Roche Continents

Roche and Genentech will continue their joint mission of serving patients.

The 26 March completion of the transaction for Roche to acquire all outstanding shares in Genentech signalled another major landmark in the company’s 112-year history and in its nearly 20-year relationship with Genentech.

The completed acquisition and combined Roche–Genentech forces create the seventh largest US pharmaceuticals company in market share and the world’s largest biotech organization. The two companies’ partnership is one of the healthcare industry’s great success stories and will now be taken to a new level. “Building on nearly two decades of successful collaboration, we will continue to pursue better treatments for patients with serious diseases”, said Roche CEO Severin Schwan.

Roche Chairman Franz B.Humer expressed satisfaction that the parties had reached a friendly agreement on the transaction. “I am delighted that the intensive negotiations have led to a successful conclusion.” He added that working together, the companies could now remove uncertainty for employees and focus on innovation and longterm projects. Franz B. Humer spoke of Roche’s tremendous respect for Genentech colleagues and looked forward to working together to accelerate the search for solutions to unmet medical needs.

Art Levinson, Chairman of Genentech’s new Board of Directors and Advisor to Genentech’s Research and Early Development Center, also stressed the highly successful partnership with Roche that has lasted for more than 18 years: “We intend to pursue our shared goal of discovering medications for serious and life-threatening conditions. We look forward to working with our partners at Roche to ensure a smooth transition and to continue our mission of serving patients.”

Joint integration from day one

Roche CEO Severin Schwan commented, “Roche and Genentech saw the potential of a pharma-biotechnology partnership early on and we are now in an enviable position to expand on the success of our long-standing relationship. We are excited about working with our colleagues at Genentech and look forward to partnering with them to develop a plan for the successful combination of the two companies. From day one we have been carrying out integration activities across all functions jointly with Genentech’s management.We don’t pretend to know everything better here at Roche. We intend to listen to our Genentech colleagues and build on their knowledge and contributions.”

A Steering Committee of senior representatives from Roche and Genentech is working on the key strategic and structural issues for the combined business. Pascal Soriot, CEO Genentech, who leads all Pharma activities in the US, and Genentech’s Art Levinson are leading the integration.

Functional work streams are focusing on the detailed design of the combined organization and integration work. Each of these work streams has a Roche sponsor and work stream lead as well as a Genentech sponsor and work stream lead. The aim is to complete the overall organization design by the end of June 2009.

Certain key decisions have already been made. As announced at the outset, Genentech’s Research and Early Development center in South San Francisco will remain an independent center. This will foster diversity in innovation and research. Commercial operations in the United States will be combined under the Genentech name, headquartered in South San Francisco, and the sales forces of both companies are due to be maintained. Synergies will be achieved through combining late stage development, technical operations and other global functions. Roche Palo Alto is to close, with the Inflammation Disease Biology Area moved to Nutley and the Virology DBA transferring to the Genentech campus in South San Francisco.

Building success on success

Commenting on the global implications for the Pharma Division as a whole, Pharma CEO Bills Burns said: “Bringing together Roche and Genentech is a transformational point for the Pharma Division and our goal of focusing on clinically differentiated medicines. From the independent Research and Early Development center fully enriching the diversity of our innovation, through to the alignment in clinical development and manufacturing, to a more powerful commercial presence in the US market; this provides a real opportunity to build success on success.

I realize the enormous personal challenge that this brings to many in the organization and the need for clearly helping colleagues as wemove forward to build our success for the future.”