Jeremy Warner's Outlook: Roche in danger of killing the golden goose
Tuesday 22 July 2008
If it ain't broke, why break it? Roche's $43.7bn cash offer for the outstanding minority in Genentech risks upsetting a model partnership between big pharma and innovative biotech, an apparently perfect marriage of Roche's marketing might with Genentech's unmatched record in cancer drug discovery, including the breast cancer drug Herceptin. Yet here comes old clumsy clogs with a low ball bid for its beautiful young soulmate.
With Genentech's shares already trading well in advance of the 9 per cent premium Roche is offering, the Swiss parent is going to have to offer quite a bit more to succeed. Biotech buyouts are usually at much bigger premiums, though with 56 per cent of the stock already, Roche plainly doesn't have to pay for control. It already has it.
Even so, nothing could be more stupid than for Roche to get into a standoff with a company so key to its success. There are said to be reasonable synergies involved in a full merger of the operations, and Roche also gets access to Genentech's cash flow. Yet once wholly in the bureaucracy of the mothership, Genentech will lose the independence of management and remuneration that may well underpin its success. Roche needs Genentech's pipeline to compensate for a growing absence in its own. Yet for how much longer will the pipeline thrive once ruled by the dead hand of Big Pharma?
- 1 Isis burns thousands of books and rare manuscripts from Mosul's libraries
- 2 Scarlett Johansson new band 'already hit with legal complaint' from another The Singles
- 3 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamaphobia
Liam Gallagher brands Kanye West 'utter s**t' during BRIT Awards performance
Isis burns thousands of books and rare manuscripts from Mosul's libraries
Husband and wife die holding hands within hours of each other after 67 years of marriage
Mohammed Emwazi: Family of man named as 'Jihadi John' described by neighbours as 'normal Muslim family'
Mohammed Emwazi: Nine things we know about man named as Isis militant 'Jihadi John'
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
This is what it's like to be dead, according to a guy who died for a bit
iJobs Money & Business
£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...
£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...