Roche Group

Roche Group is a Swiss healthcare company operating in more than 150 countries and employing more than 78,000 people worldwide. Roches operations are focused on two major healthcare areas: diagnostics and pharmaceuticals. In the field of diagnostics, Roche Group positions itself as a world leader in in vitro diagnostics, supplying a wide range of instruments and tests for disease detection and monitoring. In the area of pharmaceuticals, the company concentrates on illnesses for which their products are presumed to be needed the most: cancers, viral infections, metabolic diseases, disorders of the central nervous system, and inflammatory diseases.

The company was created in 1896 by Fritz Hoffmann-La Roche, a pioneering entrepreneur who believed in the future of branded, standardized, industrially manufactured pharmaceutical products. Shortly thereafter, the company opened its first affiliates in several countries of the world, including the United States, Germany, Italy, France, the United Kingdom, and Russia. Descendants of the founding family still own half of the company, while another Swiss pharmaceutical giant, Novartis, owns about a third. The most important and widely recognized Roche products are Xenical, Accutane, Valium, Bac-trim, Tamiflu, and Valcyte.

Over the past 100 years, the company grew organically and through both mergers and acquisitions and strategic alliances with other major players in the market. Among the most significant deals in the beginning of the new millennium were the alliance with the Japanese research and development (R&D) company Chugai and the acquisition of Amira Medical of the United States, both completed in 2001. The alliance with Chugai facilitated creation of a leading research-driven pharmaceutical company, and at the same time, helped Roche strengthen its strategic positioning in Japan, the worlds second-largest pharmaceutical market. The acquisition of Amira allowed the Roche Group (especially its diagnostics division) to complement its expertise in the all-important blood glucose monitoring sector. Other mergers, acquisitions, strategic partnerships, and alliances—for instance, with NimbleGen (performing genomic analysis and identification of potential drug targets), Transgene (developer of a vaccine against human papilloma virus-mediated diseases), Actelion (inventor of a new compound for multiple autoimmune disorders), and so forth—further enhanced and strengthened Roche s role as the worlds leading player in the pharmaceutical market. Among the most recent developments was a merger with Ventana Medical Systems, which should enable Roche to move into a very promising market of tissue-based diagnostics.

With sales of approximately 46 billion Swiss francs (CHF) (US$44.3 billion) and net income of roughly CHF11.5 billion (US$11 billion) in 2007, Roche remains one of the most profitable pharmaceutical companies in the world. Since 2001, Roche has been led by a strong and charismatic leader, Franz Humer. Under Humer s leadership, Roche has been able to diversify its business portfolio of products and services that drove the company's success. This is closely linked to another determinant of the company's great achievements—its profitability. Even though R&D expenses have increased year after year, overall costs increased [Page 1384]less than sales; this happened as a result of a variety of measures implemented under Humer. Continuous innovation, streamlined decision-making processes, and different productivity-enhancing methods all contributed to Roche s impressive accomplishments in the past eight years. In 2007 Humer announced that he would be stepping down as CEO to concentrate more on his responsibilities as chairman.

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