The big-pharma firm that saw the future

ROCHE IS A strange entity. The Swiss giant is the world’s second-biggest drugmaker and one of big pharma’s most profitable firms. But its largest shareholding group, mostly descended from Fritz Hoffmann-La Roche, who founded the company in 1896, is led by André Hoffmann, a nature lover and sustainability advocate who believes that the purpose of business is not mainly to make money. Even its bosses are discouraged from making a quick franc. Severin Schwan, an Austrian who has led the company since 2008, is only Roche’s seventh CEO in 125 years. Much of his pay is tied up in company stock for ten years, giving him, as he puts it, “literally a vested interest” in its long-term future.

Another thing sets Roche apart from the crowd. For two decades it has nurtured an unflashy diagnostics division alongside its mainstay of drug production, in an effort to create more personalised health care. This unit, which accounts for almost a quarter of sales, has generated lower margins than pharmaceuticals, and puts off the sort of investors who yearn only for blockbuster medicines. Had it not been for the Hoffmanns’ patience, some suspect, activists would have forced Roche to sell it or spin it off long ago.

And yet in the past year or so the ability to diagnose a disease in its early stages has fully come into its own. The division...