Swiss drug maker Roche Holding AG (RHHBY.PK) (ROG.VX) will face a litmus test related to its top-selling cancer drug Avastin within a few weeks. The drug has also suffered a series of clinical trial setbacks recently , which have dimmed the shine of its bullish growth prospects. But that said, there may be still room to grow for the drug before its US patent expires in 2017 as it continues to be tested for broader indications.
Avastin is manufactured by Genentech and the drug's clinical heft was the reason behind Roche converting its 56% majority stake in Genentech to full ownership last year. Roche paid $47 billion to acquire the 44% interest in Genentech it didn't already own. Avastin generated annual revenue of 6.22 billion Swiss francs and accounted for 13% of Roche's total sales in 2009.
Avastin is a unique cancer drug that works by choking off the blood supply that is essential for the growth of tumor and its spread throughout the body. The drug secured its first FDA approval in 2004 for the treatment of metastatic cancer of the colon or rectum. It has subsequently been approved to treat non-squamous, non-small cell lung cancer, metastatic breast cancer, kidney cancer and brain cancer.
It was an accelerated approval that Avastin was given in 2008 for the breast cancer indication. The accelerated approval program of FDA allows life-saving drugs to be approved based on less than traditionally required clinical data.
The companies that get their drugs approved under the accelerated approval program are required to conduct more studies demonstrating the long-term effectiveness and then seek regular approval. Roche was also asked to conduct two follow-up studies in order for Avastin to be given full approval for the breast cancer indication.
In the trial based on which Avastin was granted accelerated approval, though the drug didn't increase life expectancy in breast cancer patients, the gold standard for cancer drugs, it delayed the cancer progression by 5.5 months.
But in the follow-up studies, the results were not as robust as the initial study since the drug delayed the growth of tumors only by one month to three months.
An FDA Advisory Committee, which met last month, recommended revoking the approval of Avastin for breast cancer saying that the drug's progression-free survival advantages are not clinically meaningful. On September 16, the FDA will make a final decision about whether or not to revoke breast cancer indication of Avastin.
As much as $88,000 is charged annually for an Avastin breast cancer regimen. Even if the approval for breast cancer is revoked, Avastin is likely to be prescribed "off-label" by doctors but insurance companies may stop paying for its use in breast cancer.
According to analysts, Roche might lose $500 million of Avastin sales in the U.S. to treat breast cancer if the approval is revoked.
In February of this year, Avastin disappointed in a stomach cancer trial and in the following month, failed a prostate cancer trial too. According to Roche, stomach cancer indication had the potential to increase sales of Avastin by 1 billion Swiss francs ($933 million) and prostate cancer indication by 500 million Swiss francs ($464.3 million) to 1 billion Swiss francs.
In another setback for Avastin, Roche stopped enrolling patients in a late-stage trial for non-aggressive non-Hodgkin's Lymphoma in June, on the recommendations of an independent data and safety monitoring board.
Earlier in the week, the UK cost watchdog NICE said that it will not recommend Avastin for treating metastatic colorectal cancer.
However, it's not been all gloom and doom for Avastin this year. According to a new study, whose results were released in June, long-term use of Avastin by ovarian cancer patients slowed tumor progression by nearly four months. The treatment involved chemotherapy plus Avastin followed by continued Avastin monotherapy.
A second late-stage study, whose results were released last month, demonstrated that Avastin in combination with chemotherapy followed by the continued use of Avastin alone helped women with ovarian cancer live longer without their disease getting worse.
Let's digress from the Avastin woes and take a look at Roche's drug pipeline.
There are currently 33 phase III trials - 6 for new molecular entities and 27 for additional indications. The company also has made a dozen drug filings in the U.S and Europe.
Roche, which has been seeking to gain a foothold in the diabetes market, was dealt a temporary setback in June as its diabetes drug Taspoglutide has been delayed by at least 12 to 18 months because some patients in the ongoing phase III study suffered from side effects such as skin reactions and gastrointestinal symptoms. The filing for Taspoglutide, a once-weekly injection, was expected in the U.S. and Europe by 2011. Now, because of the side effects, the company has sought additional time to monitor patients' response to the drug.
Roche's Taspoglutide would compete with twice-daily Byetta injection developed by Amylin Pharmaceuticals Inc. and Eli Lilly & Co. and the recently launched Victoza developed by Novo Nordisk A/S.
The company also has another experimental drug for diabetes - Aleglitazar, which is under phase III testing. Aleglitazar is being developed for diabetes patients at high risk of coronary events.
In April, Roche acquired Medingo, the diabetes diagnostic care business unit of Elron Electronics. The Medingo Ltd. micro pump insulin delivery system is not yet marketed and a global launch is expected by 2012.
Trastuzumab-DM1, or T-DM1 ,which is being developed for breast cancer, is yet another drug that will be delayed as the company's request to fast-track its approval has been denied by the FDA. The BLA requesting accelerated approval for T-DM1 based on the results of a single-arm phase II study was submitted in July 2010. Now, that the request has been denied, Roche will continue with its ongoing phase III study and expects a global regulatory submission of T-DM1 mid 2012.
The denial to fast track approval of cancer drug Trastuzumab-DM1 is a disappointment for Roche because its oncology franchise is starting to slow down and it certainly needs a kicker. Three of the top selling drugs in Roche's portfolio are cancer drugs - Avastin, MabThera and Herceptin. While Avastin's US patent expires in *2017, Herceptin's and MabThera's patents expire in 2014 and 2015, respectively. (* Source : Datamonitor)
In what would represent a potentially transformative new technology to create drugs for important disease targets, Roche inked a drug development deal valued at more than $1 billion with Massachusetts-based Aileron Therapeutics Inc. earlier in the week.
The collaboration is meant to discover, develop and commercialise a new class of drugs called Stapled Peptide Therapeutics against five undisclosed targets selected from Roche's key therapeutic areas, which include oncology, virology, inflammation, metabolism and central nervous system. Stapled Peptide Therapeutics are a result of Aileron's breakthrough peptide stabilization technology, and are a potential solution to drug as-yet intractable disease targets, including those originating from long sought-after intracellular protein-protein interactions.
In the first half of 2010, Roche's net income rose 37%, while sales increased 5% , compared to the year-ago period. For full year 2010, the company expects sales growth in mid-single-digit range.
Roche has been beset with clinical trial failures and regulatory setbacks so far this year. But unlike some of its peers there is no immediate threat of generic entry for its blockbusters. The company has lost more than 20% of its stock price year-to-date. Will things turn around in the coming months?
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