Roche Holdings (Genentech)
Another major 2009 merger united Genentech and Roche Holding (RHHBY), when Roche purchased the former for $47 billion. Though Genentech had a few things on its product menu and in the pipeline, the centerpiece of the acquisition was Avastin. The drug was already Genentech’s best-selling drug, approved as a treatment for breast, colon, and lung cancer. It also held promise as a therapy for other cancers.
Worth the price? Again, this one’s hard to tell.
In 2009, Avastin’s revenue totaled $5.9 billion. In 2012, that figure barely hit $6 billion. The slow-down, however, stemmed from the fact that the drug’s FDA approval as a breast cancer treatment was retracted in 2011. Had it not been for that decision, Avastin’s revenue could have grown.
Even without the breast cancer market though, Avastin has been a cash cow, and its trials as a treatment for other cancers hold lots of promise. But it’s going to have to remain a cash cow for a long time to justify that $45 billion.