A Look at Roche’s Potential Revenue Drivers



Recent revenue drivers

Roche’s (RHHBY) human epidermal growth factor receptor 2-positive (or HER2) portfolio includes blockbuster Herceptin along with Perjeta and Kadcyla. The HER2 franchise grew by 7% and 11% in the US and Europe, respectively. Perjeta witnessed strong growth in the US and Europe while Kadcyla performed well internationally. During the first six months of 2016, Perjeta earned 906 million Swiss francs while Kadcyla recorded 408 million Swiss francs. For more information on the two drugs, read Inside Roche’s Next Oncology Portfolio Drivers.

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Roche’s recent approvals 

Roche’s recent approvals have a potential to become its drivers near term. During the second quarter of 2016, Tecentriq, or Atezolizumab, was launched in the US for bladder cancer. Venclexta, which was developed in association with AbbVie (ABBV), was launched in the US for CLL (or chronic lymphocytic leukemia) with 17p deletion. For detailed information on Tecentriq, please refer to Six Advanced Studies for Roche’s Atezolizumab.

The Programmed Death Ligand-1 protein inhibitor market already has two approved products: Bristol-Myers Squibb’s (BMY) Opdivo and Merck’s (MRK) Keytruda. Tecentriq won’t compete directly with these drugs for market share. However, if approved for lung cancer, it would share the market with these two companies. A change in the route of administration for MabThera/Rituxan to a subcutaneous mode in Europe has helped the drug to sustain its competitiveness.

Investors should note that it’s highly risky to invest in a pharmaceuticals or biotechnology equity. To avoid excessive company-specific risks, but also enjoy exposure to Roche, you can choose to invest in the Vanguard FTSE All-World Ex-US Index Fund (VEU). Roche accounts for 0.71% of VEU’s total holdings. Continue to the next part to understand Roche’s diagnostics division’s performance.


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