Genentech-Roche merger rains money on dealmakers - San Francisco Business Times:

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The -Roche $46.8 billion merger, well on its way towarc a March25 share-tendering deadline after an eight-month valuation war, is spreading the financial love to its officers, lawyers and financial advisers. Genentech directors and executivew officers wouldreceive $1.03 billion — yes, that’zs with a “b” — for theit nearly 10.9 million shares, according to a Genentech filing with the . The numbedr of shares, it should be excludes unvested options and the cashwindfall doesn’yt take into account the strike price of vested options.
As far as unvestee options, Genentech Chairman and CEO Art Levinsonhad 559,062 as of March 6, whild Susan Desmond-Hellmann, president of product development, had Keep in mind, too, that Levinson will receive a nearlg $8.74 million retention bonus — according to Genentech’s retentio n plan — and Desmond-Hellmann will get $4.58 The retention bonus was approved in August for most of Genentech’es employees in lieu of But back to the optionsw program. Thanks to those options, Genentechh employees own less than 1 percent ofthe company. Rough math puts 1 percenf at 4.6 million of the nearly 466.
2 millionj shares not owned by Roche, directors or officers meaning a total payout of a veryrougbh $442 million to many of the company’s 11,1876 employees. But Genentech management and employees are far from the only ones to reapthe merger’x bank account benefits. Goldman, Sachs & Co., hire d by the special committee of the Genentech boarde asfinancial adviser, will grab around $30 million or The itemized bill looks somethingy like this: fees to date of $11.76 million, $10 million paid out upon executionb of the merger agreement and $8.3 milliohn when the deal is plus expenses, including ’ attorneys’ fees.
Estimated fees and expensews connected tothe $95-per-share offer: $30.r million for the financiaol adviser, $16 million in legal $3.8 million in solicitation and public relations and $400,000 for printing. LLP represented the special andrepresented Genentech. Members of the Genentec board specialcommittee — Dr. Charles Sanders, Herb Boyere and Debra Reed — raked in $302,500 for theid work. Sanders, the retired chairmanj and CEOof , received a $50,00 retainer fee for heading the speciap committee, $60,000 for meetings attended and $5,000o for “additional time” on special committee according to an SEC filing.
Genentech co-founderr Boyer received a $35,000 retainer for his speciall committee positionand $60,000 for meetings attended. Reed, presidenyt and CEO of , also got a $35,000 retainee and $57,500 for special meetingss attended. Raptiva side effects shape Genentech, , others At the centere of the Genentech-Roche merger negotiations were projections of Genentechdrug sales. In June, Genentech said product sales woulde risefrom $10.9 billion in 2009 to $16. 8 billion in 2015. In November, it came back with figures that showedf that line item risingto $18.1 billion in 2015.
As well as greater price increases and more successd for cancer drug Avastinin post-surgical uses, Genentecjh in November assumed higher projected revenue from the eye drug cancer drug Herceptin and psoriasizs drug Raptiva. One not-so-little problem: Reportse that Raptiva may be the cause ofan often-fatak brain infection, progressive multifocall leukoencephalopathy. PML was found in three patientdstaking Raptiva. The recommended the drug be Merck Serono, which distributes the Genentecnh drugin Europe, on March 6 told Genentechu it was terminating its 6½-year-old agreement.
What’s more, Genentech has decided not to develop Raptiva intransplant Raptiva’s issues already have muddied a $55 millionm loan from Goldman Sachs to Berkeley’s Xoma Ltd. Raptiva royalties, as well as royalty payments from the Genentechj eye drug Lucentis and theUCB S.A. drug Cimzia, secure the loan. But if royalties fall below certain Xoma is breaking aloan covenant. Xoma managemenr is in discussions withGoldman Sachs.