In 2020, Roche faced up to its Rubicon: the advent of biosimilars to its trio of top-selling cancer drugs. The copycats eroded $5 billion of sales, but the company still managed to pull off growth.
Its secret? Continuous innovation, CFO Alan Hippe said at the annual J.P. Morgan healthcare conference.
New drugs launched since 2012—which now make up about 40% of Roche’s pharma sales—and the company's burgeoning diagnostic franchise boosted Roche’s top line to an increase in 2020 despite biosimilars eating away those billions in sales, Hippe said.
To directly combat launch of biosimilar Herceptin, Roche in mid-2020 launched Phesgo, a fixed-dose combination of Herceptin and Perjeta, for HER2-positive breast cancer. The single-dose vial can be given in a treatment center or at home, offering patients significant convenience. Previously, the two drugs had to be given separately and in that order.
When Roche introduced the new injection, it knew the product couldn't just be more convenient. “[I]t has to come with commercial incentives in the U.S. as well to make the product more attractive for oncologists,” Hippe said. Still, the CFO expects a bigger opportunity for the drug in Europe than the U.S., though he wouldn’t put a number to the estimates.
Hippe described Phesgo as one line of Roche’s defense against biosimilars. “For me, the best line of defense is innovate further and come up with new products, overcompensating what we’re losing,” he said.
For innovation, Roche has also been looking beyond its internal projects. In 2020, Roche penned 132 new partnerships across pharma, digital and personalized healthcare and diagnostics, according to Hippe, who called the high number a bit unusual for the company.
Roche got several late-stage assets through licensing last year, too. These include Regeneron’s COVID-19 antibody cocktail REGN-COV2, which was authorized in the U.S. for outpatient treatment. Roche helps with manufacturing and ex-U.S. distribution.
The Swiss drugmaker also signed an eleventh-hour deal with Blueprint Medicines for RET inhibitor Gavreto, less than two months before the drug’s FDA nod in non-small cell lung cancer.
Will the new launches and known growth drivers—such as PD-L1 inhibitor Tecentriq and multiple sclerosis drug Ocrevus—stage another growth year for Roche’s pharma business in 2021?
“There’s a lot of uncertainty, but on the other hand I think we managed 2020 well and I’m confident and optimistic that we can do the same in 2021,” Hippe said.