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Next Biotech Blockbuster

With Roche set to scoop up Genentech, which biotech is probably the next blockbuster?

As Karen Finerman so often says, the first offer is rarely the last offer. That’s how Genentech investors are betting; they’ve driven shares of the biotech above Roche's $89-per-share buyout offer.

"We believe Roche is attempting to capture Genentech's significant future growth on the cheap," said Oppenheimer & Co. analyst Bret Holley in a note to investors. Some analysts predicted Roche's offer would have to climb to more than $100 per share to be acceptable to Genentech, and one pegged the stock's value at $120.

Meanwhile, Robert W. Baird analyst Christopher Raymond says he also expects a higher offer from Roche with the $89 being an initial salvo in a negotiating process.

Whatever number they land on, it appears Genetech is out of the game now. And that could leave as much as $50 billion looking for a new home with a sizable portion of that money mandated to stay in biotech.

Where might that money go?

Some of the dollars are going to start flowing downstream, says Christopher Raymond on Fast Money. I likeGenzyme . They’ve got a very diversified portfolio.

Also some of those dollars could go to Gilead, adds Pete Najarian.

And keep your eye on Celgene, exclaims Guy Adami.
















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Trader disclosure: On July 29, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (DIS), (MSFT), (WMT), (COST); Adami Owns (GS), ( C), (NUE), (MSFT), (AGU), (INTC), (BTU); Adami's Wife Works At Schering-Plough; Najarian Owns (TSO); Najarian Owns (WMT) Calls, (XLY) Calls; Najarian Owns (AAPL) Puts and stock; Finerman And Finerman's Firm Owns C; Finerman's Firm Owns (MRK), (GS), (VLO), (TSO), (MSFT), (SUN)

Baird Maintains A Trading Market In (AFFY), (AMGN), (BMRN), (DNA)

Baird Expects And Or Intends To Seek In Next 3 Month Inv. Bank. Comp. From (AFFY), (AMGN), (BMRN), (DNA)

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