Saturday, July 28, 2018

Strong Current Results Boost Sentiment On Roche

The last four years have not been particularly good for Roche (OTCQX:RHHBY), and the share price amply reflects this. Not only is Roche just starting to see what will be significant revenue pressure from biosimilar competition to its three main drugs (which still generate more than a third of total revenue and a larger share of profits), the company has seen a run of clinical disappointments in its oncology program, headlined by the failure of PD-L1 drug Tecentriq to distinguish itself from its main rival, Merck’s (MRK) Keytruda, in the lucrative lung cancer field.

It’s not all terrible at Roche, though. The company’s non-oncology pipeline has delivered some strong new products, led by Ocrevus and Hemlibra, and the company has a very deep pipeline across oncology and neurology (as well as other therapeutic areas). What’s more, second quarter results highlight that there’s still more potential for the current business to perform well. Although Roche shares do not appear significantly undervalued, there still appears to be potential for high single-digit annualized returns with upside if the pipeline can deliver some positive surprises.

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Strong Current Results Boost Sentiment On Roche

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