Roche/Genentech: A Case Study For Future Hostile Offers

Hostile takeovers are hardly the norm in the pharmaceutical world. Given the long held belief that a company’s most important assets are its employees, the prevailing wisdom has always been that an unfriendly offer would spur workers to leave, preventing the effective development of products an acquirer was most eager to get in the first place. But facing the two-headed monster that is pipeline shortfalls and patent expiries, companies are forced to calculate the potential worth of assets relative to the risk that employees won’t walk out the door just for the night--but for good. And the math--and unusual market conditions that favor a flush buyer—mean if not a rash in hostile offers, then at least an uptick in attempts.

In the last several months prenatal test developer SequenomInc. launched an unfriendly offer for diagnostics maker Exact SciencesCorp., Astellas...