October 2, 2007 / 6:57 AM / 10 years ago

UPDATE 2-Roche names diagnostics head, boosts diabetes care

(Adds details from news conference, background, pvs ZURICH)

By Tom Armitage

BASEL, Switzerland, Oct 2 (Reuters) - Swiss pharmaceuticals company Roche Holding AG ROG.VX named a new head to its diagnostics division on Tuesday and boosted the standing of its diabetes activities within the group.

Basel-based Roche said Juergen Schwiezer, 62, would become head of its diagnostics division, replacing Severin Schwan, whose appointment to group CEO was previously announced.

Roche, the world’s biggest maker of cancer drugs, currently has two divisions - pharmaceuticals, which accounts for 78 percent of sales and diagnostics, which accounts for 22 percent of group sales.

In a sign of the importance of its diabetes activities, Roche said the unit’s head, Burkhard Piper, would in future report to Schwan, alongside the heads of the firm’s two divisions.

“The focus on diabetes is very important for the group and that is why the diabetes business will report directly to the CEO,” Piper told reporters at a news conference.

Roche has enjoyed strong sales and profit growth in recent years from cancer medicines developed with its U.S. biotech partner Genentech DNA.N.

Roche has so far been unique in pursuing a twin-pillar strategy, combining drugs and diagnostics tools in the belief that medicine in the future will be tailored to individuals.

MARKET OUTPERFORMANCE

Piper dismissed the idea that his new reporting line meant that diabetes would become a third division for the firm or that it might be spun off as a separate division.

Diabetes would be an important business unit for the company in the future, Piper said.

The number of people with diabetes is expected to increase by 44 percent to 370 million people by 2030.

worldwide?

Roche says its Accu-Chek brand of diabetes testing devices is its fourth biggest product line, ahead of the flu drug Tamiflu and behind three blockbuster cancer drugs.

Piper said the diabetes care division had ambitions to grow faster than rivals.

“We want to outperform the market,” he said. “We have renewed our portfolio in the last two years.”

Roche Diabetes Care is number one globally in blood glucose monitoring and a distant number two to Medtronic (MDT.N) in insulin infusion systems, or pumps which deliver a constant stream of insulin to diabetics.

The firm sees the combined value of the two markets at around 14 billion Swiss francs ($11.99 billion) by 2012, representing growth of over 8 percent from current levels.

Diabetes care currently accounts for around a third of sales at the diagnostics unit, which reported sales in 2006 of 8.7 billion Swiss francs. The pharmaceuticals division reported sales of 33.3 billion francs.

The new diagnostics head, Schwiezer, currently responsible for diagnostics in EMEA and Latin America, will take on his new role from January 2008. Schwan will become group CEO in March 2008, replacing Franz Humer who continues as chairman.

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