Roche's Partners: Replacing, or Fuelling In-House R&D?

Partnering is a must for every drug firm these days. But Roche's reputation as a committed, yet hands-off development partner--forged in its relationship with Genentech--still sets it apart. Critics accuse the Swiss group of using partners to fill the gap in its own R&D; indeed, much of Roche's recent growth has come from others' drugs. Roche executives argue that you can't spot winners outside without a strong internal engine; that engine remains unproven. But point isn't whether Roche's own R&D is strong or weak. The point is, does it matter?

Partnering is key to most, if not all, pharmaceutical companies these days because few of them have the internally generated pipeline they need. Thus it's "a sellers market," commented José Maria Romero, director of worldwide business development at GlaxoSmithKline PLC during last month's BioPartnering Europe conference in London. And since those with products want—and can afford to ask for—more than cash "you need flexibility in your deal structure to support partners' ambitions. Those who are more flexible build the best deals."

Most observers agree that Roche has a special talent when it comes to flexibility and therefore partnering. Roche's hallmark...

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