Biosimilar threat starts to creep up on Roche as Rituxan loses ground

Roche turned in 6% sales growth in the third quarter, but some individual performances from top drugs signaled trouble ahead.

Roche was able to grow sales by 6% in the third quarter, which is no easy task for a leading pharma company in today's climate. Still, the company's drug-by-drug performance raised concerns about current—and future—biosim attacks against its best-selling meds. 

As one influential analyst pointed out, some weakness among top cancer meds could augur trouble ahead. Third-quarter sales in Europe for Roche's top med, Rituxan, fell 16% year over year, and it's only the second quarter the Roche brand faced biosim competition in Europe, Bernstein analyst Tim Anderson wrote in a note to clients.

That performance signals just how quickly cheaper competition can undercut leading drugs in that market. Crosstown rival Novartis won European approval for its Rituxan biosim back in June. 

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Avastin, another of Roche's cancer blockbusters, slumped as well; its third-quarter sales fell by 4% around the world. Herceptin's global sales were flat. Together, Anderson wrote, those drugs "present an unsettling vision for the years ahead" as biosimilar developers continue their assault on the top targets. 

Last year, the Roche trio represented about $21 billion in sales around the world, speaking to just how much is at stake as the Swiss drugmaker looks to hold off that competition. Behind those top three franchises, however, were more promising sales performances from Perjeta, Actemra and Xolair. The drugs grew 17%, 13% and 17% in the third quarter over last year, respectively. 

New multiple sclerosis therapy Ocrevus is also ramping up quickly in the U.S. after its approval back in March. The drug is already up to $513 million in sales this year, with the vast majority in the United States. When Roche won approval for that med, the company priced it at a discount to existing treatments to help "reverse the trend" of ever-growing MS drug prices, a spokesman said. 

After turning in its third-quarter results, Roche said it's on track to meet 2017 financial guidelines of mid-single-digit growth. 

In the running to eat away at Roche's cancer stars are biosimilar developers Amgen and Mylan, which this summer won FDA panel recommendations in favor of their biosims to Avastin and Herceptin, respectively. Amgen has since picked up an FDA approval for its Avastin biosim, but Roche is suing for patent infringement, hoping for a win in court that could buy its brand more time.  

Roche previously settled patent litigation with Mylan in a deal that gives the biosimilar developer a license to launch its version of Herceptin on an undisclosed date. Celltrion is also working on a Herceptin biosim, and Teva recently scooped up commercialization rights to that drug. 

But it still remains to be seen how much of a mark biosims will be able to make in the key U.S. market. In a lawsuit with widespread implications for the industry, Pfizer is currently arguing that Johnson & Johnson's tough contracting on Remicade has made it impossible for its biosimilar, Inflectra, to gain share. 

Because J&J tied rebates on current Remicade patients to the requirement that payers don't use biosims, Pfizer claims, the competition is effectively shut out. Further, the company says, the situation won't change unless a court acts.