- Swiss pharma Roche on Thursday reported its pharmaceutical division earned 30.6 billion Swiss francs ($31.4 billion) in revenue over the first nine months of 2017.
- Sales were up 5% compared to the same period last year. More than half of that increase was attributable to growth from newer drugs like the recently launched multiple sclerosis treatment Ocrevus, the immuno-oncology therapy Tecentriq and the lung cancer drug Alecensa.
- Yet, biosimilar competition to Roche's top-selling cancer drug Rituxan put pressure on sales in Europe, where revenue declined by 16% in the third quarter. Overall global sales of Rituxan were up 1% year over year during that time period.
Roche is beginning to get a taste of how the entry of biosimilars could impact its business. Copycats of its best-selling biologic Rituxan (rituximab), sold as MabThera in Europe, entered the European market this year. Celltrion, Inc. won approval for its version of the drug, Truxima, in February, while Novartis AG's Sandoz unit garnered an OK for its Rixathon in June.
"It's progressing as we would expect in Europe," said Daniel O'Day, Roche's head of pharmaceuticals, on a Thursday morning call with investors.
"We are planning in the very early days of Europe. And I expect that this is going to be similar in the United States as well with Rituxan, is that the subcutaneous has a preferential effect in the biosimilar process. I think that speaks to one level of defense, even as we face biosimilar competition for Herceptin as well. We have very good market share with Herceptin subcutaneous. We'll do everything possible to have that brand preference."
While biosimilars of Rituxan and the cancer drug Herceptin (trastuzumab) are just entering the European market, copycats of those brands are expected to reach markets stateside over the next couple of years. The Food and Drug Administration accepted applications from Sandoz for Rixathon in September, and from Celltrion and partner Teva Pharmaceutical Industries Ltd. back in June.
And Amgen, Inc just secured an OK for a biosimilar copy of Avastin (bevacizumab), another one of Roche's top drugs.
"There's value to the originator products. We believe there's value to the subcutaneous formulations, and that's proving right in the market as well," added O'Day. "It's very much in line with what we expected and we're in a good position to be able to respond to that, with the complete understanding that we're going to have significant erosion to MabThera."
"We have two competitors on the market already in Europe and the next competitor won't be until 2019. With Herceptin, we expect several competitors to come on starting in the early part of next year," he explained further.
In order to combat the erosion of its key brands, the Swiss pharma is counting on fast launches from some of its newest products, including the multiple sclerosis drug Ocrevus (ocrelizumab), which was approved for two types of the debilitating neurological disease in March. The drug had sales of $197 million in the second quarter, increasing to $316 million in the third — nearly double what analysts had expected for the drug.
Sales of cancer drug Alecensa (alectinib) were in line with expectations, while the $121 million in revenue from Tecentriq (atezolizumab) was below the $150 million analysts had forecast.
Tecentriq was a late-entrant to the checkpoint inhibitor market and has had more difficulty gaining market share in lung cancer. O'Day said sales are currently split 60% in bladder cancer and 40% in lung cancer, but he expects that to shift in favor of lung cancer as competition in the market changes. The checkpoint inhibitor failed a key confirmatory trial in bladder cancer earlier this year, raising questions about its effectiveness in that setting.