Roche has axed one-fifth of its pipeline since the third quarter of 2023 as part of a broader portfolio review aimed at boosting the company’s focus on high-impact projects.
“We’ve taken out 20% of our molecules that have a lower likelihood to succeed, and we’ve added new ones through partnering,” CEO Thomas Schinecker said on a first-quarter earnings call with the media. It’s part of normal business to prioritize and “constantly reallocate,” he added.
Schinecker drew an analogy between the company and swans on a lake, where “you see a lot of movements under the water, but you don’t necessarily see it above the water.” He said, “I think that’s what we’re trying to achieve … making sure that the money that we have, we put it to the best use for patients and also for our organization.”
Roche is aiming for a pipeline that is composed of 80% best-in-disease or first-in-class assets, Schinecker said. The company slashed six programs in the first quarter of the year, according to an earnings presentation.
Most of these were in Phase 1 development, including camonsertib and belvarafenib for solid tumors, RG6286 for colorectal cancer, RG6163 for psychiatric disorders and RG6319 for urinary tract infections. The Swiss drugmaker had licensed camonsertib from Repare Therapeutics, but ended their agreement in February.
In urinary tract infections, Roche noted it’s moving forward with an “alternative LepB inhibitor” called RG6436.
Then there’s Enspryng for myasthenia gravis, which Roche said it would stop advancing after a Phase 3 trial of the drug did not show the level of clinical benefit it had hoped for.
The latest round of cuts follows terminations of other clinical programs. During the previous quarter, the company said it dropped its Phase 2 post-traumatic stress disorder drug balovaptan and its Phase 2 Dup15q syndrome asset basmisanil in the last quarter of 2023.
More changes are expected going into the second quarter, Schinecker said, and by the third quarter Roche should have “completely rebuilt” the pipeline.
In April, the company’s Genentech unit said it would lay off 3% of its workforce, or around 400 staffers, across several departments. It also terminated a $3 billion biobucks pact with Adaptimmune.
Despite the cuts, “we expect our headcount to remain approximately stable throughout the year,” Schinecker said. “This means what’s happening is actually a shifting of resources to new skill sets.”
One key potential growth driver Roche talked up was Xolair, which won FDA approval in February for adults and children with at least one food allergy. There are almost three and a half million children in the US with food allergies, more than 40% of whom have a serious reaction at least once in their lifetime, Schinecker said.
“The reaction to the [Xolair] approval has been quite overwhelming from the patient and physician community,” Roche Pharmaceuticals CEO Teresa Graham said. “What we see now are a lot of people who may not typically be going to their physicians on a regular basis, because no treatments were available, starting to make their appointments and go in for their assessments,” she said, adding that treatment adoption should pick up over the coming months.