Roche Shares Down On Actemra; Herceptin Success Of Little Help
March 18 2009 - 9:55AM
Dow Jones News
Roche Holding AG's (ROG.VX) shares fell Wednesday as investors'
risk adversity apparently won the upper hand when the company
reported positive study results for its cancer drug Herceptin just
after its Japanese unit Chugai Pharmaceutical Co. (4519.TO)
revealed a setback for the rheumatic arthritis drug Actemra.
While Roche said its breast cancer drug Herceptin also showed
benefits when used to treat aggressive stomach cancer, Chugai
overnight said Actemra might be a causal factor in the deaths of 15
Japanese patients, with heavy side effects detected in over 200
cases.
At 1200 GMT, Roche shares traded down 2%, or CHF2.90, at
CHF144.20 while the Swiss blue-chip market SMI traded up 0.4%.
"In these risk averse markets, investors rather sell than buy,"
said Helvea analyst Karl-Heinz Koch when asked about Roche's share
price fall.
"The news on Herceptin however provides upside to our current
long-term sales forecast for Herceptin of CHF7 billion annually,"
added the analyst, who rates Roche at buy with a CHF195 price
target. The current gastric cancer patient population would
translate into additional annual sales of more than $600 million
for Roche, Koch said.
Turning to Actemra, Koch pointed out that the death and severe
adverse event rates reported by Chugai are similar to those
observed in studies in Japan and to studies in competing drugs. "We
don't see a reason to change our outlook for the drug and continue
to look for peaksales of $1 billion," Koch said.
The Actemra study was conducted by Chugai, 60%-owned by Roche,
as part of requirements imposed by Japan's Ministry of Health,
Labor and Welfare when the drug was approved.
Roche spokeswoman Claudia Schmitt said that the death-toll rates
are similar to the ones of usual patient populations with rheumatic
arthritis and also to those of other biologic treatments of the
disease.
"We don't see a deviation here that gives us reason for
concern," she added.
When asked whether Chugai's news may have an impact on the
pending approval of Actemra by the U.S. Food and Drug
Administration, Schmitt noted that the FDA as well as the European
Regulator EMEA have access to all the data concerning Actemra. "But
it's too early to say something about this."
Analyst Carri Duncan of Sal. Oppenheim said that this new
Actemra result may well impact the FDA's decision to approve the
drug, which is expected in the fourth quarter this year. She rates
Roche at buy with a CHF220 fair value.
Company Web Site: www.roche.com
-By Julia Mengewein, Dow Jones Newswires; +41 43 443 80 45;
julia.mengewein@dowjones.com