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Roche - Pipeline - Products - Performance - Potential
Espicom Business Intelligence Ltd, June 2009, Pages: 266
Roche achieved strong sales results in 2007, coupled with a significant improvement in operating profitability, however, this performance could not be replicated as the company felt the effects of the global economic crisis, as well as a significant downturn in the revenue of its virology pharmaceutical products. Roche's powerful oncology portfolio remains the key driver behind growth; the new generation of more targeted, less toxic anticancer medicines have made Roche the global market leader in oncology.
In spite of a difficult economic background, in March 2009, Roche announced the completion of one of the largest pharmaceutical acquisitions in history. Roche purchased all remaining shares of Genentech, previously its largest pharmaceutical subsidiary and partner, in a deal valued at US$48.6 billion. Roche and Genentech began their affiliation in 1990 with the companies completing a US$1.2 billion 'merger'. Although a subsidiary within the Roche group, Genentech maintained relative autonomy and independence. Following this recent acquisition, Genentech will now operate as an independent research and early development centre within Roche from its existing campus in South San Francisco, CA. Genentech's Late Stage Development and Manufacturing operations will be combined with the global operations of Roche, achieving substantial scale benefits, operational synergies and cost avoidance. Roche's manufacturing operations in Nutley will be closed, while support functions, such as informatics and finance, will be consolidated.
Regardless of the economic environment, this is a bold and significant investment by Roche. Genentech has been key to the development of Roche's oncology portfolio and both companies will benefit from further synchronised research and development operations. The next few fiscal years will be an interesting period for Roche. It has a strong pipeline, particularly within the oncology field, however, it remains to be seen whether sales will be high enough to return the company to profitability given the costs of the acquisition and the general economic downturn.
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