Roche Holdings' $43.7 billion bid to buy the rest of Genentech highlights drugmakers' growing reliance on biotech products.

Roche's $43.7 billion offer to buy Genentech may not be the last one, Birgit Kulhoff, pharmaceuticals analyst at Rahn & Bodmer told CNBC Monday.

Stocks advanced, led by a fourth straight rally in bank stocks after Bank of America beat expectations. News of a potential pharma deal also gave the market a boost.

Swiss drugmaker Roche Holding offered to acquire all outstanding shares in its U.S. partner Genentech for $43.7 billion in cash to reinforce its position in cancer medicines.

European stocks dropped 1.9 percent on Tuesday, knocked lower by growing fears over the fate of the financial services sector, but a steep fall in oil prices helped the market end above the session's lows.

Genentech earnings fell short of analysts' expectations, but the company's shares rose slightly in extended trading as the firm lifted its profit forecast for the full year.

Wall Street is bracing for a big round of second-quarter earnings reports that few expect to deliver good news for the state of corporate America.