Roche set for jobs cuts from 2011

Roche has confirmed it will take wide-ranging steps to reduce costs, following local reports the Swiss pharma firm was poised to cut jobs.

All parts of the global pharma company will be told to review and analyse their structures and processes, with detailed decisions on the measures to be taken – and their impact on staffing levels – due to be announced before the end of the year.

Roche will then implement these measures, which it has dubbed an ‘Operational Excellence initiative’, during 2011 and 2012.

Severin Schwan, chief executive of Roche, said: “We have launched this initiative from a position of strength. By contrast with many of our competitors, we are only marginally affected by patent expiries. Furthermore, despite the recent setbacks, we have one of the strongest R&D product pipelines in the industry.

“We will focus our resources towards investments that will drive innovation and ensure the company’s long-term success, while at the same time protecting our profitability so as to safeguard our financial flexibility.”

Roche says its aim is to “adapt cost structures and accelerate productivity improvements Group-wide”, and Schwan confirmed his company’s financial outlook for 2010 remained unchanged.

During the last five years all other big pharma firms have been cutting costs and jobs to help offset major patent expiries, and Roche has finally followed suit after managing to actually increase its staff when others were making marked reductions.

Overall the Swiss firm has a strong portfolio, with its blockbuster oncology drug Avastin set to be the top selling drug globally by 2015, but price erosion in the EU and the US has affected the industry as a whole, and Roche has not been immune. 

It has also suffered from a number of late stage failures including its new rheumatoid arthritis treatment ocrelizumab, which was pulled from phase III trials in May due to safety concerns.

Even Avastin is under pressure, with the FDA currently mulling over whether to pull the drug’s breast cancer indication in the US and UK drugs watchdog NICE still unwilling to recommend its colon cancer indication, meaning that it is still unavailable in all its forms on the NHS.

Ben Adams