In the 9 years since Roche bought up all of Genentech, the Swiss pharma giant has been careful to leave its legacy R&D group pRED separate from the folks at the gRED operations they acquired in San Francisco. But in a startling shift today the executive team knitted the two groups’ BD teams into one, combining partnering ops and making Genentech’s James Sabry their global deal czar for pharma.
Sophie Kornowski-Bonnet, the French native who had been head of partnering at Roche and sat on the executive committee, is leaving for a “new opportunity,” just weeks after the research chief John Reed leaped to run Sanofi’s research group as that pharma giant looks to become more self-reliant. And Sabry, a high-profile figure in the US biotech scene — particularly California — is jumping onto the executive committee and moving to Basel.
I queried Sabry by e-mail about his new job, and he replied:
“There is much to discuss as this is a newly created role. Very much excited to be taking this on at this particular time.”
Sabry struck a string of deals in the 8 years he’s been in charge of partnering at Genentech. He tends to avoid the splashy stuff — mega-deals are out of favor at Roche, with bolt-ons the favored approach to M&A. He’s been on the lookout for deals to fill designated segments of the pipeline at Genentech, which has easily been the dominant player at Roche in producing new blockbusters. Over at pRED, the pharma team has had significantly less success, though execs have voiced their satisfaction with the group recently.
“We are not limited by capital,” Sabry told me back in 2015 as he explained his approach to dealmaking. Roche is, after all, one of the biggest spenders in pharma, with a research budget of about $9 billion.
But they are awfully hard to impress.
The biotech vet set up the $1.7 billion buyout for Seragon (which has not been a success), and was happy to play in the $1.5 billion to $3 billion range, along with a string of much smaller pacts. Reach up to the $8 billion and $10 billion arena and CEO Severin Schwan expects plenty of hands-on involvement. Now, though, Sabry’s remit has expanded considerably.
Much more common was the $534 million microbiome pact Sabry struck with Microbiotica a few days ago, partnering on a field where the company has demonstrated a real appetite for expertise.
The move on the BD side comes at a critical point of play for Roche. Their three big drug franchises are being decimated by generics, and it’s relying on new drugs like Hemlibra to make mega-cash as they disrupt old markets. The pressure on performance will remain very high.
It’s interesting that Sabry is being given a global mandate for the company just after CEO Schwan vehemently rejected the idea of melding the two research groups into one.
“Over my dead body,” was his reaction. But that can change, too.
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