While many phar­ma for­tunes are tied to Covid-19 pan­dem­ic peaks and val­leys, Roche’s con­nec­tions are more com­pli­cat­ed than most, born out in its 2021 fi­nan­cial re­port­ing.

On one hand, its al­ways top-of-mind di­ag­nos­tics busi­ness, bol­stered by anti­gen and PCR test­ing, saw soar­ing sales, up 29% to CHF $17.76 bil­lion ($19.3B) in 2021. On the oth­er hand, its phar­ma busi­ness — while be­gin­ning to re­bound by year’s end with growth 2% high­er than an­a­lyst ex­pec­ta­tions in Q4 — moved up just 3% in 2021 end­ing with sales of CHF $45.04 bil­lion ($49 bil­lion).

And there are more ups and downs like­ly to come. For 2022, Roche is pre­dict­ing a strong first quar­ter for Covid tests and di­ag­nos­tics but ex­pects a drop-off af­ter that.

Roche Group CEO Sev­erin Schwan laid out two main sce­nar­ios the com­pa­ny is gaug­ing — one in which Covid-19 re­mains in a “steady state” and a sec­ond in which the virus dies out with Omi­cron as the last wave. For now, Roche is bas­ing its guid­ance for the year on a slow­down of in­fec­tions, and the need for test­ing, in the sec­ond quar­ter and be­yond.

To­tal sales re­bound­ed to CHF $62.8 bil­lion ($68.2 bil­lion) in 2021, up from $58.3 bil­lion in 2020 and $61.5 bil­lion in 2019.

Be­yond Covid and its ef­fects, Schwan high­light­ed Roche’s pipeline in his “ab­solute fa­vorite slide” show­ing three drug launch­es — Susvi­mo and Vabysmo in oph­thal­mol­o­gy and Po­livy in first-line — along with the fil­ing and launch of two CD20xCD3 bi-specifics mo­sune­tuzum­ab and glofi­ta­m­ab drugs in can­cer, four Tecen­triq ad­ju­vant stud­ies and four tiragolum­ab + Tecen­triq stud­ies, plus three oth­er re­sult read­outs. It al­so in­clud­ed four di­ag­nos­tic pipeline launch­es set for the year.

Roche re­port­ed it start­ed 16 Phase III tri­als in 2021 with now a to­tal of 14 new com­pounds in Phase III or filed for ap­proval. But the glob­al play­er al­so qui­et­ly sig­naled a com­plete flop in its late-stage pipeline.

Last fall Roche ex­e­cut­ed a quick re­treat from the Phase III pipeline when etrolizum­ab, once known as RG7413, got the ax for ul­cer­a­tive col­i­tis af­ter putting it in 4 late-stage stud­ies on UC. But it kept truck­ing on 2 oth­er Phase II­Is for Crohn’s dis­ease.

Un­til re­cent­ly.

In the lat­est quar­ter­ly up­date, the phar­ma gi­ant fin­ished wip­ing up the pro­gram, not­ing that the drug had failed to make the cut in Q4 for Crohn’s dis­ease as well.

There’s no ex­pla­na­tion, as is usu­al in these small print buri­als. But ear­li­er, Cowen’s Steve Scala had high­light­ed the drug as a po­ten­tial star play­er, which had been an­gling to carve out a po­si­tion for it­self in a high­ly com­pet­i­tive field.

Al­so out in the Q4 culling: mid-stage drugs for au­toim­mune dis­eases (RG7835, a con­ju­gate of  IL-2 and IgG), meta­bol­ic dis­eases and NASH (RG7992, a bis­pe­cif­ic of an­ti-FGFR1/KLB, BFKB8488A), and choroi­deremia (RG6367). Phase I stud­ies for melanoma and hy­poparathy­roidism al­so got cut.

Schwan de­scribed 2022 as “a very, very im­por­tant year, in par­tic­u­lar on the phar­ma side.”

Eval­u­ate an­a­lysts agreed, es­pe­cial­ly the Tec­netriq/tiragolum­ab stud­ies, high­light­ing four piv­otal read­outs.

“The big ques­tion will be whether tiragolum­ab’s huge piv­otal pro­gramme sug­gests sig­nif­i­cant ac­tiv­i­ty in any of the oth­er tu­mour types Roche high­light­ed at to­day’s fourth-quar­ter pre­sen­ta­tion,” an­a­lysts wrote in a post Thurs­day.

Along with Tecen­triq com­bi­na­tions and in­di­ca­tions, one of the “oth­er” pipeline drug read­outs be­ing care­ful­ly watched is gan­tenerum­ab in Alzheimer’s dis­ease with re­sults ex­pect­ed now for the fourth quar­ter.

Bill An­der­son

When asked about the tim­ing and re­sults, CEO of Roche Phar­ma­ceu­ti­cals Bill An­der­son said he’s con­fi­dent the re­sults will be ready in Q4 and dis­cussed the cur­rent Alzheimer’s en­vi­ron­ment with Bio­gen’s Aduhelm drug fac­ing crit­i­cism, skep­ti­cism and low up­take. The re­cent CMS draft guid­ance to hold off pay­ing for Aduhelm ex­cept through clin­i­cal tri­als has every­one go­ing through it with “a fine-toothed comb,” he said.

“What it comes down to is that physi­cians, pa­tients, pay­ers want com­pelling ev­i­dence. In this par­tic­u­lar case for var­i­ous rea­sons, they seem to be — um yeah — vot­ing with their feet that they don’t seem to have that yet.”

He added re­gard­ing Roche’s own tri­als: “We’ve been com­pelled since we start­ed the Grad­u­ate pro­gram with gan­tenerum­ab that we need two de­liv­er large, ro­bust stud­ies run to the end. … We want to ba­si­cal­ly have the longest rea­son­able study we can run with 100% of pa­tients at the max­i­mum dose. And that’s what we’re go­ing to be de­liv­er­ing in Q4 this year. And I think that’s the best any­one can do.”

Roche is ready­ing two new­ly ap­proved treat­ments for launch, Susvi­mo for wet age-re­lat­ed mac­u­lar de­gen­er­a­tion and Vabysmo for di­a­bet­ic mac­u­lar ede­ma and wet age-re­lat­ed mac­u­lar de­gen­er­a­tion. Vabysmo ap­proved just days ago faces a tough bat­tle for share with the well-es­tab­lished Re­gen­eron’s Eylea.

On the com­pe­ti­tion front, Roche loss­es are fi­nal­ly be­gin­ning to slow — the fourth quar­ter marked its first pos­i­tive growth in the US af­ter six neg­a­tive quar­ters thanks main­ly to biosim­i­lars en­croach­ment on its three ma­jor can­cer meds — Avastin, Her­ceptin, Rit­ux­an.

Over­all, Roche cal­cu­lat­ed loss­es to biosim­i­lars at $4.5 bil­lion CHF ($4.9 bil­lion) for 2021 but an­tic­i­pates a low­er $2.5 bil­lion ef­fect in 2022.

Sanofi expects its RSV antibody jointly developed with AstraZeneca will be available next season, executive VP of vaccines Thomas Triomphe announced on the company’s quarterly call.

Beyfortus, also known as nirsevimab, was approved in the EU back in November and is currently under FDA review with an expected decision coming in the third quarter of this year. The news comes as the FDA plans to hold advisory committee meetings over the next couple months to review RSV vaccines from Pfizer and GSK.

After a whopping $4 billion asset buy from Nimbus Therapeutics, along with a $400 million deal with Hutchmed for a colorectal cancer drug, Takeda executives touted pipeline optimism on its latest earnings call this week.

That’s because the TYK2 inhibitor for psoriasis Takeda is getting from Nimbus, along with the Hutchmed fruquintinib commercialization outside of China, are just two of what it reports are 10 late-stage development programs of promising candidates.

Regeneron faced a substantial slump in overall revenue last year, but the focus still remains on some of its biggest blockbusters.

The pharma with several high-profile partnerships — Sanofi and Bayer among them — said Friday that Q4 revenue was down 31% for the quarter, and down 24% for the entire year. However, that won’t stop blockbuster expansion plans.

One of those is Eylea, the Bayer-partnered eye disease drug that has been in major competition with Roche’s Vabysmo. While Eylea is currently only approved in a 2 mg dose, the company recently filed for approval to give a 8 mg dose, in hopes of making a longer-lasting treatment.