By Scott Kanowsky
Investing.com -- Roche Holding AG Participation (SIX:ROG) says two long-awaited late-stage studies showed that its Alzheimer's disease treatment failed to stem a slide in the cognitive abilities of people with an early form of the illness.
In a statement on Monday, the Swiss pharmaceutical firm said results from the Phase III trials of the drug - known as gantenerumab - failed to meet their "primary endpoint" of slowing the clinical decline in patients with mild dementia due to Alzheimer's.
Shares in Roche fell in early trading.
"So many of our families have been directly affected by Alzheimer's, so this news is very disappointing to deliver," said Roche chief medical officer Levi Garraway.
The failure of gantenerumab deals a blow to the so-called amyloid hypothesis or a theory that the clearing of toxic cells clumping together in the brain will help ease cognitive loss in people suffering from Alzheimer's. Roche, as well as rival Eli Lilly and Company (NYSE:LLY) and Japan's Eisai (TYO:4523), have been aiming to create a medicine that harnesses this theory, with a successful treatment set to potentially generate billions of dollars in sales.
Alzheimer's disease - a neurological disorder that causes the brain to shrink in size and cells to die - has impacted an estimated 55 million people worldwide as recently as 2020, according to the advocacy group Alzheimer's Disease International. There is currently no known cure.
In a note to clients, analysts at Stifel called Roche's announcement a "major negative" for the firm.
"This is the end of this development, that will have to be removed from the sales models. It also removes a significant growth driver for the company over the next few years," the analysts said.
Roche's 2023 financial guidance will now be "highly exposed" to a potential hit worth CHF 3-4 billion (CHF 1 = $1.0552), resulting in a no-growth year for the group, they added.