Roche Bid Could Alter Pharma's DNA
The thought of Genentech going away as a separate publicly traded company is very strange to ponder. In many ways, Genentech is the biotech sector, if you get my meaning. Not having that "DNA" ticker symbol around will be very strange -- and sad.
A New M&A Trend?
Will the Roche-Genentech deal spur further merger activity in the biotech sector?
Deals like this can't hurt, and I'd expect some strength in the overall biotech sector as a result, but I'd also be cautious about predicting a broader biotech buyout trend based on Roche-Genentech.As Roche said repeatedly today, there is an existing relationship between the two companies. Roche already benefits mightily from its 56% stake in Genentech, so now it will benefit even more. There existed a certain inevitability to Roche buying the rest of Genentech. Will this induce other Big Pharma companies to gobble up the likes of a Biogen Idec (BIIB), Gilead Sciences (GILD) or Celgene (CELG), or go after smaller, more speculative biotech firms? Perhaps, but it's hard to make a bet on something like that. Such talk has been percolating for years and with a few exceptions, we haven't seen many mega-deals take place. The way I look at it, Genentech on its own was one of the best, if not the best, biotech investment in the sector. Those investors that agreed and owned the stock are now going to profit. So, buy good biotech companies with strong fundamentals and perhaps you, too, will wake up Monday morning to some happy news. Lastly, if Roche successfully buys the rest of Genentech, the New York Stock Exchange should retire the DNA ticker symbol permanently. Hang a flag from the rafters of the trading floor to remember the greatest and most successful biotech firm that ever was.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV