Genentech: Roche wants it all
Swiss pharmaceutical giant Roche AG this week bid $44 billion, or $89 a share, for the 44 percent of Genentech it doesn’t already own, said Aude Lagorce in Marketwatch.com. The proposal “highlights the pharmaceutical industry’s hunger for new drugs at a time when the pipelines of many firms are sparse.” Roche already owns almost 56 percent of Genentech, a specialist in cancer treatments, and markets many of its drugs. “But a deal would let the two share research-and-development information earlier on in the process of developing new drugs” while saving up to $850 million a year in overhead. Until now, Genentech has operated independently of Roche “to preserve its innovative spirit.”
By buying the entire company, Roche “would gain control of all profits for Genentech blockbuster cancer drugs Avastin and Herceptin,” said Javier Espinosa in Forbes.com. But Roche may have to pay dearly for those profits. Shortly after the bid was announced, traders pushed Genentech stock to $93, indicating that they expect a higher final price.
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