* Filling big shoes of former CEO
* Gained confidence after $47 billion Genentech buy-out
* Reinforced Roche's position at top of sector
* Greater biotech focus
* Now has new, younger management team
By Sam Cage
BASEL, Switzerland, Sept 8 (Reuters) - Severin Schwan has a tough act to follow running top-performing Swiss drugmaker Roche , but is quickly finding his feet -- and now he has a new, younger management team to help.
In 18 months in the job, Schwan has sealed the largest acquisition in Roche's history, overseen impressive performance in the teeth of a recession and reinforced the company's position as the most richly valued large drugmaker in the world.
"He is increasingly fitting into those big shoes," said Andrew Weiss, analyst at Swiss bank Vontobel. "I think he's rather pleased with himself that the Genentech deal has gone through."
Schwan, initially shy and reserved as chief executive, gained confidence from sealing Roche's $47 billion buy-out of U.S. biotech partner Genentech and as senior figures chairman Franz Humer and drugs chief William Burns step out of the limelight.
The 1967-born Schwan, an Austrian, took charge last year just before the bid to buy the remaining 44 percent of Genentech, a protracted process complicated by a growing global financial crisis that cast doubts on Roche's ability to raise the required debt.
In the end, Roche raised the money with ease and the acquisition was judged a better deal than two other pharma megadeals this year, Pfizer's offer for Wyeth and Merck & Co's Schering-Plough buy.
Schwan's growing reputation has since been burnished by Roche's strong business performance, helped by strong sales of cancer drugs and antiviral Tamiflu, boosted by the spread of H1N1 swine flu.
INCREASINGLY, A BIOTECH COMPANY
Schwan's one big change is Genentech's influence over Roche, especially in the United States -- a chance to shake up a key unit that had been underperforming and improve drug development.
That was underlined on Tuesday when Roche announced a revamp of top management, naming new heads of its two business units, drugs and diagnostics.
Genentech developed many of Roche's big revenue drivers like cancer drugs Avastin and Herceptin, and the Swiss group now dubs itself a biotech company, stressing good science at a time when Big Pharma is struggling to develop big-selling medicines.
Significantly, Schwan has decided to throw in his lot with the specialist Biotechnology Industry Organisation trade group, rather than with the pharmaceutical industry lobby.
While Roche's stock performance has not significantly outshone other drugmakers since Schwan took over, that is largely due to the fact it was already trading at a hefty premium to its Big Pharma peers.
Shares have regained more than 10 percent since sealing the Genentech deal and the premium, which had been cut down towards parity with some peers, has expanded again.
Roche now trades at about 12 times forecast 2010 earnings, a premium of some 20 percent over closest European rivals GlaxoSmithKline and Novartis and even further ahead of U.S. majors Pfizer, Merck & Co and Eli Lilly.
"I think there are some difficult and risky patches on the horizon but they have a rich pipeline of their own now," said Nick Draeger, a former healthcare fund manager who now manages business advisors Cederberg. "Roche is the best pharma company out there."
In July, investors, analysts and journalists saw the result -- raised financial forecasts and a relaxed and confident Schwan expounding on Roche's transformation into what he called the world's biggest biotech company.
"The Genentech takeover was not just an acquisition, but has transformed Roche into a pharma-biotech organisation which can ensure earnings growth in the short term through synergies, and long term thanks to a high, industry-leading R&D innovation," said ZKB analyst Michael Nawrath.
RAPID RISE
It could have been a poisoned chalice for the softspoken Schwan, whose dark hair is now scattered with hints of grey, after he rose rapidly through the Roche ranks from trainee finance officer to diagnostics chief and CEO in just 15 years.
He took over after a management team of ex-CEO Humer and Burns guided Roche from the sick man of the sector to that with the most enviable pipeline of new drugs.
Even then Humer, now as chairman, Burns and Chief Financial Officer Erich Hunziker dominated the Genentech transaction, handling media and investor events. Burns is now retiring -- though he will remain on the board -- and Humer is rarely spotted at Roche events since the deal was sewn up.
Company watchers say that while Schwan's performance has been solid, he has not been signficantly tested yet.
"People think he (Schwan) is a good pair of hands. But the real proof will be when the inevitable problems arise," said Draeger, who is a former employee of Roche. (Additional reporting by Paul Arnold; Editing by Ben Hirschler and Sitaraman Shankar)