By Denise Roland 

Roche Holding AG on Monday appointed Bill Anderson, head of its Genentech unit, to lead the company's broader pharmaceuticals business, elevating an insider at a critical time for the division.

The move follows the departure of company veteran Daniel O'Day, who is leaving the Swiss health care giant to be chief executive of Gilead Sciences Inc. Mr. Anderson, 52, joined Genentech in 2006 and held various sales and marketing roles before becoming head of the subsidiary last year.

The management change comes as Roche Pharmaceuticals, the company's largest division, confronts several challenges. Roche is, for the first time, facing competition for its three top-selling drugs--Herceptin, Rituxan and Avastin--as cheaper copies start to go on sale in Europe and are set to launch in the coming years in the U.S.

The company will also lose a lucrative revenue stream next year after a patent protecting a key process in the manufacture of antibody-type drugs expires this month. The Cabilly patent, as it is known, allowed Roche to collect hundreds of millions of dollars in royalties a year relating to some of the world's biggest-selling drugs, including AbbVie Inc.'s Humira. The patent generated 834 million Swiss francs ($844 million) for Roche in 2017.

It will fall to Mr. Anderson to grow Roche's newer drugs, like Ocrevus for multiple sclerosis and Perjeta for breast cancer. These and several more of Roche's fastest-growing drugs were developed by the Genentech subsidiary.

In an unusual arrangement, Genentech's research and development organization competes internally with Roche's to get drugs to late-stage development. That structure was put in place when Roche took full ownership of Genentech in 2009 to preserve the much younger Californian biotech company's distinctive culture.

"Bill brings both in-depth knowledge of our industry and extensive global leadership experience," said Roche Chief Executive Severin Schwan.

Mr. Anderson, an American, will become chief executive of Roche Pharmaceuticals on Jan. 1. The division, which includes the Genentech subsidiary, generates around three-quarters of Roche's total revenue, with the rest coming from its diagnostics business.

Write to Denise Roland at Denise.Roland@wsj.com

 

(END) Dow Jones Newswires

December 10, 2018 06:39 ET (11:39 GMT)

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