Genentech Holders Vote for Merger With Roche

Shareholders of biotechnology pioneer Genentech voted overwhelmingly Friday to approve the company’s $2.1-billion merger with Roche Holding, a Swiss pharmaceutical giant, despite last-ditch efforts by disgruntled longtime investors to derail the plan.

At the end of a rancorous annual meeting in Millbrae, south of San Francisco, the company said 97% of those voting favored the deal. The merger must also win approval by the Federal Trade Commission in Washington, which is still collecting product information from the two companies.

Under the merger plan proposed in February, shareholders will sell half of their 85 million common shares to Roche for $36 each. In addition, Roche, based in Basel, will invest $492 million in exchange for newly issued Genentech shares.

The transaction will give Roche, which also owns the New Jersey-based pharmaceutical firm Hoffmann-La Roche & Co., a controlling 60% stake in this country’s largest biotech company, with an option to buy the rest at preset prices ranging from $38 to $60 a share over the next five years.

Some of Genentech’s long-suffering investors took issue with the terms, excoriating founder and Chairman Robert A. Swanson for negotiating a deal under which they might lose the opportunity to realize considerable profits down the road should the company’s products finally achieve the success that to date has largely proved elusive.

Richard E. Doscher, a rancher from Northern California, referred to his investment in Genentech as a chance “to get on board a train going west to California.”

“Now we’re told we’ve reached Ohio and maybe (you will) take us as far as Chicago and (then we) get dumped,” said Doscher, one of about 550 shareholders at the standing-room-only session in the Westin Hotel.

Genentech, based in South San Francisco, makes drug products using gene-splicing techniques.