Roche and DeCode Turn To Diagnostics
Roche Diagnostics has signed a new five-year-alliance with deCode Genetics, in a move that suggests the preliminary success of an earlier agreement between the companies. While the earlier deal, signed in 1998, revolves around finding pharmaceutical targets, the new agreement aims to identify and validate diagnostics targets based on genes associated with common diseases.
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For the last two decades, diagnostics has been the poor stepsister of pharmaceuticals. But in the era of proteomics, diagnostics will come of age for those companies smart enough to exploit its two major market opportunities: diagnosing diseases which, caught early, can be successfully treated; and selling tests which can identify whether or not a specific drug will work for a particular patient. As their strategic options narrow--platform strategies are now virtually unfinanceable--those biotechs wearing pharmaceutical blinders are ignoring important paths to sustainability.
Roche Diagnostics is the best performing asset at Roche. As the troubled Swiss pharma company suffers through its worst pipeline drought in a decade, Roche Diagnostics is delivering a stellar performance. It is strong across all business segments, from laboratory systems to diabetes to molecular testing. Its challenge: to pull far enough ahead in its traditional businesses to maintain a comfortable lead. Its bigger hurdle, however, is to position itself as a leader in adoption of new genomic and proteomic diagnostic technologies, which is where the industry's future growth lies.
What many companies wish for these days is access to a gene pool from a population of patients afflicted with particular diseases--and not the ultra-rare familial diseases academic researchers have been tracking for years. Roche and deCode Genetics find a gene pool they like in Iceland.