Beyond Borders: Global biotechnology report 2010

Striking a healthy balance
While the last year has been difficult for
those seeking short-term gains from biotech
investments, ours has always been an
inherently risky business. But history has
also shown that a long-term perspective
focused on patients’ needs and genuine
innovation is a proven path to success.
At Roche, accessing external innovation
has long been critical to our business,
and this is set to continue. Last year,
we consolidated our leading position in
biotechnology by “privatizing” Genentech.
This decision was not driven by volatile
markets or speculation about the impact
of health care reforms. Rather, it was the
result of a successful 20-year relationship
that nurtured scientific innovation.
This move — which aims to enhance our
combined innovation while maximizing
operational efficiencies — makes sense at
a time when payors are putting downward
pressure on prices and regulatory
demands are driving up the cost of drug
development. In addition, it has boosted
Roche’s strength and scale in the US,
while the Genentech Research and Early
Development organization has remained
an independent innovation center in the
Roche Group.
When Roche’s alliance with Genentech
was first struck in 1990, few could have
predicted how significant biotechnology
would become in treating life-threatening
diseases, but an early investment with
a long-term view has certainly paid
dividends. Today, biologics account for
around two-thirds of our pipeline and
almost half our revenues.
Scientific innovation may provide the
opportunities, but technologies by
themselves do not ensure success.
Regardless of their size or stage of
development, companies need an overriding
strategy for developing medicines from
technologies. Novel drugs that can prove
meaningful clinical differentiation will
continue to be reimbursed, accelerating
the drive toward personalized health care
solutions that fit treatments to patients.
One of Roche’s most exciting compounds,
RG7204, is currently in Phase III and
demonstrating very promising results in
melanoma patients who previously had
few options. Concurrently, our colleagues
in Roche Diagnostics are developing a
companion diagnostic for the drug to
ensure the right patients receive treatment
targeted for their condition. The high level
of excitement generated in the medical and
patient communities after we presented
Phase I results demonstrates society’s
hunger for true breakthroughs in medicine.
We have long believed that we don’t
have a monopoly on innovation. Indeed,
RG7204 was developed in partnership
with California-based Plexxikon, and half
our late-stage new molecular entities
(NMEs) over the last three years have been
partnered compounds. Striking that healthy
balance between internal and external
innovation is now more important than
ever as big pharma faces the patent cliff.
Some firms are taking drastic measures to
shift the balance from internal to external
research, while others are diversifying into
less risky businesses. Roche will continue to
focus on medically differentiated therapies,
concentrating entirely on prescription
pharmaceuticals and in vitro diagnostics.
We intend to expand our relationships with
the biotech community. Year-on-year, we
continue to do more deals; our total last
year was up by 50% since 2007. We work
closely with our scientists to pick potential
Dan Zabrowski
Roche
Global Head, Roche Partnering
winners. Since programs are reviewed
and assessed using the same criteria
regardless of origin, our researchers drive
partnered projects forward with the same
passion and energy as our homegrown
programs. The results are evident. Of the
19 clinical-stage deals signed by Roche or
Genentech since 2004, 60% remain active
in the R&D portfolio.
The biotech industry has every reason for
optimism. Scientific advances show no sign
of slowing, and pharma is willing to invest
in high-quality assets and technologies.
Most important, there remains a huge need
to treat uncured diseases. At Roche, that
necessity will continue to be our driving
force in looking for new partnerships.
We look for first-in-class or best-in-class
compounds and technologies that have the
potential to change the standard of care. A
strong preclinical package and biomarker
strategy are important, as is a proven ability
to deliver. Our strategic therapy areas are
oncology, CNS, metabolism, virology and
inflammation. In return, we offer tailored
deal structures that accommodate the
needs and growth ambitions of partners,
together with a seat at the development
table to ensure that decision-making takes
into account the best available expertise
from internal and external sources.
Ultimately, maintaining a healthy balance
between internal and external innovation
will boost the industry’s growth while
providing returns for investors and, most
importantly, benefits for patients.
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