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Roche to Shut Down Applied Sciences Business Area, Cut Jobs in Germany and Connecticut

NEW YORK (GenomeWeb News) – Roche said this morning that it will dissolve its Applied Science Business Area by the end of this year and integrate products from that business with other parts of its Diagnostics Business Area.

As part of the reorganization, Roche said that it will cut around 110 positions in Penzberg, Germany and 60 positions in Branford, Conn., which is the home of its 454 Life Sciences business.

The firm said in a statement that price pressure and funding cuts in life sciences research continue to have implications for the market. It said that the reorganization is "designed to further improve productivity and enhance the market responsiveness of [the firm's] life science business, which currently accounts for about 7 percent of total Diagnostics sales."

The decision has broad implications for Roche's efforts in the sequencing field. In addition to the job cuts, Roche said that it has decided to return a development project for a semiconductor-sequencing based system to DNA Electronics. That project, a partnership with 454 Life Sciences, began in late 2010.

In addition, Roche said that it has ended its partnership with IBM for the development of a nanopore-based sequencing platform "due to high technical risks involved." The firms had inked a deal in mid-2010 to co-develop the system.

Under the reorganization Roche's PCR technology and nucleic acid product lines will be managed by Roche Molecular Diagnostics. Its custom biotech portfolio of platforms and reagents will be moved to the firm's Professional Diagnostics business.

Roche also said that a dedicated unit will be created that focuses solely on its sequencing products. That unit will "be tasked with implementing a sequencing strategy from life-science research to clinical diagnostics," and exploring internal and external opportunities.

"In regards to our commitment to life science business, and the specific businesses we have, everything remains as is," Dan Zabrowski, who will head the new sequencing unit, told GenomeWeb Daily News. "We are fully committed to the life science business and this decision did not have an impact on any of our businesses or customers. It was really a decision on how we would manage our business internally."

He added that Roche's decision to place its genetics business in with molecular diagnostics "is a logical follow-through to some internal work we've been doing to try to better integrate our PCR business from life science through translational medicine through clinical diagnostics."