The Secret To Keeping Genentech Alive Is In The Ties

The suits at Roche were clearly doing their best to channel Genentech's biotech vibe during a recent R&D update for investors, the first since the big pharma acquired Genentech outright last year. From the venue (the splashy New York City restaurant Cipriani instead of a hum drum midtown hotel) to the menu (calmari! braised fennel! meringue cake!), Roche took every opportunity to remind investors of the excitement surrounding the annual R&D meetings Genentech used to host back when it was still independent.

Genentech's R&D previews were highly regarded, hotly anticipated meetings, the equivalent to the drug industry of what a Marc Jacobs runway show is to Fashion Week.

And speaking of fashion, perhaps most notably missing from the day (Art Levinson aside) was ties. Not one of the nine presenting senior managers wore one, though only long-time Genentech researcher Richard Scheller was brazen enough to forgo the jacket too. (And yes, the entire cast was male).

We suspect the story behind the missing ties is actually quite straightforward (not to mention sitting in a memo in Severn Schwan's inbox). But we suspect the story goes something along the lines of that ties bring to mind highly-paid, smooth talkers and savvy marketers, not endearing researchers toiling day and night at the lab bench. Another even more obvious theory is that parading Genentech executives on stage in ties would have been more uncomfortably conspicuous than having Roche executives take them off.

In that regard, Scheller was probably being somewhat honest when he offered up his own answer to the pressing question: "I don't own one, so people didn't want me to look out of place."

Whether Roche's presentation March 18 will turn out to be style over substance remains to be seen. The company certainly has a pipeline of interesting opportunities, from a first-in-class BRaf inhibitor for metastatic melanoma to a high-risk/high-reward cholesterol drug. You can read all about Roche's mid- to late-stage pipeline in "The Pink Sheet." But Roche didn't unveil any surprises March 18 either, and of the 16 new molecular entities Roche is planning to file in the next five years, most are planned for the later end of the timeframe. This year is shaping up to be a quiet one for Roche in terms of new drug launches.

There's a lot riding on future pipeline successes; Roche invested close to CHF 10 billion in R&D in 2009, and is expecting to invest only slightly lower levels this year. Just as importantly, Roche folded in one of the industry's most lauded R&D engines when it acquired Genentech in a hostile fashion, and the company needs to prove it can keep Genentech running even within the confines of well-oiled big pharma machine.

If Roche can deliver on its promises, then maybe we won't have time or interest in debating fashion when we hear about the pipeline next year. Or they could always add a woman to the senior management lineup – that alone would up the fashion ante, and be nice for plenty of other reasons.

– Jessica Merrill