In Roche's first research overview since acquiring Genentech last year, management sought to assure investors that the research engine that developed breakthrough blockbuster medicines like Herceptin and Avastin is still innovating.

In an investors R&D day in New York March 18, the company laid out its mid- to late-stage pipeline - including 16 new molecular entities targeted for regulatory filing between now and 2014.

The pipeline is chock full of interesting opportunities, from a first-in-class BRaf inhibitor for malignant melanoma to a higher-risk and potentially higher-reward cholesterol medicine dalcetrapib. But the company didn't unveil any big surprises, and the vast majority of its NMEs are targeted for filing at the later end of the timeframe, in 2013 or 2014. This year, particularly, is setting up to be a quiet one for Roche in terms of new drug launches, with the vast majority of activity centered around securing new indications for existing drugs like Avastin (bevacizumab), Herceptin (trastazumab) and Rituxan (rituximab).

Those three products were brought in when Roche acquired Genentech in full, the stunning move that the Swiss drug maker set in motion almost exactly a year before the R&D day (¹ Also see "Roche Wins Genentech After Months-Long Battle" - Pink Sheet, 26 March, 2009.).

Genentech Is "Alive And Well"

First and foremost on the minds of investors is how Genentech's research productivity could be impacted by coming under the umbrella of its Big Pharma parent. "Genentech is alive and well and thriving, particularly the research and early development group," maintained Richard Scheller, a long-time Genentech researcher, who is now head of gRED, Genentech Research & Early Development.

Pascal Soriot, who heads up the global pharmaceuticals business as chief operating officer, echoed that sentiment in a follow up interview. "From a research viewpoint, they are operating as an independent unit, and I have to say, in terms of the top leadership, we haven't lost anybody in the gRED." On the development side, he conceded, the environment has been more challenging because the business has been globalized. He pointed to the exit of David Schenkein, formerly VP of clinical hematology and oncology at Genentech and now CEO at Agios Pharmaceuticals, as one obvious loss.

Indeed, when prompted by an analyst to comment on the post-merger environment at Genentech, Hal Barron, chief medical officer at Genentech and now Roche exec VP, global development and chief medical officer, said he hasn't seen as significant a change in the approach to research as he anticipated. However, he added, "I'm working harder now, and part of that is...due to the complexity of a global organization."

T-DM1 Filing Could Come In 2010

The nearest-term opportunity for Roche is T-DM1, a compound in Phase III development that links trastuzumab with a targeted delivery agent from ImmunoGen, DM1. It's in development for HER2-positive metastatic breast cancer and is expected to eventually oust Herceptin as the standard of care.

T-DM1, which has demonstrated unprecedented efficacy in heavily pre-treated HER2 positive breast cancer patients, could represent "a revolution in cancer care," Chief Marketing Officer David Loew said. Roche has a full development program underway for T-DM1, but the first potential regulatory submission could come in 2010 based on Phase II data evaluating T-DM1 as a third-line treatment. Roche plans to move the drug eventually into earlier-lines of treatment. Results from a Phase II study testing T-DM1 against Herceptin, which will be presented later this year, have prompted Roche to initiate a Phase III trial.

Additionally, Roche also plans to study T-DM1 combined with another investigational agent, pertuzumab, with the aim of eliminating the need for chemotherapy. Pertuzumab is an HER2 blocker that is believed to work synergistically to Herceptin.

T-DM1 looks to be promising, but the prospect that it will cannibalize Herceptin could dampen investor enthusiasm. Nonetheless, management maintained that T-DM1 will be a growth driver due to increased penetration and higher pricing.

Considering its value, Herceptin is low-priced, Soriot claimed, and thus T-DM1 represents an opportunity to re-evaluate pricing. "We will start from a low base when it comes to Herceptin...so there is a lot of room for increasing price," he said.

But in a March 19 research report, Bernstein Research analyst Tim Anderson questioned the price threshold. "Our view is that Roche could potentially run into resistance if it attempts to increase the cost of therapy for breast cancer patients with T-DM1," he said. "The strength of the clinical data comparing the two medicines will therefore be critical. Anderson forecast sales of T-DMI of CHF 1.2 billion ($1.1 billion) by 2015. Herceptin, meanwhile, generated sales of CHF 5.27 billion ($4.96 billion) in 2009.

Of the 16 NMEs Roche is targeting for regulatory filing between 2010 and 2014, the majority - eight - are in oncology, a heritage area for the company. Aside from T-DM1 and pertuzumab, other oncology drugs highlighted by Roche were the BRaf inhibitor RG7204, in partnership with Plexxikon, for metastatic melanoma as well as a hedgehog pathway inhibitor, RG3616, in development with Curis, for colorectal cancer, ovarian cancer and basal cell carcinoma. Roche is targeting regulatory filings for both drugs in 2011.

Roche Eyes Lucrative CV, Metabolic Opportunities

Four other drugs are in development for cardiovascular disease or diabetes, therapeutic areas where Roche does not currently play. Both are high-risk and costly areas of drug development, given the extensive clinical trials needed to meet growing safety requirements, but they also represent lucrative money-making opportunities. If positive data emerge in this area, these four drugs will likely have a substantial impact on Roche's long-term growth trajectory.

The nearest-term opportunity in the area is taspoglutide, a glucagon-like peptide-1 analogue for type 2 diabetes that Roche aims to file in 2011. The drug would compete with other GLP-1s on the market if it launches, including Eli Lilly/Amylin's Byetta (exenatide) and Novo Nordisk's Victoza (liraglutide), as well as a new long-acting form of exenatide that could be approved by FDA by that time (² Also see "FDA's "Complete Response" Letter For Byetta LAR Isn't Too Onerous, Amylin Says" - Pink Sheet, 15 March, 2010.).

Roche announced positive top-line results from five Phase III clinical trials evaluating taspoglutide in February, but plans to present the full data at the American Diabetes Association Scientific Sessions in June, which could provide more color about efficacy, tolerability and how taspoglutide may stack up against the competition.

The most significant opportunity for Roche in the mid-term is the cholesterol drug dalcetrapib, a potential first-in-class cholesterol ester transfer protein inhibitor. CETP inhibitors work by increasing "good" HDL-cholesterol instead of decreasing "bad" LDL-cholesterol, the way statins work.

Roche has high hopes for the compound. The company expects it could generate peak sales north of CHF 5 billion ($4.7 billion), according to Soriot. But CETP inhibitors are seen as a tainted class of medicines, and thus investors may be wary of dalcetrapib. Pfizer's CETP inhibitor torcetrapib met a notorious demise when the company's Phase III development program was halted in 2006 due to higher rates of high blood pressure and a related increase in deaths in the treatment arm. It was an enormous failure that ultimately contributed to the Lipitor maker's decision to exit the cardiovascular disease market altogether (³ Also see "Pfizer Terminates Torcetrapib Program" - Pink Sheet, 3 December, 2006.).

Roche has spent the years since the Pfizer setback studying the mechanism of action and evaluating the differences between dalcetrapib and torcetrapib - and trying to convince investors that dalcetrapib won't meet the same fate as torcetrapib. The market opportunity is undoubtedly nudging Roche on. "If [dalcetrapib] does work, it would transform the company," Barron said.

But he seemed to hedge his bets in opening the presentation on Roche's efforts in CV/metabolic space. "If we are shooting for really enormous opportunities in medicine...then we should expect to have some things that go the way we don't expect," he said. "We've had a lot of great successes, and we're going to have some failures as we swing for the fences."

In Phase II trials, the safety and tolerability of dalcetrapib have held up, and Barron maintained that's because dalcetrapib and torcetrapib have different mechanisms of CETP inhibition. Roche is currently studying dalcetrapib in four Phase III trials, including an extensive outcomes study that is enrolling 15,600 patients with stable congestive heart disease with recent acute coronary syndromes. If dalcetrapib does increase blood pressure, it should become apparent soon from interim analyses of the larger trial data, he said. Roche is targeting a regulatory submission for 2013.

Merck is also moving forward with development of a CETP inhibitor, anacetrapib, in Phase III studies.

The other two drugs in the cardiovascular/metabolic market in Roche's near-term pipeline are a renal sodium-glucose cotransporter 2 (SGLT-2) inhibitor being developed for type 2 diabetes and targeted for filing in 2013, and a dual agonist of peroxisome proliferator-activated receptors aleglitazar, for which Roche is targeting a filing in 2014. Safety issues have also plagued this latter class of medicines, most notably with Bristol-Myers Squibb/Merck's muraglitazar.

- Jessica Merrill ( ⁴ j.merrill@elsevier.com )

With Genentech Fully Integrated, Roche Lays Out Pipeline

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