Roche (RHHBY) received positive news when the European Commission approved its oncology drug Kadcyla for the treatment of HER2+advanced breast cancer.
The approval was based on positive results from the phase III study, EMILIA, wherein patients previously treated with Herceptin and a taxane chemotherapy were randomized to receive Kadcyla or a standard treatment, lapatinib and Xeloda.
Data from the study showed that Kadcyla helped extend the life expectancy of patients who were previously treated with lapatanib and Xeloda.
The approval does not surprise us as the Committee for Medicinal Products for Human Use (CHMP) recommended an approval in Sep 2013.
We note that Roche has a solid position in the breast cancer market with drugs like Herceptin, Perjeta and Kadcyla in its kitty for the treatment of patients suffering from HER2+ breast cancer.
The EU approval of the subcutaneous formulation of Herceptin in Sep 2013 was also a boost to Roche’s HER2+ franchise. Moreover, the U.S. Food and Drug Administration (FDA) approved Perjeta for neoadjuvant treatment (use before surgery) in HER2+ early stage breast cancer patients.
We remind investors that Kadcyla was launched in the U.S. in Feb 2013. The EU approval should further strengthen the HER2+ breast cancer franchise at Roche which was up 13% in the first nine months of 2013.
We note that Novartis’ (NVS) Afinitor is also approved in the U.S. and the EU for the treatment of HER2+ advanced breast cancer in combination with Pfizer’s (PFE) Aromasin in postmenopausal women, whose disease has returned or progressed even after undergoing treatment with a non-steroidal aromatase inhibitor.
Roche currently carries a Zacks Rank #3 (Hold). Right now, Bayer (BAYRY) looks attractive with a Zacks Rank #2 (Buy).
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