Roche is planning a big push to expand its business beyond its historic focus on cancer drugs if results from experimental treatments for a broader range of diseases prove favourable, says Severin Schwan, chief executive.
In an interview with the FT, the 43-year-old head of the Swiss pharmaceutical group expressed willingness to fund expensive late-stage clinical trials for a range of new medicines to treat inflammation, the central nervous system and metabolic disorders.
He firmly rejects the idea of following his rivals’ shift beyond patented prescription medicines and diagnostics into generic drugs, consumer healthcare and other less risky activities. “A lot of people call it diversification,” he says. “I call it giving up. Call me biased, but I really believe we have one of the best industry pipelines.”
He highlights instead Roche’s strong continued commitment to fresh investment in the research and development of new drugs, which at 21 per cent of sales currently is among the highest in the sector.
The move into new therapy areas would mark a shift from Roche’s long-standing strategic focus on cancer drugs, which accounted for 57 per cent of sales in the first half of this year. Mr Schwan, however, says oncology treatments will remain the backbone of the company.
The shift into new areas would require the company to find partners or create a larger sales force to distribute drugs beyond a small group of cancer specialists, which has allowed it to limit the high marketing costs and aggressive tactics for which its peers have been criticised.
The expansion comes at a time when Roche has suffered setbacks in recent months on the uses of its leading cancer medicine Avastin, depressing the share price. That, along with aggressive pricing pressure in the US and especially Europe, has pushed the company into launching a cost-cutting programme, details of which will be unveiled by the end of this year.
Mr Schwan – a lawyer who became chief executive in 2008 – was upbeat about preliminary findings from trials of new drugs for multiple sclerosis, rheumatoid arthritis and schizophrenia. “We go where science takes us,” he says.
He points to the company’s past leadership in diseases of the central nervous system with the sedative Valium, one of the world’s top-selling drugs for many years.
Mr Schwan cautions that regulators need to catch up with fast-evolving clinical practice, expressing frustration with the company’s recent experience with the Food & Drug Admininstration over the use of genetic tests to better target the use of its cancer drug Tarceva.
The US agency has demanded new “prospective” tests to support the use of a Roche diagnostic accompanying Tarceva because original trials did not use the test. “If the FDA hurdles for companion tests for manufacturers like Roche are too high, those tests will be offered by service labs who are not regulated by the FDA,” he says. “This is certainly not in the interest of patients.”
He welcomes recent calls by Margaret Hamburg, the FDA commissioner, to re-examine the data required for drug approvals, and warns of what he believes to be greater political influence compared with the European Medicines Agency. “Politicians ask for zero side-effects when it comes to medicines. Clinicians know that it is all about the benefit/risk ratio,” he says.
Studies in the next few months will show whether Mr Schwan will deliver on his vision for a more diversified Roche.
For now, the self-styled “realistic optimist” retains faith in innovation, as scientists seek to exploit genetic medicine. He cites as his inspiration Max Planck, the German physicist, who refused to heed peer warnings to study another discipline because they claimed the field was dead, and went on to develop quantum theory. “We are just starting to understand what is happening with diseases,” he says.
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