Company Analysis - Hoffmann-La Roche
Encouraging Results
One of Roche & Genentech's current Phase III projects showing great potential is pertuzumab, a HER2 dimerization inhibitor which binds to a different part of the HER2 receptor from trastuzumab. Encouraging Phase II results have already been generated and pending analysis of the Phase III trials, Roche aims to file it for approval after 2008. Our analysis shows that based on Roche's previous successes, pertuzumab has an 88% chance of reaching the market, with predicted peak sales of $US755 million.
In addition to its own projects, Roche has sensibly augmented its development efforts by forging agreements with, or acquiring, companies whose technologies will aid Roche in its mission to produce 'medically differentiated' therapeutics. For example, in July Roche formed an alliance with Alnylam, a leader in the up and coming field of RNA interference, which granted Roche non-exclusive access to Alnylam's RNAi technology platform. In 2002, Roche acquired development rights for AS-1402 (R-1550), a humanized monoclonal antibody targeting the PEM1 antigen, which is found on the surface of over 90% of breast cancers. This product, which facilitates destruction of cancer cells by the host's immune system, is just one example of the 50 clinical-stage programmes Roche has inlicensed. Seeking out novel projects under development by other companies is essential to Roche, giving it broader access to innovation and allowing it to apply its own research strength to novel technology platforms.
Strength through creativity
It could appear at first to be a rather counterintuitive strategy to develop therapeutics for use only in specific groups of patients. By doing so, rather than developing broad-spectrum drugs, one might foresee that this would lower the potential use and thus market size of such a product. However, although trastuzumab is only appropriate for the 25% of patients whose breast cancer is positive for the HER2 receptor, since it provides a greatly improved prognosis for those particular patients then it becomes more likely and easier for it to corner that 25% of the market, at least until similar products are available to compete with it, a process that takes a considerable amount of time. It is also crucial to consider the major increase in efficacy a company can achieve by tailoring the product very closely to the disease or patient.
Targeted drugs that provide real benefits to patients are also less likely to fall foul of advisory bodies such as the UK's NICE, which will refuse to authorise spending on a costly drug if it is yet another chemotherapeutic that shows little benefit over existing therapies, for example. The novelty of its drugs has both set the standard for the company in what it is expected to achieve in the future and to some extent the rest of the industry as a whole. This financial stability, which is further reinforced by the steady, low-risk income from its diagnostics division, has allowed Roche's continued investment in R&D and led to it firmly establishing its place as the industry leader in antibody-based therapeutics.
Roche's high success rate in bringing new drugs to the market has been continued recently with the US approval and European launch of Mircera (R-744), the first FDA-approved erythropoietin able to maintain stable haemoglobin levels in all chronic kidney disease patients with dosing once every two or four weeks. If Roche's track-record is indicative of what is to come, it should be on course to remain one of the most innovative and successful pharmaceutical companies leading the way into personalised medicine.
Leanne Coyne
Pharmaprojects Analyst
Photograph copyright F Hoffman-La Roche Ltd
