Roche

Founded by Fritz Hoffman La Roche in 1896 in Basel, Switzerland, Roche has enjoyed continuity not seen in many other pharma companies, and is still today controlled by the Hoffman family.

The fortunes of the company have waxed and waned over the years, but Roche is now most definitely enjoying a golden period, thanks to a string of successful drugs launched in the 1990s and early 2000s.

Most of this success was based on its close relatisonship with Californian biotech firm Genentech, which discovered Herceptin, Xeloda and Avastin - and in 2009 Roche moved to merge the biotech into its main operations.

Roche is now looking to its innovative late-stage pipeline to help it get back on track for the next financial year after a decline in sales for 2010.

Group sales fell 3% to CHF 47.47 billion ($50.6 billion) and pharma revenue was down by nearly 2% to CHF 37.05 billion.

The figures were skewed by sales of Tamiflu, which fell by 71%, or CHF 1.4 billion, after the H1N1 influenza pandemic petered out early last year.

But sales in Western markets also suffered twin blows from US healthcare reforms and austerity measures in Europe, leaving emerging markets to pick up some of the slack.

Roche’s oncology division saw the biggest growth across its pharmaceutical operations, with sales up 7% to CHF21.3 billion, accounting for over half of all the company’s pharma sales.

Roche’s chief executive Severin Schwann remains optimistic about Roche’s future, saying that despite a “challenging year” in 2010, the Swiss pharma firm still achieved “solid growth”.

The company did manage 4% year-on-year growth in its 2010 profits of CHF 8.9 billion, but this was partially achieved by making a 5% cut in R&D spending, which finished the year at CHF 9 billion.

Pascal Soriot, chief operating officer of Roche, said there had been not only headwinds but “cross winds” in 2010. “We look forward to the day when we can run with the winds again,” he added.

Avastin troubles

The source of one of these cross winds was Avastin’s use in metastatic breast cancer when the FDA asked for this indication to be removed after it was shown to be ineffective in phase III studies. Despite an appeal by the company, the US licence in this indication was revoked in November 2011.

Roche has forecast that sales of Avastin may actually decrease in 2011 as a knock-on effect from the FDA’s decision, and downgraded its target for the drug from CHF 9 billion to between CHF 6-7 billion.

But there was some good news for the drug in 2011, when it gained US and European approval for a new indication, ovarian cancer.

Outside its oncology franchise Roche remained strong, with arthritis drug Actemra making CHF 397 million following FDA approval in October and there was very healthy growth for ophthalmology drug Lucentis, whose sales were up 27% to CHF 1.5 billion.

Aside from Tamiflu, the biggest drop in revenue came from organ transplant treatment CellCept, which was down 15% to CHF1.29 billion as it continues to succumb to generic pressures.

Roche is set for low single digit growth for 2011 as European price erosion and the US healthcare reforms continue to impact on sales for all pharma companies in the West.

Late stage oncology

Roche has three late-stage three oncology drugs. First is its melanoma drug RG7204, a BRAF inhibitor, which gained FDA approval in August 2011. The drug has shown be shown to extend median progression-free survival life by 6.2 months in a hard to treat cancer, and is forecast to be making $1 billion in peak sales.

The second is pertuzumab in combination with Roche’s Herceptin for first line treatment of both HER2+ and metastatic breast cancer.

The third filing Roche is hoping to make will be GDC-0449 (RG3616), its hedgehog pathway inhibitor for basal cell carcinoma, a rare slow growing form of skin cancer.

The company’s hope is that these three drugs will shore up a difficult year ahead for as it continues to focus on innovation to offset the even stronger headwinds of 2011.