Company Analysis - Hoffmann-La Roche
Tamiflu - not all plain sailing
Another groundbreaking achievement for Roche away
from its leading antibody portfolio was the launch of
oseltamivir phosphate (Tamiflu), the first orally-active
neuraminidase inhibitor for the treatment of influenza.
It inhibits all influenza A and B neuraminidase subtypes,
preventing the emergence of progeny virions from
infected cells, and thus the spread of the virus. 
It has
been widely used in both the treatment and prophylaxis
of influenza, and partly due to stockpiling of the drug
that occurred following the international concerns
about a coming avian (H5N1) 'flu pandemic, had
blockbuster sales, reaching CHF2.63bn in 2006.
Although oseltamivir is designed to be active against
influenza strains including H5N1, there is limited
evidence to show its efficacy against this strain in
humans. This is due primarily to the rarity and
geographically dispersed occurrence of avian influenza
and the fact that in the few cases where it has been
used, the drug was administered more than 48 hours
after 'flu symptoms were presented - too late to have
the greatest effect. In light of this, Roche is currently
conducting further clinical research to determine its
efficacy against avian influenza in humans.
Recent data has led to some serious concerns regarding Tamiflu. In Japan, where the drug is most widely used, there have been reports of serious neuropsychiatric adverse events in children and adolescents, such as self-harm and increased risk of suicide. This has led to label warnings being added in Canada and the US, and a warning by the Japanese Ministry of Health against use in patients aged 10-19 years, although no causal link between the adverse events and oseltamivir has yet been established. A US FDA paediatric advisory committee met on 27th November to review the relevant information on these neuropsychiatric events, and Roche has now agreed to include a stronger warning label on the product.
A pipeline for survival
Although Roche is working towards bringing new and innovative drugs to the market, the majority of its ten major marketing applications and seven major regulatory approvals in the first half of 2007 were for additional indications or further markets for previously launched drugs. Nevertheless, the approvals of bevacizumab (Avastin) in the EU for first-line metastatic breast cancer, a lower strength capsule formulation of oseltamivir (Tamiflu) for paediatric use in the US, and erlotinib (Tarceva) for advanced pancreatic cancer in the EU are important achievements for Roche, with sales resulting from use in additional indications and markets providing the financial basis for Roche to develop its pipeline to full maturity.
In pursuit of "extending patients' lives and improving their health and quality of life", Roche is - indeed, must be - a research-intensive company, and its financial strength goes a long way to support its R&D expenditure, which in 2006 represented 17.7% of sales. In addition to the revenues Roche receives from sales of its launched drugs, and the significant growth in sales brought about by obtaining approvals for these drugs in additional indications, Roche has an R&D pipeline which is geared to maintain this stability and eventually support future product launches (Graph 3).
