Medical Device Daily Executive Editor
SAN FRANCISCO One of the more interesting speakers at last week's JPMorgan Healthcare Conference was Dr. Erich Hunziker, CFO of F. Hoffmann-La Roche (Basel, Switzerland), who in something of a departure from the usual corporate dog-and-pony approach at such events talked more about broader issues facing healthcare firms than he did about specific products coming down the Roche pipeline.
Noting that healthcare “is a challenging industry to be in,“ he told his audience in the Grand Ballroom of the Westin St. Francis Hotel that “things have changed“ for Big Pharma. He acknowledged that the traditional drug industry is “no longer a safe haven“ for investors.
It's not a matter of there not being a demand for products from firms such as Roche, whose core businesses are in the pharma and diagnostics/devices sectors. Indeed, said Hunziker, “everyone is getting older and wants to be healthier older.“
He noted that for those in healthcare relying on “innovation“ as a watchword in describing their products, the premium for “innovation“ must be earned by “medical differentiation.“
Hunziker said that Roche, like its competitors, is “confronted with cost pressures, especially in our core diagnostics business.“
Noting that in diagnostics, it is “almost impossible to enforce price increases,“ he said it is a reality of today's economic climate that, “like retail, auto, airline and consumer electronics, [we] no longer are able to pass cost increases on to our customers.“
From that reality has emerged the Roche 2015 Project, with the accompanying slogan, “Innovation is key.“
Hunziker said Roche 2015 really represents the thinking as the company evolves from a traditional pharma base to a company focused on “individualized medicine.“
He described it as “a targeted approach to bringing high-tech innovation to the customer.“
Referring to the combination of diagnostics and pharma businesses as offering the opportunity to develop “value-added products,“ Hunziker said, “we have pharma and diagnostics under one roof; we are bringing researchers [from both sides of the business] together to come up with the right products.“
He characterized Roche as having a “very open“ stance when it comes to innovation. “We don't care where ideas come from,“ Hunziker said, citing the company's culture as one in which a “universe of innovation“ exists.
Citing healthcare information technology as “an interesting target area,“ he said health IT “clearly is emerging the profit potential will be there.“
Hunziker said having a diagnostics business within which IT is an important component “gives us a good step [through] this door of development.“
He listed diabetes care, immunodiagnostics and molecular diagnostics as being particular “pillars of value“ for Roche moving forward, and said the company's broad global geographic reach makes for good “risk diversification“ as it taps future growth areas.
Other noteworthy leftover items from a reporter's notebook in looking back over a four-day blitz of activity that included sitting in on more than 25 presentations by med-tech companies large and small:
• Glen Muir, executive vice president and CFO of digital mammography and bone densitometry system maker Hologic (Bedford, Massachusetts), citing the rapid transition of mammography from analog and film-based to digital, said the company expects digital systems to capture half of what clearly is a “replacement market.“
He noted the growth of digital mammography is being driven by both improved quality and improved throughput, adding that imaging facilities are switching to digital units “in order to be competitive“ in the marketplace.
Muir said Hologic's next-generation technology is Tomosynthesis, the 3-D visualization of breast tissue. He said the technology offers potential for improved detection, reduced false positives and lower recall rates.
Hologic anticipates making an FDA submission for the new technology this year, with approval expected sometime in 2007.
• Answering the question “What do you prefer, a good management team or a good product?“ posed during a panel discussion that highlighted a conference luncheon one JPMorgan (New York) analyst replied: “An 'okay' management team can become a 'really good' management team with one good product.“
Another panel participant chimed in: “We're short of really good products.“
• Funniest line of the week, uttered by Dane Miller, CEO of Biomet (Warsaw, Indiana), whose comments on the likelihood of price cuts for orthopedic implants found their way into one of the nation's leading newspapers: “I'm going to work hard not to say anything that will be quoted in The New York Times.“
• Among the presentations this reporter would have liked to get to, only to be foiled by either the conference schedule or time constraints related to deadlines: AngioScore (Fremont, California), Hansen Medical (Mountain View, California), LeMaitre Vascular (Burlington, Massachusetts) and Spine Wave (Shelton, Connecticut).
Oh well, maybe next year.