In Good Company with Nicolai Tangen - HIGHLIGHTS: Thomas Schinecker - CEO of Roche

Episode Date: November 22, 2024

Roche CEO: Future of cancer treatment, AI in Medicine and Trial ChallengesWhat’s next for cancer treatment and personalized medicine? How is AI reshaping the future of drug discovery? And can Europe keep pace with China’s rapid rise in health care innovation? In this episode, Nicolai welcomes Thomas Schinecker, CEO of Roche, one of the world’s largest health care companies. They discuss Roche’s leadership in cancer treatment, breakthroughs in diagnostics, and the impact of cutting-edge R&D in areas like precision medicine and AI. Schinecker also shares his views on the rapid growth of China’s pharma industry and the challenges Europe faces in keeping up with global clinical trials.The production team for this episode includes Isabelle Karlsson and PLAN-B's Niklas Figenschau Johansen, Sebastian Langvik-Hansen and Pål Huuse. Background research was conducted by Sara Arnesen.Watch the episode on YouTube: Norges Bank Investment Management - YouTubeWant to learn more about the fund? The fund | Norges Bank Investment Management (nbim.no)Follow Nicolai Tangen on LinkedIn: Nicolai Tangen | LinkedInFollow NBIM on LinkedIn: Norges Bank Investment Management: Administrator for bedriftsside | LinkedInFollow NBIM on Instagram: Explore Norges Bank Investment Management on Instagram Hosted on Acast. See acast.com/privacy for more information.

Hi everyone, I'm Nicolai Tangjian, the CEO of the Norwegian Sovereign Wealth Fund. And today we have Thomas Schinecker, the CEO of Roche, which is one of the leading healthcare companies in the world. Roche was founded in 1896, so it's really old, lots of tradition, have really innovated in healthcare, saved millions and millions of people. And we are proud that we own 2.3% of the company worth more than $6 billion. So a big thanks Thomas for joining us today. Thank you very much for the invitation.

So Thomas, when you drive into Basel, right? You have Roche on one side of the river, Novartis on the other side of the river, two of the leading pharma companies in the world. So how come that this little Swiss town has grown to become one of the supercentres for bio-pharma? I think it's all in the history of that region, starting with the chemical industry and then later moving into the pharma part of the industry. So I think it's all basically in the history of the region and located in the center of Europe,

it's actually quite ideally located. In addition, it also has an ecosystem in terms of good universities, good educational system in general. And I think this really attracts a lot of people around the world, really talented people that can drive the innovation. You are the leader in cancer and I read this book called The Emperor of All Melodies about the incredible progress that's happened in cancer survival rates over the last 50 years. Could you just briefly take us through the main milestones in that development. On the oncology side, I think one of the major breakthroughs was clearly the understanding of our genome. If you look back in 2003, it costs billions to sequence one genome and took, I think, more than 10 years to sequence a single genome. Now you can do that within just days and it costs you hundreds of

Swiss francs or dollars whatever currency you're looking into. So really understanding the genome was a real breakthrough and with that you could understand better the drivers of what actually drives cancer, certain oncogenes etc. And with that you can target much more precisely the root cause of cancer. Then I think the other breakthrough was when we found a way on how to use antibodies, something that naturally occurs in our body, but to take these antibodies and target them much more precisely at different diseases, including cancer. And I think cancer immunotherapies are a great example of that, where you can actually activate the own immune system to fight the cancer. And I think we'll go more in that direction as well.

One topic we're working on is the personalized cancer vaccine. So really in how you can even more enhance your own immune system to fight off the cancer. So there are a number of steps that have been happening. And on the other hand, I think there's a lot of innovation that can still happen and a long way to go to really eradicate cancer. On the last call, you said you have 20 new products in the pipeline, which nine has been launched. So when you look at that pipeline, how excited are you compared to what you have been historically?

If you look at the last 10 years, or 15 years even, we've launched about two new medicines every year. And this is quite a feat. If you look at the fact that to develop a new medicine, it takes on average around 13 years. And from the beginning of development all the way to the launch of a medicine, only about one out of 10 makes it. Now, this is not a raw specific number. This is just an industry number.

So launching two every year is quite a feat. And that's the rate we want to continue. And if you continue that rate, we'll launch 20 medicines also in this decade. Now in our pipeline, we have many, many more potential medicines. But there's always nutrition. And so you have to work on many things to get just two out of the door at the end. Now you're also working on brain shuttle technology, which allows larger molecules to enter the blood-brain barrier.

What can this do? So it's very hard to treat diseases that happen in the brain. And why is that? Well, we have this blood-brain barrier. And this blood-brain barrier is there to protect our brain from viruses, from bacteria, from other things that could go into the brain and could damage our brain. And with this brain shuttle, which is a protein attached to the antibody, we can actually transport the antibody much more easily into the brain.

And with that, we can treat diseases that otherwise could not be treated as effectively. In fact, we have a very promising Alzheimer's medicine in our pipeline, and this antibody actually uses exactly this technology. We hope to launch that by the 28th, 29th timeframe, because then we can really tackle one of the biggest problems in healthcare today. Moving on to Europe's place in the world here. So Europe is falling behind China and the US when it comes to to clinical drug trials. And I think the European share has halved over

the last 10 years, which is pretty, pretty dramatic. What why is that? What the US is doing particularly well is that they have a much better environment for startups. So there is a much better access to venture capital. And with that, you have a lot of people actually moving to the US. So they have a lot of talent going to the US.

And you see a lot of the innovation, which is translated from academia into these biotanks, then actually happening more in the US, and probably also China now, than, for example, in Europe. So I think Europe has to get that right. The second piece that Europe has to get right is they have to reduce the amount of bureaucracy. If you look at clinical trials, et cetera, these are done in countries where you have less bureaucracy. If it takes you a year from the time you apply for clinical trial to being able to start

a clinical trial, that's a year of lost time, a year of time where we cannot save a number of patients' lives if this medicine makes it. So I think Europe really needs to work on the bureaucracy piece as well. Are you acquiring patents and companies in China? So we've done a couple of licensing deals from biotechs where we licensed in a number of molecules and I have to say the science is great. Is it better now than in the US you think? and I have to say the science is great. Is it better now than in the US, you think? I wouldn't say that at this stage.

I would say, you know, if you look at, you know, around the globe, US, Europe, China and Japan are where most of the innovation is coming from. US is clearly, I think, still in the leadership position, but China is catching up very quickly. Moving on to the important topic of pricing, of course, there's always been a trade off in the pharma industry about how much you charge and how many people will benefit from it. Generally, are drug prices too high now across the world? Well, if you look at pricing, you also have to look at the model of how innovation happens.

As I mentioned, you have, in pharma, a cycle of about 13 years to develop a new medicine. And you have a risk profile where only one out of 10 medicines make it. So you actually have to earn the money back with one medicine that you couldn't with the other nine that failed. And you only have a short period of time. You only have around 10 years, and in some parts of the world this time is shortening even, 10 years to earn back the money. The benefit to society is, of course, already during these 10 years when you have launched

this medicine, but the benefit to society goes way beyond. If you look at just the medicines that we have launched in our history, now 44 medicines are now on the WHO list of essential medicines, like antibiotics, like Valium, a number of other cancer medicines, et cetera. Now, if the innovation didn't happen before, because there were no incentives for innovation, then these medicines would not be as widely available as they are today. Moving on to leadership, you've been the CEO of Roche for a bit more than a year. What's the most fun part being the CEO of Roche?

Yeah, so I've been with Roche for now 21 years and you know I love this company, I love the culture in this company and I love the purpose of our company. When I talk to some of our researchers and medical doctors, you know when we run a clinical trial that sometimes takes three to four years in the phase three, and then the day when they see the results and they see that the results are positive and what impact they can have on patients' lives, you have people that have tears in their eyes because they see the kind of impact they can have.