Roche Gives Up on Heart Drug after Trial Disappoints

07.05.2012 -

Swiss drugmaker Roche has ended efforts to develop a heart disease drug which some industry analysts had estimated could have achieved $10 billion in annual sales, after poor results from a late-stage trial.

The trial's independent Data and Safety Monitoring Board recommended stopping the trial due to a lack of meaningful efficacy for the drug, dalcetrapib, when added to the existing standard of care in patients with stable coronary heart disease, Roche said on Monday.

Rivals Merck & Co and Eli Lilly are developing similar drugs, part of a new class of treatments which have been promising to boost levels of "good" high-density cholesterol (HDL). All of the drugs are designed to block the cholesteryl ester transfer protein, or CETP, which is linked to heart disease.

"The termination of the trial removes a significant potential growth driver for Roche from 2014 onwards," said Kepler analyst Martin Voegtli who had based his Roche valuation on risk-adjusted annual sales of 2.9 billion Swiss francs ($3.2 billion) by 2020 for dalcetrapib.

"This would have been their entry into the cardiovascular market," he said.

Statins and a raft of blood pressure medicines have dramatically reduced the number of heart attacks and strokes suffered by the population at large. But heart disease remains the biggest killer in the world, creating an opening for more effective medicines.

Other analysts said the dalcetrapib failure could put a dampener on the development of similar drugs by Roche's rivals.

"We anticipate a negative reaction driven by bad sentiment and we see other programmes at risk as this is the second failure in this class following Pfizer's torcetrapib," said Exane BNP Paribas analysts in a note.

The drug, which Roche bought from Japan Tobacco was seen as approximately two year's ahead of Merck & Co's anacetrapib, also in a late-stage Phase III trial, which was far more effective in mid-stage trials.

The rival Merck drug boosted HDL levels by 138% in a mid-stage trial, compared with an average increase of 31% with Roche's dalcetrapib.

Voegtli said it was likely that more than 70% of the costs Roche earmarked for the drug's trial and related studies had already been spent, adding there had been no recent successes from the research centre in Switzerland.

"On the positive side, there will be no further research and development or sales force costs associated with the drug going forward," said Voegtli, who lowered his 12-month price target on Roche from 182 francs per share to 175 per share.

"While we have always stated that dalcetrapib is a high-risk project, we are disappointed by the fact that this drug didn't provide benefit to the patients in our study," Roche's chief medical officer and head of global product development, Hal Barron, said on Monday.

In September last year the company's head of pharmaceutical research Jean-Jacques Garaud said the experimental drug, which raised HDL substantially in a Phase II trial, had the potential to generate annual sales of $10 billion.

And in August Deutsche Bank analyst Tim Race had flagged theoretical peak sales of 10 billion Swiss francs ($11 billion) but was adjusting his estimate for risk to 1.2 billion by 2016.

A Roche spokesman told Reuters the company never provided potential peak sales estimates.

Last year the company said it had group sales of 42.5 billion francs and spent over 8 billion on research and development.