NEW YORK – Roche reported strong revenues from its pharmaceutical division on Thursday, particularly from its anti-PD-L1 and -HER2 franchises, even as those products face increasing competitive pressures in the marketplace.
Roche's revenue for the fourth quarter in 2022 rose 4 percent at constant exchange rates to CHF 16.24 billion ($17.77 billion) compared to CHF 16.12 billion in the same quarter in 2021. Revenues from the Swiss drugmaker's pharmaceuticals division increased 9 percent to CHF 12.36 billion compared to CHF 11.66 billion during the same period in 2021, while revenues from the diagnostics division fell 9 percent to CHF 3.88 billion compared to CHF 4.46 billion in 2021. Roche Group CEO Severin Schwan said in a conference call Thursday that the company's revenue gains in 2022 were partly offset by declining COVID-19-related product sales of around CHF 1 billion.
Sales of Tecentriq (atezolizumab), a PD-L1 inhibitor developed by Genentech, contributed CHF 1.03 billion to Q4 2022 revenues, a 24 percent increase compared to CHF 838 million in Q4 2021.
According to Roche CFO Alan Hippe, indications in first-line hepatocellular carcinoma, first-line small cell lung cancer, and adjuvant non-small cell lung cancer are the main drivers for growth in sales of Tecentriq. Roche submitted regulatory filings for a subcutaneous injection formulation of Tecentriq following positive results from a Phase III trial in August.
In that study of 438 patients with locally advanced or metastatic NSCLC, the difference in levels of subcutaneously injected Tecentriq in the blood were non-inferior compared with levels of the drug infused intravenously. "Subcutaneous [injection] is much more convenient for patients and physicians, and in fact, it would reduce treatment time to seven minutes," Hippe said. "We have the opportunity to be first in the market for a PD-1/PD-L1 subcutaneous formulation with a likely lead time of over one year."
In January, Genentech announced that the Phase III IMbrave050 trial met its primary endpoint in a prespecified interim analysis. In the trial, the company is comparing a combination of Tecentriq and Avastin (bevacizumab) with active surveillance as adjuvant therapy in patients with hepatocellular carcinoma at high risk of recurrence. The analysis showed a statistically significant improvement in recurrence-free survival.
Tecentriq faces new competitive pressure with the FDA's recent approval of Merck's PD-1 inhibitor Keytruda (pembrolizumab) as an adjuvant therapy for non-small cell lung cancer patients, regardless of PD-L1 expression. In order to receive Tecentriq as an adjuvant NSCLC treatment, patients must have PD-L1 expression on at least 1 percent of tumor cells.
Keytruda's approval was based on results from the Phase III KEYNOTE-091 trial, which showed that it reduced the risk of disease recurrence or death by 27 percent compared to placebo in the all-comer population. However, Tecentriq still has the edge, according to Roche Pharmaceuticals CEO Thomas Schinecker. "We have first-mover advantage, and we have a significantly better hazard ratio," he said. "In fact, our hazard ratio [in the IMpower010 trial] in the PD-L1-positive population is 0.43 versus 0.82 in this KEYNOTE-091 study, which is a significant benefit to patients."
In addition to Phase III readouts for Tecentriq in head and neck cancer and triple-negative breast cancer, Roche is anticipating an overall survival readout from its SKYSCRAPER-01 Phase III trial comparing the anti-TIGIT tiragolumab and Tecentriq against just Tecentriq as a first-line therapy in patients with PD-L1-positive advanced NSCLC. The combination had failed to improve progression-free survival over Tecentriq, but noticing that patients on tiragolumab-Tecentriq had numerically higher overall survival, the company has decided to continue the study until this co-primary endpoint matures and reads out.
In Roche's HER2 franchise, Perjeta (pertuzumab) sales were CHF 997 million, an increase of 4 percent from CHF 981 million in Q4 2021. Kadcyla (trastuzumab emtansine) sales during the same period were CHF 490 million, down 3 percent from CHF 522 million.
Kadcyla is facing tough competition from AstraZeneca and Daiichi-Sankyo's Enhertu (trastuzumab deruxtecan) in adjuvant HER2-positive metastatic breast cancer. Schinecker noted that more than 60 percent of Kadcyla sales are for adjuvant breast cancer therapy and that there could be an impact on Kadcyla from Enhertu, depending on data readouts from ongoing clinical trials over the next couple of years. "That's about the same time when we also have our patent life ending on Kadcyla," Schinecker said.
Sales of Alecensa (alectinib), a treatment for ALK-positive metastatic NSCLC, contributed CHF 386 million in Q4 2022, a 10 percent increase from CHF 368 million in Q4 2021. Roche is anticipating results from the Phase III ALINA trial in adjuvant ALK-positive NSCLC in 2023.
Full-year results
For the full year in 2022, Roche reported total revenues of CHF 63.28 billion, a 2 percent increase at constant exchange rates compared to CHF 62.80 billion in 2021. Product sales for the pharmaceutical division over the same period grew 2 percent to CHF 45.55 billion from CHF 45.04 billion, while revenues from the diagnostics division remained flat at around CHF 17.73 billion.
In 2022, Tecentriq sales increased 14 percent to CHF 3.72 billion, Perjeta sales grew 5 percent to CHF 4.09 billion, and Kadcyla sales increased 7 percent to CHF 2.08 billion. In Europe, Perjeta's sales in 2022 took a hit, declining 16 percent year over year, but was offset by the launch of Roche's HER2-targeted combination subcutaneous injection product Phesgo (pertuzumab/trastuzumab/hyaluronidase) in 30 countries. Phesgo's sales increased 121 percent during the year to CHF 740 million.
As of Dec. 31, Roche had CHF 4.99 billion in cash and cash equivalents and CHF 4.78 billion in marketable securities.
In 2023, Roche is expecting sales from COVID-19-related products to decline by roughly CHF 5 billion. As a result, the company is expecting revenues to decrease this year in the low-single-digit range and core EPS to develop in line with the expected sales decline at constant exchange rates. Excluding the negative impact from COVID-19-related products, Roche anticipates sales growth in both its pharmaceutical and diagnostics divisions.
The COVID-19 product-related declines comprise "about 8 percent of our overall business, and we will largely compensate for that," Schwan said.
In releasing its Q4 financials, the company also announced on Thursday that Teresa Graham, Roche Pharmaceuticals' current head of global product strategy, will be division CEO, effective in March.