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As Genomics Revenues Fall 18 Percent, Roche Plans to Focus on Sequencing, qPCR, Custom Biotech

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In a presentation outlining Roche's 2012 financial results for the first half of the year, the company shed further light on its previously disclosed plans to restructure its Applied Science business, noting that it intends to focus on sequencing, qPCR, and custom biotech services and reagents.

Roche announced earlier this year that it would discontinue its NimbleGen microarray business as part of an overhaul of the Applied Science group, keeping only the products related to sequence capture. The company said at the time that this restructuring would cut 120 Roche NimbleGen staffers in the US, Iceland, and Germany, as well about 20 employees at 454 Life Sciences in Branford, Conn., and 20 related to its cellular analysis business at its Penzberg, Germany, site (IS 6/12/2012).

The company's half-year financial report, released last week, outlines the financial considerations underlying the decision to restructure.

Half-year revenues for the Applied Science segment of Roche's Diagnostics division fell three percent year-over-year to CHF 363 million ($367 million) from CHF 377 million ($381 million) in the first half of 2011.

The Applied Science unit generated around 7 percent of Roche's half-year 2012 total revenues of CHF 5.01 billion ($5.07 billion).

Within the Applied Science unit, the genomics segment, which includes 454 sequencing business and NimbleGen microarrays, was hit particularly hard. Revenues for the genomics division fell 18 percent in the first half of 2012 compared to the same period a year ago, though Roche did not break out revenues for this group.

In its half-year report, the company attributed the double-digit decline in genomics revenues to "competition in gene sequencing and a slowdown in public research funding."

As a result, it is "consolidating business segments whilst continuing to invest in new technologies, particularly sequencing."

Roche did not elaborate on potential plans for investing in sequencing, but earlier this year, after Illumina rebuffed its hostile takeover bid (IS 1/31/2012), officials said they were in discussions with research centers at three large universities that are developing sequencing technologies (IS 4/24/2012).

The company disclosed in its half-year report that shutting down the NimbleGen business cost it around CHF 185 million ($187 million). In total, restructuring costs within its Applied Science and Diabetes Care units were CHF 289 million ($292 million) for the first half of the year.

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