At a recent presentation in London, Roche (NASDAQOTH: RHHBY) execs spent hours justifying the $9.5 billion spent on R&D last year. These events can be tedious, but one quote from the head of pharmaceutical development sent my head spinning. When discussing the company's extensive late-stage pipeline, she claimed, "Five of our late-stage molecules have no class competition."
To the uninitiated, this may not seem like such a big deal, but there are a couple of things you need to bear in mind about Roche and the industry as a whole. This is not a company that grasps at straws. Roche's R&D machine is unusually efficient, and it's not at all shy about scuttling early and middle-stage programs with mediocre prospects.
Generally, when a drug emerges with a new mechanism of action, competitors in the same class aren't far behind. So when Roche says it has five first-in-class drugs nearing the finish line unopposed, it's time to pay attention.
A big response in leukemia
Most of the attention gained by Roche's oncology unit has been focused on its antibody atezolizumab that acts on the programmed cell-death checkpoint. Merck and Bristol-Myers Squibb are well established in this space, with their drugs Keytruda and Opdivo, respectively. What they don't have is an oral BCL-2 inhibitor such as venetoclax.
Developed by Roche in collaboration with AbbVie, venetoclax inhibits BCL-2. This protein prevents white blood cells, among others, from dying off when their time has come. Not dying when they're supposed to is a hallmark of most malignancies, and this is the only drug in significant trials that acts on this pathway.
It's not only unique, but it also appears to do the trick. Earlier this year, Roche released phase 2 results from an advanced leukemia trial. A whopping 84% of these difficult-to-treat patients responded to the therapy -- an outstanding rate. The well-tolerated drug is a part of 15 clinical trials across four types of blood cancer. The FDA has given it a breakthrough therapy designation and is currently mulling a venetoclax application for the treatment of a genetic subset of advanced leukemia patients.
A hemophilia problem solver
Investors will want to keep their eyes open for a slew of venetoclax presentations scheduled during next month's meeting of the American Society of Hematology. Also likely to draw attention at the meeting will be data from hemophilia A game-changer ACE910.
Many hemophilia A patients develop inhibitors to the clotting factor they receive as a replacement therapy. This antibody effectively solves this problem. In a small phase 1 study, the larger dose reduced annual bleeding events by 80% in patients with inhibitors. Since these patients represent a population with unmet need, the FDA has also designated this drug a breakthrough therapy.
A promising sight
Also aimed at a population with unmet need is lampalizumab, as there are no proven medical treatments for dry macular degeneration. In a phase 2 study with patients exhibiting an advanced form of the disease, this first-in-class antibody significantly reduced disease progression in a genetic subset of patients.
Filling unmet neurological needs
In multiple sclerosis there are a dozen available therapies, but patients with the most severe form of the disease are left out in the cold. Ocrelizumab could change this situation soon. Although it isn't the first antibody to target the beta cells with CD20 protein, it is the only one being developed for multiple sclerosis. It's also the only drug of any class in a large trial to effectively slow disease progression in patients with the primary progressive form of the disease.
Ocrelizumab also showed an outstanding combination of efficacy, safety, and tolerability in the much larger relapsing-remitting population. Multiple sclerosis therapies to date are either marginally effective but safe and well tolerated, or vice versa. A drug that succeeds in all three areas would turn the treatment paradigm on its head.
Another new area
Ocrelizumab is one of two late-stage compounds likely to make a splash in new therapeutic areas for Roche. The other is severe asthma candidate lebrikizumab.
Recently the FDA approved GlaxoSmithKline's (NYSE: GSK) severe asthma therapy, Nucala. In trials leading to its approval, the IL-5 agonist lowered exacerbations, which is important. What it didn't accomplish was a significant improvement in lung function, as measured by the volume of air a patient can exhale in one second.
It seems Glaxo just can't catch a break. In a phase 2 study, Roche's first-in-class anti-IL-13, lebrikizumab, significantly lowered the rate of exacerbations and increased forced expiratory volume, albeit in a defined subset of patients. Investors will want to see if the trend continues. You can expect data from a phase 3 trial in the first half of next year.
On being first
With new drugs, the marketplace can be as unpredictable as the human body. Being first-in-class to win approval doesn't necessarily guarantee top sales. For example, the first of the anti-TNFs, Johnson & Johnson's Remicade, ranks well below AbbVie's third-in-class Humira on the all-time best-seller list. However, after its 17 years on the market, I don't think anybody at Johnson & Johnson is complaining about the $6.4 billion in sales Remicade is likely to generate this year.
While there is no surefire way to guarantee success when launching first-in-class therapies, I can't think of any drugs that flopped after effectively addressing unmet needs. Looking at this late-stage pipeline, I'd say this is a strategy Roche is playing as well as any investor could hope for.
Cory Renauer owns shares of Johnson & Johnson. The Motley Fool recommends Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.