2013 In Review – Roche's biosimilar defence strategy gains momentum

If 2013 marked a critical year for the development of biosimilars, given the approval of Celltrion and Hospira's Inflectra in Europe (see 2013 In Review – A biosimilar breakthrough?), it also witnessed Roche's biosimilar defence strategy gain notable momentum.

With strong uptake of Perjeta and the approval of Kadcyla and Gazyva, some have been left wondering if there is any commercial merit in the development of biosimilar versions of older Roche products such as Herceptin and Rituxan – both of which are established as key targets for biosimilar players.

Roche has posed this question by significantly raising the efficacy bar in both HER2-positive breast cancer (Perjeta and Kadcyla) and chronic lymphocytic leukaemia (Gazyva), by delivering compelling head-to-head data versus its older franchises.

The approval of Perjeta last year for the first-line treatment of HER2-positive breast cancer kick-started the commercial element of this 'regeneration' process. Having already shown a Herceptin/Perjeta combination to significantly increase progression-free survival (6.1 months) versus Herceptin alone, 2013 saw the approval and launch of Roche's conjugated antibody Kadcyla as a second-line therapy. In addition, Roche secured approval of Perjeta in the neo-adjuvant setting, thereby opening up a completely new stream of revenue.

2014 will see the most significant Phase III data for these franchises published – those from the ongoing MARIANNE study, which is assessing a combination of Perjeta and Kadcyla in first-line HER2-positive metastatic breast cancer. Given the results produced by these two products to date, analyst and investor confidence in MARIANNE has continued to grow. A positive result would further limit the role of Herceptin in the HER2 breast cancer treatment paradigm, and thus reduce the commercial opportunity for biosimilar versions.

Perjeta and Kadcyla are of course not simply designed to insulate Roche's revenue base from biosimilar competition, but also grow its already substantial cancer franchises. A new report by analysts at Bank of America Merrill Lynch anticipates that the HER2 breast cancer portfolio could generate combined sales of around $12 billion by 2021, versus the $6.6 billion that was generated by Herceptin alone in 2012. Increased duration of use – owing to improved survival rates – and premium pricing versus Herceptin, largely distil robust revenue forecasts for Perjeta and Kadcyla into a simple case of mathematics, supported by Roche's long-standing entrenchment in this particular disease area.

Pricing – particularly in Europe – is the one issue where Roche is likely to face some potential pushback, despite the efficacy demonstrated by its new products. A firmly entrenched company strategy moving forward is the concept of more tailored pricing models; something that may be externally expanded upon in 2014.

More recently, Roche's successor to Rituxan – Gazyva – secured earlier than expected US approval in chronic lymphocytic leukaemia on the back of impressive head-to-head data versus Rituxan, which has raised expectations that it will deliver similarly compelling data in the much larger non-Hodgkin's lymphoma indication. Full data released at the recent American Society for Hematology (ASH) meeting further demonstrated not only Gazyva's ability to raise the bar versus Rituxan, but likely maintain the position of anti-CD20 therapy as the backbone treatment in key haematological cancers despite aggressive competition from novel, oral therapies.

Despite Roche's long history of success in the oncology antibody market, a glance back at investment analyst notes since the beginning of the year (and certainly since the approval of Perjeta in mid-2012) demonstrates a notable upward evolution in the confidence levels towards the company's strategy of 'enhancing' its Herceptin and Rituxan franchises.

Concurrently, the outlook for biosimilars – from both analysts and the developers themselves – has arguably lost some momentum over the same period. Despite the hugely significant regulatory success of Celltrion and Hospira, a previous gold-rush mentality has continued to dissipate over the past 18 months. This has been driven in part by greater realisation that if regulatory hurdles are overcome, then notable commercial hurdles remain in place, but also setbacks to a number of biosimilar development programmes and alliances – most notably those with a focus on Rituxan.

There can be little doubt, however, that in addition, the fast pace of expansion and enhancement for Roche's antibody portfolio has not only raised the bar for biosimilar developers but caused shades of envy in juxtaposition to the continued slow pace of biosimilar development.

See also

Physician Views Poll Results – Uptake of Roche's Gazyva expected to be rapid; additional data with other chemotherapy regimens will be critical in driving usage, however

FirstWord Lists: Top 20 oncology products in 2012 and 2018 – does Roche's dominance know no bounds?

ViewPoints: Roche's follow-on biologic strategy validated in three steps

ViewPoints: Roche – The making of a modern pharmaceutical giant: a Franz Humer timeline

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