Biotech Values

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Report: Analysts peg Genentech price at $107.50 a share
East Bay Business Times - by Ron Leuty

http://eastbay.bizjournals.com/eastbay/stories/2008/08/11/daily86.html?ana=yfcpc

Holding AG will boost its offer for Genentech Inc. to $53 billion, or $107.50 per share, according to an average from a survey of analysts by Reuters.

The Swiss drug maker last month offered $43.7 billion, or $89 per share, for the 44 percent of Genentech that it doesn’t already own. But a three-person special committee -- including Genentech co-founder Herbert Boyer -- on Wednesday rejected Roche’s offer, saying the company would consider a higher proposal that “recognizes the value of the company.”

Genentech (NYSE: DNA) is the world’s largest biotech company in terms of market value.

Reuters surveyed 13 biotech industry analysts who expected a final deal price in the range of a little less than $100 to $125. On average, the analysts forecast a deal-making price of $107.50 per share.

Citigroup on Friday raised its price target to $108 from $91 but downgraded the stock to “hold” from “buy” because the potential premium “is not attractive enough relative to the current stock price.”

Genentech stock closed Thursday at $98.81 per share and was down 54 cents in midday Friday trading.

Other members of Genentech’s special committee are Dr. Charles Sanders, the retired chairman and CEO of Glaxo Inc., and Debra Reed, president and CEO of San Diego Gas & Electric and Southern California Gas Co.

Roche already owns about 56 percent of Genentech.

Genentech is based in South San Francisco and has a major manufacturing plant in Vacaville, as well as facilities in Oceanside and Hillsboro, Ore.

San Francisco Business Times