Roche-Genentech: The Going Gets Messy

A quick roundup of recent developments in Roche’s dramatic $44 billion bid takeover bid for Genentech:

• Genentech established a committee of three “independent” directors to evaluate the Roche bid. The especially odd thing here is that one of them is Genentech’s co-founder Herbert Boyer. I’m sure Boyer somehow fits the definition of “independent” for SEC purposes — he’s no longer an employee, although he still owns 112,000 shares — but it’s kind of hard to imagine just how independent he can be in evaluating the sale of his own child (now all grown up, of course) to a Swiss monolith.
• Genentech is sending out mixed signals about its options for resisting the Roche offer. As the WSJ Health Blog pointed out last week, the company’s latest proxy notes that Roche has the option to set an acquisition price by requesting valuations from two “nationally recognized” investment banks and averaging them. (The only catch: Genentech’s “independent” directors get to select the banks.) In its most recent public statement, however, Genentech waffles on that point and argues that “does not obligate Genentech or the special committee to agree to any specific process or any price based on valuation assessments provided by investment banks.”
• Anyone who doubts whether Roche is willing to play hardball needs to remember that it spent seven months waging an ultimately successful takeover of the diagnostics maker Ventana Medical Systems for $3.4 billion. That deal, too, was the brainchild of Severin Schwan, then head of Roche’s diagnostics group and now CEO of the entire company.
• For some far-out speculation, turn to the In Vivo Blog, where Kate Rawson argues that the Roche bid is actually a defensive play against the future approval of biogeneric competition to Genentech’s leading biotech drugs. It’s a complicated thesis that doesn’t totally hold up so far as I’m concerned, but if you’re a pharma-deal junkie, it’s worth a look.