Case Study
Genentech: After the Acquisition by Roche
Strategic Management
June 2014
Introduction Roche completed the acquisition of Genentech in 2009 for a total of $46.8 Billion dollars. Genentech was initially concerned about funding for early drug discovery with the acquisition taking place. Genentech was previously able to spend money on research and development for new drug discovery and now that Roche is fully in the picture, they were concerned that Roche may want to reduce funding for early drug discovery (Rothaermel, Pg. C415, 2012). Roche and Genentech were both concerned about the acquisition also because of the different cultures of the two firms even though they had been working together over the last twenty years. Genentech was a more relaxed company, allowing the employees to come to work dressed in jeans, while Roche had a more professional and traditional working environment. Genentech reached most of its successes within oncology, creating the best cancer drugs available on the market, by giving their scientists the time and money they needed to innovate. The scientists that research and develop these products are considered the key players for Genentech and Roche needs to make sure to find a way and keep these scientists since they create the products that generate the most revenue for the company.
Summary
The acquisition by Roche appears to be a success because “the merger allowed Roche access to Genentech’s top-selling drugs, including the block-busters Avastin, MabThera, and Herceptin, all of which were outselling Roche’s own drugs” (Rothaermel,Pg. C431, 2012). “ In essence, the merger of Roche and Genentech was about Genentech going global” said Andew Weiss, analyst at Swiss private bank Vontobel (Copley, 2012). Because of the success that Genentech has achieved with their approach to research, “Roche is also now starting to adopt the Genentech approach by trying to understand the chain of events that
Strategic Management
June 2014
Introduction Roche completed the acquisition of Genentech in 2009 for a total of $46.8 Billion dollars. Genentech was initially concerned about funding for early drug discovery with the acquisition taking place. Genentech was previously able to spend money on research and development for new drug discovery and now that Roche is fully in the picture, they were concerned that Roche may want to reduce funding for early drug discovery (Rothaermel, Pg. C415, 2012). Roche and Genentech were both concerned about the acquisition also because of the different cultures of the two firms even though they had been working together over the last twenty years. Genentech was a more relaxed company, allowing the employees to come to work dressed in jeans, while Roche had a more professional and traditional working environment. Genentech reached most of its successes within oncology, creating the best cancer drugs available on the market, by giving their scientists the time and money they needed to innovate. The scientists that research and develop these products are considered the key players for Genentech and Roche needs to make sure to find a way and keep these scientists since they create the products that generate the most revenue for the company.
Summary
The acquisition by Roche appears to be a success because “the merger allowed Roche access to Genentech’s top-selling drugs, including the block-busters Avastin, MabThera, and Herceptin, all of which were outselling Roche’s own drugs” (Rothaermel,Pg. C431, 2012). “ In essence, the merger of Roche and Genentech was about Genentech going global” said Andew Weiss, analyst at Swiss private bank Vontobel (Copley, 2012). Because of the success that Genentech has achieved with their approach to research, “Roche is also now starting to adopt the Genentech approach by trying to understand the chain of events that
Cited: Copley, C. (2012, July 3). Analysis - After Roche Merger, biotech tail wags big pharma dog. Retrieved May 31, 2014, from Reuters.co.uk: http://uk.reuters.com/article/2012/07/03/uk-roche-genentech-idUKBRE8620FZ20120703 GEN News Highlights. (2012, July 3). Retrieved June 1, 2014, from Genetic Engineering & Biotechnology News: http://www.genengnews.com/gen-news-highlights/three-years-after-merger-genentech-r-d-outshines-that-of-roche-s/81246997/ Rothaermel, F. T. (2012). Strategic Management . McGraw-Hill Irwin.