Genentech Inc holds its annual research and development day on Monday as it aims to convince shareholders that the company is worth far more than the $42 billion Roche has said it is willing to pay for it.
The world's second-largest biotechnology company pushed up the date of the meeting with analysts and investors after recommending shareholders reject Roche's tender offer.
Swiss drugmaker Roche Holding AG is attempting to acquire the 44 percent of Genentech it does not already own for $86.50 per share.
We have moved up this meeting, which usually occurs toward the end of March, in order to tell our story prior to the March 12 expiration date of Roche's tender offer, Genentech Chief Executive Arthur Levinson told employees in an email made public through a securities filing.
At the meeting, the executive committee and select officers will provide investors with an in-depth view of the company's short- and long-term prospects, including our ongoing research, current and future pipeline, commercial results and financial expectations, Levinson told employees.
Cowen & Co analyst Eric Schmidt does not believe the presentation will be critical to the tender offer's outcome.
Moving up the meeting might be a precautionary measure on Genentech's part to make sure it gets its story told in the way it wants its story to be represented, Schmidt said.
But I feel pretty strongly the majority of their shareholders are not going to tender to Roche at $86.50. I don't think people are convinced that $86.50 is the right price for this company, Schmidt said.
Genentech shares rose on Thursday above the offer price for the first time since the tender began February 9, as confidence grew that a deal would get done after Roche appeared set to raise most of the financing it will need through U.S. and European bond markets.
Genentech shares closed at $87.48 on the New York Stock Exchange on Thursday.
A special committee of Genentech's board earlier this week urged shareholders to reject the Roche bid, saying it substantially undervalues the company. Genentech rejected $89 per share last summer and Roche decided to take its case directly to shareholders at the reduced price.
Genentech's banker, Goldman Sachs, had proposed $112 a share, Roche said, giving an indication of how far apart the sides were before Roche went hostile at $86.50 a share.
Roche said it lowered its offer due to changes in market conditions as the recession took a toll. But Genentech's special committee said even the higher price significantly undervalues the company.
We believe Genentech's exceptional management and team, including its world-renowned scientists, can create far more value for stockholders than Roche has offered, Charles Sanders, chairman of the Genentech board's special committee, said in a statement this week.
At Monday's meeting, Genentech will review the breadth of its research and drug development pipeline, likely highlighting many programs involving its most important growth driver, the cancer drug Avastin.
The acquisition, if successful, would give Roche full rights to Genentech's portfolio of lucrative cancer drugs and other medicines, including Avastin, which is approved to treat advanced colon, breast and lung cancers and is being tested for several other uses.
Investors are awaiting important clinical data on Avastin due in April. Analysts believe positive results from that study, which could lead to Avastin's expanded use in colon cancer patients following surgery, would likely drive Genentech's share price well beyond Roche's current offer.
(Editing by Gerald E. McCormick)