Analysts at Merrill Lynch have raised their rating and financial forecasts for Swiss pharmaceutical giant, Roche, citing the recent positive news that its oncology agent, Avastin (bevacizumab), improves survival in non-small cell lung cancer when added to the standard chemotherapy regimen [[15/03/05a]].

Specifically, ML is upping its full-year 2006 and 2007 earnings estimates by 4% and 6% respectively, but the 2005 EPS forecast remains unchanged at 5.83 Swiss francs.

The preliminary data showed that addition of Avastin to standard care in patients with first line NSCLC increased survival to 12.5 months, versus 10.2 months with standard chemotherapy alone. However, ML notes that the drug’s safety still needs to be clarified, as mention was made of cases of lung bleeding, adding that 9% of patients in a Phase II trial experienced this side effect, and 6% were fatal.

Roche is planning to share the data with the regulatory authorities in order to discuss the next steps for registering Avastin for first-line treatment of NSCLC – a filing is expected to take place in the middle of the year, with a possible green light in the US early next year, with Europe following in mid-2006. The analysis forecasts the survival benefit data will boost the drug’s sales to over 3.9 billion Swiss francs by 2007 – up from the previous estimate of 2.4 billion francs. As a result, ML also says that Roche’s pharmaceutical sales will rise by 12% over the 2005 to 2008 period – versus the earlier 10% forecast.