One of the pivotal negotiating points of the longstanding acquisition of Genentech by Roche was the forthcoming study of Avastin in colon cancer. The Avastin trial was widely reported as a key element to the negotiations. As Roche & Genentech openly debated a fair value for DNA shares, both sides played the PR game as the trials data was expected to be released this spring.
While already a huge component of Genentech’s revenue stream with an approved indication toward late-stage cancer, Avastin was thought to potentially extend its use toward patients in early stages of the disease. Success would have brought about a significant increase in value for the product as part of the Genentech portfolio of products.
Today, Roche announced that the study “failed to meet its primary endpoint”, the phrase that no drug developer ever wants to utter. While treatments fail with considerable regularity, this one is particularly notable as it immediately brings into question whether Roche was out-maneuvered in its year-long negotiation with Genentech that ended only weeks before these results were announced.
The actual data will be released next month at American Society of Clinical Oncology (ASCO) but investors already have their own opinion as Roche shares lost 10% of their value in early-day trading overseas.
Ultimately, Roche won a victory and has already begun making significant change on the Genentech campus in South San Francisco. But many are wondering, was the price was too steep?
Beaker's Blog 
If anyone out there thinks that Roche did not consider the potential that this product wouldn’t be approved for the additional indications, you’re kidding yourself. Roche set a deadline to make a decision that fell before this data was to be released. They took a gamble…and lost. Their offer would’ve been considered very low had it been approved and yes, slightly high since it was not.