Roche is reportedly close to reaching a deal over the Genentech acquisition.

The Wall Street Journal reported Monday night that the terms of the current deal under consideration would provide for a share price of $95 per share, which is 6% higher than Roche’s initial offer back in July.

Reuters is reporting that a source close to Roche says that the company would pay as high as $105 per share to close the deal, but that the source currently doubts that this will be necessary.

According to the San Jose Mercury News, sources close to the negotations are saying that this is basically a “done deal.”

So, we may finally be on the verge of losing a Bay Area icon.  Before the first Roche bid back in July, it seemed almost unfathomable to imagine the Bay Area biotech community without Genentech.  Now, it is all but a certainty that Genentech will be absorbed into Roche, and we in the biotech world little by little have grown to accept a community without Genentech.

In looking at this deal, it is impossible not to believe that the declining economy played an important role in the negotiations.  As the value of shares tumble, what shareholder wouldn’t seriously consider the possibility of cashing out?  In this case, shareholders knew they had an eager buyer waiting on the sidelines, so as the economy continued to deteriorate, the willingness to sell likely grew.

Furthermore, both Reuters and the San Jose Mercury News are reporting that Genentech at least seems to be growing weary of the shadow of uncertainty hanging over the company.  There is only so long that you can keep a company in limbo and prevent it from disintegrating.  I expect that Genentech is starting to recognize the impact that Roche’s ongoing acquisition efforts are having over the company generally, and that perhaps some key people over at Genentech are starting feel that it is time to move forward with what is increasingly perceived as the inevitable.

So, the California Biotech Law Blog anticipates that an announcement of a done deal is forthcoming.  We will keep you posted as the developments arise.

Biotech companies are facing the new reality of having to contemplate bankruptcy filing in the bad economy.

Bloomberg.com is reporting that five biotech companies have already had to seek bankruptcy protection in the last month, and that more bankruptcies are likely on the way.  According to Bloomberg.com, the companies most at risk have less than six months of cash on hand, only a few drugs in development, and no "definitive" clinical data.  Bloomberg.com reports that a quarter of biotech companies currently fall into this category.

Bankruptcies have in the past been rare in the biotech world.  Troubled biotech companies have historically been acquired or have entered into licensing and other types of deals to survive.  However, the scope of this particular financial crisis is making bankruptcy filings more likely for biotech companies, since no one is available to bail them out from their current financial situation. 

Bloomberg.com reports on the reasons for this new biotech reality as follows:

The amount raised this year by biotechnology companies fell by $9.7 billion through September, or 54 percent, compared with the same period in 2007. . .  Biotechnology companies in the U.S. are raising less cash than they have in a decade. . . .Financing fell to $8.2 billion through September, from $17.9 billion last year. Venture capital funding fell 16 percent, to $2.9 billion. . . .

So what can biotechs in this situation do to survive?

Well, if they are lucky, they will be acquired by a pharmaceutical company.  Otherwise, they can try to just go into hibernation until the economy is better–a strategy that many businesses out there will likewise be doing.

The biotech community can only hope that this will be a short-lived crisis.  But isn’t that what we all are hoping for right now?