Roche stock price plummeted 5%, breast cancer drug giredestrant failed in clinical trials

Investing.com - Roche Holding AG’s stock price dropped over 5% on Monday after experimental oral breast cancer drug giredestrant failed in a key clinical trial, casting a shadow over Wall Street’s previous expectations that the drug could reach annual sales of billions of Swiss francs.

The Swiss pharmaceutical company’s stock traded at CHF 341.20, with a 52-week high of CHF 374.90. Its Persevera trial previously failed to show a statistically significant progression-free survival benefit in first-line ER-positive, HER2-negative metastatic breast cancer patients. Full data will be released at an upcoming medical conference.

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Jefferies rates Roche as “Underperform,” with a target price of CHF 230, stating that this result “completely destroys” the commercial prospects of giredestrant. The firm forecasts the drug’s global sales peak at CHF 1.2 billion, with a risk-adjusted probability of 60%, compared to VisibleAlpha’s consensus estimate of CHF 5.8 billion and a probability of 77%.

“Although Roche emphasizes numerical improvements, in a clinical setting, this is unlikely to be clinically meaningful, as incremental benefits must be sufficiently obvious to replace entrenched therapies,” Jefferies analysts wrote.

The trial needed a hazard ratio of 0.6 to 0.7. The core failure was that giredestrant did not demonstrate additional benefits when combined with CDK4/6 inhibitors (the standard treatment for this indication), weakening positive signals from early coopERA, evERA, and lidERA studies.

Jefferies raised AstraZeneca’s target price from $98 to $120, rating it as a buy, citing structural advantages in its competitor SERD drug camizestrant’s trial design.

AstraZeneca’s CAMBRIA-2 study enrolled 5,500 patients, while Roche’s lidERA trial enrolled 4,200 patients; the former allows both groups to use CDK4/6 inhibitors, including patients with less than 12 weeks of prior endocrine therapy, planning a seven-year treatment. Roche’s lidERA trial excludes CDK4/6 inhibitors, requires no prior endocrine therapy, and plans for five years of treatment. Data from CAMBRIA-2 are expected in 2027.

Jefferies states that the failure of Persevera will “completely reverse the positive momentum since the end of last year,” and will compress Roche’s P/E multiple from its current 17x.

Roche’s next giredestrant data readout is from the PionERA trial, also expected in 2027. Roche’s market capitalization is CHF 276.1 billion. Its 52-week low is CHF 231.90.

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