Roche Fights Roche in Bid to Preserve $9 Billion Drug Business

(Bloomberg) -- As Roche Holding AG prepares a breast cancer treatment that might extend the lives of hundreds of thousands of women, the company will face stiff competition for the regime -- from its own medicine chest.

Since its introduction in 1998, Roche’s Herceptin has dramatically improved the outlook for women with an aggressive form of early breast cancer. By the end of March, the company says it will release test results for a newer regimen. But even if that improves on the currently used combination of Herceptin and chemotherapy, it may not be enough to offset the costs -- both financial and in terms of side effects -- when the older version works so well.

“The results are being awaited with great anticipation,” said Suzette Delaloge, head of the breast cancer department at the Gustave Roussy Institute near Paris. Delaloge said she’ll want to see improved outcomes for specific patient groups and perhaps better overall survival rates, though it’s quite possible that the new combination will offer “a benefit that’s clear but not very spectacular.”

For the test, dubbed Aphinity, Roche has added a drug called Perjeta to the Herceptin regimen widely used after breast surgery, and success would likely bolster sales of both. About 70 percent of Roche’s $6.8 billion in Herceptin revenue last year came from patients who might benefit from the combination being tested. The drugs’ combined sales could hit $9 billion by 2021, analysts estimate, based on the likelihood of success.

The study is important for Roche as its three top-selling drugs -- which rack up a total of $20 billion in annual sales -- start losing patent protection in the next three years. Herceptin, its No. 2 seller, will face competition from cheaper copies in Europe this year. So success with the Aphinity trial could add as much as $17 billion to Roche’s market value, according to brokerage Jefferies LLC. Failure, on the other hand, could erase $30 billion.

Roche’s drugs have already revolutionized the treatment of breast cancer. Herceptin essentially cures more than four out of five women with early breast cancer and a mutated gene called HER2 when used with chemotherapy after surgery. That gene is linked to aggressive tumors in about one-fifth of the 1.7 million people worldwide diagnosed with breast cancer annually. 

To be considered a success, the study needs to show that more than 90 percent of the women taking the latest combination see no return of their cancer for at least two years, Mirabaud Securities LLP says. If the combination doesn’t meet that goal, up to $4.9 billion in Herceptin sales could be at risk as cheaper copies enter the market, Mirabaud estimates.

The question is how much closer researchers can get to a cure, and at what price given that Herceptin and Perjeta each cost more than $6,000 a month. Aphinity’s primary measures are how long patients survive without the return of invasive breast cancer, and the prevalence of heart problems -- an issue with both Herceptin and Perjeta. Other common side effects of the regimen include diarrhea, hair loss, nausea, and low levels of white blood cells.

“A large number of women have an excellent prognosis” under the current regime, said Eric Winer, director of the Breast Oncology Center at the Dana-Farber Cancer Institute in Boston. “Do we need to give every one of these women another drug?”

High Bar

As Roche analyzes the results, executives have largely shied away from making predictions, though pharma chief Dan O’Day said the company is “encouraged.” He pointed to the success Perjeta and Herceptin have already had, including a previous trial with patients whose cancer had metastasized. In that study, people taking the combination were shown to live almost 16 months longer than those who took Herceptin and chemotherapy alone.

“We hope it works just as well” in the latest trial, said Jennifer Litton, an associate professor in breast medical oncology at the University of Texas MD Anderson Cancer Center. Litton wasn’t part of the test but has prescribed Perjeta to patients whose cancer has spread. “I definitely have seen the difference,” though she notes that many of her patients suffer from diarrhea after using the drug.

But if the study shows that the benefit is marginal and the side effects significant, the combination will be a tough sell, said Jame Abraham, director of the Cleveland Clinic’s breast oncology program. 

“The bar is really high,” said Abraham, whose patients participated in the Aphinity trial. “We need to really look at the data carefully.”

To contact the reporters on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net, Marthe Fourcade in Paris at mfourcade@bloomberg.net. To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net, David Rocks