ROche is A A strange entity. The Swiss Giants are the second largest pharmaceutical company in the world and one of the most profitable of the largest pharmaceutical companies. However, its largest equity-holding group, a descendant of Fritz Hoffmann La Roche, who founded the company in 1896, loves nature and is sustainable, believing that the purpose of its business is not primarily to make money. Led by sexual advocate André Hoffmann. Even his boss is hesitant to earn francs quickly. Austrian Severin Schwan, who has been leading the company since 2008, is Roche’s seventh. It’s just that. CEO In 125 years. Much of his salary has been tied to the company’s stock for 10 years, and as he says, he gives “literally vested interests” to the long-term future.

Another point makes Roche stand out from the crowd. For 20 years, in an effort to create more personalized healthcare, we have fostered a flashy diagnostic department alongside our flagship pharmaceutical production. With nearly a quarter of sales, the unit has a lower rate of return than pharmaceuticals, putting off investors looking only for blockbuster drugs. Some suspect that without the patience of Mr. and Mrs. Hoffman, some activists would have been forced to sell or spin off it to Roche.

However, in the last year or so, the ability to diagnose the disease at an early stage has been fully demonstrated. This division has supported the company through the covid-19 pandemic. Roche was not one of the star vaccine producers, PCR And despite the slowdown in cancer treatment, which is its biggest business, antigen testing has boosted profits. In addition, due to advances in molecular biology gene sequencing and other technologies, SARS—COV-2, the covid-19 virus, and how to fight it. This emphasizes the value of combining biotechnology and diagnostics. Both are areas where Roche is good at.

Instead of abolishing diagnostics, Roche is now expanding into digitalization and advanced data analysis to create personalized cancer treatments. This is the “golden age of diagnostics,” said Tim Haines, boss of biotechnology venture capital firm Abingworth. Bets placed years ago make Basel-based sober-sounding companies visionary.

With a diagnostic background, Schwan can’t help but get excited. After a long conversation with economist, He came back a day later. As he explains, cancer is a collection of diseases based on individual mutations. Diagnosis identifies genetic and other differences between patients and leads to the creation of more personalized therapies. The tailor-made market is, by definition, smaller than the blockbuster drug market, but a patient’s responsiveness to treatment can increase the value of the drug proportionally. Even higher accuracy can be achieved by sieving a sea of ​​genomic data.

Accumulating large amounts of information about patients has long been awkward with medical privacy concerns. Schwann believes this is not the case now. He states that the pandemic helped change mood in two ways. First, by using data processing to accelerate the fight against coronavirus infections, health authorities, hospitals and doctors have the idea of ​​sharing medical records if the information is anonymized. It’s easier to accept. After all, this is biotechnology, not big tech. “We are not in the advertising business,” he says. Second, regulators have shown his “incredible” willingness to access clinical trial data in real time, accelerating drug approval. “Why shouldn’t we do the same for life-saving cancer medications?”

Roche, who recently lags behind oncology rival Merck in immunotherapy treatment, has been looking forward to a shift in this digitization. The two US acquisitions in 2018 are particularly fruitful. It can be a thing. The first is Foundation Medicine. This is a gene sequencing company that can identify cancer. DNA With a blood sample, not from a tumor biopsy. The other is Flatiron Health, an expert in cancer-related health records, which produces data on real-world patients that complement clinical trials. Both produce what Roche calls cancer insights. Like the diagnostics business, it doesn’t just help drive your company’s drug development. They also sell services to their rivals and make themselves a business. They haven’t made a profit yet, but one day the “insight” business could become Roche’s third pillar, Schwan said.

There are potential pitfalls. Biology is as troublesome and unpredictable as nature. Data analysis may not be as useful in biotechnology as in other industries. Roche has no field on its own. Silicon Valley giant tech companies are already in motion. And Roche-based Europe has long been nervous about data collection and privacy. If that applies to healthcare, the region’s healthcare It will be a hindrance to the industry.

That said, Roche has a track record of accomplishing unexpected things. Swiss investment firm Stephen Schneider of Fontbell has achieved the unusual feat of maintaining profits despite the expiration of patents on the three major anti-cancer drugs with annual sales of $ 21 billion. The company’s immunotherapeutic drug, Tecentriq, has recently shown promising results in the treatment of early-stage lung cancer, which could be a major breakthrough. And they’re mastering the technology to buy trendy biotechnology companies without compromising their innovative fizz.

Black Schwann

In fact, its success supports long-term thinking, and shareholders’ focus on concepts such as sustainability shows that it can coexist with commercial success. Despite the influence of the Hoffman family, Schwann is not meek. He defends the high drug prices in the United States. He believes in strong intellectual property protection. When the US government upheld a patent exemption for the covid-19 vaccine this year, he compared it to the nationalization of a communist East German pharmaceutical company. Roche may be unusual. The company is also flashy as it is one of the few world-class megafarms in Europe. ■

This article was published in the printed Business section under the heading “Companies that saw the future.”