Roche: Failed TIGIT Trial Finally Removes Overhang, While Roche Also Doubles Down on Cell Therapy

We're maintaining our CHF 379/$55 fair value estimates for Roche's nonvoting shares following news of an oncology trial failure as well as a cell therapy acquisition. Roche announced that the Skyscraper-01 trial studying TIGIT antibody tiragolumab in combination with Roche's approved oncology drug Tecentriq in patients with PD-L1 positive non-small cell lung cancer did not meet its endpoint of improved overall survival versus Tecentriq alone. This was the final analysis of a long-running trial that first failed on a progression-free survival endpoint back in 2022 but showed a trend toward an overall survival benefit in 2023. We have already removed tiragolumab from our forecast based on prior failures, so we're not making any changes to our valuation based on this news. We expect that Roche could reevaluate some of its ongoing tiragolumab trials in areas like earlier-stage lung cancer, liver cancer, esophageal cancer, and head and neck cancer, although the firm's investment has already been dialed back in lung cancer, given failures and discontinuations in other lung cancer studies. We continue to see strong potential for the remainder of Roche's oncology portfolio and pipeline, adding support to its wide moat.