Drug Pipeline Pulse Check: Roche's Stumble Boosts Amylin

by: Research Recap


A diabetes drug produced by Roche has experienced a setback after the firm said adverse reactions to the drug – Taspoglutide – have forced the company to make changes to ongoing clinical trials, creating concern over both the drug’s timeline to approval and its ability to compete successfully with other similar therapies.

Analyst Karen Anderson of Morningstar noted that although the development is a negative one for Roche, the firm’s strong portfolio and other late-stage candidates will “prevent this news from having a significant impact on our fair value estimate for the firm.” Morningstar analysts had previously expected Roche to file for the drug’s approval in 2011, but now they are pushing back revenue forecasts by two years. ”Despite this development, we still think the product has blockbuster potential…” (Morningstar)

However, other analysts are concerned. Jefferies industry analyst Jeffrey Holford said the long delay could really hurt the Swiss firm’s future prospects for the diabetes drug. ”Now the product can’t launch before 2014. We question to some extent whether it can be launched at all,” he said. (Reuters) “A delay of 12 to 18 months is not good,” Andrew Weiss, an analyst at Bank Vontobel AG in Zurich, told Bloomberg News. “It’s an important drug for Roche and they need it on the market to balance out the oncology franchise, which is starting to slow down.” But despite the bad news, Weiss still recommends buying the stock.

Due to Roche’s drug delay, analysts are upgrading San Diego-based competitor Amylin, which is awaiting a U.S. regulatory decision on its experimental once-weekly diabetes drug, Bydureon. J.P. Morgan analyst Cory Kasimov called the news from Roche a “significant break” for Bydureon and upgraded shares of Amylin to “overweight” from “neutral.” (Reuters) Canaccord Adams also upgraded Amylin two notches to “hold” from “sell”. (MySmartTrend)

According to Thomson/First Call, the median price target for Roche is now at $49, more than its current share price of about $35. Amylin’s median price target is $24, higher than its current share price of around $18.


Analysts are seeing potential for Alnylam’s stock after Sanofi-Aventis (NYSE:SNY) announced that it’s sealed a collaborative deal with Regulus Therapeutics, a joint venture owned by Alnylam and Isis Pharmaceuticals (ISIS) that was started in 2007. The venture, worth $750 million, will focus on the development and commercialization of microRNA technology. Both Isis and Alnylam will receive $1.8 million of the upfront payment and the companies will continue to receive a similar percentage of future milestone payments.

Rodman & Renshaw analyst Simos Simeonidis wrote in a note to investors that the stock can provide significant returns in as quickly as 6-9 months. ”We see current levels as a very attractive entry point into the Alnylam story, with the stock trading at pre-Roche deal levels, and we see the opportunity for 25-30% returns in next few months,” he said, adding that the partnership could spur more health-care money into small-cap biotechs. (Minyanville)

The median price target for Alnylam’s stock is currently at $22, higher than its current share price of $15.25, based on Thomson/First Call data.


Although preliminary top-line results from the Phase III clinical program for Hematide, a drug for the treatment of anemia in chronic renal failure patients, met statistical criteria, Affymax and Takeda Pharmaceutical’s new drug stumbled on some troubling cardiovascular safety data in the nondialysis patient group, leaving the drug’s regulatory and commercial potential uncertain. (BioWorld)

Hermatide had been targeted as a more convenient and safer alternative to Amgen Inc.’s(NASDAQ:AMGN) anemia drugs Epogen and Aranesp, and analysts had projected that sales of Hematide could exceed $500 million within the first two years of launch. But now those estimates could seem less likely since the new drug application could be delayed. Affymax’s stock was to “market weight” at Thomas Weisel. (24/7 Wall St.)

Christopher Raymond of Robert W. Baird & Co. said even though Affymax and Takeda are not yet disclosing a plan for filing, it’s possible the firms could scrap the nondialysis indication and seek approval only in chronic renal failure patients on dialysis. (Bio World) “Completion of these four Phase III studies is a key milestone and we look forward to pre-NDA discussions with the FDA,” said Arlene M. Morris, chief executive officer of Affymax. “We are continuing to evaluate the data, in particular the non-dialysis studies, and the impact on the timing of an NDA submission.” (Euro Investor)

Sheena Lee