Delay to Roche's Actemra robs 2008 of its biggest approval

Analysis

The delay announced today to approval for Actemra is clearly a disappointment for Roche; the rheumatoid arthritis drug was forecast to be its second biggest growth driver over the next seven years, seen bringing in almost as much new revenue as cancer drug Avastin over that time.

The setback also robs 2008 of what would have been by far its biggest US approval, in terms of future sales. Whilst the FDA has already approved more new molecules this year than 2007’s paltry performance, notching up 20 at the last count, it has also knocked back or delayed several products which were carrying big expectations, Actemra being the most notable (see table below).

In April, EP Vantage looked at consensus analyst forecasts and drew up a list of the ten biggest approvals on the cards for 2008, ranked on US sales forecasts for 2013 (R&D productivity - focus on quality not just quantity, April 28, 2008). Of that ten, only four have been granted a license by the FDA, and two are still pending.

Two, Merck & Co’s Cordaptive and Vanda’s Fanapta (then called Fiapta), now look very unlikely to make it to the market, at least not for several years. Meanwhile, Schering-Plough announced yesterday that it would run another trial of its anaesthetic reversal drug Bridion, to examine potential allergic reactions, which could allow a re-file in 2010 at the earliest.

Decisions on both Eli Lilly’s Effient and Forest Laboratories’ milnacipran could come any time, and positive news from one of them would at least mean a 50% success rate for those previous big contenders of 2008.

Progress of top 10 New Molecular Entities due to be approved 2008
Rank    Product  Company  Approval due by   Approval status 2013 US sales forecast in April ($m)  Current 2013 US sales forecast ($m)
 1   Actemra  Roche   19 Sep 08   Re-file anticipated Q3 2009  809   2,197*
 2   Pristiq  Wyeth   29 Feb 08   Approved  727   643
 3   Effient  Eli Lilly   26 Jun 08   Decision delayed and still pending   642   866
 4   Cordaptive  Merck & Co   30 Apr 08   Non-approvable letter   636   0
 5   Milnacipran  Forest Laboratories   31 Oct 08   Decision delayed and still pending   625   544
 6   Promacta/Revolade     GlaxoSmithKline      01 Jul 08   Approved  621   466
 7   Cimzia  UCB   22 Apr 08   Approved  447   222
 8   Fiapta  Vanda Pharmaceuticals   25 Jul 08   Non-approvable letter   398   0
 9   Bridion  Schering-Plough   02 Jul 08   Non-approvable letter, re-file anticipated 2010   359   0
 10   Recothrom  ZymoGenetics   17 Jan 08   Approved  346   249

* Now likely to fall

Towards the end of trading today Roche shares were 2% lower at SFr165, with disappointment around Actemra weighing.

The FDA has asked Roche to carry out some pre-clinical animal model studies to confirm that the drug does not affect peri or postnatal development or fertility, but has not requested further clinical trials. It also wants the company to establish a Risk Evaluation and Mitigation Strategy (REMS), a plan to help ensure that doctors prescribe and use Actemra correctly, something that the FDA is increasingly requiring for new biological drugs.

Roche intends to resubmit all the data by the third quarter of 2009, meaning approval early in 2010 now looks the most likely.

Tangible impact

Based on current consensus sales forecasts which factor in a launch this year, Actemra is worth is almost $9bn for Roche, according to EvaluatePharma’s NPV Analyzer. Shifting US sales back by two years, which may be a touch pessimistic, that NPV falls 14% to $7.7bn. The loss in value is equivalent to 1% drop in Roche’s share price.

While this indicates that the market may be being overly concerned about the set back, consensus forecasts put the drug as Roche’s fourth biggest seller in 2014, clearly a very important product. Encouragingly, in November European regulators recommended the drug be approved, and today approval was granted in Switzerland.

So while the delay is disappointing, the FDA's request does not seem too ominous at this stage, and Acemra could still meet those lofty expectations, albeit a few years later.

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