Posted by: Audrey Erbes | September 7, 2010

Roche Cost Cutting:What are Analysts Saying?

Roche is talking like the past post-merger Roche many have grown to know in earlier years. ASeptember 3rd Reuter report collects what  analysts are saying. (Right click on Reuter and open hyperlink in new window.)
While Novartis indicates they see no need to cut costs at their firm, while Roche looks to make almost a 2 billion dollar reduction in costs– mainly from staff cuts in the U.S. and Europe– based on comments by analysts. “Cost savings could easily reach 2 billion Swiss francs ($1.9 billion) as of 2012 to 2013, which would boost our earnings per share forecast by some 10 percent,” said Helvea analysts Odile Rundquist and Karl-Heinz Koch.”

“Roche could incur a one-off provision of 300 million Swiss francs to achieve cost cuts, said Kepler Capital Markets analyst Martin Voegtli….They will mainly be looking at the primary sales force and R&D for cuts, which will be mostly in the United States and Europe,” said Sarasin analysts David Kaegi.

There was overcapacity in the sales team — numbering around 1,500 in the United States and Europe — after a recent delay to its diabetes drug candidate taspoglutide and the fact Roche had one of the highest research and development spending rates in the industry offered scope for savings, Kaegi said.”

Yours truly will be watching which primary sales force in the U.S. might be targeted–the traditional Roche primary care, small molecule product team or Genentech’s specialist, biologics-rich sales force.

Audrey

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