Roche’s Autoimmune Drug Sales Will Likely Peak In 2018

by Trefis Team
Roche Holdings
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We estimate that Roche’s (NASDAQ:RHHBY) autoimmune drug sales will peak in 2018, following which we expect a gradual decline due to patent losses and expected competition from biosimilars and generics. We have created an interactive dashboard on Roche’s autoimmune segment, which includes our forecast for individual drugs in the coming years. Note that you can adjust the revenue drivers and gross profit margins, and see the impact on Roche’s overall sales and profits. Below are some of the charts and data from the interactive dashboard.

Key Outputs (Based on 2017 results)

  • Autoimmune drug revenues ~ $8 Billion
  • Autoimmune drug contribution to Roche’s overall revenues ~ 14%
  • Autoimmune drug gross profit – $6.3 Billion

Actemra And Xolair Are Key Drugs Within Autoimmune Portfolio

How We Expect Autoimmune Segment To Perform In The Coming Years

Rationale Behind Our Forecast

  • Roche’s Autoimmune Drug Sales have increased from $2.9 billion in 2009 to $7.9 billion in 2017, exhibiting consistent growth. This can be primarily attributed to the continued uptake of MabThera/Rituxan, Actemra and Xolair, and the launch of new drug Esbriet. We expect the figure to peak around 2018, after which we expect a gradual decline due to patent loss and expected competition from biosimilars and generics.
  • The EU patent for MabThera/Rituxan expired in 2013 while its U.S. patent will expire in 2018. Xolair patent expired in 2017 and Pulmozyme U.S. patents will expire in 2019. These three drugs together accounted for nearly half of Roche’s autoimmune drug sales in 2017.
  • Actemra and Xolair, together accounted for nearly $3.6 billion in revenue in 2017. This represented about 46% of Roche’s autoimmune drug sales. We expect these drugs to garner more than $3.5 billion in combined annual sales in the next couple of years. Actemra is used for treatment of rheumatoid arthritis and juvenile idiopathic arthritis. Xolair is indicated for allergic asthma. There has been an increase in the incidence of autoimmune and allergic diseases. This, coupled with an aging population, is likely to increase spending on autoimmune drugs.
  • Roche is currently testing these drugs for additional indictions. Actemra, in particular, could benefit from these additional approvals. Phase 3 trials are being conducted for Actemra for systemic sclerosis. Also, Roche has one new compound – Etrolizumab – in its phase 3 pipeline. The drug could be launched by 2020 if phase 3 trials are successful and it received FDA approval. We estimate peak sales to be around $1.5 billion.
  • FDA approved Esbriet for treatment of idiopathic pulmonary fibrosis in 2014. The drug, whose revenue stood at $48 million in 2014, garnered nearly $856 million in 2017. Peak sales could range from $3-4 billion. The drug was developed by Intermune, which was acquired by Roche.

Gross Profits To Decline For The Segment In Line With Expected Revenue Forecast

Don’t Agree With Our Forecast? Feel Free To Create Your Own By Making Changes To Our Model

Our price estimate of $36 for Roche implies a premium of over 15% to the market.

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