With a market cap of $196 billion, Roche Holding Ltd. (ADR) (OTCMKTS:RHHBY) is certainly a Big Pharma player, slightly ahead of Pfizer Inc. (NYSE:PFE) at $193 billion. But, this Switzerland-based company hasn’t gotten as much press in the U.S. as other drug players, at least not recently.
Some of that may be because Roche hasn’t had a stellar year, given the concerns with market players regarding drug pricing and a potential Clinton presidency.
RHHBY stock is off nearly 18% year to date. Comparing some of the major drug companies’ performance this year, it looks like European-based firms have had a tougher go of it than those based in the U.S. For example, PFE stock performance is essentially flat over the same time frame.
But, that lack of interest makes this a very interesting opportunity for RHHBY.
Roche Is Stepping Up in Immuno-Oncology
Roche has one of the most compelling immuno-oncology programs in the industry and is making great strides to be a major competitor in this explosive sector.
Basically, immuno-oncology drugs are a new class of pharmaceuticals that actually work with your immune system to boost its resistance to specific cancers. There are a number of companies that have R&D programs in this field, and some already have drugs on the market. But, RHHBY is poised to be a major contender.
At this point, all the immuno-oncology drugs available are focused on specific cancers that have not responded to platinum-based chemotherapy. These are late-stage drugs because the field is still in its infancy. They can help add a month or three to a patient’s life, but can’t yet cure them.
That will, hopefully, come with time.
RHHBY Has a Growing Stable of Pharmaceuticals
Instead of getting into the nitty-gritty science of how these drugs work — which is fascinating by the way — let’s focus on RHHBY’s promising stable of drugs and its significant portfolio beyond this sector.
Cancer drug Rituxan was its top seller last year, with sales in excess of $7 billion. Breast cancer drug Herceptin and chemotherapy drug Avastin combined with Rituxan to bring in $20 billion for RHHBY last year. Then, there are broader medicines, such as osteoporosis drug Boniva, chemo recovery drug Neupogen and influenza drug Tamiflu, which made up another $20 billion in sales, not including diagnostic and group sales.
Given its top sellers, it’s easy to assume that RHHBY is already a well-respected cancer drug developer around the globe. And, its new generation drugs are going to hit the ground running.
Earlier this year, Roche’s atezolizumab had been given a second fast-track designation by the U.S. Food and Drug Administration (FDA) for patients suffering from non-small-cell lung cancer. A month earlier, atezolizumab was also given fast-track approval for bladder cancer.
This is a very promising signal that this drug may well be another blockbuster for the company.
In the meantime, now that the specter of a Clinton presidency is gone, RHHBY has plenty of headroom. Plus, Roche stock investors get a generous 3.6% dividend as a down payment on your patience.
Richard Band’s Profitable Investing advisory service helps retirement savers outperform the market without losing a minute of sleep along the way. His straightforward style and low-risk value approach has won seven Best Financial Advisory awards from the Newsletter and Electronic Publishers Foundation.