Roche shares drop as oral breast cancer drug fails trial

FRANKFURT, March 9 (Reuters) – Roche’s shares dropped more than 5% on Monday as the Swiss drugmaker failed to show that its promising breast cancer drug candidate giredestrant can help newly diagnosed patients.

At 0956 GMT, the stock trimmed early some losses to trade 4.6% lower at 325.80 Swiss francs, its lowest level in about two months.

Roche said the late-stage trial did not provide reliable evidence that the drug’s use in combination with Pfizer’s Ibrance as a first treatment slows disease progression when compared with a standard hormonal therapy plus Ibrance, missing the study’s goal.

Barclays analyst James Gordon said “shares could overreact on sentiment,” adding that it was a buying opportunity as the commercial opportunity of add-on treatments is not fully appreciated by the market.

The data marked a reversal of fortunes for Roche’s drug.

Last year, a late-stage trial showed the oral compound cut the risk of tumour recurrence in breast cancer patients who had received the established initial treatment, boosting Roche’s shares.

“We expect this should completely reverse the positive momentum from late last year on positive readouts,” said Jefferies analyst Michael Leuchten.

Giredestrant belongs to a drug class known as oral selective oestrogen receptor degraders (SERD), used to fight tumours that grow in response to oestrogen – accounting for up to 80% of all breast cancer cases.

The market opportunity has also attracted AstraZeneca, which is developing rival compound camizestrant.

“This (trial) outcome aligns with our concerns that the trial was underpowered, particularly important relative to stronger trial designs like AZN’s camizestrant,” said Leuchten.

The miss “widens that gap and challenges the more optimistic multi-billion-dollar narrative that had (been) rebuilt around giredestrant.”

Roche applied for potential U.S. Food and Drug Administration approval of the drug last month, based on previous study data. It will also submit data from this study in the coming weeks.

(Reporting by Ludwig Burger and Puyaan Singh; Editing by Linda Pasquini and Janane Venkatraman)