Roche - The world's biggest R&D spenders

2010 R&D budget: $9.2 billion (9.05B Swiss francs)
2009 R&D budget: $9.7 billion (9.5B Swiss francs)
Change: Down 5 percent

Of all the Big Pharma companies at the beginning of 2010, Roche had the reputation of being an R&D trendsetter. It was pursuing solid new blockbusters and later in the year closed on its $47 billion acquisition of Genentech, which had the reputation of being the most innovative big biotech in the world. Even more importantly the company wasn't staring at a patent cliff like Pfizer and others.

But some of the glitter came off last year. The diabetes drug taspoglutide turned out to be a failure, torpedoed by side effects. The pharma giant handed the program back to Ipsen and wrote off its losses. Roche received an unexpected setback at the FDA when regulators returned its application for T-DM1, an armed antibody licensed from ImmunoGen that has demonstrated enormous potential. And prospects for Avastin, once a bright spot, soured in light of regulatory setbacks.

Like other big outfits, Roche has been recalibrating its R&D focus. A review led the company to dump a $500 million R&D effort in RNAi, rattling a field that looks still looks promising but won't pay off in time for Roche. Later in the year, it bowed out of a pact with Ligand on hepatitis C and just days ago it was Transgene's turn to get a Dear John letter.

Roche announced plans to trim 600 R&D jobs last November, and CEO Severin Schwan left no doubt that he would be turning over more than a few rocks in search of added productivity in 2011.

But even as it manages to trim its R&D budget in significant ways, Roche has ambitious research plans for the year ahead. T-DM1 may have been delayed, but it remains one of the leading cancer drugs in the late-stage pipeline, and the company will aggressively follow up in search of an approval for breast cancer. Roche is also working with Plexxikon on PLX4032 (or RG7204), which has produced stellar results for metastatic melanoma. Investigators also have high hopes for applications covering RG3616 and pertuzumab this year.

Roche now has to see if it can get its R&D mojo working or find itself mired in criticism as late-stage drugs fail to live up to expectations.

Like Pfizer and Novartis, Roche has big plans to invest in an R&D hub in China. The huge Asian market represents one of the most compelling new opportunities on the planet, and Chinese drug R&D is developing into one of the hottest of all hotbeds for innovation.

Roche - The world's biggest R&D spenders