Going, Going....Gone: Genentech Agrees to Roche Buyout
Late Thursday, after 8 months of difficult and often acrimonious negotiations, Genentech’s board finally caved and agreed to allow Roche to purchase the remaining 44% of the outstanding Genentech shares that it doesn’t already own. The price: $95 per share—less than the $112 per share that Genentech’s board and management team wanted —but better than the $86.50 per share that was tendered last fall.
While Roche contends that it will continue to run Genentech as an autonomously operating business unit, many Genentech employees are dubious. I suspect that many DNA (Genentech’s stock symbol) employees will embrace a “wait and see” attitude before any decisions are made about whether or not to stay at the “new company.” Roche’s greatest challenge will be integrating the two companies without ruining Genentech’s innovative culture and immediately sending its best scientists and management team out the door. Pharma and biotech corporate cultures are very different from one another and many biotech employees find it difficult to adapt to big pharma’s slow-moving and anachronistic approach to drug development. As previously reported, US business operations of both companies will be based at Genentech’s headquarters in South San Francisco, CA rather than in Nutley, NJ, where Roche’s American business is currently based. This is not good news for many of Roche’s Nutley employees. Roche has been trying unsuccessfully for years to jettison the Nutley site and it seems likely now. Don’t be surprised if you see a mass exodus at the Nutley site. All of Roche’s US products will be sold under the Genentech brand.
Roche’s purchase of Genentech, America’s oldest biotechnology company (started in 1976) and considered by many to be the crown jewel of the industry, truly signals the end of an era. Let’s hope that another “Genentech” (and others like it) emerge as the US biotechnology industry continues to evolve in the 21st century.
Until next time...
Good Luck and Good Job Hunting!!!!!
