Can Roche’s #1 Therapeutic Area With $28 Billion In Revenue Grow Further?

by Trefis Team
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Roche Holding’s (NASDAQ:RHHBY) oncology portfolio is its largest therapeutic area and it will likely remain flat with revenues of around $29 billion over the next few years, as growth in sales of newer drugs, such as Kadcyla, Tecentriq, and Alecensa will be offset by the decline expected in MabThera, Herceptin, and Avastin. In this analysis, we compare Roche’s oncology growth vis-à-vis its primary competitors and provide an outlook of the future course of business. You can view our interactive dashboard analysis ~ Can Roche’s #1 Therapeutic Area With $28 Billion In Revenue Grow Further? ~ for more details. In addition, look at our data for healthcare companies here.

Roche Is The Leader In Oncology Drugs Portfolio With Revenues Much Higher Than That of Johnson & Johnson, Merck, Bristol-Myers Squibb, And Pfizer

  • Average Annual Growth:
    • Roche: 3.6%
    • Bristol-Myers Squibb: 23.1%
    • Johnson & Johnson: 30.3%
    • Merck: 92.7%
    • Pfizer: 19.6%

Roche’s Share In the Oncology Drugs Market Could Decline As Other Pharma Companies See Faster Growth In Their Sales

  • Combined oncology drugs revenue for Roche, Bristol-Myers Squibb, Johnson & Johnson, Merck, and Pfizer grew at an average annual rate of 18.0% from $45.4 billion in 2016 to $62.7 billion in 2018.
  • Roche’s share has declined from around 58% in 2016 to 45% in 2018, as other pharmaceutical companies, such as Merck, saw explosive growth in their oncology drugs’ sales.
  • Looking forward, this trend could continue with Roche’s share declining to 41% in 2021, as it is expected to continue to grow at a slower pace, when compared to the overall market.

Roche’s Oncology Portfolio Growth Will Largely Be Impacted By Patent Losses In The Near Term

  • Avastin was first approved by the U.S. FDA in 2004. The drug has seen strong growth with annual sales of around $7.0 billion in 2016-2018. However, it will lose market exclusivity in 2019, and face generic competition from Pfizer’s Zirabev, a biosimilar for Avastin, and it is already approved in the EU.
  • Herceptin is also a blockbuster drug for Roche with annual sales of close to $7.0 billion in 2016-2018. However, it also will lose the market exclusivity this year, and face generic competition from Pfizer’s Trazimera, which is a biosimilar for Herceptin, and it was approved by the U.S. FDA in March 2019.
  • MabThera/Rituxan is another multi-billion dollar drug for Roche, with sales of $5.9 billion in 2016. It has seen a decline in sales to $5.3 billion in 2018, and it could decline to less than $4 billion in 2021. The drug lost its marketing exclusivity last year, and it now faces biosimilar competition from Celltrion and Teva’s Truxima.
  • On the upside, Perjeta has been doing well with sales growing from $1.9 billion in 2016 to $2.8 billion in 2018. We expect this trend to continue, and forecast sales to be north of $4.0 billion in 2021, as it has shown better results in the recent studies related to the treatment of breast cancer. Kadcyla also saw sales close to $1.0 billion in recent years, which could grow to $1.6 billion by 2021, given its recently received FDA approval for adjuvant treatment of breast cancer.
  • Tecentriq is a relatively new drug for Roche, with potential sales of over $2.0 billion by 2021, given its series of approvals in recent years for bladder, lung, and breast cancer. Alecensa has seen strong growth from $184 million in 2016 to $650 million in 2018, and the sales could grow to $1.35 billion in 2021, given its presence in the lung cancer market.

Oncology Drugs Also Account For Close To Half of Roche’s Total Sales But This Could Decline In The Coming Years

  • Roche’s oncology drugs sales accounted for 50% of the company’s total revenues in 2016.
  • The figure declined to 47% in 2018, amid slower growth from the oncology portfolio, when compared to some of the company’s other divisions, such as immunology and neuroscience.
  • We expect the above trend to continue with slower growth in oncology sales, leading to a 45% share of oncology in Roche’s top line by 2021.

 

 

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