"What I like best about the mini-Genentech spinoff idea is that the company will be seeded with a pipeline that's truly vetted.
Genentech hired highly motivated, hard-working, well-trained expert scientists. Identify stocks that meet your criteria using seven unique stock screeners. Genentech was a pioneering research-driven biotechnology company that has continued to conduct R&D internally as well as through collaborations.. Genentech's research collaborations include: In 2008 Genentech entered into a collaboration with Roche and its subsidiary GlycArt to develop obinutuzumab. Returning to reality, what does happen to the $44 billion (or more, if Roche ups the Genentech bid) that will flow to Genentech's existing shareholders?The consensus appears to be that Roche will have to raise the offer to make the deal work.
What happened. Roche Holding (NASDAQ:RHHBY) acquired Genentech, a pharmaceuticals company with three blockbuster oncology drugs, in 2009 for a sum of $47 billion. I'm talking, of course, about mini-Genentech stock options."Minority shareholders want to be treated fairly; $89 a share is not fair value," says Jennison's Chan, who believes a triple-digit offer would be much more palatable.Rodman's King has an even better idea: Levinson rallies private equity buddies, including early Genentech funder and venture capitalist extraordinaire Tom Perkins, to raise money enabling Genentech to make its own hostile bid for Roche or otherwise buy itself out.as well as those mentioned above.Roche Chairman Franz Humer and tell him, 'You don't buy us, we'll buy you, punk.'"Anyway, it's just an idea. Later, Genentech could not fulfil its IPO hype History always repeats itself.
People cannot think out of box and appreciate unconventional things. The weakness in the U.S. dollar works to Roche's advantage today, and the company acknowledges that the environment for Big Pharma is changing, growing more competitive.At current prices, Genentech makes up roughly 35% of the $277 billion in total market cap from the so-called "Big Six" profitable, large-cap biotech companies, which include Biogen Idec,And by partially spinning off Genentech's drug-discovery and early-stage drug-development operations into a separate, publicly traded company, Roche could reward Genentech scientists who stay with the favored currency of Silicon Valley. It's hard to imagine Roche having a hard time selling that deal to Wall Street.Genentech also has one of the deepest R&D pipelines in the industry, which should help Roche grow into the future, but if the company were interested in unlocking more of the value from that pipeline -- and could get investors to share the risk and reward of early-stage drug development -- a mini-Genentech spinoff (with Roche still controlling a majority stake, of course) makes a lot of sense.Says King: "If I were Levinson, I'd get in the face ofDavid Chan, portfolio manager of the $1 billion Jennison Health Sciences Fund and current owner of 12.8 million Genentech shares, says a portion of that money will be re-allocated into other health care and biotech stocks as growth fund managers look for new opportunities.medical technology are good places to look for growth these days."Genentech is the most widely held of the Big Six, so removing it from the list not only shrinks the sector considerably but also makes it less attractive to investors who owned Genentech because it was the "safe" way to gain biotech exposure.Yes, it's probably too early to think about Roche spinning off a piece of the "old" Genentech into a new, publicly traded company, but the idea isn't totally far fetched.