Roche announces Operational Excellence initiative

Roche announces Operational Excellence initiative
Adapting cost structure; sustaining innovation leadership in a changing environment

Roche (SIX: RO, ROG; OTCQX: RHHBY) today announced the launch of a Group-wide Operational Excellence initiative. In view of mounting pressures to curb healthcare costs - especially in the United States and Europe - together with recent developments in late-stage projects in the Roche pipeline, this initiative aims to adapt cost structures and accelerate productivity improvements Group-wide.

Severin Schwan, CEO of Roche, commented: "We have launched this initiative from a position of strength. By contrast with many of our competitors, we are only marginally affected by patent expiries. Furthermore, despite the recent setbacks, we have one of the strongest R&D product pipelines in the industry. We will focus our resources towards investments that will drive innovation and ensure the company's long-term success, while at the same time protecting our profitability so as to safeguard our financial flexibility. Roche also confirms its full-year outlook for 2010."

With tightening healthcare budgets, Roche expects that payers will increasingly allocate resources to treatments and diagnostic tools providing the highest medical value for patients. Therefore, Operational Excellence is not simply a cost-reduction effort but is above all about pro-actively setting the right priorities to ensure a successful future.

Over the months ahead, all parts of the organisation will review and analyse their respective structures and processes. Detailed decisions on the measures that will be taken and the potential impact on staffing levels will be announced before the end of the year. The Operational Excellence initiative is scheduled for implementation during 2011 and 2012.

About Roche
Headquartered in Basel, Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world's largest biotech company with truly differentiated medicines in oncology, virology, inflammation, metabolism and CNS. Roche is also the world leader in in-vitro diagnostics, tissue-based cancer diagnostics, and a pioneer in diabetes management. Roche's personalised healthcare strategy aims at providing medicines and diagnostic tools that enable tangible improvements in the health, quality of life and survival of patients. In 2009, Roche had over 80,000 employees worldwide and invested almost 10 billion Swiss francs in R&D. The Group posted sales of 49.1 billion Swiss francs. Genentech, United States, is a wholly owned member of the Roche Group. Roche has a majority stake in Chugai Pharmaceutical, Japan. For more information: www.roche.com.

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