Why: Drugs that target genetic mutations unique to cancer cells may be more effective than ones that act more broadly.

Key innovation: A new drug blogs the effects of a mutation thought to be present in as many as 8 percent of all cancers.

Technology:

act more broadly, and Roche has a number of such drugs in development. Last summer, it published promising results from a new drug that blocks the effect of a mutation thought to be present in 40 to 60 percent of malignant melanomas, and up to 8 percent of all cancers. In October, the U.S. Food and Drug Administration gave approval to a drug developed by Genentech, which was acquired by Roche in 2009, that blocks a specific protein associated with a certain type of stomach cancer.

Market:

Cancer drugs represent the majority of revenue for Roche and Genentech's drug Avastin, now widely prescribed to help slow the growth of tumors by cutting off their supply of blood, did over $6 billion in sales in 2010.

Strategy:

Through acquisitions and partnerships, Roche has become one of the leaders in the push to use genetic information to develop drugs to treat a wide range of diseases. Through Genentech, the company has licensed a drug-delivery system developed by startup Seattle Genetics that uses antibodies to deliver cancer-killing drugs to targeted cells, potentially reducing the toxic side effects of chemotherapy medications.

Challenges and Next Steps:

In December, the FDA decided to remove its approval of Avastin for treatment of breast cancer due to studies showing that the benefits of the drug do not outweigh the risks. Although Avastin is still indicated to treat colon, kidney, brain, and lung cancers, the decision represented a major blow to the company's most popular drug.