Roche ($RHHBY) and Novartis ($NVS) may not head to the altar anytime soon--if ever. But the Swiss drugmakers could spend some quality time together. As Roche CEO Severin Schwan said over the weekend, why not collaborate? After all, Roche cooperates with plenty of other rivals.
|Roche CEO Severin Schwan|
"If the right opportunity comes up, we would be extremely open to talk with Novartis as we would be with all the other players," Schwan told the Financial Times.
Eyebrows went up last week when Novartis board member Pierre Landolt suggested that the companies' two new chairmen--the incoming Christoph Franz at Roche and the recently installed Joerg Reinhardt at Novartis--get together for some merger talk. The idea seemed curious, even odd, at least at this point in time.
Though Novartis owns 33% of Roche, and some years ago a merger seemed something of a possibility, these days people talk more about Novartis selling that stake, rather than increasing it. Indeed, when Reinhardt took over, investors and analysts immediately asked whether he'd unload the Roche share. (Reinhardt said he's considering any and all unloadings, but no rush to sell anything.)
But cooperation is in the air in pharma. From consortia charged with shrinking development costs to R&D collaborations to marketing partnerships, companies are working together more than ever against their common enemies--generic competition, R&D productivity declines, skeptical payers. So, Schwan figures that teaming up with Roche's Swiss neighbor might make sense.
"It's opportunity driven," Schwan told the FT of partnerships with competitors. "If it makes sense for both companies, why not sit together and talk? It's a very professional relationship we have with Novartis."
As the FT points out, Roche and Novartis have cooperated on some products. Novartis develops and markets Roche's eye drug Lucentis in Europe, and the two are partnered up on the asthma drug Xolair, which they're currently working to develop as a treatment for serious hives. These days, both companies sit at the top of the heap when it comes to R&D spending--with Roche at more than $10 billion, and Novartis more than $9 billion. And neither company is immune from R&D failure.
Obviously, at least some of Novartis' leadership would like to be more friendly with Roche. Will we soon see Franz and Reinhardt playing golf? Or Schwan and Novartis CEO Joe Jimenez chatting over lunch?
- read the FT interview
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