Roche says it wants to acquire the rest of the shares it does not already own in US biotechnology giant Genentech and is prepared to $89 each, or $43.7 billion in cash, to get hold of them.

The Swiss drugmaker, which already owns 55.9% of Genentech, noted that its offer represents an 8% premium on the South San Francisco-based firm’s closing share price on Friday. Roche said that “we believe our offer is both fair and generous and provides an opportunity for all non-Roche Genentech shareholders to receive an immediate premium for all of their shares”.

Roche chairman Franz Humer said that the firms’ relationship thus far “has resulted in one of the biggest success stories in the healthcare industry…leading to some of the most important breakthroughs in the treatment of cancer”, notably Avastin (bevacizumab), Rituxan (rituximab) and Herceptin (trastuzumab). However, chief executive Severin Schwan claimed the firm wants to take “the necessary steps to nurture Genentech's innovative and unique science-driven culture”, as it completes its move from being a “research-focused biotech venture into an integrated pharmaceutical organisation”.

Mr Schwan said that Genentech would still operate as an independent unit within Roche “to safeguard a diversity of different approaches and to foster the long term flow of novel breakthrough medicines”. However it would now be “better able to share technologies and expertise in pharmaceuticals and diagnostics across the group and broaden the mutual access to the external innovation networks of both companies”.

Another attraction is the savings that could be made. Roche said the combination would generate annual pretax cost synergy benefits of about $750-$850 million and would be accretive to earnings per share in the first year.

Earnings down
The deal turned the spotlight off Roche’s half-year results which were announced three days before the results were originally scheduled to be released. They showed that group sales fell 4% to just over 22 billion Swiss francs (up 4% in local currencies), while net income slipped 2% to 5.73 billion francs.

The firm’s pharmaceuticals division suffered a 6% sales decline to 17.26 billion francs hit hard by a severe reduction in revenues from the influenza jab Tamiflu (oseltamivir) which fell back 71% globally to 327 million francs. The decline was expected, as most of the firm’s existing pandemic stockpiling orders have now been fulfilled.

On the positive side, the six-month sales of the division’s oncology products were once again impressive. MabThera/Rituxan for non-Hodgkin’s lymphoma grew 17% to 2.87 billion francs, while sales of Herceptin were up 11% to 2.47 billion francs. Avastin recorded an increase of 36% to 2.36 billion francs, while Tarceva (erlotinib) sales grew by 28% to 587 million francs.

The transplantation product CellCept (mycophenolate mofetil) rose 13% to 1.01 billion francs, while Roche’s hepatitis C treatment Pegasys (peginterferon alfa) was up 3% to 785 million francs. The osteoporosis drug Boniva/Bonviva (ibandronic acid) put in a good showing, climbing 51% to 507 million francs.