Those words were said by Art Levinson, CEO of Genentech, who, along with other executives, gave a thorough defence of the biotech’s belief it is worth more than Roche offered.
Levinson and other Genentech executives said they personally stood behind the financial model and were confident putting the company’s financial credibility on the line.
A comprehensive overview of why Genentech is in a strong position, for both the short and long term, was given, as were the perceived flaws in Roche’s disagreements with the November financial model.
David Ebersman, chief financial officer, defended Genentech’s adoption of the November financial model, which Roche had alleged was created “to increase the $89 per share proposal”.
Ebersman said the model was created because the 2007 long range plan was out of date and stressed that there was “a good rational behind every change made”. Providing extra financial information because of the situation with Roche Ebersman ran through the model’s assumptions.
Some of these detracted value from the predictions made in the 2007 plan, with the November model adding a net total of $900m in sales by 2015, an increase of six per cent.
The reasoning behind these changes was explained to Roche but this failed to convince the Swiss firm. Ebersman expressed disappointment at this, saying that Genentech’s arguments were “very compelling”.
Genentech plays pipeline top trumps
Ian Clark, executive vice president, commercial, highlighted the strength of Genentech’s Phase III pipeline, with 15 sets of results expected in 2009.
This includes the eagerly anticipated Avastin results, which are due in April and if positive could send Genentech’s stock soaring. The biotech is “cautiously optimistic” the results will be positive, citing its understanding of the underlying science to support this belief.
Genentech believes that metastatic use of Avastin will be worth $4.1bn (€3.2bn) by 2015, although this could be as high as $5.1bn if all trials are successful. In addition, Avastin as an adjuvant is anticipated to generate $2.6bn by 2015 but again this could be as high as $5.1bn.
Avastin is supported by other potential blockbusters that Genentech highlighted and a strong long term pipeline, with the company expecting to file 89 investigational new drug applications between 2011 and 2020.
However, the Genentech saved its strongest assertions of its value to Roche until the end, resulting in laughter and applause among the crowd.
First Ebersman showed a slide of Roche’s pipeline from Phase II through to ongoing regulatory review. He then highlighted the Genentech developed drugs and removed these, leaving a strikingly empty slide, with 73 per cent of the drugs removed.
The final summation was made by Levinson, who showed that 66 per cent of Roche’s sales last year were Genentech derived, with this rising from 21 per cent in 2000.