A Closer Look At Roche’s Phase 3 Drug Pipeline
We estimate that Roche’s (NASDAQ:RHHBY) phase 3 drug pipeline (not counting the enhancement of currently marketed products) can be worth as much as $42 billion, or nearly 20% of its current market value. Interestingly, a large chunk of this value is likely to be realized from a number of neuroscience drugs, specifically the ones targeting Alzheimer’s. This is interesting considering that Roche’s stronghold has traditionally been cancer drugs, which we estimate are the second most valuable in the company’s pipeline. Take a look at our interactive breakdown of Roche’s phase 3 drug pipeline which shows key factors determining the pipeline’s value such as expected peak sales, expected growth trajectory and probability of market approval. You can adjust the assumptions to see how it impacts drug pipeline’s revenue forecast and valuation.
Our price estimate for Roche stands at $33, implying a slight premium to the market price.
Summary of Roche’s Phase 3 Drug Pipeline
Estimated value ~ $42 billion
Estimated probability-adjusted revenue for 2024 ~ $9.1 billion
Breakup of probability-adjusted revenue for 2024 by therapeutic area:
- Neuroscience ~ $3.4 billion
- Oncology ~ $2.9 billion
- Other ~ $1.5 billion
- Ophthalmology ~ $850 million
- Immunology ~ $375 million
Top Drugs In Phase 3 Pipeline
The top drugs in Roche’s phase 3 pipeline include neuroscience drugs such as Gantenerumab and Crenezumab, oncology drugs Taselisib, Ipatasertib and Idasanutlin, and other drugs such as Lampalizumab and Emicizumab. Together, these drugs are expected to offset the the challenges that Roche will face due to competition from biosimilars. The company earns nearly $21 billion annually from 3 cancer drugs – Rituxan, Avastin and Herceptin. All of these have either recently lost patent protection or will lose it in the next 1-2 years. Several companies including Pfizer are developing biosimilar versions for these drugs. The image below is a snapshot of our interactive breakdown of Roche’s phase 3 drug pipeline.
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