Roche writes off $3B on lower sales forecasts for gene therapies, cancer drugs
03 Feb 2023
AcquisitionDrug ApprovalGene TherapyFinancial Statement
Swiss drugmaker Roche recorded impairment charges of 2.8 billion Swiss francs, or roughly $3 billion, in 2022 to account for falling sales forecasts for marketed cancer drugs as well as for gene therapies acquired via its 2019 deal for Spark Therapeutics.
The charges, disclosed Thursday in the Swiss drugmaker’s 2022 finance report, are notably higher than the 651 million Swiss francs the company wrote off in 2021.
The biggest charge came from 740 million Swiss francs worth of write-downs to the combined assets of Spark , which Roche bought for $4.8 billion. The accounting changes affected Luxturna, a marketed therapy for an uncommon, inherited form of blindness, along with experimental treatments for hemophilia A and B as well as an rare enzyme-driven disorder called Pompe disease.
The reduced sales expectations are “primarily a matter of delays,” CEO Severin Schwan said in a conference call with analysts and investors. “Timelines have moved out actually for the whole field, but we are impacted as well. So Spark is part of that.”
In an emailed response to questions from BioPharma Dive, a Roche spokesperson said the charges were part of the company’s regular year-end process, and not reflective of any strategic change.
“The regular attrition rate for such projects means that a certain level of intangible asset impairment is normal, but the amounts and timing are not precisely predictable, as they depend on preclinical and clinical data and portfolio management decisions,” the spokesperson said.
The hemophilia A gene therapy has generated promising mid-stage data, and the company plans on advancing it into Phase 3 trials this year. (The treatment was the subject of a Federal Trade Commission inquiry into Roche’s acquisition of Spark due to potential overlaps with the Swiss drugmaker’s marketed treatment Hemlibra.)
The company also recorded impairment charges of 663 million Swiss francs and 292 million Swss francs, respectively, on two targeted lung cancer therapies called Gavreto and Rozlytrek. Gavreto is part of a collaboration with Blueprint Medicines in which the big drugmaker paid $775 million upfront, while Roche gained access to Rozlytrek in its $1.7 billion acquisition of Ignyta.
Other charges came from decisions to stop drug programs that were in development following acquisitions. Those included an idiopathic pulmonary fibrosis treatment that Roche gained through the acquisition of Promedior, an immunological drug that came with the buyout of Tusk Therapeutics, and a project aimed at inflammatory disease for which Roche bought Jecure Therapeutics.
Ned Pagliarulo contributed reporting
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