Roche head of diagnostics to take helm of Swiss pharma giant

Roche’s head of diagnostics, Thomas Schinecker, is to take over as group chief executive next year, replacing Severin Schwan, who will become chairman after rejuvenating the Swiss drug maker’s suite of treatments.

Chairman Christoph Franz will not seek re-election after nine years as non-executive board chairman at the next annual shareholder meeting in March 2023, the Swiss group said in a statement on Thursday.

Mr Schwan, one of Europe’s best-paid corporate executives, said the changeover had long been in the making under the controlling families’ supervision and it was a result of “long-term planning and the continuity, which certainly also reflects our capital structure”.

The long-term share gains allowed him to secure a milestone deal last year with rival Novartis, which sold its nearly one-third voting stake in Roche back to its crosstown rival for $20.7 billion, entrenching the dominant role of the Roche family shareholders.

Mr Schwan, one of Europe’s best-paid corporate executives, said the changeover had been long in the making under the controlling families’ supervision and it was a result of “long-term planning and the continuity, which certainly also reflects our capital structure”.

In a separate release, Roche said first-half adjusted operating income rose a better-than-expected 9 per cent on higher sales of diagnostic tests and pharmaceuticals.

Core operating income, which is adjusted for one-off effects, gained 9 per cent to 12.67 billion Swiss francs (€12.77 billion), above market consensus of SFr12.1 billion.

In a sign of oncology gradually taking a lesser role, haemophilia treatment Hemlibra and multiple sclerosis drug Ocrevus continued to drive growth.

Under Mr Schinecker’s leadership, the diagnostics business met a surge in demand for Covid-19 test kits during the pandemic, which has been easing during the second quarter. His promotion is a reflection of a “fantastic, outstanding track record” during this phase, Mr Schwan told journalists in a call, adding that it did not mean a strategic re-rating of the Swiss group’s two business pillars, drugs and diagnostics, was on the cards.

Roche reaffirmed that sales of Covid-19 medicines and diagnostics would decrease by about SFr2 billion Swiss this year to about SFr5 billion, even as new coronavirus subvariants fuel a resurgence in infections.

A World Health Organisation official warned this week that Europeans must accelerate vaccine uptake and bring back mask wearing. The guidance reflected a cautious stance amid great uncertainty, Mr Schwan said, but he encouraged “the financial community to model different scenarios”.

Mr Schinecker will probably fight an uphill battle to further boost drug development because a key cancer drug candidate, tiragolumab, failed in May to meaningfully slow disease progression in patients with the most common form of lung cancer.

Late-stage trial results on drug development venture gantenerumab against Alzheimer’s disease will be keenly followed by investors, but Roche’s leadership has sought to curb expectations for the readout, due later this year.