Roche Holding AG's (ROG.VX) shares fell Wednesday as investors' risk adversity apparently won the upper hand when the company reported positive study results for its cancer drug Herceptin just after its Japanese unit Chugai Pharmaceutical Co. (4519.TO) revealed a setback for the rheumatic arthritis drug Actemra.

While Roche said its breast cancer drug Herceptin also showed benefits when used to treat aggressive stomach cancer, Chugai overnight said Actemra might be a causal factor in the deaths of 15 Japanese patients, with heavy side effects detected in over 200 cases.

At 1200 GMT, Roche shares traded down 2%, or CHF2.90, at CHF144.20 while the Swiss blue-chip market SMI traded up 0.4%.

"In these risk averse markets, investors rather sell than buy," said Helvea analyst Karl-Heinz Koch when asked about Roche's share price fall.

"The news on Herceptin however provides upside to our current long-term sales forecast for Herceptin of CHF7 billion annually," added the analyst, who rates Roche at buy with a CHF195 price target. The current gastric cancer patient population would translate into additional annual sales of more than $600 million for Roche, Koch said.

Turning to Actemra, Koch pointed out that the death and severe adverse event rates reported by Chugai are similar to those observed in studies in Japan and to studies in competing drugs. "We don't see a reason to change our outlook for the drug and continue to look for peaksales of $1 billion," Koch said.

The Actemra study was conducted by Chugai, 60%-owned by Roche, as part of requirements imposed by Japan's Ministry of Health, Labor and Welfare when the drug was approved.

Roche spokeswoman Claudia Schmitt said that the death-toll rates are similar to the ones of usual patient populations with rheumatic arthritis and also to those of other biologic treatments of the disease.

"We don't see a deviation here that gives us reason for concern," she added.

When asked whether Chugai's news may have an impact on the pending approval of Actemra by the U.S. Food and Drug Administration, Schmitt noted that the FDA as well as the European Regulator EMEA have access to all the data concerning Actemra. "But it's too early to say something about this."

Analyst Carri Duncan of Sal. Oppenheim said that this new Actemra result may well impact the FDA's decision to approve the drug, which is expected in the fourth quarter this year. She rates Roche at buy with a CHF220 fair value.

Company Web Site: www.roche.com

-By Julia Mengewein, Dow Jones Newswires; +41 43 443 80 45; julia.mengewein@dowjones.com