Roche shares up after R89bn deal

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Roche1 Reuters. The logo of Swiss pharmaceutical company Roche.

Zurich - Shares in pharmaceutical group Roche rose on Monday after the Swiss giant announced an $8.3-billion (R89 billion) takeover of US firm InterMune, boosting its role in the lung disease sector and reducing its reliance on cancer drugs.

With analysts saying that the high price paid by Roche for the California biotechnology company would be worthwhile eventually, the group's stock rose by 0.38 percent to 262.25 Swiss francs (216.32 euros; $286.92) in Zurich.

The overall SMI index was meanwhile up by 0.5 percent.

Roche's announcement late on Sunday of a $74-per-share deal with InterMune corresponded to a premium of 38 percent on the Californian firm's Friday closing price, the Swiss group said.

“We are very pleased that we reached this agreement with InterMune. Our offer provides significant value to InterMune's shareholders and this acquisition will complement Roche's strengths in pulmonary therapy,” said Roche chief executive Severin Schwan.

“We look forward to welcoming InterMune employees into the Roche Group and to making a difference for patients with idiopathic pulmonary fibrosis, a devastating disease,” he said.

InterMune's flagship medicine pirfenidone has already won approval in the European Union and Canada as a treatment for idiopathic pulmonary fibrosis (IPF), and is under regulatory review in the United States.

IPF causes a progressive loss of lung function due to fibrosis, or scarring, and can be fatal.

Roche is already present in the sector thanks to its drugs Pulmozyme and Xolair, and has other therapeutic medicines targeting respiratory diseases in the pipeline.

The Swiss group's purchase is part of a move to lessen its reliance on its bedrock anti-cancer drugs, noted Rainer Skierka, an analyst at the bank J. Safra Sarasin.

“Given InterMune's financials, Roche will pay a hefty premium for InterMune's business,” he said.

However, “the medium-term potential of InterMune's flagship products, when they come to the market, and Roche's step to reduce its oncology dependence by diversifying into immunology, justifies the premium which Roche will have to pay,” he added. - Sapa-AFP



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