Roche's New Medicines Drive 11% Pharma Growth as Biosimilar Erosion Stabilizes in Europe
Key Insights
Roche's pharmaceutical sales rose 11% to 48.5 billion Swiss francs in 2019, driven by strong performances from Ocrevus, Hemlibra, Tecentriq, and Perjeta.
The "big three" cancer drugs—Avastin, Herceptin, and Rituxan/MabThera (search)—face biosimilar competition, with MabThera sales in Europe dropping sharply to 590 million francs.
CEO Severin Schwan stated the worst of biosimilar impact is over in Europe, with the region returning to growth, though Avastin biosimilars in the US pose a new threat.
Roche has reported an 11% increase in pharmaceutical sales for the full year 2019, reaching 48.5 billion Swiss francs (approximately $50 billion), as a new wave of medicines successfully offset declining revenues from its legacy oncology franchise. Group sales rose 9% in constant currencies to nearly 61.5 billion francs ($63 billion).
The Swiss pharmaceutical giant's "big three" cancer drugs—Avastin (bevacizumab), Herceptin (trastuzumab), and Rituxan/MabThera (search) (rituximab)—appear to have reached their peak, with all three facing biosimilar competition in both Europe and the United States. The impact has been particularly pronounced in Europe, where biosimilar rivals are more entrenched.
New Medicines Fuel Growth
Strong performances from recently launched products drove the company's pharma division growth. Ocrevus (ocrelizumab) for multiple sclerosis (search), Hemlibra (emicizumab) for hemophilia (search), and the cancer therapies Tecentriq (atezolizumab) and Perjeta (pertuzumab) were key contributors to the positive results.
Among the legacy portfolio, Avastin has been the least affected by biosimilar erosion thus far, with sales increasing 4% to just over 7 billion Swiss francs ($7.3 billion). In contrast, MabThera sales in Europe fell sharply to 590 million Swiss francs ($607 million) for the year.
Biosimilar Pressure: Europe Stabilizing, US Threat Looms
CEO Severin Schwan told investors that the worst of biosimilar impact is now behind the company in Europe. "The company's European business is now returning to growth after the hit from biosimilars thanks to its newer medicines," Schwan said during an investor briefing.
However, Schwan cautioned that a further revenue hit is expected from Avastin biosimilars, which are just beginning to launch in the US market and are gaining traction in Europe. Pfizer plans to launch cheaper biosimilars of all three blockbuster drugs in the US at discounts of 22% to 24% compared with the originator products, with additional competition from other manufacturers.
Pfizer's Rituximab Biosimilar Advances
In a separate development underscoring the intensifying biosimilar landscape, Pfizer announced that its rituximab biosimilar candidate has met its primary endpoint in the REFLECTIONS comparative safety and efficacy trial. The late-stage study demonstrated equivalence in overall response rate for first-line treatment of patients with CD20 (search)-positive, low tumor burden, follicular lymphoma (search).
Rituximab, Roche's biggest-selling drug with approximately $7.3 billion in sales in 2016, has been off-patent for several years in the US and Europe. The first biosimilar rituximab, developed by South Korea's Celltrion, was approved in Europe in February 2017. Celltrion and partner Teva (search) subsequently filed with the FDA, while Sandoz gained European approval and filed with the FDA in September. Amgen is also advancing its ABP 798 rituximab biosimilar in late-stage development.
Roche has responded to biosimilar competition with a subcutaneous formulation of rituximab, approved in Europe since 2014 and in the US since 2017, which reduces administration time from 90 minutes of infusion to a simple injection.
Pipeline Outlook and Coronavirus Impact
Roche expects to counter ongoing biosimilar pressure with additional launches, including the spinal muscular atrophy (search) (SMA) drug risdiplam, which is under FDA review with a decision expected by May 24. As an oral therapy, risdiplam would compete against Biogen's Spinraza (nusinersen) and Novartis' gene therapy Zolgensma (onasemnogene abeparvovec), the latter priced at $2.1 million for a single dose.
Schwan also noted that the coronavirus outbreak in China is complicating operations, with employee travel reduced to an absolute minimum and increased remote working. Although Roche was the first company to provide a diagnostic test for the virus, city isolation measures have made it difficult to bring diagnostics to the point of care.