2. Roche

Roche is starting to feel the full power of biosimilars' attacks in 2020, and even its growth-driving new drugs could be under threat from rival launches. (Roche)

2019 revenue:
CHF 61.47 billion ($63.54 billion)
2018 revenue: CHF 56.85 billion ($58.76 billion)
Headquarters: Basel, Switzerland

Roche weathered an eventful 2019. The first wave of biosimilars to its three best-selling drugs—Rituxan, Avastin and Herceptin—hit the scene in the U.S. What looked to be a painless acquisition of Spark Therapeutics unexpectedly became a poster child for closer antitrust scrutiny. And the FDA wrapped the year up with a swift approval for AstraZeneca and Daiichi Sankyo’s Enhertu, a major threat to Roche’s megablockbuster breast cancer franchise.

The wave began in mid-2019, when Amgen and Allergan rolled out Mvasi and Kanjinti—copycats to Avastin and Herceptin, respectively. Teva and Celltrion launched their Rituxan copy, Truxima, in November, followed by Mylan and Biocon’s Herceptin biosim Ogivri. Most recently, Pfizer rolled out versions of all three drugs in February.

Still, Roche's cancer triumvirate generated combined sales of CHF 19.59 billion ($19.86 billion) in 2019. And that was after copycats had eaten away Rituxan and Herceptin's European sales by around 30% to 40% year over year.

The U.S. is a much larger market for those key meds, and the competition stateside is obviously just beginning. So Roche has been working to soften the blow by rolling out new drugs—and so far, it’s working.

RELATED: Biosimilars will leave a $10B gap in Roche's sales, but new drugs can more than fill it: exec

These include multiple sclerosis antibody Ocrevus, also known as “the most successful launch in the history of Roche,” according to CEO Severin Schwan. First approved by the FDA in March 2017, Ocrevus reached CHF 3.71 billion sales in 2019 with a whopping  57% growth over 2018.

Many newer entries in the MS field have not been able to blunt Ocrevus’ momentum, despite their own blockbuster expectations. Novartis’ Mayzent, while working out a reimbursement lag and managing to boost diagnosis of the secondary progressive form of the disease, only sold $17 million in the fourth quarter of 2019. Merck KGaA’s Mavenclad, which finally snared its FDA nod in relapsing forms of MS eight years after a rejection in 2011, raked in €321 million globally in 2019. Biogen’s Tecfidera follow-up Vumerity was only approved in late October.

However, a more serious threat may be just around the corner. Applications for Novartis’ repurposed blood cancer treatment Arzerra (ofatumumab) were recently accepted by the FDA and EMA, with decisions scheduled for June 2020 and by Q2 2021, respectively, though the ongoing COVID-19 pandemic might cause delays. The drug previously beat Sanofi’s Aubagio in a phase 3 for a broad patient population with RMS, cutting the annual number of relapses as well as the risk of disability progression.

Both Arzerra and Ocrevus are anti-CD20 antibodies. A group of physicians polled by SVB Leerink expressed “unanimous excitement” around the Novartis option because it offers “'Ocrevus-like' efficacy, with the convenience of self-administration.” Ocrevus can only be given by intravenous infusions by a licensed practitioner.

Another undeniable growth driver, at least for 2019, was hemophilia A therapy Hemlibra. First approved by the FDA in November 2017, Hemlibra raked in CHF 1.4 billion last year. But with new gene therapies looming, and offering a potential cure for the blood disorder, the company snatched up Spark Therapeutics for $4.3 billion, a deal that antitrust authorities allowed after extensive investigation of their hemophilia business overlap.

RELATED: The top 10 largest biopharma M&A deals in 2019 - 9. Roche/Spark Therapeutics

While Spark is undoubtedly a pioneer in gene therapy, its lead hem A program, SPK-8011, is a bit behind in the race. BioMarin Pharmaceutical’s rival drug valoctocogene roxaparvovec, which analysts view as a blockbuster-in-the-making, has earned FDA priority review, with a decision expected in August. By contrast, the Spark offering is still expecting the readout from a lead-in observational study in mid-2020 before an official phase 3.

At this year’s J.P. Morgan Healthcare Conference in January, BioMarin CEO Jean-Jacques Bienaime said his company has scaled up manufacturing capacity that can now support up to 10,000 doses per year, which means it could treat the entire U.S. population of severe hemophilia A patients in two years.

Also among a team of new Roche drugs that have helped offset the impact from biosimilars is Tecentriq, which increased annual sales by 143% to reach CHF 1.88 billion in 2019. The PD-L1 inhibitor achieved several regulatory milestones in 2019. It became the first immuno-oncology drug allowed in patients with PD-L1-positive triple-negative breast cancer and also the first in previously untreated extensive-stage small cell lung cancer.

In the large non-small cell lung cancer space, it also nabbed an FDA green light for use in combination with chemo to treat frontline nonsquamous cases with no EGFR or ALK mutations. Solo Tecentriq is also looking at a potential nod—and showdown against Merck & Co.’s Keytruda—for first-line, PD-L1-high NSCLC by June, thanks to an FDA priority review.

RELATED: The 10 most-anticipated drug launches of 2020 - 1. Enhertu 8. Valoctocogene roxaparvovec - 10. Risdiplam

Together, Roche’s HER2 franchise—including Herceptin, Perjeta and Kadcyla—made up CHF 10.95 billion of Roche’s total haul last year. But that business could be under threat from AZ and Daiichi’s Enhertu, which, like Kadcyla, is an antibody-drug conjugate. The new drug previously delivered an estimated one-year survival rate of 86% for a group of HER2 breast cancer patients who had a median six prior therapies.

The AZ-Daiichi pair is running a head-to-head study against Kadcyla in the second-line setting. And its future looks even brighter after showing it could extend patients’ lives over chemo in late-line HER2-positive gastric cancer, where Kadcyla had flunked in the second-line.

All told, Roche’s pharma division delivered CHF 48.52 billion in 2019, a 11% increase over 2018, though Herceptin and Avastin sales both dropped by double digits in U.S. in the fourth quarter. Sales from the compnany's diagnostics division came in at CHF 12.95 billion. For 2020, the Swiss pharma expects slower sales growth, in the low- to mid-single digit range.

2. Roche