Roche’s Potential Blockbuster Fuels Best Month Since 1997
(Bloomberg) — Roche Holding AG’s shares just posted their best month since 1997, lifted by optimism over an experimental breast cancer pill and encouraging trial results. Analysts see further gains ahead.
November’s 19% surge in the Swiss drugmaker’s stock gained traction after Roche said its giredestrant medicine helped women with a form of early breast cancer. That followed news of two late-stage trials showing a multiple sclerosis drug could work for most forms of the disease.
The jump in the share price — which boosted Roche’s market value to the equivalent of $311 billion — was “underpinned by data and should not retreat,” Stefan Schneider, an analyst at Bank Vontobel AG, said by email. “Continued positive clinical trials should help the stock further.”
Doctors have long sought more effective and tolerable hormone therapies for early breast cancer, and giredestrant has been touted as a potential blockbuster. JPMorgan Chase & Co. analysts say last month’s trial results could unlock about $5 billion of peak sales for the drug. Intron Health estimates global adjuvant sales of $10 billion for the medicine by 2032 — or even more.
“This readout is a game changer for Roche,” Intron Health analyst Naresh Chouhan said in a note, pointing to the “very large” size of the potential market and the drug’s first-in-class status. Meanwhile, upcoming clinical trial results for drugs targeting areas such as obesity and a genetic muscular disorder have the potential to turn Roche into the most attractive European pharmaceutical stock by mid-2026, he said.
Still, the path to success isn’t guaranteed. Other drugmakers are also targeting early-stage, estrogen-driven breast cancer — the most common form of the disease — and AstraZeneca Plc is due to report findings for a rival medicine next year.
Some oncologists are staying cautious on the outlook for Roche’s pill.
“Expectations should be tempered for the interim readout of Roche’s giredestrant” in the late-stage trial, Jefferies analyst Michael Leuchten wrote in a note, citing a breast cancer expert. “Whilst data may open the possibility for a new treatment paradigm, he does not believe these results will be practice-changing quite yet.”
More broadly, investors have been rotating into health care from AI-exposed momentum stocks, with the reallocations taking place on both sides of the Atlantic, amid easing concerns over drug pricing and tariff risks, as well as appealing valuations.
In November the S&P 500 Health Care Index posted its best month since October 2022, while the Stoxx 600 Health Care Index had its biggest monthly advance since the beginning of this year.
“Healthcare companies have clearly been devalued,” Henning Postada, global head of multi-asset investing at DWS, told reporters last week, adding that investor concerns have been “priced into the share prices of these companies, to a certain extent.”
–With assistance from Marilen Martin and James Cone.
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