Biotech
Thursday, July 21st, 2022 9:05 am EDT
Dive Brief:
- Roche CEO Severin Schwan, the longest-serving head of a Western pharmaceutical company, is stepping down next year and will seek election as board chair, the company said Thursday. Diagnostics division chief Thomas Schinecker will assume the chief executive role on March 15, 2023.
- Under Schwan’s leadership, Roche secured full ownership of Genentech, a deal that made the company a leader in biologic cancer drugs, as well as acquired Spark Therapeutics, giving the Swiss drugmaker the first gene therapy for an inherited disease approved in the U.S. During his tenure, the company also repurchased $20 billion of its own shares held by crosstown rival Novartis since 2001.
- The CEO change was announced alongside earnings for the first six months of the year. While sales of Roche’s flagship cancer drugs Herceptin, Avastin and Rituxan are on track to decline by 2.5 billion Swiss francs, or $2.6 billion, in 2022, the company reported double-digit growth from new products in cancer, hemophilia and musculoskeletal diseases.
Dive Insight:
Schwan took the helm in early 2008, making him the longest-serving CEO of any big drugmaker after Eisai’s Haruo Naito. His long tenure has given Roche an unusual level of continuity, but also reflects a company that remains majority-owned by the descendants of its founder, who hold shares as a pool. When named to the position at 41, however, Schwan was young by biopharmaceutical company standards.
Over his time as CEO, Roche folded in Genentech and bought companies like Ignyta and Spark to beef up its drug offerings, as well as forging numerous deals like licensing the spinal muscular atrophy treatment Evrysdi from PTC Therapeutics. On the diagnostics side, Roche bought out the shares of Foundation Medicine it didn’t already own, giving it a leading position in cancer testing as well.
While the Genentech transaction secured a large biologic drug business, it came at a time when much of the industry was watchful of approaching patent expirations for many of those drugs. Copycat competition to Avastin Herceptin and Rituxan has now entered the market in the both the U.S. and Europe, helping to push sales of Herceptin down by more than 50% since entry of the first U.S. biosimilar.
Managing the transition to new products was a key job for Schwan. Between internal pipeline projects and external dealmaking, Roche has largely delivered. In breast cancer, for example, Kadcyla and Perjeta are helping to offset double-digit declines for Herceptin, while new cancer drug Tecentriq is making up for losses from Avastin, sales of which are also declining at double-digit rates.
The company has expanded into new therapeutic areas, such as with Ocrevus in multiple sclerosis, Hemlibra in hemophilia and Evrysdi in spinal muscular atrophy.
On Thursday, the company reported a 3% year-over-year increase in pharmaceutical sales for the first six months of 2022, totaling about $23 billion.
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