Roche adds to pipeline with side bet on CNS

Analysis

Roche might be best known for its cancer drugs – a therapy area that the Swiss pharma giant is seen continuing to dominate – but attempts to broaden its horizons continue apace. Two deals struck this week over products that address central nervous system disorders add to a growing pipeline focus for the company.

While only 4% of Roche’s current drug sales are derived from CNS-targeted therapies, 18% of its research projects are focused on the space, a notable investment considering that many of its peers have chosen to exit this area. Oncology remains a mainstay, however, with almost half of the company's pipeline made up of cancer drugs, a commitment that is seen resulting in cancer drug sales of $27.6bn by 2018, almost triple its nearest rival, EvaluatePharma data reveal (see tables).

Tale of two deals

Roche announced two CNS transactions this week, firstly in Alzheimer’s in a deal that cements its relationship with AC Immune. The partners' second agreement will see them formulating preclinical anti-Tau antibody candidates for further development. Crenezumab, a phase II a-beta antibody that Roche is currently testing in phase II, was also sourced from the private Swiss drug developer back in 2006.

In the last couple of years Roche has emerged as a rare dealmaker in the Alzheimer’s space, and it now has a fairly broad pipeline that encompasses most mechanisms of actions under investigation (Roche signs first Alzheimer's deal of the year as crucial progress awaited, September 6, 2011).

Under a second deal announced this morning, Roche and Seaside Therapeutics said they will collaborate on developing disease-modifying treatments for both Fragile X syndrome and autism spectrum disorders. Fragile-X is the most common cause of inherited learning disabilities, and up to 6% of children with autism are diagnosed with this gene mutation.

Roche has bought an option to commercialise Seaside’s lead GABA-B agonist, STX209, one of the most advanced candidates in development for Fragile X and autism (Therapeutic Focus - Turning point ahead for Fragile X syndrome, February 28, 2012). The drug is in phase III Fragile X trials currently enrolling patients, and enrolment into a phase 2b study in autism spectrum disorder was recently completed.

The two companies will also collaborate over the development of mGluR5 antagonists, which target the receptor for glutamate; neurotransmitter pathways are a main focus of research in Fragile X. Roche already has mGluR5s in the pipeline - RO4917523 (RG7090), which is in phase II, and CTEP, a preclinical candidate.

Moving the needle

Roche’s current CNS portfolio includes only three drugs for which sales are disclosed – the Parkinson’s agent Madopar, the epilepsy treatment Rivotril and Lexotan, approved to treat anxiety – although there are many other smaller products for which sales are not disclosed. The franchise accounts for less than $1bn in annual sales; Roche’s total drug sales reached $33.8bn last year.

In the pipeline only two CNS agents are attracting forecasts from equity analysts: RG1678 or bitopertin, a schizophrenia drug in phase III, and ocrelizumab, an anti-CD20 antibody in late-stage MS studies. However, in terms of number of projects, CNS represents the company’s second-largest focus, behind oncology.

Like the two agents licensed yesterday many are early stage and this seeming focus is unlikely to move the needle sales-wise in years to come. But it shows that despite the desertion of big pharma interest in areas ravaged by huge patent expiries and pipeline failure, such as depression and epilepsy, certain CNS areas do remain of interest. And Roche is certainly picking its CNS projects carefully.

In fact the table below suggests that in 2018 only one CNS therapy area, MS, will make it into the top 15 most valuable drug groups. While disorders of the central nervous system remain a key area of research, they are are not seen as big sales generators in the immediate future, although success with an Alzheimer's agent would swiftly change that.

WW Rx & OTC Sales by Therapy Area (2011/18): Top 15 Categories & Total Market
WW Sales ($bn) CAGR
Rank Therapy Area 2011 2018 % Growth
1 Oncology 64.6 104.1 8.3%
2 Anti-diabetics 34.4 58.2 9.1%
3 Anti-rheumatics 37.6 45.0 3.0%
4 Vaccines 24.9 39.9 8.2%
5 Bronchodilators 35.6 32.2 (1.7%)
6 Anti-virals 23.4 32.1 5.4%
7 Anti-hypertensives 41.2 28.4 (6.0%)
8 Sensory Organs 14.4 20.9 6.4%
9 Dermatologicals 13.9 18.9 5.2%
10 Anti-hyperlipidaemics 30.7 18.0 (8.5%)
11 Anti-coagulants 8.1 16.8 12.9%
12 MS therapies 12.5 15.1 3.1%
13 Anti-bacterials 15.6 14.7 (1.0%)
14 Anti-fibrinolytics 9.8 13.5 5.4%
15 Immunosuppressants 6.8 12.6 10.9%
Top 15 374 470 3.3%
Other 380 464 2.9%
Total WW Rx & OTC Sales 754 934 3.1%

In terms of oncology, however, Roche continues to dominate, and although it might not be growing as fast as smaller rivals the company will take some catching.  

Meanwhile the double-digit annual growth rates forecast for Celgene and Bristol-Myers Squibb will be watched with envy by others with oncology ambitions.

With market values of $29bn and $58bn respectively, they might be too big to buy, particularly Bristol-Myers. However, with big pharma under huge pressure to deliver growth, industry-leading growth rates in a hugely attractive therapy area might in the end prove too much to pass up on.

The tables in this article were extracted from EvaluatePharma's World Preview 2018, which is available to download here.

Top 10 Companies & Total Worldwide Oncology Sales 2011-18
WW Sales ($m) CAGR
Rank Company 2011 2018 2011-18
1 Roche 21,768 27,551 3%
2 Celgene 4,669 9,286 10%
3 Novartis 6,759 8,050 3%
4 Bristol-Myers Squibb 2,367 5,475 13%
5 Pfizer 2,749 4,802 8%
6 Johnson & Johnson 1,986 4,424 12%
7 GlaxoSmithKline 1,087 3,344 17%
8 AstraZeneca 3,705 2,881 (4%)
9 Sanofi 3,721 2,692 (5%)
10 Takeda 1,850 1,876 0%
Top 10 50,661 70,382 5%
Other 13,952 33,717 13%
Total Industry 64,612 104,099 7%

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