(Removes reference to side effects on "other organs" in
* Peak sales were seen at $2 bln by Vontobel analysts
* Roche decision follows setbacks for rival diabetes drugs
* Failure raises questions about Basel research unit
* Roche to review cardio metabolic research
* Says remains committed to Basel research hub
By Katharina Bart
ZURICH, July 10 Roche will halt
development of a diabetes drug partly because of its undesired
side-effects, marking another high-profile setback for the Swiss
company as it struggles to diversify outside its core cancer
The news is a fresh blow for Roche's Basel research
operations, known as pRED, which have languished in the shadow
of the work done at Genentech, the 2009 acquisition that cooked
up Roche's four top-selling medicines in 2011.
Last year Roche scrapped development of pRED's dalcetrapib -
a medicine aimed at boosting levels of "good" high-density
cholesterol. Some industry analysts had estimated that
dalcetrapib could have achieved $10 billion in annual sales.
"The news just raises more fundamental questions about the
productivity of pRED," Kepler Chevreux analysts wrote.
Roche spokesman Alexander Klauser said the drugmaker would
review its research and development for cardio metabolic
diseases but added that the company remains committed to pRed.
"The fact is, Roche isn't particularly good in metabolic and
cardiovascular drugs and should exit its research in these
areas," Zuercher Kantonalbank analyst Michael Nawrath said.
The diabetes treatment - aleglitazar - belongs to a class of
drugs that rival pharmaceutical companies had already pulled
back from, raising the question of why Roche had pressed ahead
with what analysts had considered to be a risky bet.
Patients in a late-stage trial of the drug suffered side
effects to the kidneys and heart, Klauser said, adding that
Roche could not yet quantify the financial impact of halting
AstraZeneca had scrapped development of a similar
class of drug in 2006, the same year as Bristol-Myers Squibb
stopped work on another after regulatory setbacks.
"In hindsight, it seemed odd how Roche put so many resources
into a compound whose mechanism - given experience with at least
three other drugs in the class - was at best questionable,"
Kepler Chevreux analysts wrote in a note.
Shares in Roche were little changed at 244 Swiss francs by
1240 GMT, in line with a flat European healthcare index.
Bank Vontobel, which had forecast 2 billion Swiss francs
($2.05 billion) in peak sales from aleglitazar, pruned its price
target for Roche to 263 francs, from 270 francs, after the
setback but confirmed its "buy" rating.
As it went into the 7,000-patient late-stage study of
aleglitazar, Roche took steps to reduce the possibility that its
product might have the same problems as other medicines in the
class. In particular, it conducted a renal safety study to
ensure that its product was free of the kidney problems that
undermined AstraZeneca's drug.
Drugs such as aleglitazar are designed to turn on two
protein receptors known as PPARs, one that regulates glucose and
another lipids. These dual PPAR drugs have long fascinated
researchers as a potential way to help diabetics to address
multiple targets linked to heart disease.
($1 = 0.9735 Swiss francs)
(Additional reporting by Paul Arnold, Ben Hirschler and
Caroline Copley; Editing by David Holmes and David Goodman)