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Roche steps up cost cuts via efficiency to stay ahead of opponents

Author : Pankaj Singh | Published Date : 2018-09-15 

Roche, the biggest manufacturer of cancer medications across the world, has reportedly started an efficiency drive in a bid to counterattack competition by employing cost cuts. According to sources familiar with the development, Roche is struggling with sales as its biotech product portfolio ages amid intensifying rivalries, though it owns the best research and development laboratories in the pharmaceutical industry.

Severin Schwan, the Chief Executive, was quoted stating that he believes that he would be able to seal the sales gap with an anticipated moderate growth in the year 2019, accredited to new drugs like Ocrevus that treats multiple sclerosis. Schwan added that with companies having a sharp portfolio shift like Roche, it is imperative to dramatically reallocate resources, and Roche is currently working on the same lines.

Schwan also claimed that though the company’s Tecentriq immunotherapy failed to combat Merck & Company’s Keytruda for treating first-line lung cancer there are still important opportunities, especially in the hard-to-treat breast cancer market.

Market experts claim that the company needs to make big moves to retain its market position. Roche estimates that it would have a giant $10 Bn sales gap to seal by 2022, from competitor invasions in the cancer treatment sector, a territory that the Swiss drugmaker has dominated till date, claim sources.

Reportedly, the three top-selling drugs by Roche are used in cancer treatment and had a joint sales of 21 billion dollars in 2017, which made up for 40 percent of its overall sales. 

Incidentally, in the European domain where biosimilars are majorly influencing the industry, the cost-cutting drive by Roche is an advanced step wherein few commercial operations are trimmed back.

According to sources familiar with the development, Roche intends to restrict its research & development activities and wants to stick by a long-standing business strategy of utilizing only small to mid-level bolt-on acquisitions to bolster its drug pipeline, instead of purchasing big drug business.

About Author

Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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