Seeking Alpha: Poor Pipeline Productivity Has Left Roche More Vulnerable

I bought Roche (OTCQX:RHHBY) years ago because I thought that the Street was overly concerned about near-term threats to the company's oncology portfolio and was overlooking the long-term potential of a true giant in oncology and an underrated player in global pharmaceuticals and diagnostics. I really can't complain about the performance since my early 2011 purchase, as Roche's 90%-plus gain has outstripped Novartis (NYSE:NVS), Johnson & Johnson (NYSE:JNJ), Glaxo (NYSE:GSK), Pfizer (NYSE:PFE) and Novartis . Of the stocks I was looking at at that time (when I decided to sell Johnson & Johnson), only Amgen (NASDAQ:AMGN) and Bristol-Myers (NYSE:BMY) have done better.

Since then, though, Roche has underwhelmed me with its R&D productivity. The company has done fine with its oncology drug development, but its repeated failures outside of oncology have left the company with a gap in its pipeline and vulnerability to potential price competition in immuno-oncology. Absent a more comprehensive re-think of its approach to R&D, it may be time to think about taking profits in this Swiss drug and diagnostics giant.

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Poor Pipeline Productivity Has Left Roche More Vulnerable