Recently, Genentech, a subsidiary of Roche, announced the termination of its cooperation agreement with Bicycle Therapeutics. This decision will officially take effect in August.

Genentech has had an exclusive partnership with Bicycle since February 2020, when Bicycle received a down payment of $30 million and is expected to receive a total transaction value of up to $1.7 billion (approximately RMB 12.2 billion) after Genentech reaches certain R&D milestones.

However, the cooperation failed to proceed smoothly. Since 2023, Genentech has successively terminated several projects in the cooperation, until now it has completely stopped the cooperation.

The reasons for the termination of the collaboration include, on the one hand, Genentech's readjustment of project priorities and its gradual reduction of investment in Bicycle's projects. On the other hand, Bicycle's technology platform has certain limitations. Peptide screening is more difficult than antibody screening, and its shorter half-life limits development efficiency. Compared to antibody-drug conjugates (ADCs), Bicycle's peptide-drug conjugates (PDCs) have a shorter half-life, resulting in insufficient drug exposure in the tumor microenvironment, thus limiting efficacy.

This termination of the partnership had a significant impact on both parties.

For Bicycle Therapeutics, the termination of the collaboration undoubtedly dealt a blow to its financial situation. However, Bicycle had anticipated this as early as last year, when both parties downgraded the collaboration. To address the financial pressure, Bicycle announced a series of cost-cutting measures, including laying off approximately 25% of its workforce to extend the use of its cash reserves to 2028. Although a Bicycle spokesperson stated that the layoffs were not directly related to the termination of the collaboration, the decision undoubtedly reflects the company's pressure on resource allocation.

For Roche, the termination of the cooperation will reduce its R&D expenses in the second quarter of 2025. Roche can optimize the allocation of R&D resources and reduce R&D costs by terminating some cooperation projects, thereby focusing on the advancement of other core projects.

For example, in Roche's oncology R&D pipeline, Tecentriq (atezolizumab) is its important immunotherapy drug. Its subcutaneous injection formulation has been approved for marketing by the UK MHRA and is suitable for all indications for which the intravenous formulation has been approved, including lung cancer, liver cancer, etc.

Roche also has multiple pipelines in breast cancer treatment. Giredestrant is an oral SERD drug currently in Phase III development for breast cancer. Roche is actively pursuing its application in ER-positive breast cancer, with first results from the Phase III persevERA study for first-line ER-positive breast cancer expected this year.

Conclusion: While the collaboration between Roche and Bicycle has ended, this does not mark its complete failure. Rather, it signifies a period of continuous exploration and adjustment by both parties as they seek a more suitable path for their respective development. Despite the end of their partnership, both Roche and Bicycle will continue to deepen their respective fields and contribute to the fight against major diseases like cancer.

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