$1B at stake for Roche in warring Herceptin studies

Herceptin will step into the spotlight at this week's European Society for Medical Oncology meeting. Whether Roche ($RHHBY) will like what happens next isn't clear.

As Bloomberg reports, French researchers will present data on shorter-term Herceptin treatment, when used after surgery to stave off a recurrence of a patient's breast cancer. But Roche will air its own data, which could back treatment for up to two years. The difference could amount to billions of dollars in sales--and a sizable impact on earnings per share.

Currently, women tend to use the Roche drug for one year after surgery to keep their cancers from coming back. As Bloomberg notes, the question isn't whether Herceptin works; it's whether using the drug for a shorter period of time could not only reduce side effects, but provide the same benefit to patients.

The French team studied whether six months of treatment works as well as a year. If that data proves positive, then cost-conscious payers could make the case for shorter treatment, cutting Roche's sales volume in the process. In fact, as Sanford C. Bernstein analyst Tim Anderson wrote to investors, if doctors ratcheted back the treatment period, EPS could drop as much as 12%. If only EU doctors cut the treatment period short, earnings could drop 2%.

But if Roche's data supports a longer course of treatment, the needle is likely to swing upward instead. Jeffries Group has estimated a $1 billion windfall if the company shows two years is better than one, Bloomberg notes. That would boost sales by 17.5%, to $6.7 billion from $5.7 billion last year.

- see the Bloomberg piece

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