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What Analysts Recommend for Roche in January 2018

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Recent developments

In December 2017, Roche and Ignyta entered a merger agreement where Roche will fully acquire Ignyta at a price of $27.0 per share in an all-cash transaction. The net amount corresponds to $1.7 billion on a diluted basis. Ignyta’s lead molecule, entrectinib, is being investigated to address tumors that harbor ROS1 or NTRK fusions. The ongoing pivotal phase two clinical trial, if successful, would support a dual new drug application (or NDA) submission.

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In the STARTRK-two trial, among individuals with ROS1 fusion-positive advanced non-small cell lung cancer (or NSCLC) receiving entrectinib, investigators found that 78% of patients demonstrated the confirmed ORR (objective response rate). In the STARTRK-2 trial results, patients receiving entrectinib demonstrated a median duration of response of 28.6 months, while median PFS (progression-free survival) was 29.6 months with 53% of patients remaining in the trial.

Analysts’ recommendations

Three analysts were tracking Roche (RHHBY) in January 2018. Two of them recommended a “strong buy,” while one analyst recommended a “buy.” On January 4, 2018, Roche had a consensus 12-month target price of $35.5, which represents a 10.4% return on investment over the next 12 months. The Vanguard International Dividend Appreciation ETF (VIGI) invests ~2.7% of its total portfolio holding in Roche.

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Competitor ratings

Of the 23 analysts tracking Merck (MRK) in January 2018, ~57% of analysts recommended some form of a “buy” rating, while none of them recommended any form of a “sell” rating. On January 4, 2018, Merck had a consensus 12-month target price of $65.23, which represents a ~16.2% return on investment over the next 12 months.

Of the four analysts tracking Novartis (NVS) in January 2018, ~50% of analysts recommended some form of a “buy” rating. On January 4, 2018, Novartis had a consensus 12-month target price of $93, which represents a 9% return on investment over the next 12 months.

Of the 24 analysts tracking Pfizer (PFE) in January 2018, ~54% of the analysts recommended some form of a “buy” rating, while two analysts recommended a “strong sell.” On January 4, 2018, Pfizer had a consensus 12-month target price of $38.29, which represents a 4.3% return on investment over the next 12 months.

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