Roche Drops as Key Study on Cancer Drug Combo Disappoints

  • Results ‘went down like lead balloon,’ analyst writes
  • Drugmaker’s executives argue study has been misunderstood

Roche Holding AG shares fell by the most in almost a year after the Swiss drugmaker struggled to explain disappointing results from a study intended to secure the future of its lucrative breast cancer franchise. 

The trial threw into question how much of the market Roche will be able to push from Herceptin, an aging mainstay that will face pressure from copycat versions later this year, onto a pricey new combination treatment. Before an audience of skeptical investors and analysts late Monday in Chicago, Roche executives and a doctor who has worked on many of the company’s clinical trials argued that the study had been misunderstood.

The experimental combination -- Herceptin plus a new therapy called Perjeta -- added less than 1 percentage point of improvement to the proportion of women who lived at least three years without tumors returning. An editorial in the New England Journal of Medicine called the study outcome “a disappointment” and said the combination’s cost and potential side effects outweigh the benefit for low-risk patients.

The results “appear to have gone down like a lead balloon,” Nick Turner, an analyst at Mirabaud Securities in London, wrote in a note to clients. Investors were hoping to see a greater impact on patients, he said.

Roche dropped 4.4 percent to 253.30 Swiss francs at 11:15 a.m. in Zurich trading. Earlier, the stock sank as much as 5.2 percent, the steepest decline since June 24 last year.

Copycats for Cancer

Restricting use of the new combination to high-risk patients will probably put a lid on sales growth for Roche’s breast-cancer franchise, costing the Basel, Switzerland-based company as much as 1.3 billion francs ($1.35 billion) a year in revenue, Stefan Schneider, an analyst with Vontobel AG, wrote in a note to investors on Tuesday.

The late-stage data comes at a critical time as Roche faces potential cheaper copycat competitors for its three biggest cancer medicines. The company said its Perjeta trial showed the new combination helps patients, especially people with high-risk breast cancer. For patients with less severe cancer, where tumors hadn’t spread to the lymph nodes, Perjeta didn’t help at all, according to the trial, dubbed Aphinity.

Adding Perjeta to Herceptin could double the current monthly cost of $6,100. Monday’s trial results will lay the groundwork for negotiations over how much insurers and government health systems are willing to pay, especially in Europe, where drugmakers must show that expensive new treatments outperform the older, cheaper options.

Confusing Day

Roche pharma chief Daniel O’Day described a “somewhat confusing day” as he and others faced a barrage of questions from about 300 analysts and investors in a packed room at the American Society of Clinical Oncology’s annual meeting.

“The discussion was weird,” said Jose Baselga, chief medical officer of Memorial Hospital at Memorial Sloan Kettering Cancer Center, who worked on the Aphinity trial as well as at least four other Roche studies. Baselga has also advised Roche’s Genentech unit.

Baselga attacked the New England Journal of Medicine’s assessment and said the new combination is “curing patients.” After critical questions, he retreated from a claim that the data had been highly statistically significant -- a signpost for how robust the results are.

Roche argued the data will be enough to convince regulators to sign off on the new combination. The company plans to track the women for years to determine if the improvement continues to increase over time. One in four women taking Herceptin eventually developed a recurrence in an older test, so reducing the risk of relapsing is critical, according to O’Day.

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