Yahoo Finance Presents: Severin Schwan

On this episode of Yahoo Finance Presents, Roche CEO Severin Schwan sat down with Yahoo Finance's Anjalee Khemlani to discuss the status of COVID-19 antibody testing, the development of a drug treatment, and the current geopolitical climate that affects the healthcare supply chain.

Video Transcript

ANJALEE KHEMLANI: And joining me now is Roche CEO Severin Schwan. Severin, thanks so much for joining us today. And I understand you now have an FDA emergency use authorization for your antibody test. That's very exciting news. Tell me a little bit about why this is different from, you know, the several others that are out on the market, and you know, how this is going to help with talks of reopening in the US.

SEVERIN SCHWAN: We are very excited about this new antibody test. And what is so special about this test is its high reliability. It has a sensitivity of 100%. It has a specificity of 99.8%. So this will be a test where you can really rely on the result.

ANJALEE KHEMLANI: Yes, I've heard you talk about that, about how very specific it is, and how that sets it apart from many others that are already in the market. As you're looking to develop, you know, more-- in your efforts to respond to the coronavirus, you've already come out with that PCR test, the high throughput test. We saw some of the struggles in that earlier response when it comes to the supply chain. Are you anticipating any issues with ramping up the antibody test?

SEVERIN SCHWAN: From a technology point of view, it is much easier to ramp up antibody tests versus molecular tests. So I'm confident that we will be able to provide this test in high quantities, and that this will allow the testing of broader parts of the population. Just to put this into perspective, in May alone, Roche will ramp up its production into the high double digit millions of tests per month. So this is already at the very beginning a multitude of what we can produce of molecular tests.

Also, very importantly, there's a broad base of instruments out with labs which can run such antibody tests. So I'm very confident that-- that we can make this test available fast in high quantities.

ANJALEE KHEMLANI: Speaking of availability, one of the issues has been, generally, in the industry, accessibility. We're talking about, you know, the idea that the PCR tests were so hard to get for some individuals, whether it be the supply chain, or I've heard you say that it's literally impossible to just test everyone. So there should be some form of restriction on who gets tested. Do you see anything similar for the antibody test? Or is this going to be far more widespread?

SEVERIN SCHWAN: You're absolutely right. For the foreseeable time, molecular tests, which directly measure the virus, need to be used in a very focused way, for people who have symptoms or people who are at risk. As far as the antibody test is concerned, that is a test which actually matches whether your immune system has responded to the virus, here, testing will be available to-- to the broad population.

Initially, also, antibody testing will be focused on people who are at higher risk, or people who think that they might have been infected and never tested for it because they didn't show very strong symptoms, for example. But eventually, the big advantage with antibody tests is that you can go much broader. And that, of course, will allow us to target measures in terms of lockdown, et cetera, in a much more targeted way.

ANJALEE KHEMLANI: Absolutely. Switching to the other side of things, you're also working on clinical trials, both with the World Health Organization and in the US, to determine the efficacy of Actemra, a rheumatoid arthritis drug, on the coronavirus. So how has that been going? And do you see it complementing the one drug that's already out there?

SEVERIN SCHWAN: We have increasing evidence from physicians around the world that Actemra indeed helps patients who are severely ill and who suffer from pneumonia. And the mechanism of this medicine is that it dampens the immune response. So what typically happens if people get very off-- not typically, but what often happens if people get-- get very ill, there's an overreaction of the immune system.

So we have evidence that this mechanism is working. However, there are still robust randomized big clinical trials going on, and we will see the results in June next month. So let's keep fingers crossed that this will also contribute for COVID-19 patients. It is complementary to antiviral medicines. Antiviral medicines, you would typically take very early on so that you can-- you can block the increase of the virus in the body. And this medicine would-- would rather be used for patients who are the later stage of the disease.

ANJALEE KHEMLANI: Absolutely. And one of the things that's been a concern and continues to be a topic of conversation-- and this is stemming from pre outbreak-- is the idea of pricing of drugs. So what have you been considering when it comes to accessibility of this drug? Are you planning to donate or provide for free access to this if it proves effective?

SEVERIN SCHWAN: We will certainly make sure that access is not a hurdle for Actemra, in case it should be used in a broader way. But we also should consider and that will also help us to-- to take care of the financial burden for societies, is that, typically, this is a medicine which is used for diseases, chronic diseases, where you give this medicine many times. And the pricing, of course, is designed accordingly.

Now, for COVID-19 patients, you only need one dose. So it is in itself will limit the financial burden for societies. We will see how the clinical trials read out, how much the demand as a result of that will be. And then we will, at any rate, make sure that this medicine is broadly available for patients in need.

ANJALEE KHEMLANI: Great. And when we're talking about the access, you're not just looking at the US. You're looking globally as well. It's been a really interesting time in terms of geopolitics. How has that affected operations? Is it affecting operations that say, for example, the US government has had a pretty heavy hand in the distribution and circulation of testing? And will that affect if Actemra is also approved?

SEVERIN SCHWAN: We haven't seen that yet. And I think there's a very simple reason for that. And that is that supply chains are really international supply chains. So every country depends on each other. I'll give you an example. If you look at the diagnostic tests, for example, we have instruments which are produced in Switzerland. We have reagents which are produced in the United States. We have consumables which are produced in Germany.

And you can only run the test if you have all components. So whenever a country would stop delivering or exporting certain components, there would be retaliation of all the other countries. And as a consequence, actually, it's in the best interests of the international community not to put in any export controls in place for medical devices or medicines. And so far, we haven't seen that.

ANJALEE KHEMLANI: Looking back, this time last year, the drug landscape was far different in the United States, and pricing pressures were a really big concern. Has that affected how you're going to be going forward, especially during this outbreak?

SEVERIN SCHWAN: Right. I think, for the industry overall, this is also an opportunity to demonstrate how much this industry can contribute to health care systems and to societies. And we see this already happening. And we see a lot of positive feedback, and people are looking at the industry. So I do believe that this is-- is not only an opportunity in a more narrow sense of resolving this issue at hand and overcoming the pandemic, but I also think it's an opportunity for the industry to show to the broader public how much we all benefit from this industry around the world.

ANJALEE KHEMLANI: Severin Schwan, CEO of Roche, thank you so much for joining me today.

SEVERIN SCHWAN: Thank you.