Roche shares drop as oral breast cancer drug fails in trial

Roche shares drop as oral breast cancer drug combination fails key trial

Roche's Giredestrant Breast Cancer Drug Trial Results and Market Impact

Share Price Reaction

FRANKFURT, March 9 (Reuters) - Roche's shares dropped more than 7% at one stage on Monday, their biggest decline in nearly a year, after the Swiss drugmaker said its promising breast cancer pill, giredestrant, failed to meaningfully help newly diagnosed patients.

Roche said the late-stage trial did not provide reliable evidence that using giredestrant in combination with Pfizer's older drug Ibrance as a first treatment slows disease progression, when compared with a standard hormonal therapy plus Ibrance regime - missing the study's goal.

By 1335 GMT, Roche shares were trading down 4.1% at 327.20 Swiss francs, their lowest level in about two months.

Previous Successes and Ongoing Potential

Second-Line and Adjuvant Treatment

Giredestrant, however, could still be used as a second treatment after an earlier late-stage trial showed the oral compound cut the risk of tumour recurrence in breast cancer patients who had previously been treated. The results of that trial, last year, had boosted Roche shares.

The drug previously also succeeded as an add-on, or adjuvant, treatment in patients with a form of early-stage breast cancer.

Analyst Perspectives

Barclays Analyst View

Barclays analyst James Gordon said that the share decline was a buying opportunity as the commercial potential of add-on treatments is not fully appreciated by the market. Gordon estimates $6.5 billion in peak annual revenue for the drug in this setting.

Drug Class and Competitors

Giredestrant belongs to a drug class known as oral selective oestrogen receptor degraders (SERD), used to fight tumours that grow in response to oestrogen - accounting for up to 80% of all breast cancer cases.

The market opportunity has also attracted AstraZeneca, which is developing rival compound camizestrant.

Jefferies Analyst View

"This (trial) outcome aligns with our concerns that the trial was underpowered, particularly important relative to stronger trial designs like AZN's camizestrant," said Jefferies analyst Michael Leuchten, referring to AstraZeneca's study in which patients were switched to camizestrant if a mutation was detected before their disease worsened.

Roche's miss challenges the "more optimistic multi-billion-dollar narrative that had (been) rebuilt around giredestrant," he said.

Regulatory Outlook

Roche applied for potential U.S. Food and Drug Administration approval of the drug last month, based on data from previous studies and plans to submit data from this study in the coming weeks.

(Reporting by Ludwig Burger in Frankfurt, Puyaan Singh in Bengaluru and Bhanvi Satija in London; Editing by Linda Pasquini, Janane Venkatraman and Susan Fenton)