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When one door closes, another opens
December 2013
by Amy Swinderman  |  Email the author
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BASEL, Switzerland—Swiss drug giant Roche is putting more eggs into its biologics basket in the form of an $870 million investment in its global biologic medicine manufacturing network, but also removing a few eggs in the form of the closing of its 454 Life Sciences DNA sequencing division.
 
In mid-October, Roche—already the world’s largest supplier of biologics—announced it will make “the necessary investments to ensure ongoing supply of these medicines at the highest-quality standards” by increasing production capabilities for its biologic medicines at several of its global facilities over the next five years. The pharma already has 10 licensed biologic medicines that accounted for approximately 70 percent of its third-quarter pharmaceutical sales, as well as 39 investigational biologic medicines in its total 65-drug pipeline.
 
“Investing 800 million Swiss francs in biologics manufacturing capability underscores Roche’s supremacy in this area of medicine,” Andrew Weiss, an analyst at Vontobel, said in a research note.
 
It’s important to note that the growing biologics market—which by many estimates will top $220 billion by the end of the decade—is currently free from generic competition, sparing Roche from the pain of falling off the patent cliff. This “growing global demand for our marketed products, including biologic medicines … means we are currently increasing both internal and external manufacturing capacity,” says Luke Willats, who handles media relations for Roche Group Communications.
 
“Roche invests over 8 billion Swiss francs a year to discover and develop new medicines across oncology, neuroscience, inflammation, ophthalmology, infectious diseases and metabolism, and this takes the form of both large- and small-molecule research,” says Willats.
 
The construction of an antibody-drug conjugate (ADC) production facility will begin at Roche’s headquarters in Basel, Switzerland, which is expected to create 50 jobs. This investment will provide additional capacity and flexibility to support Roche’s first approved ADC, Kadcyla, and eight more ADCs in clinical development. Biologic drug substance manufacturing capacity will be increased at Roche’s sites in Vacaville and Oceanside, Calif., creating about 250 new jobs. In Penzberg, Germany, the investment will support manufacturing for marketed biologic products and pipeline molecules and create about 200 positions.
 
On the heels of this news, Roche also announced it has entered into a long-term strategic manufacturing agreement with Samsung Biologics, under which Samsung will manufacture Roche’s proprietary commercial biologic medicines at its two manufacturing facilities in Incheon, South Korea. Terms of the agreement, including financial details and specific products to be manufactured, were not released, and Willets only comments, “Our biologics manufacturing strategy requires both an internal and external network to help ensure agility and flexibility to address demand uncertainty and supply resiliency. As part of this strategy, Roche establishes strategic partnerships with select, targeted, reliable external manufacturing organizations.”
 
The renewed focus for Roche also involves a quiet exit from the next-generation sequencing market, as the company also announced last month that it will shut down its 454 Life Sciences unit and lay off 130 employees. Roche purchased the business from Curagen in 2007, but quickly fell behind competitors Illumina and Life Technologies. Still, the division’s de-novo sequencing and resequencing of whole genomes, targeted resequencing of genomic regions of interest, metagenomics, transcriptome sequencing and methylation analysis enabled more than 1,000 peer-reviewed publications in diverse research fields such as cancer, infectious disease, immunogenetics, drug discovery, agriculture, environmental ecology and paleontology.
 
Being that Roche made an unsuccessful $6-billion-plus acquisition maneuver for Illumina last year, one wonders how differently all of this news would have played out had the purchase been successful. Yet, despite the closure of 454 Life Sciences, Willats stresses that Roche is “committed to providing our 454 instruments, parts, reagents, consumables and service for all our 454 products currently on the market over the next three years.”
 
“New tests in oncology, long-read length for GS Junior and an automated front-end workflow for GS Junior will also be provided,” he adds. “We will also continue to provide and develop our existing and new (NimbleGen) sequence capture and target enrichment products for our sequencing customers to support their research activities with essential next-generation sequencing workflow components.”
 
Roche still “sees great potential in this sequencing technology, which offers unprecedented read length, accuracy and speed for the development of future clinical next-generation sequencing applications,” Willats tells DDNews. To that end, Roche recently signed a development and commercialization collaboration with Pacific Biosciences that aims to create new sequencing systems and related consumables for clinical customers that build on the company’s single-molecule sequencing chemistry.
 
“The Roche Sequencing unit is committed to continuously seek both internal and external opportunities to ensure we provide our customers with next-generation sequencing products and services that could differentiate us from our competitors,” says Willats.
 
Code: E121308

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