Roche's Genentech bid underscores dash for biotech

By Ben Hirschler, European Pharmaceuticals Correspondent -Analysis

LONDON (Reuters) - Roche Holding's$43.7 billion (21.9 billion pound) bid to buy out the remainder of Genentech highlights drugmakers' growing reliance on biotech products as conventional medicines are cannibalised by generics.

The deal would be the largest biotechnology acquisition ever, reflecting Genentech's unrivalled position in cancer, and comes on the heels of a spate of big-ticket purchases. Industry analysts expect more to follow.

"Big pharma is looking to spread its wings and bolster its pipeline," said Simon Friend, global pharmaceutical leader at PricewaterhouseCoopers.

"Just about every major drug company you talk to says they are devoting a much higher proportion of their own research and investment in stuff they are buying to biotech," said Paul Diggle, an analyst at Nomura Code.

"I suspect Amgen and Genzyme will be the two companies people think about next."

Other big recent deals include Takeda Pharmaceutical's agreement in April to buy Millennium Pharmaceuticals for $8.8 billion and AstraZeneca Plc buying MedImmune last year for $15.6 billion.

And in the last month alone, Novartis has agreed to buy Speedel for about $880 million, while GlaxoSmithKline Plc clinched a record $3.3 billion insomnia drug licensing deal with Actelion.

Drugmakers are scrambling to secure promising pipelines and technologies to ensure future growth as many of the world's top conventional, or small molecule, drugs face patent loss over the next five years.