Company Analysis - Hoffmann-La Roche
Innovating in Healthcare
In the past, it has been standard practice for pharmaceutical companies to
develop drugs that have blockbuster potential by being 'one-size-fits-all'.
However, this model of drug development is now under reconsideration, primarily
due to an ever-increasing understanding of human genetics and the insight this
brings into how some drugs are often significantly less effective in certain
segments of the population than others. This can impact the companies
themselves - drug development is a high-risk and costly business; the occurrence
of serious adverse events
leading to the withdrawal of
drugs or failure to even reach
the market can be financially
disastrous. The future of
medicine is therefore likely to
involve a more personalized
approach, where treatments
are tailored to suit the
genotype of the individual
patient, to achieve greater
efficacy and fewer side-effects.
With its Pharmaceutical and
Diagnostics divisions, Roche is
a company leading the way into
this new approach.
"We Innovate Healthcare" - Roche's slogan is borne out by past achievements,
and is certainly appropriate to its current business strategy. Roche Pharmaceuticals
produces "medically differentiated medicines that offer real advantages over
existing treatments", and owning the majority stake in Genentech and Chugai
firmly entrenches Roche's position within the field of biotechnology (Graph 1). In
fact, over 50% of Roche's drug sales come from biopharmaceuticals, which
include five of its top-ten products. Having bought the patents for the
polymerase chain reaction in 1992, Roche Diagnostics is the world leader in its
field and with this expertise in both diagnostics and biotechnology, Roche is
striving to unlock the potential of combining diagnostic tools with therapeutics to
produce patient-specific treatments.
