Media Release

Basel, 5 February 2007


Roche continues to strengthen Research and Development
Focus on Disease Biology Areas to enhance alignment of R&D

Today Roche announced that it will be introducing a new operating model for its global research and development (R&D) activities, organised around Disease Biology Areas (DBA). Each DBA will cover the whole range of activities - from R&D to strategic marketing - in a specific therapeutic field. The Disease Biology Area Leadership Teams (DBLTs) will be co-located in Basel, Nutley and Palo Alto. In an integrated approach, they will seamlessly manage compounds from drug discovery through to medical proof of concept, with oversight through to the market.

Roche’s R&D efforts continue to focus on clinically differentiated medicines. DBAs will be created for the following five therapeutic areas:

• Oncology, DBLT based in Nutley, New Jersey, USA
• Virology, DBLT based in Palo Alto, California, USA
• Inflammation, DBLT based in Palo Alto, California, USA
• Metabolism, DBLT based in Basel, Switzerland
• Central nervous system, DBLT based in Basel, Switzerland

This new model is designed to ensure that Roche’s steadily expanding R&D operation is suitably equipped to meet increasingly complex requirements. By simplifying and accelerating the multiple decision-making processes involved, the model will be more efficient and effective in translating research activity in each therapeutic area into clinically differentiated medicines. It will also enable the Group’s growing number of development projects to be integrated more quickly.

As innovation continues to be at the core of its activities, the Roche Group expects further increases in 2007 and beyond, not only in R&D staff numbers but also in its R&D budget, currently running at approximately 6 billion Swiss francs ($4.8bn).

"Innovation and the creativity of our people will remain the basis of our success", says Roche Chairman and CEO, Franz B. Humer. "We have significantly increased our investments in R&D over past years and will continue to do so. By combining existing expertise in Disease Biology Areas, we will further enhance the optimal conditions for bringing future innovations to fruition faster and more efficiently - with clear benefits for patients and doctors".

Research sites around the world
In addition to Basel, Nutley and Palo Alto, all other current research sites in the Roche network will continue to play an important role in creating innovation. Therapeutic protein research will be intensified at the Penzberg site in Germany, and in Shanghai, China, Roche will expand its R&D activities, supporting the DBAs world wide. Indeed the wide variety of functional experience will continue to support our endeavours across the company.

Alignment of therapeutic areas
Each of the five DBAs will be managed by a cross-functional leadership team with representatives from Discovery, Clinical Research and Exploratory Development, Clinical Development and Strategic Marketing co-located at one site. In their own therapeutic areas these teams will decide which medicines to develop and along which most efficient path. The five teams will report to the newly created Strategic Portfolio Committee, which is made up of senior Pharma Division managers.

"We’re taking the opportunity to refocus at a time of economic strength on the challenges that lie ahead", says William M. Burns, Pharmaceuticals Division CEO. "New structures and flatter hierarchies will enable us to be more aligned and focused, take decisions faster, implement ideas more rapidly, and bring more new products through the pipeline".

Personnel changes
The new model involves leadership changes in R&D.

Jonathan Knowles, President of Global Research will focus on his role as Head of Group Research. In this role he will be in charge of coordinating research across Roche Pharmaceuticals, Roche Diagnostics, Chugai, Genentech and other partners.

Lee Babiss, currently Research Site Head in Nutley, has been appointed to the position of Head of Roche Pharma Research. This newly created role will focus on leading and managing Research within Roche Pharma, including research sites in Basel, Nutley, Palo Alto, Penzberg and Shanghai.

Eduard Holdener will, as previously announced, retire at the end of 2007. His role as Head of Global Pharmaceutical Development was taken over on 1 January 2007 by Jean-Jacques Garaud, who, like Lee Babiss, reports to William M. Burns and is also a member of the Pharmaceuticals Executive Committee. Until his retirement, Eduard Holdener will, as Chief Medical Officer, continue to have direct responsibility for Drug Safety and Quality Audit and for setting up the Development Centre in Shanghai.

Investment, innovation network and personalised medicine
Roche’s recent R&D investment has risen to 6 billion Swiss francs ($4.8bn) per annum, with research staff numbers exceeding 6500. Roche will increase its R&D investment yet again this year and expects a commensurate boost in the number of its R&D staff. It will continue to pursue its unique R&D network strategy which, together with Genentech and Chugai and numerous alliances worldwide, provides broad access to innovation. Cooperation between the Pharmaceuticals and Diagnostics Divisions in the area of personalised medicine will be further strengthened, thus consolidating the Roche Group’s leading position in this area.

Roche pipeline highlights
Roche’s rich and promising pharmaceutical pipeline includes as of September 30, 2006, 61 new molecular entities and 54 additional indications in development addressing major unmet medical needs. The growth drivers in the near future are expected to come from the areas of oncology, autoimmune diseases and metabolic disorders.

Oncology
Roche possesses one of the strongest oncology pipelines in the industry. With 32 projects in research, 41 in development * and numerous additional indications for products already marketed, Roche addresses all major tumour categories and offers cancer drugs for both early intervention and supportive care.

Inflammation
The Roche Group has invested in a broad autoimmune disease portfolio and pipeline focused on clinically differentiated compounds (14 projects in research and 13 in development*).
Two first-in-class molecules (MabThera/Rituxan, already on the market; Actemra, in phase III) with novel mechanisms of action provide benefits for patients responding inadequately to current therapeutic options, or for whom these therapies may offer an excellent first choice in the future.

Metabolism
Also in the pipeline are numerous potential medicines for vascular and metabolic disorders (29 projects in research and 11 in development*), including treatments for diabetes which, together with Roche’s broad Diabetes Care portfolio in Diagnostics, will contribute to the company's growth over the coming years.


For further pipeline information, see Roche’s updated pipeline chart on 7th February 2007.


About Roche
Headquartered in Basel, Switzerland, Roche is one of the world’s leading research-focused healthcare groups in the fields of pharmaceuticals and diagnostics. As a supplier of innovative products and services for the early detection, prevention, diagnosis and treatment of disease, the Group contributes on a broad range of fronts to improving people’s health and quality of life. Roche is a world leader in diagnostics, the leading supplier of medicines for cancer and transplantation and a market leader in virology. Roche employs roughly 70,000 people in 150 countries and has R&D agreements and strategic alliances with numerous partners, including majority ownership interests in Genentech and Chugai.

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* Status of September 30, 2006