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Roche Collaborates with Merck KGaA

Zacks Equity Research

Roche’s (RHHBY) Ventana Medical Systems announced that it has entered into an agreement with Germany-based Merck KGaA (MKGAF).

As per the deal, Roche will collaborate with Merck KGaA's biopharmaceutical division for the development and commercialization of a companion diagnostic (CDx) for an undisclosed target using its proprietary diagnostic assays.

Roche will develop and validate the CDx and ensure its readiness, availability, and adherence to FDA and other health authority standards for future clinical trials. Merck KGaA aims to develop a patient stratifying diagnostic test, which can be used in multiple cancer indications.

We note that Roche has more than 180 collaboration agreements to develop and commercialize companion diagnostics globally.

In Jun 2014, Roche entered into a collaboration agreement with MedImmune, the global biologics research and development arm of AstraZeneca (AZN).

Both the companies are jointly developing a PD-L1 (SP263) immunohistochemistry assay to enroll patients in clinical trials for MedImmune's MEDI4736 anti-PD-L1 therapy for non-small cell lung carcinoma.

The treatment is based on cancer immunotherapy, which is gaining a lot of interest in the recent times as pharmaceuticals majors focus their R&D efforts on the same.

We remind investors that Roche is a specialist in drugs for oncology, immunology, and infectious diseases. Apart from providing therapeutic products and services for diverse medical needs, Roche also focuses on innovative diagnostic solutions for the early detection and treatment of diseases.

Roche has a broad portfolio of diagnostic tests with more than a hundred high-quality Elecsys assays for immune testing along with a new generation of fully automated cobas analyzers for improved medical decision making, scheduling and efficiency. We are encouraged by Roche’s efforts to further strengthen its Diagnostic Division.

Roche, a large-cap pharma, currently carries a Zacks Rank #3 (Hold). Right now, AbbVie, Inc. (ABBV) is a better-ranked large-cap pharma with a Zacks Rank #2 (Buy).

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