Roche Pharmaceutical Company SWOT Analysis Report
Summary
- Roche accrued $1.1bn sales in 2009 in the BRIC market giving it a market share of 1.8% with year-on-year growth of 3.9%.
- China was the largest contributor to the company’s sales in the BRIC countries in 2009. The company had sales of $419m in China, equivalent to 40.1% of its total BRIC sales at a year-on-year growth of 29.4%.
- Anti-neoplastic and immunomodulating agents were the largest therapeutic area in Roche’s portfolio for the BRIC markets. It recorded sales of $512m 2009 at a year on year growth of 9.2%.
- MabThera, Xeloda, Cellcept and Herceptin were the leading anti-neoplastic brands for Roche in the BRIC markets in 2009.
- Roche’s alliance with Hetero in India and Shanghai Pharma/HEC in China will be the prime growth drivers for the company in the BRIC markets.
Company overview
Roche
was founded in 1896 and initially specialized in the development and marketing
of vaccines. Over the years, Roche has expanded its business and has grown
inorganically through the acquisition of Genentech and Chugai. Genentech’s
acquisition gave Roche access to oncology products including Herceptin,
MabThera and Avastin. Roche now focuses on two business segments, prescription
medicines and diagnostics having divested its vitamins/chemicals and consumer
health businesses.
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Table 51: Overview of Roche
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Headquarters
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Switzerland
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Global sales
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$32.8bn
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BRIC sales
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$1.1bn
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Market share (% of total global sales in BRIC)
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3.2
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Major therapeutic focus
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Anti-neoplastic & immunomodulating agents
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Source: IMS Health, copyright ©, reprinted with permission
Therapeutic focus
The
anti-neoplastic drug class was the largest therapeutic category for Roche in
the BRIC markets. Roche’s acquisition of Genentech boosted its oncology
portfolio with leading brands including Avastin, MabThera, and Herceptin. The
segment captured 49% of the company’s sales, equivalent to $512m in 2009and had
a CAGR of 40.9% during 2005–09. Anti-infectives, the second largest drug class
for Roche in these markets reported a 33.3% year-on-year growth in 2009. The
segment generated sales of $159m in 2009 with brands including Pegasys and
Rocephin leading the class.
Geographic focus
China
was Roche’s largest market among the BRIC countries with $419m sales in 2009,
equivalent to 40.1% of the company’s sales. China was also the only market
which demonstrated a positive sales growth for Roche. The anti-neoplastic drug
class accounted for 68.3% of Roche’s Chinese operations and had strong 34.5%
year-on-year growth. Roche registered sales of $378m in Russia, equivalent to
36.2% of the company’s BRIC sales. This was a decline in sales of 12.3% which
can be attributed to the performance of the anti-neoplastic drugs. Drugs for
nervous system disorders were the largest therapy franchise for Roche in Brazil
with a 38.1% sales share.
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Table 52: Roche’s sales distribution across BRIC countries, 2009
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Country
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Sales 2009 ($m)
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Sales growth, 2008–09 (%)
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Sales share, 2009 (%)
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CAGR, 2005–09 (%)
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China
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419
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29.4
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40.1
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26.6
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Russia
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378
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-12.3
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36.2
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33.5
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Brazil
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248
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-1.2
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23.8
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11.2
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Total
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1,045
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3.9
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100.0
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23.8
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Source: IMS Health, copyright ©, reprinted with permission
Marketed products
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Table 53: Leading brands of Roche in the BRIC market, 2009
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Brands
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Sales 2009 ($m)
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Sales growth, 2008–09 (%)
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Sales share, 2009 (%)
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CAGR, 2005–09 (%)
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MabThera
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152
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-10.2
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14.6
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60.7
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Xeloda
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101
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31.9
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9.6
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41.0
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Cellcept
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86
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9.3
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8.2
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14.9
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Herceptin
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81
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31.0
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7.8
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73.8
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Pegasys
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61
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45.5
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5.8
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52.2
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Xenical
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53
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-28.4
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5.0
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4.7
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Rocephin
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51
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6.5
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4.8
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7.4
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Rivotril
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46
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-2.8
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4.4
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14.6
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Avastin
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43
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26.9
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4.1
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184.5
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Roaccutane
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38
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-1.6
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3.6
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16.5
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Top 10
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711
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6.3
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68.0
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30.2
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Others
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334
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-0.9
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32.0
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14.1
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Total
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1,045
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3.9
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100.0
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23.8
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Source: IMS Health, copyright ©, reprinted with permission
R&D
Roche
has 17 R&D centers across the globe with one center in Shanghai, China. The
company invested 22.8% of its sales in R&D in 2009. Its R&D mainly
focuses on five Disease Biology Areas (DBAs) including oncology, inflammation,
virology, metabolism and CNS. Roche’s 2010 pipeline portfolio included 59 NMEs
(new molecular entities). Genentech research and Early Development (gRED)
operates independently from the Roche Pharma Research and Early Development
(pRED), the company’s original research division.
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Table 54: Roche’s late stage R&D pipeline
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Molecule
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Indication
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Rituximab
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ANCA-associated vasculitis
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Tocilizumab
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Early rheumatoid arthritis
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Aleglitazar
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Cardiovascular risk reduction
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Taspoglutide
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Type 2 diabetes
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Dalcetrapib
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Atherosclerosis
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Trastuzumab-DM1
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Metastatic breast cancer HER2+ 1st line
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Source: Company reports
Growth strategy
Roche
completed the acquisition of Genentech in 2009 for $46.8bn, through which it
gained access to the latter’s oncology portfolio. Especially important for
future revenue growth in Genentech’s monoclonal antibody (mAb) technology.
MabThera, Herceptin and Avastin are the key revenue generators from this
portfolio and have strengthened Roche’s position in the oncology market. .
Expansion in emerging markets
Roche
has introduced the Tamiflu Reserves Program (TRP) to provide the medicine at
low cost to developing countries. In addition, Roche is also targeting
increased distribution of the drug through provision of sub-licenses to Hetero
in India and Shanghai Pharma and HEC in China.
Roche
is working with the insurance and the re-insurance companies in China and
Russia to increase coverage and ease of access to medicines. Roche plans to
join with community clinics in China and enhance local research and treatment
services. Roche is also planning to launch its anti-cancer drug Herceptin in
China by 2012 upon regulatory approval. Roche’s expansion into China is an
attempt to overcome the loss in sales incurred in US and Europe due to a
reduction in reimbursements for expensive branded drugs and the promotion of
generic drugs.
SWOT
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Table 55: SWOT analysis – Roche
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Strengths
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Weaknesses
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Strong oncology portfolio with brands including MabThera, Avastin
and Herceptin, capturing 30.4% of the global oncology market.
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Loss of patent litigation in India concerning the generic versions
of Tarceva and Valcyte.
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Non-exposure to patent threats in the near future.
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Opportunities
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Threats
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Roche’s 2010 pipeline portfolio includes 59 NMEs (new molecular
entities).
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Discontinuation of ocrelizumab trial for use in rheumatoid
arthritis due to high risk benefit ratio.
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Shift in focus to personalized healthcare integrating its
pharmaceutical and diagnostic division.
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Avastin receives negative response from the FDA for use in breast
cancer treatment.
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Roche's partnership with local companies in India and China to
commercialize its drug Tamiflu.
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