Imagine you're a Genentech worker in San Diego. Since Roche and Genentech first signed their partnership deal in the 1990s, you've enjoyed a relatively hands-off approach that's allowed independent research to thrive. In fact, Roche's affiliation with Genentech is regarded as the gold standard of what a Big Pharma's relationship with a small biotech should be. What's more, it's a set-up that's produced great results, such as Rituxan, Herceptin and Avastin--Roche's blockbusters.
But now things may change. Roche, of course, has made an offer to buy the remaining portion of Genentech that it doesn't already own. Analysts and employees worry that a takeover could negatively impact Genentech's internal culture, which has been credited for the company's success over the years. Genenech is scrambling to make sure its talented employees don't jump ship for fear that the status quo will change or that they'll be laid off. The biotech has announced plans to put $371 million earmarked for its stock option plan into retention bonuses as it negotiates with Roche over a buyout.
It's unlikely that Genentech's 500,000 square-foot Oceanside, Ca., plant will experience the kind of layoffs Roche's Palo Alto holdings will. The Oceanside plant is the home of 25 percent of Avastin production, which requires the kind of talent pool found in very few areas of the country, San Diego being one of them. Though sweeping layoffs are unlikely, Oceanside will undergo internal changes. A Genentech spokesperson said the company has yet to decide how many jobs would be cut if the deal does go through. But one thing's for sure: Roche must be careful as it navigates the takeover waters. One wrong move could cause Genentech employees to jump ship, which could render what's sure to be an expensive purchase not nearly as valuable as it has been in the past.
- read this Voice of San Diego article for more