What that really seems to mean it is faster and easier than ever before for groups such as Roche and Merck to test and design treatments using genetics and epigenetics. This is leading to more personalised care rather than blockbuster drugs applicable to the masses.
The model works if the insights derived and results delivered can be more profitable, which likely means targeting rich people’s problems and delivering their longevity escape velocity where their life expectancy increases by more than a year for each year they live.
Severin Schwan, Roche’s seventh CEO in 125 years, in an interview with the Economist talked about the “insights” business as a third pillar for Roche—as big, if not bigger, than diagnostics and pharma.
Beyond the social inequality and impact on social services, it also opens up healthcare to consumer-facing technology companies.
As the Economist noted, Roche’s insights business was effectively formed through its acquisitions of Foundation Medicine, a gene-sequencing company that can identify cancers from DNA in blood samples, and Flatiron Health, a specialist in cancer-related health records that generates data on patients from the real world, supplementing clinical trials. Roche valued Flatiron at $2.15bn in its 2018 purchase and closed out the purchase of the remaining minority shares in Foundation the same year at a $5.3bn valuation.
Both Foundation and Flatiron were backed by GV, formerly known as Google Ventures and a corporate venturing unit for US-listed Alphabet.
GV has made much of its name and returns over the past decade from a string of life sciences and healthcare deals and exits but Carole Nuechterlein, head of Roche Venture Fund at the drugs group’s headquarters in Switzerland, takes much of the credit for the handling of these deals.
Roche had been shareholder in both Flatiron and Foundation before taking control but leaving much autonomy with both groups.
This is the model Roche followed with its $47bn purchase of Genentech back in 2009. As probably the founding biotech – a then-young VC firm in Kleiner Perkins had its partner Bob Swanson close a seed deal over a beer with lead scientist Herb Boyer – Genentech listed in 1980 before eventually falling to Roche and bringing its blockbuster drugs to the Swiss group for greater distribution and up to $21bn in annual sales a decade later.
Now celebrating 20 years running Roche Ventures, Nuechterlein – a prior GCV Powerlist award winner – has seen it all before.
But never at such scale. It is actually a golden age for healthcare not just diagnostics as the century for biology is now firmly underway.
The next GCV Powerlist will be announced on 21 July thanks to partner Dentons as part of the GCV Digital Forum and my thanks to the Global Healthcare Council for its work on the latest quarterly report out next week.
