Roche Holding AG (RHHBY, ROG.VX) Chief Executive Severin Schwan said the integration of its $46.8 billion takeover of Genentech Inc. is "by and large completed," expressed his confidence in the Swiss drug giant's pipeline, and said he remains open to yet more deal-making.

His comments came in an interview the day before Roche is set to hold a major investor meeting amid the bustle of Wall Street, a location that highlights the importance of its year-old takeover of the South San Francisco biotech bellwether, which has held similar gatherings in recent years.

At the meeting, Roche will detail the promise of its pipeline--which has faced some recent disappointments--for the first time since buying Genentech. But after completing the biggest deal in the company's history, Schwan said that he is open to "small and mid-size deals."

"We want to continue to tap into the innovation from outside of the company," he said, noting that Roche signed 65 partnership transactions last year.

He declined to comment on any potential interest in buying OSI Pharmaceuticals Inc. (OSIP), which is a partner with Roche in selling its only product, cancer treatment Tarceva, which had worldwide sales of $1.2 billion in 2009.

OSI has resisted a hostile $3.5 billion takeover attempt from Japan's Astellas Pharma Inc.'s (ALPMY, 4503.TO) as too low, and has begun to talk with other companies, seeking a higher bid.

Schwan said the integration of Genentech has been smooth because of the complimentary aspects of the two companies.

The two companies had an 18-year affiliation and Roche had very little overlapping operations. Schwan said that personnel turnover at Genentech was better than before the deal, although he conceded that there are retention plans in place.

He said the company hasn't lost any of its top scientists and that Genentech workers have adjusted well to Roche's "decentralized" management style.

In terms of its pipeline, Schwan highlighted Roche's late-stage cholesterol treatment, called dalcetrapib, which the company plans to file for regulatory approval in 2013.

"It will change how we treat lipid diseases," he said. "If it is positive, it will show an improvement in terms of morbidity and mortality."

The drug aims to raise so-called good cholesterol more effectively than existing drugs and may reduce the risk of heart attacks and related disease.

If it is successful, Schwan said he believes that the drug will be the first weapon used by physicians, putting it in the same league as the biggest heart drugs on the market, including Pfizer Inc.'s (PFE) Lipitor. That drug, which had 2009 sales of $11.4 billion, will likely be available in generic form by the time dalcetrapib is launched.

But he warned that dalcetrapib is a "high-risk project" and its true usefulness will only be known after the data are reviewed.

The drug is in the same class of drugs, known as inhibitors of the cholesteryl ester transfer protein, or CETP, as Pfizer's torcetrapib, a promising drug that was killed in 2006 after there were safety concerns.

Schwan said that dalcetrapib doesn't have those same safety issues, something that the company will explain in detail on Thursday.

He also touted Trastuzumab-DM1, or T-DM1, a follow-up to the company's hugely successful cancer treatment Herceptin and said it could be filed for accelerated approval in the U.S. by year-end. Herceptin had 2009 sales of almost $5 billion.

Schwan said the drug is more effective than Herceptin and is important in managing the life cycle of that drug, which will lose its patent protection in some parts of the world in the middle of this decade.

Trastuzumab-DM1 is a new type of drug called an antibody conjugate that has Genentech's blockbuster cancer drug Herceptin attached to a cell-killing drug made by Immunogen Inc. (IMGN). The idea is to seek the cancer with the antibody, then kill it.

In recent weeks, Roche reported that best-selling cancer drug Avastin, a key component of the Genentech deal and a future source of growth, missed goals for two cancer indications, causing some analysts to lower their long-term revenue expectations.

Also, its experimental drug ocrelizumab, in development with Biogen Idec Inc. (BIIB) as a follow-up to blockbuster Rituxan, also has proved disappointing after programs for lupus and rheumatoid arthritis were recently suspended due to safety concerns.

-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; thomas.gryta@dowjones.com

(Goran Mijuk and Peter Loftus contributed to this article.)
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