Big Pharma's M&A plans will likely take a hit if the U.S. government under the Trump administration lives up to its threats of imposing tariffs on the industry, Roche’s CEO has warned.
In a first-quarter earnings call with journalists Thursday morning, Thomas Schinecker said that, for now, the Swiss pharma’s mantra for finding new acquisitions continues to be: “Does the deal make financial sense?”
But Schinecker added that if pharmaceutical tariffs do come into force, the industry will find it “more difficult to make financial sense of any M&A deals.”
“My assumption would be that you will see an industry worldwide situation where people probably reduce the effort at this stage, and we'll see how things develop,” the CEO continued. “You know, things can change very quickly in this environment.”
Against a backdrop of continued threats by the Trump administration to extend tariffs to include pharmaceutical imports into the U.S., Roche announced earlier this week that it will be investing $50 billion in the country over the next five years.
These ambitions include the “significant expansion and upgrading” of three existing pharmaceuticals and diagnostics R&D centers as well as previously disclosed plans to consolidate the pharma’s cardiovascular, renal and metabolism R&D work at a new center in Harvard’s Enterprise Research Campus.
One impact that the administration is already having on the drug development landscape is widespread cuts to the FDA’s workforce. But Roche Pharma’s CEO Teresa Graham told journalists on the same April 24 call that this has not yet impacted the company’s interactions with the agency.
“Obviously, we're watching very closely the evolutions within [the Department of Health and Human Services] and the FDA,” Graham said. “At this time, we are not seeing any slowdown, either in development or approval processes, and things seem to be fairly business as usual for the pharma side.”
Meanwhile, Roche used its first-quarter earnings results to disclose that it had dropped two candidates from its phase 1 pipeline. One of these was RG6315, which was being developed for systemic sclerosis. Roche’s Genentech unit had decided to halt work on the drug for “strategic reasons” rather than because of any safety concerns, a spokesperson told Fierce.
The other terminated program was P-MUC1C-ALLO1, an allogeneic CAR-T that Genentech had come into possession of as part of Roche’s $1.5 billion acquisition of Poseida Therapeutics in November 2024. That specific program had not been part of Roche’s previous partnership with Poseida, the spokesperson pointed out.