Roche (RHHBY) Receives FDA Clearance for Ventana MMR Test

Roche Holdings AG RHHBY recently announced FDA clearance for the VENTANA MMR IHC Panel for immunohistochemistry (IHC) tests on colorectal cancer patients.

The tests will detect certain proteins associated with a DNA repair mechanism called mismatch repair (MMR). This in turn will enable in differentiating between sporadic colorectal cancer and probable Lynch syndrome, a hereditary form of colorectal cancer.

Per the company, this is the first FDA clearance of an IHC panel of this type.  The panel of five assays includes four that target MMR proteins MLH1, MSH2, MSH6 and PMS2, as well as the VENTANA BRAF V600E (VE1) assay.

Per statistics, colorectal cancer is the third leading cause of cancer-related deaths in women in the United State and the second leading cause in men which is expected to result in more than 50,000 deaths in the United States in 2017.

The FDA approval further broadens Roche’s diagnostic portfolio.

 

 

Roche’s stock has rallied 3.8% year to date compared with industry’s gain of 17.7%.

Apart from providing therapeutic products and services for diverse medical needs, Roche also focuses on innovative diagnostic solutions for the early detection and treatment of diseases. Immunodiagnostics is the key focus area for this segment. In 2016, Roche added nine instruments and tests to its comprehensive portfolio, further improving decision-making in healthcare, and supporting laboratories’ efforts to increase efficiency. The launches include cobase 801 immunoassay module, the CoaguChek INRange system to monitor vitamin K antagonist therapy, and the Accu-Chek Guide, a next-generation blood glucose monitoring system.

Meanwhile, Roche has a strong presence in the oncology market. The company dominates the breast cancer space with strong demand for its HER2 franchise drugs like Herceptin, Perjeta and Kadcyla. Apart from its strong breast cancer franchise, Roche’s oncology portfolio also boasts drugs like Avastin and Tarceva.

However, sales of Avastin and Tarceva continue to decline. Generic competition for Xeloda continues to hurt sales. Competition from biosimilars looms large on Roche's key drugs like Herceptin, Avastin and Rituxan. The FDA recently accepted Novartis AG’s NVS Biologics License Application for a proposed biosimilar version of Rituxan. Hence, approval of new drugs and label expansion of existing drugs will bode well for Roche.  

Zacks Rank & Key Picks

Roche currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the health care sector are Sucampo Pharmaceuticals, Inc. SCMP and Corcept Therapeutics Incorporated CORT. While Sucampo carries a Zacks Rank #1 (Strong Buy), Corcept carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Sucampo’s earnings per share estimates have increased from $1.01 to $1.11 for 2017 and from $1.06 to $1.21 for 2018 over the last 30 days. The company delivered positive earnings surprise in three of the trailing four quarters with an average beat of 15.63%.

Corcept’s earnings per share estimates have moved up from 45 cents to 48 cents for 2017 and from 77 cents to 80 cents for 2018 over the last 60 days. The company delivered positive earnings surprise in two of the trailing four quarters with an average beat of 14.32%. Share price of the company has rallied 144.5% year to date.

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