Wednesday, Oct 25, 1995
South San Francisco, Calif. -- October 25, 1995 --Genentech, Inc. (NYSE:GNE) today announced that its non-Roche stockholders approved the transaction with Roche Holding, Ltd of Basel, Switzerland. The transaction extends for four years Roche's option to have Genentech redeem the outstanding common stock of the company, and it provides stockholders the right to sell ("put") their shares to Genentech at $60.00 per share for thirty business days following the close of the four-year extension if Roche hasn't exercised its option.
Results of voting non-Roche stockholders were 28,448,506 votes (98%) in favor of the transaction; 449,603 votes against the transaction; and 133,568 votes abstaining. The vote was tallied at a Special Meeting of Stockholders today in South San Francisco, California. The newly created Special Common Stock will begin trading on the New York and Pacific Stock Exchanges on October 26, 1995.
"With the demonstrated support of our stockholders for this expanded relationship with Roche, Genentech now is better positioned than ever to achieve its goal of optimal growth," said Arthur D. Levinson, Ph.D., Genentech president and chief executive officer. "With today's approval, we are moving four very promising research projects into clinical development, while also accelerating our search for key strategic alliances. We clearly intend to build the value of the company to a level in 1999 that will result in stockholders not wanting to 'put' their stock."
The transaction ratified today provides the following:
Roche has the option to cause Genentech to redeem the newly created outstanding Genentech shares at a predetermined price that escalates quarterly up to $82.00 per share over the next four years ending June 30, 1999. The redemption price is currently $62.50 per share. It will increase quarterly at $1.25 for the next six quarters, and at $1.50 for the last eight quarters, peaking at $82.00 in the last quarter beginning April 1, 1999. If settlement of stockholder suits is approved by the Delaware Chancery Court, the call price will increase by $0.50 each quarter with an end price of $82.50.
If Roche does not cause Genentech to redeem outstanding shares by June 30, 1999, Genentech's stockholders will have the option to exercise a "put" on none, some or all of their shares at the stockholder's discretion at $60.00 per share within a thirty business day period commencing July 1, 1999.
Roche may increase its ownership of Genentech up to 79.9 percent through purchases on the open market.
Roche is granted an option for ten years on rights at commercial terms for new Genentech products in non-US markets. At the conclusion of Phase II clinical trials or earlier, Roche may decide to develop such a new Genentech drug outside of the United States. If so, Genentech and Roche will split approximately equally all U.S. development expenses (including preclinical, clinical, process development, and related expenses). Roche will pay for all non-US development expenses. Roche will pay a royalty of 12.5 percent until a product reaches $100 million in sales, then the royalty for that product's full sales becomes 15 percent.
Roche will have exclusive rights and pay Genentech a 20 percent royalty on Canadian sales of Protropin®, Nutropin®, Activase®, and Pulmozyme®, as well as European sales of Pulmozyme.
Genentech will supply selected products for ex-US sales to Roche at cost plus a margin.
Roche will continue to have two seats on Genentech's Board of Directors.
Genentech, Inc. is a leading biotechnology company that discovers, develops, manufactures and markets human pharmaceuticals for significant unmet medical needs. The company has headquarters in South San Francisco, California and is traded on the New York and Pacific Stock Exchanges under the symbol GNE.
# # #