Roche CEO Severin Schwan is keeping his hand on the budget ax
Just a few weeks after Roche brought out the ax and chopped more than 200 jobs out of Genentech in an unusual cost-cutting move in R&D for the pharma giant, CEO Severin Schwan is likely raising some added tensions with a pledge to root out inefficiencies.
In an interview with Reuters that will be closely read today by the rank and file, Schwan said that the company is streamlining its global business units in a move that will affect “scores of jobs.”
Roche is losing patent protection on its big three aging drug franchises for Rituxan, Herceptin and Avastin as it ramps up new revenue from fresh stars like Ocrevus. The changeup will likely blunt near-term revenue, putting the heat on the Basel-based operation to cut costs where it can.
Roche has been careful to leave Genentech and its unique culture as unmolested as possible in the years since the takeover. And it’s been loathe to interfere much with the alternative pRED group since the big reorganization that came through at the same time. Analysts, though, will be looking carefully to see what the year ahead will bring to the company’s research operations, which consumes a budget of about $11 billion a year — the biggest among the top 15 R&D groups in the world.