The Economist June 5th 2021 pp59 |Business|Schumpeter|”The firm that saw the future” “Long ago Roche bet on personalized health care. Now its time has come”
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Summary provided by 2244
The Swiss company Roche is establishing the proverbial three-legged stool of business by adding bioinformatics to it's existing diagnostics and pharmaceutical business.
The combination of pharmacy and the less profitable diagnostics business recently proved again the power of having both of these core compentencies. Sales for Covid PCR and antigen testing helped the company perform well as drug sales flagged during the pandemic and “advances in gene sequencing…helped identify…covid 19 and well as ways to fight it.”
Roche is now "doubling down...[by]...expanding into digitization and advanced data analysis to create individually tailored cancer treatments.” Roche driven this mission in part by acquiring Foundation Medicine and Flatiron Health in 2018.
Foundation Medicine has been a standout in the field of molecular diagnostics by using gene sequencing to identify “cancers from DNA in blood samples, instead of from tumor biopsies.” Flatiron being a “specialist in cancer-related health records that generates data on patients in the real world, supplementing clinical trials” brings the power of bioinformatics to Roche. In time, bioinformatics may be profitable for Roche as it makes these services available beyond internal customers.
Personalized cancer therapy, which is already standard of care for some cancers, leverages a patient's tumor DNA test data and established bioinformatics to guide selection of cancer drugs best suited to fight off their cancer cells.
Another advantage of having these three core compentencies is that Roche can build a companion diagnostic for each drug it develops that target cancer cells carrying specifc mutations in cancer-causing genes. The companion diagnostic testing is utilized during clinical trials and then becomes a key part of the drug approval process. Prescription of the drug then is based on whether the companion diagnostic proves the cancer is susceptible to the drug.
Roche’s CEO, Severin Schwan, notes that the covid pandemic accelerated the acceptance of anonymized bioinformatic data used in clinical trials and that regulators have learned to move faster with drug approvals that are life-saving. He comments logically “Why should we not do the same for life-saving cancer medicines?”
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