Roche, a US$45 billion fifth largest pharmaceutical company, has finalised changes to the management and set-up of its life-science business. The company decided to shut down the Applied Science Business Area and merge its portfolio of products within Roche’s other Diagnostics Business Areas. This will streamline decision-making and enhance technology flow from research use to the clinical setting. The proposed reorganisation of Roche’s life-science business is expected to affect an estimated 110 positions in Penzberg (Germany) and 60 positions in Branford (Connecticut, USA).

Following assessment of its sequencing R&D portfolio, Roche has decided to return the ISFET project for the development of a semiconductor-based sequencing system to DNA Electronics. Roche believes that it will be unable to disrupt the market with the product at launch. Roche has also ended its partnership with IBM for the development of a nanopore-based sequencing platform due to high technical risks involved.

Roland Diggelmann, COO of Roche’s Diagnostics Division: “After thoroughly reviewing the activities of our Applied Science Business Area, we concluded that reorganising our life-science business will allow us to fully leverage the synergies these products have with our existing clinical diagnostic portfolio. Roche remains committed to the life-science business, and we will continue to serve our customers with our existing life science portfolio and experts in the field.”

The price pressure and funding cuts in life-science research that have been features of the market environment for some time now are expected to continue. The organisational arrangements Roche is introducing are designed to further improve productivity and enhance the market responsiveness of its life-science business, which currently accounts for about 7 % of total Diagnostics sales.

Two key product areas in Applied Science – polymerase chain reaction technology (PCR) and nucleic acid product lines (NAP), as well as Roche’s Custom Biotech portfolio – have overlaps with the division’s Molecular Diagnostics and Professional Diagnostics Business Areas. To address this, Roche plans to implement the following organisational changes.

PCR technology and NAP will in future be managed by Roche Molecular Diagnostics. This includes real-time PCR and nucleic acid purification platforms and reagents, as well as nucleic acid-related biochemical reagents.

The Custom Biotech portfolio, which includes platforms and reagents that are more closely aligned with Roche’s clinical chemistry portfolio, will move to Roche Professional Diagnostics.

A dedicated unit will be established to focus solely on sequencing. This unit will be tasked with implementing a sequencing strategy from life-science research to clinical diagnostics, explore internal and external opportunities that can provide customers with differentiated products, and will also manage Roche’s existing sequencing business.

As a consequence, the Applied Science business area will be dissolved as of the end of 2013. Roche’s financial reporting will reflect the new business structure for the first time when the Group publishes its 2013 half-year results. The Group’s outlook for 2013 remains unchanged.