September 11, 2013 / 2:22 PM / 6 years ago

Roche executive says ultra-rare diseases outside core

LONDON (Reuters) - Treating ultra-rare diseases is a distinct business from Roche’s ROG.VX current area of expertise, the Swiss group’s head of pharmaceuticals said, in comments that may cast doubt on its interest in Alexion Pharmaceuticals (ALXN.O).

Roche Diagnostics COO Daniel O'Day speaks to media during the annual news conference in Basel February 1, 2012. REUTERS/Ruben Sprich

“Our business is based on personalised healthcare and defining the patients most at risk and finding therapies,” Daniel O’Day said in an interview during a visit to London this week.

“But I think ultra-rare diseases with very, very small patient populations, high prices and different regulatory channels is a complementary but different business than we are in at Roche today.”

Shares in U.S. biotechnology group Alexion jumped in July after people familiar with the matter said Roche was seeking financing for a possible bid. No offer has emerged, however, and some investors have questioned the wisdom of such a pricey deal.

Alexion has a current market value of $22 billion (13 billion pounds) and buying the company would mark Roche’s biggest acquisition since 2009, when it paid nearly $47 billion to gain full ownership of Genentech.

O’Day declined to comment on Alexion specifically, but he noted that Roche already had a strong in-house pipeline of promising new drugs in oncology, immunology and neuroscience, which increased the hurdle for deals.

“In pharma, we have a very attractive portfolio ourselves, so the bar is high to bring things in,” he said.

Alexion currently sells Soliris, a treatment for two extremely uncommon genetic disorders that can damage vital organs including the kidneys, heart and brain.

Sales of Soliris, despite treating only a few thousand patients worldwide, are forecast by analysts to reach $1.5 billion this year and $3.1 billion by 2017 - thanks to a U.S. list price of around $440,000 per patient a year.

Alexion is also conducting trials of Soliris in patients with several other ultra orphan diseases, a term used to define conditions that occur in fewer than 20 people per million.

“The skill sets it takes to develop those types of products and to have discussions with authorities about reimbursement makes it a parallel but different kind of business,” O’Day said.

Roche Chief Executive Severin Schwan has said he is open to bolt-on acquisitions, although he has proved ready to walk away if a potential deal does not stack up. Last year, Roche abandoned an attempt to buy Illumina (ILMN.O) for $6.7 billion after shareholders in the U.S. gene-sequencing company held out for a higher price.

Editing by Jane Merriman

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