# Roche’s SWOT analysis: branded VEGF market challenges amid metabolic expansion

Roche Holding AG faces a complex market environment as it navigates challenges in its ophthalmology business while expanding its metabolic portfolio. Recent earnings reveal both promising developments and significant headwinds that could shape the company’s trajectory in the coming years.

Q3 2025 performance reveals market headwinds

Roche’s third-quarter earnings highlighted challenges within the branded VEGF (Vascular Endothelial Growth Factor) market, primarily stemming from funding issues at the Good Days foundation. Despite Vabysmo achieving 13% year-over-year growth at constant exchange rates (CER), the company has reduced its full-year guidance for the drug from an expected 20% to approximately 15% growth at CER.

The contraction in the branded VEGF market appears largely attributable to patient assistance funding shortfalls for branded VEGF treatments. This situation has created a challenging environment for Roche’s ophthalmology business, even as the company maintains market share gains within the shrinking branded segment.

Vabysmo shows resilience amid market contraction

Vabysmo continues to demonstrate strength in several key metrics despite broader market challenges. Approximately 60% of U.S. patient starts on Vabysmo are treatment-naive, indicating strong adoption among new patients rather than merely converting existing patients from other therapies.

Healthcare providers have responded positively to Vabysmo’s efficacy profile, particularly regarding anatomic outcomes and disease control across three indications: neovascular age-related macular degeneration (nAMD), diabetic macular edema (DME), and retinal vein occlusion (RVO). This positive reception suggests potential for continued market penetration even amid funding challenges.

The competitive landscape shows some potential advantages for Roche. Regeneron’s Eylea HD is facing challenges, with plans to submit an application for an additional manufacturing filler within three months to address FDA concerns. These difficulties for a key competitor could create additional opportunities for Vabysmo to gain market share.

Strategic expansion into metabolic therapeutics

Roche has signaled a strategic pivot toward expanding its metabolic portfolio with the planned acquisition of 89bio and its lead asset pegozafermin. The deal, valued at up to $3.5 billion, represents a significant investment in a growing therapeutic area.

Topline histology data from phase 3 studies of pegozafermin in F2-F3 and F4 MASH (Metabolic dysfunction-Associated SteatoHepatitis) are expected in the first half of 2027 and in 2028, respectively. Roche emphasizes the unique engineering of pegozafermin for efficacy and extended dosing intervals, potentially differentiating it in an increasingly competitive market.

This expansion comes as companies like Novo Nordisk establish strong positions in the metabolic space. Roche appears to be positioning itself to compete in this growing market segment, though success will depend on clinical trial outcomes and effective commercialization strategies.

Shifting analyst sentiment

Market perception of Roche has evolved over recent months. In April 2025, HSBC downgraded Roche from Buy to Hold, citing the perception of Roche as a defensive stock and excitement around orforglipron making it a "crowded trade." While positive catalysts had occurred, HSBC expressed concern that upcoming oncology catalysts like giredestrant phase III could underperform expectations.

Additional concerns highlighted by analysts include forex risks and diagnostics challenges in China. These factors have contributed to a more cautious outlook on Roche’s near-term prospects, even as the company pursues strategic initiatives in metabolic therapeutics.

Bear Case

How might continued funding issues at Good Days foundation impact Vabysmo’s growth trajectory?

The funding challenges at Good Days foundation present a significant risk to Vabysmo’s growth potential. Patient assistance programs play a crucial role in facilitating access to high-cost branded medications like Vabysmo. With these funding sources constrained, many patients may be unable to initiate or maintain therapy with branded VEGF inhibitors.

The impact is already evident in Roche’s revised guidance, reducing expected Vabysmo growth from 20% to 15% for the full year. If funding issues persist or worsen, further downward revisions could follow. The broader contraction in the branded VEGF market suggests this is not merely a Roche-specific issue but a structural challenge affecting the entire therapeutic category.

Long-term implications could include increased pressure to reduce pricing or develop alternative patient support mechanisms. Without addressing the underlying funding challenges, Vabysmo may struggle to reach its full commercial potential despite positive clinical reception and efficacy data.

What risks does Roche face with its metabolic expansion strategy in a competitive landscape?

Roche’s entry into the metabolic therapeutics space through the 89bio acquisition comes with substantial risks. The $3.5 billion investment represents a significant financial commitment to an asset still in clinical development, with pivotal data not expected until 2027-2028.

The metabolic space has become increasingly competitive, with established players like Novo Nordisk already holding strong market positions. Roche will need pegozafermin to demonstrate clear differentiation and superior efficacy to compete effectively. The extended timeline for phase 3 data creates a prolonged period of uncertainty regarding the asset’s true value.

Additionally, regulatory standards for metabolic drugs have evolved, with increasing emphasis on cardiovascular outcomes and safety profiles. Any safety signals or efficacy shortfalls in the ongoing trials could significantly impact the commercial potential of pegozafermin and the return on Roche’s substantial investment.

Bull Case

How might Vabysmo’s strong adoption among treatment-naive patients translate to long-term market dominance?

Vabysmo’s impressive 60% adoption rate among treatment-naive patients in the U.S. suggests the drug is becoming the preferred first-line option for many healthcare providers. This pattern of adoption is particularly valuable for building a sustainable market position, as it establishes Vabysmo in the treatment paradigm from the outset rather than requiring conversion from established therapies.

The positive feedback from healthcare providers regarding Vabysmo’s efficacy in anatomic outcomes and disease control across multiple indications (nAMD, DME, and RVO) reinforces its clinical value proposition. As physicians gain more experience with the drug and observe these benefits firsthand, prescription patterns could further solidify in Vabysmo’s favor.

If competitor products like Regeneron’s Eylea HD continue to face manufacturing and regulatory challenges, Vabysmo could capitalize on this opportunity to expand its market share. Once the current funding challenges in the branded VEGF market stabilize, Vabysmo would be well-positioned to resume stronger growth trajectories based on its established clinical profile and growing physician preference.

What potential does the pegozafermin acquisition hold for Roche’s metabolic portfolio?

The acquisition of 89bio and pegozafermin represents a strategic entry into the high-growth metabolic therapeutics market. Roche’s emphasis on pegozafermin’s unique engineering for efficacy and extended dosing intervals suggests potential competitive advantages if clinical data support these claims.

The metabolic dysfunction-associated steatohepatitis (MASH) market represents a substantial opportunity with limited effective treatment options currently available. If pegozafermin demonstrates positive results in the upcoming phase 3 trials, Roche could establish an early and significant position in this underserved therapeutic area.

Roche’s established global commercial infrastructure and experience in specialty pharmaceuticals could provide advantages in launching and scaling pegozafermin upon approval. The company’s research capabilities might also identify opportunities to expand pegozafermin’s indications or develop combination approaches that further differentiate the asset from competitors.

SWOT Analysis

Strengths

• Vabysmo gaining market share despite broader market contraction
• Strong adoption rate (60%) among treatment-naive patients in the U.S.
• Positive healthcare provider feedback on Vabysmo’s efficacy across multiple indications
• Strategic expansion into metabolic therapeutics through 89bio acquisition
• Established global commercial infrastructure

Weaknesses

• Downward revision of full-year guidance for Vabysmo sales growth
• Dependency on patient assistance funding for branded VEGF treatments
• Extended timeline for pegozafermin phase 3 data (2027-2028)
• Perceived as a "crowded trade" according to some analysts
• Potential forex exposure risks

Opportunities

• Competitor challenges (Regeneron’s Eylea HD manufacturing issues)
• Growing metabolic therapeutics market with pegozafermin
• Potential recovery in branded VEGF market if funding issues resolve
• Possible expansion of Vabysmo into additional indications
• Leveraging existing commercial infrastructure for new product launches

Threats

• Continued funding issues affecting branded VEGF market
• Competitive pressures from established players in metabolic space
• Forex and diagnostics risks, particularly in China
• Potential underperformance of oncology catalysts
• Regulatory and clinical development risks for pegozafermin

Analysts Targets

• BMO Capital Markets (October 24, 2025): No specific price target mentioned
• HSBC Global Research (April 28, 2025): Downgraded from Buy to Hold, target price reduced from CHF 338 to CHF 295

This analysis is based on information available as of October 30, 2025, including analyst reports from BMO Capital Markets (October 24, 2025) and HSBC Global Research (April 28, 2025).

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