Roche to shed jobs in merger with "California cowboys"

Deal dissection of the day, No. 1: Now that Genentech has finally conceded to Roche's buyout plans, the postgame analysis begins. As we all know after months of following the possibility of a deal, preserving innovation at Genentech is job one. Next on the priority list comes cost-cutting. But neither of those goals will kick in if shareholders don't tender, so we're hearing plenty about their opinions. Here's a sampling of the predictions, prognostications, and pushy advice:

  • Roche plans to shed more than 1,500 jobs in New Jersey and relocate major operations to California as part of the Genentech takeover. Some 1,600 researchers and scientists will stay behind in Nutley, NJ. But the company is redoing its campus master plan to figure out what to do with all the vacant buildings that are left. And who's first in line for the job cuts? None other than sales and marketing, the Star-Ledger says.

  • After years of partnership, Roche and Genentech are already close. Merging their drug portolios should be a snap, New York Times DealBook says. But their cultures are almost diametrically opposed: Roche is Swiss; trains-running-on-time, precision-watchmaking Swiss. Genentech, as one Silicon Valley venture capitalist put it, "are a bunch of entrepreneurial California cowboys." Get the image? Then you see the problem.

  • Roche execs may be guzzling celebratory champagne (somehow we can't imagine it, but it's possible). But along with its buyout of Genentech's promising pipeline come worries about payer reimbursements. President Obama's push for comparative-effectiveness research could leave some Genentech drugs struggling, BusinessWeek reports. Some previous head-to-head studies have shown the benefits of expensive cancer biologics are small; if that trend continues, the bottom line could suffer.

  • Unfamiliar with Genentech's groundbreaking past? The hometown San Francisco Chronicle offers a sort of paean to the biotech pioneer. It comes with an elegiac tone, so have your Kleenex handy.

  • While Genentech shareholders debate Roche's final $95 bid, Chairman Franz Humer promises the Wall Street Journal that the deal will create "the best healthcare company in the world." He's "very confident" top Genentech execs will stick around, including CEO Arthur Levinson. And if Genentech folks have ideas about retaining its unique culture, he's all ears.

  • Speaking of Levinson, he apparently gets no big payout from this change in control. Unlike his M&A compatriots--Schering-Plough chief Fred Hassan and Wyeth's Bernard Poussot--he's not in line for millions in bonus compensation, BNet Pharma reports. He'll make a profit on his current stock holdings, which could be hefty. But that's it.

Stay tuned. The chattering classes aren't nearly through with this one.

- see the DealBook post
- read the story in the Star-Ledger
- check out BusinessWeek's take
- find the Chronicle piece
- get the WSJ's Humer interview
- read the Levinson story at BNet