Roche Hires U.S. Academic to Revitalise Research Unit

Swiss drugmaker Roche has hired a leading American academic in a bid to revive part of its research operations which have struggled to shake off a string of high-profile and costly failures.

The Basel-based drugmaker said on Tuesday John C. Reed, 54, chief executive at Sanford-Burnham Medical Research Institute in California, would take over as head of Roche's Pharma Research and Early Development - known as pRED - on April 2.

Mike Burgess, who has led the unit on a temporary basis since Roche revamped its research operations last June, will leave the company.

"Appointing a new head of pRED from the outside is viewed as an excellent move in order to reposition this organisational unit within Roche," said Kepler Capital Markets analyst Martin Voegtli.

"Historical R&D productivity of pRED has been poor and we expect dynamics to pick up."

Roche's pRED unit has languished in the shadow of Genentech's Research and Early Development (gRED) operations - the main driver of the company's pipeline whose labs cooked up Roche's four top-selling medicines in 2011.

The drugmaker decided to keep the two research operations separate after its 2009 takeover of the Californian biotech company to preserve Genentech's culture.

In the meantime, pRED has been hit by several problems. Last year Roche halted clinical trials of experimental heart drug dalcetrapib, one of pRED's most promising drug candidates.

The failure contributed to Roche's decision to close its 80-year-old Nutley, New Jersey research facility and replace Jean-Jacques Garaud, then head of pRED.

Industry investors have clamoured for a better return on research investments as drug makers lose billions of dollars in sales to cheaper generic versions of their top products in recent years.

Roche pledged at its investor day last September to keep a lid on research spending, which totalled 8.3 billion Swiss francs ($8.7 billion) in 2011, around one fifth of total sales.