Roche Holding AG named the architect of its integration with Genentech to head its drugs business, closing a $47 billion buyout that sets the U.S. biotech at the heart of the Swiss group's growth plans.

Roche said on Tuesday that industry insider Pascal Soriot would replace veteran William Burns as head of its pharma division at the end of the year -- the final move in a management reshuffle started when Severin Schwan took over as chief executive last year.

The Swiss firm, which bought out minority Genentech shareholders in the spring, now describes itself as a biotechnology company and will continue to run its U.S. operations under the Genentech name, underlining the latter's strategic importance.

Roche was a Genentech story and it will continue to be so for some time, before Roche starts to bring its own products through, said Karl-Heinz Koch, analyst at Swiss brokerage Helvea.

Roche is one of several major players in the sector looking to biotech drugs, which are hard to copy and offer big sales potential, as pharma manufacturers worldwide struggle to develop and make money from traditional medicines.

Genentech's research, development and commercial operations will all remain at the U.S. group's San Francisco headquarters, Roche said.


Soriot was appointed CEO of Genentech in April and has been leading the integration of the business and planning the future set-up of the combined company together with Arthur Levinson, the previous head of the U.S. group.

A Frenchman who trained as a vet, and a one-time chief operating officer of Sanofi-Aventis's U.S. operations, Soriot joined Roche in 2006.

Roche on Tuesday also named Daniel O'Day, who currently heads its molecular diagnostics business, as new chief of the diagnostics division and announced a series of other appointments.

The drugs unit accounted for some 80 percent of Roche's 2008 sales of 46 billion Swiss francs ($44 billion) and diagnostics made up the remainder. Fourth quarter sales at Genentech totaled $3.7 billion.

Roche had previously announced Burns would step down at the end of 2009. The 62-year-old Scotsman will be nominated to Roche's board at the 2010 annual meeting.

The management changes achieved two things -- (they) significantly reduce the average age in the new executive committee and the structure of the new body should ease the decision-making process, Helvea's Koch said.

Roche stock fell 0.1 percent to 165.30 Swiss francs by 1234 GMT, lagging a DJ Stoxx European healthcare sector .SXDP that rose 0.15 percent.

($1=1.055 Swiss Franc)

(editing by John Stonestreet)