Ready to rumble: Roche scores Rozlytrek OK to challenge Bayer—and undercuts it on price

Jefferies analysts predict Roche's Rozlytrek could rack up $700 million in peak global sales. (Roche)

Roche’s targeted cancer drug Rozlytrek is officially cleared for U.S. launch—and in not one, but two indications.

On Thursday, the FDA greenlighted the medication to treat adults with ROS1-positive non-small cell lung cancer. Separately, it approved the product in both adults and children aged 12 and older with tough-to-treat NTRK fusion-positive tumors.

Roche will price the new drug at $17,050 per month for adults, a spokeswoman said, noting that it offers patient access programs that include support for out-of-pocket costs and free drug for those who meet certain eligibility criteria.

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That sticker is more or less "consistent with monthly oncology pricing," but it's well below the $32,800 per month Bayer charges for its rival NTRK drug, Vitrakvi, Evercore ISI analyst Umer Raffat pointed out in a note to clients titled, "pricing war in cancer?"

Rozlytrek list price is "almost a 50% discount," he noted, adding that "this will be a very interesting competitive dynamic to track in coming weeks." Bayer has its own pair of access programs, one of which refunds payment when patients don’t respond to the drug within 90 days.

For cancer powerhouse Roche, it’s the first FDA go-ahead that isn’t tied to a tumor’s particular location in the body: NTRK gene fusions have been found in a range of tumor types, including breast, colorectal, neuroendocrine, lung and thyroid cancers.

The company was also quick to point out that Rozlytrek has delivered responses in cancer that has spread to the brain. That fact is particularly important in ROS1-positive NSCLC patients, up to 40% of whom have tumors that have done exactly that.

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The OKs aren’t the first for Rozlytrek, which made its global debut with an NTRK approval from Japan’s Ministry of Health, Labour and Welfare back in June. It’s awaiting a ROS1 nod from the country as well, along with European regulators’ blessings in both indications.

Those approvals will go a long way toward helping Rozlytrek hit the $700 million in peak global sales Jefferies analysts have predicted for the drug. But NTRK sales won’t come easy: Rozlytrek will go up against Vitrakvi, another tumor-agnostic drug that grabbed its own U.S. approval last November.

While Bernstein analyst Wimal Kapadia has forecast peak sales of €900 million for Vitrakvi, it’s tough to write off any oncology med with Roche behind it. “Any decent cancer drug in Roche's hands becomes interesting," Kapadia wrote in a recent note to clients.

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A companion diagnostic would certainly help Rozlytrek in the sales department, considering that biomarker testing for ROS1 in NSCLC and for NTRK fusions is the only way to identify eligible patients. Right now, though, an FDA-approved companion isn’t available, though Foundation Medicine plans to submit one to regulators.