Roche to invest in plant upgrades

SWISS drug maker Roche is to invest Sf800m ($880m) in manufacturing facilities over the next five years, creating 500 jobs, as it prepares for demand for its biologic medicines.

SWISS drug maker Roche is to invest Sf800m ($880m) in its manufacturing facilities over the next five years, creating 500 jobs, as it prepares for growing demand for its biologic medicines.

The world’s largest maker of cancer drugs, which employs about 80,000 people in more than 100 countries, said yesterday that the investment would increase its production capacity in Penzberg, Germany; Basel, Switzerland; and two facilities in the US.

The expansion shows Roche’s confidence in its development pipeline of cancer drugs and bucks a trend of cost-cutting by big drug makers in recent weeks as sales growth slows.

Last week Israel-based Teva, the world’s largest maker of generic drugs by sales, said it would cut 5,000 jobs, while Merck & Company plans to slash annual operating costs by $2.5bn and eliminate more than 10% of staff.

Shares in the drug maker were down 0.2% at Sf238 early yesterday, when the Stoxx Europe 600 healthcare sector index was down 0.1%.

Vontobel analyst Andrew Weiss said he was not surprised by the investment as manufacturing was a core competency of Roche, which is at present the leanest drug company with only 15 manufacturing sites worldwide.

Many of Roche’s most promising medicines, such as rheumatoid arthritis treatment RoActemra and new breast cancer drugs Kadcyla and Perjeta, are biologics — which, unlike chemical drugs, are proteins or cells derived from living organisms that are difficult to replicate.

The Basel-based firm has also mostly been spared the pain so far of the patent expiries ravaging rivals as many of its top-sellers are biologics, which have not faced generic competition.

“As the world’s largest supplier of biologics, Roche is committed to making the necessary investments to ensure ongoing supply of these medicines at the highest quality standards,” said Roche pharmaceuticals division chief operating officer Daniel O’Day.

Roche is to invest Sf260m at its Vacaville and Oceanside sites in the US, creating about 250 jobs. In Penzberg, it will invest about Sf350m, creating 200 jobs.

It will also build a production facility in Basel to manufacture antibody-drug conjugates, or “armed antibodies” which take drugs directly to cancer cells.

Roche won US approval in February for Kadcyla, its first such antibody-drug conjugate, which treats breast cancer with fewer side-effects such as hair loss.

It has another eight antibodydrug conjugates in clinical development and 16 in pre-clinical development.