BASEL (Reuters) - Outgoing Lufthansa (LHAG.DE) boss Christoph Franz vowed to keep Roche ROG.VX on its current course after shareholders overwhelmingly elected him as chairman of the Swiss drugmaker.
The 53-year-old is taking over as non-executive chairman of the world’s largest drugmaker by market capitalization from Franz Humer who is stepping down after 16 years as CEO and chairman.
“One thing has become clear today. This company is on track and therefore continuity (...) is the order of the day,” Franz said on Tuesday, after 99.8 percent of shareholders approved his election.
“We are the innovation drivers in our industry but we cannot rest on our laurels. We have to look into the future and shape our successes for the next few years,” he added.
Franz, who implemented a tough cost-cutting programme at the German airline that was met with ire from trade unions, is inheriting a company at the top of its game. Roche boasts an enviable list of high-margin new cancer drugs, a well-stocked pipeline and bumper profit margins.
Still, in the mid-term, the company’s margins and profits could come under pressure, as more drugmakers crowd into the hot area of cancer research and encroach on Roche’s dominance.
This puts pressure on Roche to move into a new therapeutic area, having had a string of failures with medicines to treat cardiovascular disease, diabetes and schizophrenia.
On Monday, it halted a late-stage study into its experimental lung cancer drug MetMab, because it failed to help people with the disease.
Franz, who has spent the majority of his career in the rail and airline industries, plans to embark on a tour of Roche’s most important markets with Humer this year to speak with the company’s main stakeholders.
He said his biggest challenge would be to keep the company “flying high” with a well-stocked pipeline.
Investors are also speculating how Roche might use its cash now that its net debt to assets ratio is back within its target band of zero to 15 percent after paying down debt from its 2009 acquisition of the remainder of Californian biotech Genentech.
Franz stressed that Roche, which walked away from an attempt to buy U.S. gene sequencing company Illumina (ILMN.O) for $6.7 billion in 2012, would remain a disciplined acquirer.
“We have more freedom to act but we are also under no obligation to use this freedom,” he told journalists after the shareholder meeting.
His appointment completes a changing of the guard at Switzerland’s two biggest drugmakers after former Bayer (BAYGn.DE) pharma chief Joerg Reinhardt took over as chairman of Novartis NOVN.VX last August.
The arrival of the two Germans has stirred hope of a thawing in relations that could see Novartis sell back its one-third voting stake in its cross-town rival. But Franz said it was up to Novartis to decide what to do with the holding.
Editing by Mark Potter and Louise Heavens