Roche Halts Multiple Phase 3 Trials Amid Significant Revenue Impact from Biosimilars

Compiled by Keke

On February 4, Roche announced its financial results for the fourth quarter and full year of 2020. The company’s sales amounted to CHF 44.53 billion (USD 49.53 billion), representing an 8% year-on-year decline, or a 2% decrease on a constant currency basis.

The financial report mentioned that the company is discontinuing a series of cancer, autoimmune, and respiratory candidate drugs that have entered mid-to-late stage trials. Among them, the combination of the Akt inhibitor ipatasertib (also known as RG7440) with chemotherapy drugs for first-line treatment of HR-positive/triple-negative breast cancer (TNBC) patients has been removed from the Phase 3 clinical trial pipeline. Analysts at Jefferies pointed out in a report that the termination of the ipatasertib trial was "expected" after disappointing data from its breast cancer study were presented at the 2020 European Society for Medical Oncology (EMSO) conference. Since then, ipatasertib had become a burden on Roche’s late-stage R&D pipeline.

According to an analysis by EvaluatePharma, Ipatasertib, co-developed by Roche and Assay, was initially projected to achieve global sales exceeding $1.1 billion in 2026. However, Jefferies analysts had previously estimated the likelihood of Ipatasertib’s market approval at only 40%. The drug is still being evaluated in combination therapies for prostate cancer and certain types of breast cancer, although its therapeutic indications have been significantly narrowed.

Additionally, the Phase 3 trial evaluating the combination of Roche’s approved checkpoint inhibitor Tecentriq and Avastin (with taxanes) as first-line treatment for patients with ovarian cancer was also discontinued. Other Phase 3 studies halted by Roche include idasanutlin, an MDM2-p53 inhibitor, for relapsed or refractory acute myeloid leukemia (R/R AML), and etrolizumab, a dual-acting anti-integrin antibody, for ulcerative colitis (UC).

Roche Q4 2020 R&D Pipeline Update

In its Phase II pipeline, Roche also discontinued two trials: one involving astegolimab (RG6149), an anti-ST2 antibody licensed from Amgen, which failed in the treatment of asthma by targeting interleukin-33 (IL-33) (a setback similarly experienced by other companies with similar candidates, such as Sanofi and GlaxoSmithKline); the other involved the BTK inhibitor fenebrutinib for the treatment of rheumatoid arthritis, while Roche is concurrently conducting trials of this agent for multiple sclerosis.

Beyond pipeline updates, the greatest challenge facing Roche in fiscal year 2020 was likely the market impact of biosimilars. Judging by the first year after the launch of biosimilars for Herceptin, Avastin, and Rituxan in the United States, the company appears to have already faced the worst-case scenario. Biosimilars have swept through the three major oncology markets—the United States, the European Union, and Japan—resulting in a loss of CHF 5.05 billion (approximately USD 5.62 billion) in 2020, with global losses totaling around CHF 5.7 billion. The U.S. market accounted for a significant share of this decline, particularly as biosimilars for Herceptin and Avastin had already been available in the European market for some time. In the United States, Avastin sales fell by 37% in 2020 to CHF 1.80 billion; Rituxan sales declined by 32% to CHF 2.86 billion; and Herceptin sales dropped by 47% to CHF 1.36 billion.

The decline exceeded the expectations of industry observers. Bill Anderson, head of Roche’s pharmaceutical division, stated, “We had anticipated the worst-case scenario, but its impact remains far greater than our baseline projections. The absolute decline globally in 2021 is expected to be more moderate, with projected losses of CHF 4.6 billion ($5.1 billion).”

Traditionally, Roche has relied on new drugs to underpin the core position of its product portfolio, but the COVID-19 pandemic disrupted this strategy in 2020. Starting in the third quarter of 2020, the multiple sclerosis drug Ocrevus replaced Avastin as Roche’s best-selling medication. However, its year-over-year growth rate of 17% slowed significantly due to the impact of COVID-19, with sales of CHF 4.48 billion ($4.98 billion) falling short of Wall Street’s consensus expectations.

In the first quarter of 2020, Ocrevus attracted a significant number of patients to switch to this therapy. However, the pandemic sharply slowed the pace of this transition. As Ocrevus targets B cells and is administered by healthcare professionals, some existing patients were hesitant about receiving their doses, fearing that the treatment might impair their immune system’s ability to fight the novel coronavirus or that visiting treatment centers could increase their risk of infection. Nevertheless, the financial report highlighted a surge in sales for Ocrevus as well as other new drugs such as Tecentriq and Hemlibra. Despite this growth, it was insufficient to make 2020 a year of positive sales growth for Roche.

The truly encouraging development may well be the performance of the diagnostics business. In 2020, Roche’s Diagnostics Division saw its annual sales grow by 14%, reaching a total of over CHF 13.8 billion (approximately USD 15.3 billion), as demand for COVID-19 testing more than offset losses incurred due to clinic closures and postponed health check-ups.

Over the past year, Roche has launched 15 different tests for COVID-19, including rapid point-of-care solutions and high-throughput centralized laboratory diagnostics, encompassing antigen, antibody, and molecular testing methods. Other tests are used to assess the potential severity of an individual’s immune response to the virus.

Overall, the division’s sales grew by 28% in the fourth quarter of 2020 alone. The Molecular Diagnostics division was the primary contributor to this growth, generating approximately $4.16 billion in revenue, representing a year-on-year increase of more than 90% on a constant currency basis compared to 2019. Dr. Severin Schwan, CEO of Roche, stated, “We developed a comprehensive portfolio of diagnostic solutions in record time and established new partnerships to develop and produce effective COVID-19 therapeutics. Building on our revitalized portfolio and the significant progress made in our development pipeline, Roche is well positioned for future growth.”

In other areas, sales of Roche’s centralized and point-of-care businesses declined by 1% in 2020, as its immunodiagnostics segment was adversely affected by a drop in routine testing due to the COVID-19 pandemic. These impacts were particularly pronounced in China. According to Roche, rapid tests for the novel coronavirus and products from other biotechnology manufacturers did not offset the decline in sales in China, unlike in North America, Europe, the Middle East, and Africa. On a positive note, Roche is expected to launch several new drugs in China over the coming year.

In 2020, Roche delivered and installed more than 1,000 high-throughput cobas 6800/8800 laboratory instruments, nearly double the projected number. Additionally, Roche hired 1,000 new employees globally to help boost production capacity. The company has committed to investing $880 million to expand the supply chain for COVID-19 tests and related therapies.

Reference Sources:

1.Roche chucks out phase 3 ipatasertib combo tests, midstage IL-33 asthma, BTKi arthritis trials in Q4 clear-out

2.Roche's COVID-19 diagnostics boosted 2020 sales despite other testing losses

3.Roche Washes Hands of Mid and Late-Stage Trial Failures

4.Roche's COVID-19 diagnostics boosted 2020 sales despite other testing losses