Label Expansion for Roche's Avastin in Japan

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Roche (RHHBY) is a leader in the oncology market with several leading drugs in its portfolio.

In particular, Roche is well placed in breast cancer market fueled by its HER2 franchise. The HER2 franchise includes drugs like Herceptin, Perjeta and Kadcyla.

Apart from HER2 franchise, Roche is also making efforts to develop drugs for other indications.

The company recently received positive news when oncology drug Avastin was approved for an additional indication - ovarian cancer in Japan.

The approval was based on positive results from a phase III study, GOG-0218. The study evaluated the efficacy and safety of Avastin when administered in combination with carboplatin/paclitaxel, a standard chemotherapy and thereafter as a monotherapy.

The study met its primary endpoint and Avastin was able to significantly prolong progression free survival in patients with ovarian cancer as compared to those patients who received the standard chemotherapy alone.

We remind investors that Avastin is already approved in Europe and the U.S. for breast cancer, colorectal cancer, non-small cell lung cancer, renal cell cancer and ovarian cancer.

We note that Avastin was one of the leading drugs for Roche in the first nine months of 2013, up 19% year over year. The increase in sales was due to the recent approvals including ovarian cancer in Europe, colorectal cancer in the U.S. and Europe, and the first approval for newly diagnosed glioblastoma in Japan.

We are encouraged by Roche's efforts to expand Avastin's label  whcih should further boost sales.

Roche currently carries a Zacks Rank #3 (Hold). Right now, stocks that look attractive include Shire (SHPG), Bayer (BAYRY), and Auxilium Pharmaceuticals (AUXL). While Shire carries a Zacks Rank #1 (Strong Buy), both Bayer and Auxilium Pharma are Zacks Rank #2 (Buy) stocks.

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