Roche produces 'hidden billionaires' as cancer drugs dominate

Roche ($RHHBY) shares quickly ticked up today after the FDA approved its highly anticipated breast cancer treatment Kadcyla. That will only add to the wealth of a dozen shareholders tied to the families that control the Swiss company and who quietly have been made billionaires by its success.

According to Bloomberg, the 12 are part of the Hoffmann-Oeri family of Switzerland and the Engelhorn family of Germany. It puts their combined fortunes at more than $35 billion. It says 8 of the 12 are great-grandchildren of Fritz Hoffmann-La Roche, who founded the company in 1896 with his cough syrup formula. They control at least 50% of the company's voting rights and 9.3% of its value, the news service says. By having their financial interests held in a voting pool created 65 years ago, 8 of the 12 were what Bloomberg called "hidden billionaires."

Kepler Capital Markets analyst Martin Voegtli tells Bloomberg that they don't meddle but maintain deep interest in Roche. "On the operational side of things their involvement is limited, although they are fully committed to the business," he said.

While many companies saw revenues fall last year, Roche sales grew to $48.5 billion. Core earnings were up 10%. Pharma revenues grew by 5% at constant exchange rates. Bloomberg points out that shares of the company have risen 14% year-to-date.

Roche and its biotech subsidiary Genentech have the best-selling cancer treatments in the world. Drugs like the multifaceted Rituxan and Avastin and breast cancer treatment Herceptin dominate. And today, Roche added to that portfolio with the FDA approval of Kadcyla for patients with HER2-positive, late-stage (metastatic) breast cancer. The drug, FierceBiotech reports, is projected to generate $2 billion and $5 billion. That will add to the wealth of the billionaires it has already produced. 

- read the Bloomberg story

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