Genentech playing poker with Alzheimer's?

Genentech playing poker with Alzheimer's?

Summary: If the market buys into the importance of Genentech's Alzheimer's work, bidding the stock over the current $86/share Roche offer, the deal could be off.

TOPICS: Health, Apps

On the surface, Genentech's announcement that it has found a new link between a protein called APP and Alzheimer's looks like a really good thing.

(Julie Christie got an Oscar nomination last year for playing an Alzheimer's victim in Away from Her Marion Cotillard won for La Vie En Rose.)

Marc Tessier-Lavigne said his group found that APP does the work of "pruning" nerve cells in human embryos, under the command of a compound known as death receptor 6, which regulates nerve development so we end up with normal brains and nerve systems.

It has long been known that APP has a hand in Alzheimer's. It's the source of beta-amyloid plaques, and many recently failed drug trials have been aimed at destroying the plaques.

All Tessier-Lavigne has, then, is the normal use of APP. Why and how it reappears in old age and starts destroying us from the outside in, let alone how to stop it, remain mysteries. Intriguing mysteries but mysteries.

Now for the poker part. As our sister site BNET reports, Roche Holding AG of Switzerland is currently trying to buy the 44% of Genentech it does not already own.

It's the centerpiece of the Roche CEO's argument for a pay raise, and it is stretching every sinew to finance a $42.1 billion bid, promising it will feel quite full if it can pull off the coup.

If the market buys into the importance of Genentech's Alzheimer's work, bidding the stock over the current $86/share Roche offer, the deal could be off.

It seems clear there is a long road from knowing what protein to attack and why to having an effective drug in a clinical trial. How long that road is for Genentech is unclear.

At this writing Genentech was trading at $85.17, about $2 higher than at the moment of the Alzheimer's announcement, but still lower than the Roche offer.

Will Alzheimer's help Genentech get away from Roche? Does it still want to? And who will play Tessier-Lavigne in the movie? Stay tuned.

Topics: Health, Apps

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  • Your health articles push my buttons.

    It's not you. It's the subject. My knowledge of the health industry is only about 5% of what I know about Open Source. That doesn't mean I don't have opinions, well informed or not.

    We are loosing the luxuries of outlandish CEO salaries and bonuses. If an airline executive had 15% of the aluminum ripped out of his airline's fleet for scrap to fund his bonus he'd be thrown in a Federal prison never to see the light of day again. But a drug industry executive can play stock shenanigans to pad his bonus and only suffer a sore wrist from glad handing everyone. Making money from making people well is the other side of making money from letting people stay sick.

    I know big money buys big advances. It also makes for very expensive drugs. I don't know what the answer is but I do know it has nothing to do with marketing. It has to do with results, not the image of results. It has to do with sharing knowledge not locking it up and charging a fee for it especially when some of that knowledge was publicly funded. It has to do with making a drug that outperforms its predecessor not a sugar pill. And stock prices should be dependent on performance not on successfully lobbying Washington to extend a drug's patent.
    • It pushes my buttons too

      It is a puzzlement. Companies like Genentech
      rely on the high price of drugs in the U.S. to
      fund their R&D, yet those profits are driving
      costs to unaffordable levels.

      What happens when the subsidy goes away?
  • RE: Genentech playing poker with Alzheimer

    Does Alzheimer make buttons push?