Roche CEO plans to steer clear of big acquisitions

[July 19, 2014]  ZURICH (Reuters) - Roche plans to steer clear of the wave of big takeovers sweeping through the healthcare industry and focus instead on small acquisitions and partnerships, the Swiss drugmaker's chief executive said in an interview published on Saturday.

"We're sticking to our previous strategy. This includes targeted, small acquisitions and partnerships like the ones we have carried out in recent months," Severin Schwan told business newspaper Finanz und Wirtschaft.

Several multi-billion dollar deals and bids over the past few months have made 2014 a busy year for healthcare acquisitions as companies look to build scale in leading businesses or slash their tax bill, a tactic known as inversion.

On Friday, U.S. drugmaker AbbVie Inc finally clinched Dublin-based Shire Plc in a $55 billion deal that will give it access to expensive medicines to treat rare diseases.

But since acquiring the remainder of U.S. biotech company Genentech for $46.8 billion in 2009, Roche has earned a reputation as a disciplined acquirer, prepared to walk away from potential deals rather than overpay.

It has snapped up a couple of smaller diagnostic companies so far this year and earlier this month agreed to buy privately-held U.S. biotech company Seragon Pharmaceuticals for $1.7 billion.

Roche's criteria include whether a product or a technology has the potential to improve the standard of care and whether it fits into the company's two business areas of pharmaceuticals and diagnostics, Schwan told the paper.

High valuations of companies in the healthcare industry have dampened Roche's appetite for big deals, he added.

"We take a look at everything. But at present the calculations only add up in the fewest cases," Schwan said.

"We have to weigh up internal and external opportunities. It can't be that we have to put important internal opportunities on ice because of too-expensive acquisitions."

(Reporting by Caroline Copley; Editing by Catherine Evans)

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