Finantial Times | James Shotter in Zürich and Andrew Jack in London
Roche’s chief executive has signalled openness to renewed co-operation with counterparts at his Swiss rival Novartis, in a sign of thawing relations between the two Basel-based pharmaceutical groups.
Severin Schwan told the Financial Times in an interview: “If the right opportunity comes up, we would be extremely open to talk with Novartis as we would be with all the other players.”
His comments came just two weeks after Christoph Franz was named to replace Franz Humer as chairman of Roche, and a month after Jörg Reinhardt took over from Daniel Vasella as chairman of Novartis.
The changes at the top follow a long and frosty relationship between Mr Humer and Mr Vasella, who had masterminded the purchase of a large strategic stake in Roche at the start of the millennium in anticipation of a possible merger.
Relations between the two men quickly soured, although the companies did co-operate on Xolair and Lucentis, two drugs that Roche controls through its subsidiary Genentech, fully acquired in 2009.
The arrival of Mr Reinhardt sparked discussion of fresh co-operation, and earlier this month, Pierre Landolt, a Novartis board member, even suggested that a merger of the two companies would make sense “from an objective standpoint”.
Mr Schwan, who has been chief executive of Roche since 2008, stressed there had been no discussions between the two companies over the future of the 33 per cent stake Novartis has built up in Roche.
But he expressed openness to partnership. “It’s very science driven . . . It’s opportunity driven,” he said. “If it makes sense for both companies, why not sit together and talk? It’s a very professional relationship we have with Novartis.”
His company collaborates with other peers on a number of products, and such alliances are increasingly important across the industry as the cost of developing new drugs is rising fast, making the failure of drugs in the latter stages of development increasingly expensive.
Roche is not immune to such challenges. In July, the group halted trials of aleglitazar, an anti-diabetes drug, due to concerns about its side-effects. A year earlier, it abandoned development of a drug designed to boost “good” cholesterol after tests found “a lack of clinically meaningful efficacy”. The disappointments focused the minds of analysts on Roche’s non-cancer franchise, which has never reached the same heights as its blockbuster oncology business.
“The demise of aleglitazar will likely increase the pressure on management to intensify their attempts to diversify their portfolio away from their oncology backbone,” Andrew Baum, an analyst at Citi, wrote at the time. Roche’s “attempts to diversify into hepatitis C, diabetes, and cardio-metabolic disease have all failed over recent years”, he noted.
Mr Schwan conceded that Roche had suffered “setbacks” in the field of metabolism. But he argued that the company already had a strong franchise in areas beyond oncology, such as immunology and autoimmune diseases.
Beyond actemra, a treatment for rheumatoid arthritis already on the market, he cited lebrikizumab, a compound designed to treat asthma, as part of its non-oncology pipeline for which he has high hopes.
“[It’s an] extremely promising late-stage compound. If the phase two data are confirmed, it will be a blockbuster, no doubt. Of course, we need to complete phase three trials, but if they are positive this is a huge opportunity,” he said. “I feel we are actually pretty broad in our portfolio.”
Some observers have wondered whether Roche might boost its non-cancer pipeline through acquisitions, and over the summer there was speculation that it was considering making a bid for the US group Alexion, which went so far as to hire Goldman Sachs to prepare itself for such an eventuality.
Mr Schwan declined to comment on specific deals, but said Roche was interested in “bolt-on acquisitions” that built on its core franchise. Although the company continually screens the market for all opportunities, he added that deals with companies with drugs at an earlier rather than later stage of development were easier to justify financially.