Espicom View: With the recent acquisition of Life Technologies by Thermo Fisher Scientific and the failed acquisition of Illumina hovering over Roche's diagnostic segment, this latest move by Roche seems like a reaction. Both Life Technologies and Illumina have developed faster ways to sequence genes. Setting up this new sequencing unit implies that Roche has left the idea of acquiring Illumina in the past and is venturing into this arena on its own. With the resources at Roche's disposal, the company should be able to make an impact in the sequencing market.
Roche has made certain changes to the management and establishment of its life-science business. The company's applied science business will be dissolved and its portfolio of products will be integrated within Roche's other diagnostics business areas. This approach strategy will streamline decision-making and enhance technology flow from research use to the clinical setting. The proposed reorganisation of its life-science business is expected to affect an estimated 110 positions in Penzberg, Germany, and 60 positions in Branford, CT.
Following assessment of its sequencing R&D portfolio, the company has decided to return the ISFET (ion-sensitive field effect transitor) 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. Additionally, the company has ended its partnership with IBM for the development of a nanopore-based sequencing platform, due to reported high technical risks involved.
The price pressure and funding cuts in life-science research are expected to continue owing to the current market environment. The organisational restructuring will focus on improving productivity and enhance the market responsiveness of Roche's life-science business, which currently accounts for about 7 per cent of its total diagnostics sales.
Two key product areas in applied science, PCR technology 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, the company intends to implement the following organisational changes:
â¢ 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.
â¢ The custom biotech portfolio, which includes platforms and reagents that are more closely aligned with the company's clinical chemistry portfolio, will move to Roche professional diagnostics.
â¢ 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 Rocheâs existing sequencing business. As a result, the applied science business area will be dissolved by the end of 2013.