ZURICH/LONDON (Reuters) - Recent setbacks mean the high-water mark for Avastin revenues will be lower than some investors had hoped, but Roche’s cancer blockbuster remains on track to become the world’s top-selling medicine.
Avastin, which starves tumours of blood supply, is a key weapon in the fight against colon, lung, breast and other cancers — and Roche’s biggest drug.
“Avastin has been a very important step forward in treatment,” said Dr. Martin Reck, a cancer specialist at Germany’s Krankenhaus Grosshansdorf involved in clinical trials of the antibody-based medicine in lung cancer.
Not everything is going according to plan.
Avastin failed to help with prostate and gastric cancer in recent studies. It is also unclear whether U.S. regulators will upgrade its provisional green light in breast cancer into full approval, given a lack of overall survival benefit.
With Roche enjoying a premium rating, and 24 out of 37 analysts tracked by Thomson Reuters recommending the stock as a “buy”, there is little room for error.
Avastin sales will come in for especially close scrutiny when Roche reports first-quarter sales figures on April 15, after a disappointing fourth quarter last year in which revenues from the drug were hit by wholesaler destocking.
But Avastin is unlikely to lose its crown any time soon.
“Avastin is much further ahead than any other drug as it has so much clinical data and experience behind it. It is also very expensive to bring a new drug to the point where it can rival Avastin,” said Sarasin analyst David Kaegi.
As a result, portfolio manager for the Polar Capital healthcare opportunities fund Daniel Mahony believes Avastin will remain the go-to medicine in its field, despite already having been on the market since 2004.
“This makes it harder for other drugs to dislodge it and means that it has a longer runway than people would have thought,” he said.
By 2014, the drug is set to be the world’s biggest selling prescription medicine, with annual sales of some $9 billion a year, according to consensus forecasts.
Avastin is already Roche’s top product, accounting for 13 percent of sales in 2009 and perhaps 25 percent of operating profit, and analysts at Bernstein expect it to account for a quarter of Roche’s growth between now and 2015 — helped in part by promising new trial results in ovarian cancer.
Just how big the new use in ovarian cancer will be depends on the clinical data.
So far, Roche has merely said Avastin helps women with advanced ovarian cancer live longer without their disease getting worse. Full details will be unveiled at the annual meeting of the American Society of Clinical Oncology in June.
“It is really ovarian cancer that people are banking on now. It has potential sales of $2 billion,” said Helvea analyst Karl-Heinz Koch.
For graphic on Avastin sales see r.reuters.com/caw75j
Avastin won’t keep growing forever and rivals have emerged, even if the hurdle for competitors is high.
Michael Hay, senior analyst at BioMedTracker, sees sales peaking in three or four years’ time as competitors gain traction.
“Avastin has rather saturated its three main markets (colon, breast and lung cancer), so any competition that may come on will really eat into its share of potential patients,” he said.
In colon cancer, the competition has already arrived in the form of so-called EGFR drugs like Erbitux — sold by Eli Lilly, Bristol-Myers Squibb and Merck KGaA — and Amgen’s Vectibix.
The new ability to select patients with the right genetic profile that respond to these epidermal growth factor receptor, or EGFR, drugs means they are producing better results.
Avastin could also face competition from other anti-angiogenic agents designed to starve tumours of blood, such as Sanofi-Aventis and Regeneron’s aflibercept and GlaxoSmithKline’s Votrient.
However, the recent failure of AstraZeneca’s Recentin in a head-to-head trial with Avastin suggests the entry barrier for new drugs is high.
A year ago, many analysts had thought Avastin might eventually match Pfizer’s record-beating cholesterol fighter Lipitor, which is expected to sell some $12 billion this year, before losing patent protection in 2011.
That no longer looks in reach, following the setbacks in prostate and gastric cancer and, crucially, the failure of Avastin in the so-called adjuvant setting in colon cancer in 2009.
Adjuvant therapy refers to treatment after surgery, which is common in colon and breast cancer. Getting into this new area would spell substantial extra sales beyond the current metastatic setting — but it now seems a very long shot.
“If Avastin had been successful in the adjuvant setting, it would have likely become the world’s largest selling drug ever,” Vontobel analyst Andrew Weiss said.
Editing by Sitaraman Shankar