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Will Roche Go "Crazy" For Genentech?

Monday, 11 Aug 2008 | 10:38 AM ET

Analysts are pretty much in agreement that Swiss drugmaker Roche is gonna have to pony up more than the 89 bucks it has already offered for the rest of Genentech it doesn't currently own.

The $44 billion question, of course, is how much more. Shares of DNA keep hitting new highs as investors bet that Roche will revise. We've yet to hear a formal response from the three-member committee of independent directors that Genentech has formed to evaluate the bid.

In the meantime, I think we've got a new outlier on the speculated takeout price. Sanford C. Bernstein biotech analyst Geoffrey Porges is out with a research note to clients this morning titled, "Genentech: What would Genentech REALLY Be Worth? And Why $130/Share Is Not As Crazy As It Sounds."

Porges writes that his sum-of-the-parts analysis, which he details in the report, pegs DNA at $124 a share when he adds in drug development pipeline "opportunities" and drugs already on the market being approved in the future for other uses.

Porges gives an 80 percent chance of a deal getting done at $105/share or higher. And on his 20 percent odds that a deal falls through he sees a Genentech "stand-alone" valuation of $86 a share, which was his target price before Roche stepped in. Right now he has a $101 price target.

A part of Bernstein owns at least one percent of DNA shares.

This morning DNA is trading around $97.

P.S. A couple of weeks ago I reported that Food and Drug Administration Commissioner Dr. Andrew von Eschenbach had accepted a CNBC invitation to guest host "Squawk Box" this Thursday.

Well, I'm disappointed, to say the least, that this morning a spokesman--not the spokesperson who had formally confirmed his appearance via email several weeks ago--told a Squawk producer/booker that the commish has to cancel because of a "scheduling conflict."

Questions? Comments? Pharma@cnbc.com