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Roche's Ocrevus Wins FDA Approval for 2 Forms of Sclerosis

Zacks Equity Research

Roche Holdings AG RHHBY announced that the FDA has approved Ocrevus (ocrelizumab) as the first and only drug for both relapsing and primary progressive forms of multiple sclerosis.

Roche’s share price shows that the company has outperformed the Zacks classified industry year to date. The stock gained 12.4% compared to the Large Cap Pharmaceuticals industry’s gain of 6.7%.

The approved drug demonstrated a favorable benefit-risk profile in three large phase III studies with a diverse patient population, including those in the early stages.

We note that Ocrevus demonstrated superior efficacy on the three major markers of disease activity by reducing relapses per year by nearly half, slowing the worsening of disability and significantly reducing MRI lesions compared with Rebif in two identical RMS Phase III studies (OPERA I & OPERAII) over the two-year controlled treatment period.

The most common side effects associated were infusion reactions and upper respiratory tract infections, which were mostly mild to moderate in severity.

We note that the company’s Marketing Authorisation Application (MAA) for Ocrevus has also been validated by the European Medicines Agency (EMA) and is currently under review.

The approval boosts Roche’s neuroscience portfolio. Roche has more than a dozen pipeline candidates in the neuroscience portfolio for diseases that include multiple sclerosis, Alzheimer’s disease, spinal muscular atrophy, Parkinson’s disease and autism.

We remind investors that Biogen Inc. BIIB has a strong position in the MS market backed by a wide range of products including Avonex, Tysabri, Tecfidera & Plegridy.

Meanwhile, Roche has a strong presence in the oncology market. The company dominates the breast cancer space with strong demand for its HER2 franchise drugs like Herceptin, Perjeta and Kadcyla. We are also impressed by the company's efforts to develop its portfolio beyond oncology into immunology. New drug launches, such as Tecentriq, Cotellic and Alecensa boosted sales and is expected to continue to do so in the upcoming quarters.

Zacks Rank & Stocks to Consider

Roche currently sports a Zacks Rank #1 (Strong Buy).

Other favorably placed stocks in the healthcare sector include Heska Corp. HSKA and Retrophin, Inc. RTRX. Both the stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings estimates increased from $1.53 to $1.65 for 2017 and from $1.90 to $2.01 for 2018 over the last 30 days. The company posted a positive earnings surprise in all the four trailing quarters with an average beat of 291.54%. Its share price increased 32.7% year to date.

Retrophin’s loss estimates narrowed from 85 cents 72 cents for 2017 and from 67 cents to 53 cents for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 80.55%.

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Roche Holding AG (RHHBY): Free Stock Analysis Report
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