Despite Expansion Overall, Roche Diabetes Care Lays Off 157
3/15/2017 6:51:15 AM
March 15, 2017
By Mark Terry,
BioSpace.com Breaking News Staff
Roche Diabetes Care announced yesterday that it plans to lay off 157 staffers as part of its U.S. Commercial Operations restructuring. Of those employees, 133 are full-time, 24 are contractors, and 42 are based in Indianapolis.
Recently, on February 1, Reuters reported that Roche had plans to expand its diabetes business, which is worth $2 billion annually, not sell or spin it off. Some analysts believe the speculation of a sale was related to Johnson & Johnson (JNJ)’s announcement in late January that it planned to divest its own diabetes unit.
The U.S. diabetes market has been in decline lately, largely because of reimbursement issues. Paris-based Sanofi (SNY)’s Diabetes and Cardiovascular unit sales dropped 2.5 percent globally in the third quarter of 2016, and its diabetes franchise was down 1.5 percent. Around the same time, Novo Nordisk (NVO), a major Sanofi competitor in the diabetes space, announced plans to layoff 1,000 workers.
Roche indicated that the job cuts were to remain competitive in the diabetes care market. “Roche is deeply grateful to all those who have contributed and dedicated themselves to the company and the millions of people living with diabetes,” the company said in a statement. “The company is committed to supporting its colleagues in identifying other positions within the wider Roche organization where possible.”
Although the U.S. diabetes market is in decline, the Asian market is up, with recent sales increasing by 16 percent, mostly driven by China. Roland Diggelmann, head of Roche’s Diagnostics division, told Reuters in February that approximately 100 million Chinese were possibly diabetics, and only a small percent of them had been diagnosed.
There is even speculation that Roche would consider buying J&J’s diabetes assets, although Diggelmann said that regulators probably wouldn’t allow it, and that Roche’s interest was minimal because they overlap with the company’s existing portfolio.
In a May 13, 2016 article on Med Device Online, Diggelmann believed that the diabetes market would turn around for the company. “You shouldn’t expect growth this year, but next year I think it will go back to growth. That’s definitely our vision. It’s still a good business. We don’t disclose the margins, but it is a cashflow-generating business and it’s a business with a future.”
On February 15, 2017, Roche announced it had expanded its partnership with mySugr, a digital diabetes service company. mySugr develops apps that help diabetics manage their illness. Roche’s next generation of Accu-Chek blood glucose meters, the Accu-Chek Guide and the Accu-Chek Instant systems integrate with the mySugr apps.
“With this expanded partnership we will continue to offer latest innovations to our customers that will empower them to seamlessly integrate therapy management into their everyday lives, so they have less to think and worry about,” said Marcel Gmuender, Global Head of Roche Diabetes Care, in a statement. “Digital health solutions have proven to help manage diabetes-related data more effectively. This makes data more meaningful and can ultimately lead to better therapy outcomes.”
At the same time, Roche Diabetes Care announced a new Bluetooth version of its Accu-Chek Guide monitor, which allowed integration into some of Medtronic’s future insulin pumps. The Accu-Chek Guide was approved by the U.S. Food and Drug Administration (FDA) in August 2016, but as of mid-February, was not available in the UK.
The two deals with mySugr and Medtronic (MDT) suggest that Roche isn’t limiting its involvement in the diabetes market, but it’s working on strategic partnerships to expand its blood glucose meters’ functionality and to promote their wider use.
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