Swiss drugmaker Roche launched a surprise hostile bid for US biotech group Genentech at a lower price, reflecting tougher financing conditions and a drop in Genentech shares. Roche Holding AG is now making a public tender offer at $86.50 per share in cash for the 44 percent of Genentech it does not already own, valuing the deal at $42 billion and replacing its initial $44 billion bid.
The move comes just days after the world's biggest drugmaker Pfizer Inc agreed to buy rival Wyeth for $68 billion, backed by a new $22.5 billion loan, indicating debt markets for cash-rich pharmaceutical makers are far from dead. "We are confident that we will have the financing available when the money is needed," Roche Chairman Franz Humer told reporters.
Buying Genentech Inc would give Roche control of all revenues for blockbuster cancer drugs Avastin and Herceptin, as well as absorbing an attractive portfolio of new medicines, and reflects Big Pharma's rush to acquire biotech assets to fill sparse new product pipelines.