1. Roche (Genentech): Mixed results mar turnaround plans

Sandra Horning, chief medical officer and head of global product development

2013: $10.3 billion (9.27B Swiss francs)
2012: $10.7 billion (9.55B Swiss francs)
Change: Down 4%
As a percentage of sales: 18.6%
Chief Medical Officer: Sandra Horning

Over the past few years Roche ($RHHBY) has depended heavily on its cancer drug pipeline at Genentech to continue to deliver significant new therapies as it tried to reorganize and revive its long-standing R&D division based in Basel. But even after a wholesale revamp of its operations, the jury is still out on whether the pharma giant--with its industry-dominating R&D budget in pharma and diagnostics--can work itself out of the hole it dug for itself.

When the annual report for 2013 came out, Roche counted 15 programs in late-stage development.

And there are more coming. Just weeks ago Roche highlighted positive data for lebrikizumab, an IL-13 antibody that looked promising against asthma in Phase IIb. Back in 2011, Roche CEO Severin Schwan picked lebrikizumab as one of three prospective blockbusters in the pipeline. Roche plans to file an approval by 2016 as it also pushes ahead with another midstage immunology program for the ulcerative colitis drug etrolizumab.

Schwan, though, has to be reevaluating the potential of another one of his top picks: MetMab. In March the drug failed in a Phase III study of non-small cell lung cancer. MetMab (onartuzumab) was aimed straight at the Met pathway, with investigators expecting to see further signs that the drug could throw a monkey wrench in a biologic cascade that triggers the spread of cancer as cells grow, divide and spread. The late-stage study was designed to determine whether a combination approach with Tarceva could allow advanced patients to live longer.

The failure follows fast on the heels of another signal defeat in late-stage studies for Roche. The schizophrenia drug bitopertin failed a full slate of Phase III trials, marking the latest in a series of setbacks for the difficult field.

The problems with pRED have been underscored repeatedly over the past two years. The unit failed badly with aleglitazar, a diabetes drug that never had much of a hope. The therapy was kept in the pipeline long after PPARs had been involved in dozens of clinical wipeouts--just as dalcetrapib had to wind its way to the bitter end after Pfizer's pratfall with a rival drug.

Generalized medicine drugs are distinctly out of favor now. But its Basel-based pRED group has been refilling its pipeline over the last year after shuttering its sprawling research campus in Nutley, NJ. And gRED (Genentech) in California has been continuing its hunt for new drugs, which has delivered a series of pioneering approvals.

Sophie Kornowski-Bonnet, head of Roche partnering--Courtesy of Roche

pRED research chief John Reed and Sophie Kornowski-Bonnet, head of Roche partnering, tell FierceBiotech that with 36 molecules in development, they're bullishly looking for about 18 more programs over the next year or two to complete the pipeline overhaul. The two top Roche executives, in attendance at the J.P. Morgan conference in San Francisco, expect to get the boost from both internal research as well as external partnerships and buyouts. And Kornowski-Bonnet says they're willing to spend "up to a few billion, I suppose," for new deals that can add significant new therapies and technologies.

Right now, Roche can't afford to cut back on R&D. But for Reed to keep his promise of stability in pRED, the R&D arm will need to start delivering in Phase III.

For more:
Special Reports:
Biopharma's Top R&D Spenders of 2012 - Roche (Genentech) | 20 Highest-Paid Biopharma CEOs of 2012 - Severin Schwan - Roche
Roche's dealmakers at pRED will continue their global shopping spree in 2014
Completing a U-turn on RNA, Roche's resurgent pRED strikes deal with Santaris
Roche teams with Molecular Partners on armed proteins in $1B-plus deal
John Reed sets out on a long-distance run at Roche's pRED

1. Roche (Genentech): Mixed results mar turnaround plans

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