The fact that Roche has separate R&D units has been the topic of second-guessing on the part of observers and analysts.
It has been easy to think of Swiss-based Roche’s research and development efforts to essentially be its U.S.-based Genentech. Within the company it’s referred to as gRED, or Genentech Research & Early Development. What has often been forgotten—and probably with good reason—is the Roche Pharma Research & Early Development, or pRED. It also has an R&D arm in Japan, Chugai.
But it appears that pRED is finally in the midst of what Roche hopes will be a renaissance, with the announcement of several promising mid-stage pipeline products. In a recent interview, Roche’s chief executive officer, Severin Schwan, told Reuters, “In pRED, some exciting opportunities are now coming through after a time when many things did not work. It goes in waves. You can’t program to have a certain number of molecules coming through the pipeline every year in each unit.”
pRED’s products-to-watch include CEA-TCB, a bispecific antibody for cancer, a follow-up drug for eye drug Lucentis, a drug for autism, and idasunutlin for acute myeloid leukemia (AML). None are up for approval any time soon. The company is expected to file for idasunutlin in 2019.
John Carroll, with Endpoints News, writes, “It’s been close to five years since John Reed jumped from Sanford-Burnham to become the head of Roche’s Basel-based pRED organization. And only now is the big drug research group he leads getting a closeup after years spent watching his colleagues at gRED—Genentech—steal the show with a string of blockbuster hits. The old pRED was shredded when Roche announced in the summer of 2012 that it would shutter its big R&D campus in Nutley, NJ and move a group of survivors into Manhattan. The reorganization, like any such R&D organization, Reed told me in 2013, was pure ‘poison’ for the group, vowing to stick with a research strategy and avoid any more such traumatic disruptions.”
The fact that Roche has separate R&D units has been the topic of second-guessing on the part of observers and analysts. When Roche bought out Genentech, many thought the Swiss-based company culture would be a bad fit with the so-hip-it-hurts culture at Genentech. But Genentech kept its culture and continued to churn out highly successful products.
However, Reuters notes, “A resurgence would be timely. Chief Executive Severin Schwan needs his R&D operations firing on all cylinders to fulfill promises of growth as patents expire on Rituxan, Avastin and Herceptin. These Genentech-developed drugs, which have combined sales of $20 billion a year, are either already exposed to rivals’ cheaper copies in leading markets or soon will be.”
Still, it’s not completely clear if Schwan’s emphasis on pRED is real or merely a way to assure investors that Roche isn’t losing its edge as Roche faces the likelihood of losing its dominance. Roche has the Number 4 and 5 top-selling drugs in the world, Rutuxan and Herceptin. But biosimilars are already on the market and eating away at their profits. And combined, the drugs are slated to bring in $14.5 billion this year.
Carroll writes, “It’s unusual for any giant pharma company like Roche to tout mid-stage programs, which have a high mortality rate, especially as marketing challenges can now just as easily kill off a program just as surely as bad data ever could. But then it’s also extraordinarily unusual for a company like Roche to successfully acquire Genentech without killing the innovative spirit that drove a legendary string of new cancer drugs into existence.”
So for Roche’s sake, pRED needs to start pulling its weight. Michael Nawrath, an analyst with Zuercher Kantonalbank, told Reuters, “Roche’s three big drug hopefuls—Ocrevus, Tecentriq and Hemlibra—aren’t from pRED, they’re from elsewhere in the company. Without the Americans, Roche would be just a specialized diagnostics company.”
