Roche fears drug industry drowning in “spam” data

• Data volume inside Roche doubling every 15 months
• CFO worries a lot of data is “just spam”
• Information overload now key challenge in drug R&D

LONDON (Reuters) - The pharmaceutical industry is drowning in a mountain of data as companies hunt for new drug leads inside their own laboratories and through alliances with outside firms, Roche’s chief financial officer said.

Erich Hunziker — who also heads information technology at the Swiss drugmaker — said on Wednesday that dealing with the ever-growing stream of data was one of his biggest concerns.

“The data volume of Roche at the moment is doubling within 15 months,” he told an industry conference.

“I don’t think we are increasing our know-how every 15 months, far from it. I’m scared that a lot of this data is just spam. We don’t know how to filter it.”

In addition to handling information from its in-house global team of researchers, Roche also has to process data from around 150 smaller partner companies, plus many would-be partners.

Hunziker said Roche was now screening up to 1,800 proposals for alliances every year from outside biotech companies, universities and other research organisations.

Scientific advances and increased computing power mean researchers now have more opportunities than ever to pursue drug development ideas, but the industry’s track record in delivering new medicines to the market has not increased in tandem.

In fact, investors are increasingly uncertain about returns on the billions of dollars being poured into research and development by drug companies around the world.

Disappointing R&D productivity, coupled with a wave of patent expiries, has been a key factor in the sector’s massive de-rating in recent years, with the industry now trading on the lowest price-to-earnings ratio in 30 years.

Hunziker told the FT Global Pharmaceutical and Biotechnology Conference that two clear models had emerged for pharmaceutical companies in recent years — with some companies, like Novartis and GlaxoSmithKline, embracing diversification and others, like Roche, sticking to a pure pharma.

Setbacks this year mean Roche has come under fire from some analysts for over-spending on its research but Hunziker said he was convinced that in the long term his company’s model would deliver better returns than those from diversified groups.

Roche and Novartis have both announced strategic updates this month and their very different approach has led to frosty relations between the chief executives of the two companies.