Despite Roche's sharp COVID sales decline, eye drug Vabysmo powers major revenue win, CEO says

As Roche CEO Thomas Schinecker sees it, the Swiss pharma made a “major achievement” in 2023. Despite a sharp decline in COVID-related sales, the company was able to grow overall revenues thanks in large part to the performance of eye disease drug Vabysmo.

Despite losing 4.3 billion Swiss francs (CHF) in COVID-related revenues across its diagnostics and pharma units, Roche managed to grow groupwide sales by 1% to CHF 58.7 billion ($68.1 billion) last year.

That figure is based on constant exchange rates. As reported, Roche’s sales actually dropped by 7% last year because of a strong Swiss franc.

Within the pharma group, Roche’s non-COVID drug sales rose by 7% at unchanged exchange rates in the fourth quarter, bringing the full-year growth rate to 9%. For the full year, Roche’s pharma division generated 44.6 billion CHF.

The superstar in Roche’s pharma portfolio is the eye disease drug Vabysmo. First approved by the FDA in January of 2022, Vabysmo more than tripled sales last year, bringing in CHF 2.36 billion ($2.7 billion). The number beat analysts’ consensus expectations by 3.9%. The bispecific now ranks sixth among Roche’s top-selling drugs.

In the U.S., Vabysmo snagged 22% of market share in age-related macular degeneration and 15% in diabetic macular edema as of November, up 3 percentage points each compared with August, Roche’s pharma chief, Teresa Graham, told investors on a call Thursday.

Vabysmo expanded its share despite Regeneron winning an FDA go-ahead for the high-dose version of its Eylea in August.  

Nearly half of all patients who’re starting Vabysmo are new to any treatment, Graham said. That’s an improvement from a percentage range in the teens at the beginning of 2023. This shows that Vabysmo is establishing itself as the new standard of care, Graham said.

To demonstrate Vabysmo’s popularity in the U.S., Graham noted that 928 retinal specialists who have not prescribed a Roche product in ophthalmology for many years are now regular users of Vabysmo.

Vabysmo’s success is not only pressuring Eylea, but it’s also costing Roche’s Novartis-partnered eye drug Lucentis. In 2023, Roche booked a 52% decline at constant exchange rates for its share of the older-generation VEGF inhibitor.

Also in the ophthalmology department, Roche is gearing up for a relaunch of the implant-drug combo Susvimo this year. The company halted its distribution in the fall of 2022 because of a device problem.

Elsewhere, oncology remains Roche’s largest business. Phesgo, the fixed-dose combination of Perjeta and Herceptin, reached blockbuster status last year, pulling down with CHF 1.12 billion in sales. The drug enjoyed strong growth thanks to a conversation rate of 39% for Perjeta patients in the early launch countries. The goal, Graham said, is to reach a 50% conversion rate.

Meanwhile, PD-L1 inhibitor Tecentriq brought in CHF 3.77 billion in sales, good for a 9% increase year over year at unchanged exchange rates.

In one of Tecentriq’s growth indications, the Roche drug recently started to face increased competition after the FDA in October approved Merck’s Keytruda for use both before and after surgery in a wide range of patients with non-small cell lung cancer (NSCLC).

“Within the U.S., we are holding our own in a very competitive market,” Graham said during a separate call with reporters, without giving any specific numbers.

In the fourth quarter, Roche still counted adjuvant NSCLC—alongside first-line liver cancer—as a growth driver for Tecentriq. But Graham acknowledged that the growth is coming mainly from outside the U.S. as new countries come online with reimbursement.

Roche started 2023 with several potential Tecentriq readouts lined up in early-stage cancer. The first one, for Tecentriq and Avastin in early-stage liver cancer, reached its disease recurrence goal. But immature overall survival data have apparently prevented Roche from seeking an FDA approval in this setting.

During Thursday’s presentation, in a slide of key updates expected in 2024, the company did not include plans for an FDA filing in adjuvant liver cancer. Roche also shared that the phase 3 IMvoke010 trial for Tecentriq in adjuvant head and neck cancer has failed. This followed another flop last year from the phase 3 IMpassion030 study in adjuvant triple-negative breast cancer.

On the blood cancer side of the business, Polivy rode a launch in first-line diffuse large B-cell lymphoma to a doubling of its revenue, collecting CHF 837 million in sales in 2023.

But the drug’s fourth-quarter sales actually declined compared with its third-quarter number. The softening was largely caused by a software update in one of Roche’s distribution facilities at the end of 2023, according to Graham. That change specifically impacted Polivy and “drove a different buying pattern” from customers, Graham explained.

“There’s nothing that we see in the underlying growth of Polivy” that would bring the drug’s potential into question, and “we will continue to see strong growth and to see it establish itself as the new standard of care,” the Roche exec said.

Moving into 2024, Roche expects sales growth at mid-single-digit percentages across the group.