaking News Staff

All eyes will be on Swiss-based Roche at its upcoming financial report. A string of failed drug trials and upcoming biosimilar competition are likely to have a negative impact on its 2017 guidance.

Problems include the company quietly abandoning its Seragon program earlier this year, which is picked up in 2014 when Genentech acquired Seragon Pharmaceuticals. With little fanfare or explanation, Genentech shuttered it in Phase II.

The biggest failure was in May, when Genentech announced that Tecentriq (atezolizumab) failed to meet its primary endpoint in its Phase III IMvigor2011 clinical trial. Already approved for certain types of bladder and urinary tract cancer (urothelial carcinoma), it was being evaluated in patients with locally advanced or metastatic urothelial cancer (mUC) whose disease progressed during or after treatment with a platinum-based chemotherapy. It failed to meet the primary endpoint of overall survival (OS) compared to chemotherapy.

The results were a surprise to almost everybody, including Roche, which noted that the chemotherapy wing of the trial had an unusually high response they weren’t expecting. It put the company under pressure, because the U.S. Food and Drug Administration (FDA) had granted the company accelerated approval based on more positive results from the smaller Phase II IMvigor 210 study. So it is possible the FDA could rescind the accelerated approval.

This occurred at the same time a similar drug from Merck & Co. had positive results. Reuters notes, “That flop was closely followed by unimpressive data from Roche’s Aphinity study that showed combining Roche’s two breast cancer drugs Herceptin and Perjeta produced only a modest additional benefit.”

David Evans, an analyst with Kepler Cheuvreux, slashed his forecasts for peak adjuvant sales of Perjeta to $1.5 billion, from a previous projection of $3.5 billion. In a note to clients, he wrote, “Apart from the underwhelming Aphinity data, Roche has had some other setbacks. Their impact in the second half might limit Roche’s chances of upgrading 2017 guidance.”

Roche is also facing a number of biosimilars to its three cancer drugs, Rituxan, Avastin and Herceptin in both Europe and the U.S. Together they bring in $22 billion per year. Roche’s chief executive officer, Severin Schwan, has argued that the company can improve sales overall by developing new drugs for other diseases, but the prominent failures have investors and analysts skeptical.

Novartis’s Rituxan biosimilar was approved in Europe in June. “It’s only two weeks in,” said Richard Francis, Novartis ’ Sandoz generics unit head, to Reuters. “But the reception we’re seeing from physicians and key stakeholders is very positive.”

It’s not all gloom and doom, however. The FDA approved Ocrevus for primary progressive multiple sclerosis in March, and its hemophilia drug emicizumab, if approved, is projected to bring in $1.5 billion in sales by 2022. In addition, in trials, Genentech’s Alecensa has shown itself to be more effective than Pfizer ’s Xalkori for lung cancer.

Reuters writes, “Roche also contends the Herceptin-Perjeta data is not as dire as some judge it and believes it still reinforces its case with regulators that the two medicines should be used together to keep breast cancer from returning.”

Although Roche has made comments suggesting that they are not overly worried about the biosimilar competition, many analysts clearly are. “Roche has $22 billion of revenues exposed to biosimilars,” said Tim Race, an analyst with Deutsche Bank, in a note. “The rapid pace of innovation, particularly in oncology, means we have a lower than historical level of visibility that Roche can maintain its market leadership.”