Bloomberg News

Glaxo, Takeda Unlikely to Build In-House Diagnostic Units

February 13, 2012

(Adds Pfizer, Sanofi comments in eighth, ninth paragraphs.)

Feb. 10 (Bloomberg) -- GlaxoSmithKline Plc and Takeda Pharmaceutical Co. Ltd. said they are unlikely to build in-house diagnostic divisions like Roche Holding AG, which is bidding to take over a U.S. maker of gene-mapping tools.

“The tandem of diagnostics and therapeutics is a logical tandem and will be very important in the future,” said Tachi Yamada, chief medical and scientific officer of Osaka, Japan- based Takeda, in an interview in London today. “But I don’t know that you have to control both ends of it.”

Roche, the world’s biggest maker of cancer drugs, began a $5.7 billion hostile takeover offer for Illumina Inc. on Jan. 25. The acquisition would build Roche’s palette of health diagnostics products and potentially allow the company to better target its medicines toward individual patients. Illumina said Jan. 10 that by the end of the year it would market a machine capable of scanning a person’s complete DNA in a day.

Glaxo Chief Financial Officer Simon Dingemans said the London-based company isn’t interested in creating a new unit to add to its three existing pharmaceutical, vaccine and consumer health-care businesses.

“We’re not about to go buy medical equipment or diagnostics businesses or new legs to the group,” Dingemans said in an interview yesterday in London. “We’re focused on buying things that we can add value to.” He cited the company’s 2009 acquisition of Stiefel Laboratories Inc. for its dermatology products as an example.

The company wouldn’t rule out bringing in specific diagnostics for select disease areas such as oncology, he said.

‘Ecosystem of Research’

Executives at Pfizer Inc. and Sanofi also said they don’t see the need to make acquisitions to expand in diagnostics.

“We’re finding it’s an ecosystem of research and development, of broad-based collaborations,” Freda Lewis-Hall, chief medical officer at Pfizer, said yesterday. The drugmaker is enthusiastic about “partnering with companies that have assets and expertise that we would like to adjoin that we don’t necessarily need to own.”

Sanofi is “very interested in diagnostics but I think you can get there through partnerships,” Chief Executive Officer Chris Viehbacher said on Jan. 26.

Ethical Implications

Yamada, former head of research and development at Glaxo, questioned the ethical implications of proprietary diagnostics technology.

“If a diagnostic defined a benefit for Alzheimer’s, for example, it would be morally and ethically unconscionable for us to withhold it from other companies,” he said.

Drugmakers are increasingly working with diagnostics makers whose tools help determine whether a patient is genetically susceptible to a particular disease or would be especially responsive to certain treatments.

Siemens AG, Europe’s largest engineering company, this week said it will work with Viiv Healthcare Ltd., a joint-venture between Glaxo and Pfizer focused on HIV drugs, and Tocagen Inc., a developer of an experimental brain-tumor treatment, to create companion tests for the drugmakers’ therapies.

“We’re really focused on making drugs, as hard enough as it is,” Yamada said. “I just don’t want to dilute our own attention.”

--Editors: Kristen Hallam, Robert Valpuesta

To contact the reporter on this story: Makiko Kitamura in London at

To contact the editor responsible for this story: Phil Serafino at

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