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Roche Sees More Growth Opportunities for Phesgo, Tecentriq; Still Optimistic on Tiragolumab


NEW YORK – Roche on Thursday reported a 3 percent increase in pharmaceutical division revenues and strong performance from several precision oncology products, such as Phesgo (pertuzumab/trastuzumab/hyaluronidase) and Tecentriq (atezolizumab).

And while the company experienced a setback in the development program of its anti-TIGIT immunotherapy tiragolumab during the second quarter, Roche executives said they're not giving up on that program yet.

For the six months ended June 30, Roche's pharmaceutical division recorded revenues of CHF 22.35 billion ($23.02 billion) compared to CHF 21.67 billion in the first half of 2021. During a call to discuss the company's financial performance, William Anderson, CEO of Roche Pharmaceuticals, described the revenue increase as "solid growth" that shows the firm is starting to shake off the negative impact from biosimilar competition. "That's back squarely in the black," he said.

In the company's HER2-franchise, Perjeta (pertuzumab) contributed CHF 2.06 billion in sales in the first half, marking a 5 percent increase from the year-ago period; Kadcyla (trastuzumab emtansine) revenues grew 14 percent to CHF 1.07 billion; and Phesgo revenues grew 241 percent to CHF 325 million. Due to biosimilar competition, revenues of the company's first-generation HER2-targeted drug Herceptin (trastuzumab) declined 16 percent year over year to CHF 1.18 billion.

However, Phesgo, which is a subcutaneous version of Herceptin plus Perjeta, is proving particularly attractive in countries with limited capacity to administer infusion cancer drugs, said Anderson. In early launch countries, Roche has been able to convert 27 percent of Perjeta users to Phesgo, and in countries with limited infusion capacity, the conversion rate is up to 90 percent. Phesgo's point of differentiation in terms of administration may also make it harder for biosimilar developers to put up competing products when Perjeta's patent expires, Anderson added.

He highlighted that Roche is also studying the combination of Phesgo with the selective estrogen receptor degrader giredestrant in the Phase III heredERA trial in the first-line metastatic breast cancer setting in patients who are both HER2-positive and estrogen receptor-positive. "In the maintenance setting, this would give patients basically a lower intervention because giredestrant is a pill and Phesgo is a subcutaneous product," Anderson said. "We hope for a more potent but also patient-friendly solution."

Tecentriq, a checkpoint inhibitor marketed for non-small cell lung cancer and other tumor types, recorded revenues of CHF 1.76 billion, an 11 percent increase compared to H1 2021. Rozlytrek (entrectinib), a drug for ROS1-positive NSCLC, meanwhile, brought in revenues of CHF 34 million, a 54 percent increase compared to the year-ago period.

Anderson noted that the company is moving beyond the revenue losses as a result of having to stop marketing Tecentriq in triple-negative breast cancer and bladder cancer indications. The company decided after discussing the available data with the FDA to pull these indications that had previously received accelerated approval.

In the US, Tecentriq's uptake was particularly strong in the adjuvant NSCLC setting, where the company last year garnered FDA approval for patients with tumors expressing PD-L1 in at least 1 percent of cells. In the second quarter, the European Commission also approved the drug for adjuvant use but in patients with PD-L1 expression in at least 50 percent of cells. "In the US we're now up to 80 percent testing in the adjuvant setting for PD-L1 and then we're at 60 percent market share in … the high PD-L1 [expressing] patients," Anderson said.

Roche also expects Japanese regulators to approve Tecentriq in the adjuvant setting in the fall. Given these factors, Anderson predicted Tecentriq has much more runway for growth.

The company also had some bad news in Q2. In May, Roche announced its anti-TIGIT immunotherapy tiragolumab plus Tecentriq failed to significantly improve progression-free survival compared to just Tecentriq in PD-L1-high advanced NSCLC patients. However, noting that patients in the combination arm of the SKYSCRAPER-01 trial had numerically higher overall survival, the company has decided to continue the study until this co-primary endpoint matures and reads out.

During the call, Roche CEO Severin Schwan said the company is disappointed with this setback. "At the minimum, we have lost a year," he acknowledged. "If we would have had positive progression-free survival, we would have been to the market probably earlier … [and] it would have been a better start in terms of our market share position."

Ultimately, though, Roche is not giving up on tiragolumab. "In case overall survival is positive, we can still salvage a lot of value out of tiragolumab," Schwan said. "At the end of the day, of course, overall survival will always beat progression-free survival. … As a patient ... what you care about is how long you live and what quality of life you have."

Lastly, during H1, Roche wrote off CHF 336 million related to a "product intangible asset relating to Flatiron's technology." Roche CFO Alan Hippe said that while the firm is happy with the performance of the Flatiron real-world data business, compared to the original business plan, "we've been too optimistic." The company has reset its expectations, but Hippe maintained that Roche's overall strategy around using RWD is still intact.

Schwan assured that Roche remains committed to leveraging RWD and advanced analytics. "That's a huge opportunity in the long term, and from a strategic point of view, it's very synergistic with our core business both in pharma and in diagnostics," he said.

In parallel with announcing H1 financials, Roche said its board of directors will propose Schwan as their new chairman, with Christoph Franz stepping down from the role in March of 2023. In light of this, Thomas Schinecker, current CEO of Roche Diagnostics, will replace Schwan as the head of the overall business, effective March 15, 2023. Schwan has been at Roche's helm since 2008.