​BerGenBio ASA Just Served Up Some Good News For Roche Holding AG Shareholders

Mark Collins  |

BerGenBio ASA (OSLO:BGBIO) is a small Norwegian biotechnology company that will be very much off the radar of the vast majority of investors in this space and – arguably – for good reason. The company is only publicly traded by way of a circa $49 million initial public offering (IPO) conducted last year that saw it list on the Oslo Stock Exchange and it's yet to seek a major US or alternative listing. This very much limits its exposure to institutional investment and, at the same time, limits an individual retail investor's potential for exposure to BerGenBio.

It's not entirely under the radar, however. For investors of one company, a behemoth f the healthcare and pharmaceutical space, what BerGenBio is trying to do with its lead development asset could have real implications.

The company in question is Roche Holding AG (RHHBY).

Genentech, a subsidiary of the just mentioned Roche, sells a drug called Tarceva in global markets as a treatment for various cancers, primarily lung cancer. A decade or more ago, revenues from this asset came in at more than $1 billion annually. Today, annual revenues are in the low hundreds of millions at best.

The reason for the decline?

A decline in efficacy of the drug associated with patients building up a resistance to it over time.

So where does BerGenBio fit into all this?

The company is developing a drug called BGB324, also known as bemcentinib, and it's designed to reverse and prevent resistance to EGFR drugs such as Genentech’s Tarceva. If the company is successful in getting BGB324 to market, then, it could be administered as part of a combination therapy with Tarceva and, in turn, could revitalize the latter's revenue potential in the lung cancer space – something that would be great news for Genentech and, by proxy, Roche shareholders.

The reason that this is noteworthy today, then, is that BerGenBio just put out data from a clinical trial that's designed to prove the above statement – that this drug can be administered alongside Tarceva and can result in a reduced rate of resistance to the latter in lung cancer patients.

And as per the latest release, it looks as though there's a chance it can perform against this predefined endpoint. In nine patients, all of which suffered from NSCLC, the drug registered a disease control rate of 33% in those that completed at least one cycle of treatment (which was all nine). Further, as outlined by BerGenBio CEO Richard Godfrey in the statement that accompanied the data, two patients in Arm B continue on the study and are experiencing sustained disease control and one patient in Arm A is approaching their two-year anniversary on bemcentinib in combination with erlotinib and is asymptomatic.

It's important to note that this is a small population and, at the same time, that these data are interim (a third cohort of the trial just started enrolling) but, given the numbers, it's not unreasonable to suggest that this is a major step forward for drugs of this type.

So what's next?

Data from the third arm of the study (the one that just started enrolment) is set to hit press before the end of the second quarter this year. At that point, we'll get a much clearer idea of exactly what role this drug might play in this indication long term.

DISCLOSURE: The author has no positions in any of the stocks mentioned.

The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


Symbol Name Price Change % Volume
RHHBY Roche Holding Ltd ADR (Sponsored) 37.30 -0.30 -0.80 305,876



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