The same cannot be said for the offer from BMS, of New York, as ImClone, also of New York, has been on the block before: in 2006, corporate raider Carl Icahn gained control of ImClone's board and put the company up for sale, although the right buyer never materialized. Still, as both ImClone and Genentech have managed to work productively as partners with pharma for many years—BMS and ImClone became intertwined seven years ago in their 2001 multibillion dollar co-marketing deal for Erbitux (cetuximab) and Genentech and Roche have worked together as separate entities for nearly two decades—why is now the right time for a buyout?
For Roche, the bid is more about long-term growth than short-term revenue. Roche is already the majority shareholder of Genentech stock, and owning Genentech outright would add just CHF 1.7 ($1.4) billion to Roche's books annually, an amount now attributed to Genentech minority interests—the 44% of Genentech shareholders that is not Roche. Although Roche has estimated merger synergies would save between $750 million and $850 million a year (which works out to $9.4 billion if one assumes the savings will last forever in total at the higher estimate) these figures are not enough to fully explain why Roche decided to step in.
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