Roche to focus on R&D, no job cuts in 2023, says new CEO

Thomas Schinecker, the new CEO of Roche, speaks during the company's annual general meeting in Basel, Switzerland, on March 14, 2023. © Keystone / Georgios Kefalas

The Swiss pharma giant plans to invest more in research and development this year, Roche’s new CEO Thomas Schinecker has said. He also rules out any job cuts in 2023.

“We are increasing our spending in the low single-digit percentage range to just under CHF15 billion ($16 billion),” he told the Tamedia media group in an interviewExternal link published on Wednesday.

There will also “certainly not” be any job cuts in 2023, Schinecker added.

“We will continue to strengthen ourselves in the digital area. And in research, we are always looking for the best talent worldwide,” he said.

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Despite lower-than-expected income from Covid-related sales and patent protection expiring on three cancer therapies, there will be no cost-cutting programmes, he said. In February Roche warned profits will decline in 2023 as falling demand for its Covid-19 therapy and diagnostics kits will knock sales by over $5 billion.

“Profit will decline at the same rate as turnover, which means we can maintain our profit margin,” said Schinecker, who was previously Roche’s head of diagnostics.

He defended the 42.1% profit margin of Roche’s pharma division, arguing that the company bears high risks.

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“Only one in ten medicines reaches the patient; the others fail in research. The development costs for a new drug amount to an industry average of CHF2.6 billion. Two-thirds of the costs are incurred before the clinical phase,” he declared.

Schinecker, who takes over at Roche on Wednesday, says the company wants to focus on laboratory informatics.

“We are working on algorithms that combine different data from patients and give the doctor in the hospital or surgery help with diagnosis and therapy via artificial intelligence and machine learning,” he said.

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Last year, Roche group revenue edged 1% higher to CHF63.3 billion, the company reported, slightly beating market expectations of CHF63.2 billion, while core operating profit gained 1% to CHF22.2 billion, just below the average analyst estimate of CHF22.4 billion.