UPDATE 1-Roche to shed 170 jobs in diagnostics restructuring

Tue Apr 23, 2013 6:55am BST

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* To dissolve Applied Science unit

* 110 jobs to be cut in Germany, 60 in the United States

* Says still committed to life-science business

* Backs full-year outlook

ZURICH, April 23 (Reuters) - Swiss drugmaker Roche Holding AG is cutting 170 jobs in Germany and the United States in a reorganisation of its life sciences business to beat price pressure and research funding cuts.

The firm said on Tuesday it would dissolve its Applied Science business area, which makes up about 7 percent of sales in its diagnostics unit, at the end of 2013 and integrate its products into other parts of its diagnostics business.

The Basel-based firm also confirmed its outlook for full-year sales growth in line with 2012 when they rose 7 percent, with core earnings rising ahead of revenues.

The reorganisation will lead to 110 job cuts at its site in Penzburg, Germany and a loss of a further 60 positions at Bradford, Connecticut in the United States.

The performance of Roche's diagnostics division, which made up 22 percent of group revenue in 2012, has lagged behind the larger pharmaceuticals unit. Applied Science sales fell 10 percent in the first quarter.

The drugmaker has forged ahead with personalised therapies and is investing in the fast-growing field of gene-sequencing, which will help to better predict which patients are likely to respond to a particular drug.

But on Tuesday, Roche said it would end its partnership with IBM to develop a nanopore-based sequencing platform due to the high technical risks involved.

It has also decided to stop its project with DNA Electronics to develop semiconductor-based sequencing system.

Roche plans to set up a dedicated unit to focus solely on sequencing to explore external and internal opportunities.

Last year Roche walked away from a $6.8 billion hostile bid for gene-sequencing market leader Illumina - which makes machines that decode a person's genome, or genetic code - after shareholders blocked its move to gain seats on the company's board.

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