Roche (RHHBY) Progresses with Label Expansion of Lucentis

Roche (RHHBY) announced that the FDA has accepted to file the company’s supplemental Biologics License Application (sBLA) for ophthalmology Lucentis for the treatment of diabetic retinopathy.

In addition, the FDA also granted priority review to Lucentis for the above mentioned indication. The agency is expected to take a decision by Feb 6, 2015.

The sBLA was based on positive results from two phase III trials, RISE and RIDE, wherein meaningful improvements were observed in a clinically significant proportion of diabetic retinopathy patients treated with Lucentis at two years compared to patients treated with sham injections (control group).

We note that Lucentis was approved in 2012 for the treatment of diabetic macular edema (:DME), which causes vision loss in people with diabetic retinopathy. The drug is also approved for the treatment of wet age-related macular degeneration (wet AMD), macular edema following retinal vein occlusion (:RVO).

As per Roche, 7.7 million people in the U.S. get affected by diabetic retinopathy every year. While Roche holds commercial rights for Lucentis in the U.S., Novartis (NVS) holds the rights to develop and market it outside the U.S. Novartis also pays royalties to Roche on net Lucentis sales outside the U.S.

We expect label expansion for Lucentis for additional indications to boost its sales. We are also impressed by Roche’s efforts to grow its portfolio beyond oncology to immunology and ophthalmology.

Roche currently carries a Zacks Rank #4 (Sell). Other better-ranked stocks in the health care sector include Shire (SHPG) and Sucampo Pharmaceuticals (SCMP). Both carry a Zacks Rank #1 (Strong Buy).

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