UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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SCHEDULE 14A
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Genentech, Inc.
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 #1 Genentech: An Overview Genentech: An Overview Patrick Yang, Executive Vice President Manufacturing, Genentech November 17, 2006 |
 #2 Meeting Agenda Introduction to Genentech Pat Yang Manufacturing Next steps Pat Yang Q&A All |
 #3 Manufacturing Manufacturing • Genentech is a world leader in biotech manufacturing, with more FDA-approved manufacturing capacity for the production of biotech medicines than any other company • Four facilities: South San Francisco, CA; Vacaville, CA and Oceanside, CA and Porriño, Spain • We believe we have the right plans in place to meet the growing demand for our products: • Oceanside facility purchased from Biogen Idec in 2005 • Option to purchase facility in Singapore • Working with Lonza, Wyeth and Novartis • Process yield improvements for Rituxan and Avastin • New capacity coming online for bulk and filling/packaging |
 #4 • Q4’06, announced Lonza will acquire our 40,000 liter facility in Porriño, Spain; Lonza will continue production of Avastin for Genentech for 3 years • We anticipate closing the transaction before the end of 2006 Porriño, Spain (Lonza Biologics) Status Enhancement Project Facility • Anticipate construction, qualification and licensure of our new plant in Vacaville, California in 2H’09 (additional 200,000 liters) Vacaville, CA CCP2 Genentech Bulk Manufacturing Oceanside, CA NIMO • Anticipate FDA licensure to produce commercial Avastin in 1H’07 (90,000 liters) Contract Manufacturing Wyeth BioPharma Andover, MA • Received FDA licensure to produce Herceptin Q3’06 Process Improvements Rituxan • Anticipate approval of higher titer Rituxan process in Vacaville by the end of 2006 (+50%) Avastin • Anticipate approval of higher titer Avastin process in South San Francisco by the end of 2006 (+50%) Near-term Key Capacity Enhancement Projects Near-term Key Capacity Enhancement Projects As of November 9, 2006 |
 #5 Novartis Pharmaceuticals Huningue, France • Began manufacturing all future worldwide supply of Xolair Wyeth BioPhmara Andover, MA • Received FDA licensure to produce Herceptin Lonza Biologics Porrino, Spain • Announced Lonza will acquire our 40,000 liter facility in Porriño, Spain; facility will continue production of Avastin for 3 years Lonza Biologics Singapore • Entered into long-term supply agreement with Lonza to manufacture Genentech products at their 80,000-liter facility in Singapore; We have an exclusive option to purchase the Singapore facility in the future 2006 Key Contract Manufacturing Accomplishments 2006 Key Contract Manufacturing Accomplishments • Our strategies include expanding or acquiring facilities and engaging contract manufacturers that produce Genentech’s products on our behalf As of November 9, 2006 |
     #6
• Completed qualification runs of Avastin at Oceanside • Expect FDA licensure to produce Avastin 1H’07 • Purchased state-of-the-art finish/fill facility in Hillsboro, Oregon • Expect facility to be licensed and operational in 2010 • Expect FDA approval of high titer processes for Rituxan (in Vacaville) and Avastin (in SSF) • Signed two new product supply agreements with Roche Other 2006 Manufacturing Accomplishments Other 2006 Manufacturing Accomplishments As of November 9, 2006 |
 #7 Genentech’s Oceanside Facilities Genentech’s Oceanside Facilities Manufacturing Facility Manufacturing Facility NIMO Commercial Facility NICO Clinical Facility Purchased Purchased June 2005 February 2006 Potential Capacity Potential Capacity 90,000 liters 5,500 liters # of Employees # of Employees Approximately 530 employees as of September 30, 2006 Plan to employ approximately 30 employees by the end of 2006 Status Status • Q3’06 completed qualification runs of Avastin • Expect FDA licensure to produce Avastin in 1H’07 • Expect to be operational by Q1’07 QuickTime™ and a MPEG-4 Video decompressor are needed to see this picture. |
 #8 - Potential to purchase Lonza Singapore Facility 610,000 Liters Option to Purchase from 2007 - 2010 •Q4’06 Genentech obtained an exclusive option to purchase the
Lonza Singapore facility during the period from 2007 to 2012 •Licensure to produce
Avastin is expected in 2010 80,000 liters Lonza Singapore Facility •Q4’06, announced Lonza will acquire our 40,000 liter facility in Porriño, Spain; Lonza will continue production of Avastin for Genentech for 3 years. •We anticipate closing
the transaction before the end of 2006. Lonza Biologics, Porriño,
Spain Comments Other Comments Potential Capacity Genentech Bulk Manufacturing Facility 240,000 Liters Current Total Capacity in Use - Potential addition of Vacaville, CA 530,000 Liters Potential Capacity in 1H’09 - Potential addition of Oceanside, CA 330,000 Liters Potential Capacity in 1H’07 Comments Contract Manufacturing (Bulk) •Expect FDA licensure
in 2H’09 200,000 (8x25,000L) Vacaville, CA (CCP2) •In July 2006, Roche
signed two new product supply agreements which supplement and supersede existing product supply agreements. Roche has agreed to purchase specified amounts of Herceptin, Avastin and Rituxan through 2008 and to purchase specified amounts of Herceptin and Avastin through 2012. – Previously, Roche had assumed most of their own ex-US Herceptin supply and was
planning on assuming all their ex- US Avastin supply. •Genentech has and will continue to supply all of Roche’s
ex-U.S. Rituxan supply. Roche, Penzberg, Germany •Received FDA licensure
in Q1’06 to produce bulk substance
Xolair (will produce all future worldwide supply).
As of Q3’06, Genentech will acquire bulk supply of Xolair from Novartis and compensate them on a cost plus mark up basis. Novartis Pharmaceuticals, Huningue, France •Received
FDA licensure in Q3’06 to produce Herceptin; expect Wyeth to produce 25% of Herceptin over the next several years. Genentech will produce the remainder in Vacaville. Wyeth BioPharma, Andover, MA •Received FDA licensure
in Q3’05 to produce Rituxan; expect Lonza to
produce ~50% of Rituxan over the next several years. Genentech will
produce the remainder in our other facilities. •Q3’06 we completed qualification runs of
Avastin •Expect FDA licensure to produce Avastin in 1H’07 •First licensed in
2000. Licensed to produce Avastin, Herceptin, Rituxan, Xolair. •First licensed in
1985. Licensed to produce Activase, Avastin, Cathflo Activase, Herceptin, Lucentis, Nutropin, Nutropin AQ, Pulmozyme, Raptiva, Rituxan, and TNKase. Comments Lonza Biologics, Portsmouth, NH 90,000 (6x15,000L) Oceanside, CA (NIMO) 144,000 (12x12,000L) Vacaville, CA (CCP1) 96,000 (8x12,000L) South San Francisco, CA Current Capacity Genentech Bulk Manufacturing Facility Manufacturing Capacity Manufacturing Capacity As of November 9, 2006 |
 #9 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 650,000 1999 2000 2001 2002 2003 2004 2005 2006 1H'07 2008 2H'09 2010 *Chinese Hamster Ovary Cell Culture Note: In Q4’06, Genentech has entered into an agreement with Lonza to purchase Genentech's Porrino, Spain manufacturing facility. Concurrently, we entered into a supply agreement for the manufacture of certain Genentech products at Lonza's facility currently under construction in Singapore, with Genentech also receiving the right to exercise an exclusive option to purchase the Lonza Singapore facility during the period from 2007 to 2012. The transactions are subject to various closing conditions.. As of November 9, 2006 Genentech Commercial Cell Culture* Bioreactor Capacity Genentech Commercial Cell Culture* Bioreactor Capacity Current Commercial Capacity South San Francisco, CA and Vacaville, CA (CCP1) |
 #10 What Does This Mean For You? What Does This Mean For You? • We encourage continued focus on your current efforts to bring important new medicines to patients, as this is in everyone’s best interest • While we fully expect the deal to go through, we aren’t there yet • Your current management continues to run the company until close • Once the GNE and Tanox transition teams are up and running, more detailed information will be available on next steps, key milestones, etc. • Most importantly, we recognize that this is an uncertain time for Tanox employees. Consistent with our values, our intent is to treat
Tanox employees with the same respect & integrity that we treat our own employees |
 #11 Transition Process Will Be Organized Around Four Areas Transition Process Will Be Organized Around Four Areas EC / Legal EC Product Portfolio Committee Research Review Committee EC / PROP Executive Team Decision maker Feb. 28, 2007* Feb. 28, 2007* Jan. 31, 2007* Feb 28, 2007* 3.Recomm end-ation Feb 10, 2007* Feb. 10, 2007* Jan. 31, 2007* Jan 31, 2007* 2. Evaluation Number of contracts; Rights and obligations of each Number of employees by functional area Number and value of R&D programs Number, location, and capability of facility 1. Assessmen t Contracts HR Change management R&D Programs Facilities/ Property Process Summary * All dates are
tentative |
 #12 Decisions Yet to be Determined Decisions Yet to be Determined • Future plans for Tanox’s pipeline • Future plans for Tanox’s sites • Future status of employees • Who will be retained • How/when decisions will be made after close; however, our intent is for decisions to be made as quickly and with as much transparency as possible • Where retained employees will be located • Details of post-close integration and timeline |
 #13 Next Steps Next Steps •Today:
• Small functional meetings with Genentech and Tanox management •Next few
months: • Additional site visits to establish post-close integration plans • Deal not closed until at least Q1’07; Tanox remains an independent company until the deal closes. It is important to stay focused and keep moving projects forward during this time: • Tanox shareholder vote • Hart-Scott-Rodino submission and review • Review of deal by Federal Trade Commission • Transition team established |
 #14 Genentech Transition Team Ashraf Hanna, Team Leader Mark Asbury Leigh Morgan Charles Calderaro Sean Bohen Andy Chan Neil Cohen Contracts R&D HR Facilities/ Property Communi cation Ray Sanchez- Pescadore, Project Manager Brian Muma |
 #15 Forward Looking Statement Forward Looking Statement • This presentation contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include, among other things, our expectations regarding the closing of the
acquisition and the integration of the operations of Tanox, our belief that we have the
right plans in place to meet future demand for our products, our belief regarding the
future growth and profitability of Xolair and anti-IgE inhibition products, our future product development plans (including anti-IL 13 Mab for asthma, anti-Factor D Mab
for dry AMD and anti-CD4 for HIV), our expectations regarding the timing of our
evaluations and decisions for transition plans, and the timing of and actual severance payment amounts for Tanox employees; planned manufacturing expansions and our
manufacturing capacity, including expected timeframes for FDA filings and approval
for licensure of manufacturing facilities and expected timeframe for facilities to
become operational; and FDA approvals of yield improvements. Actual results could
differ materially. Among other things, the transaction and its timing could be
affected or prevented by failure of certain closing conditions to occur, including
FTC or other regulatory actions or delays; integration of the Tanox business
(including the timing of our decisions regarding such integration) could be affected
by failures in our due diligence review of the Tanox business and failure to
retain certain key employees; growth and profitability of our asthma and anti-IgE
business (including Xolair) could be affected by adverse market conditions, increased
competition, delay or failure of clinical programs, and safety or manufacturing
issues; future development plans may be affected by changes in our corporate strategy, increased competition, regulatory actions or delays, unsuccessful clinical trials or third party intellectual property rights; Xolair clinical trials could be affected by a number of factors including unexpected safety, efficacy or
manufacturing issues, additional time requirements for data analysis and FDA actions
or delays; achieving sales revenue consistent with internal forecasts, unexpected
expenses such as litigation or legal settlement expenses, changes in tax rules, adverse market conditions, increased competition, regulatory actions or delays; the severance
described in this presentation will be subject to other terms and conditions set
forth in the severance plan established by Genentech (including the execution of a
release by each eligible employee); and the expected FDA filings and licensure
timeframes, planned manufacturing expansions, manufacturing capacity, timeframes for
FDA approvals of yield improvements and timeframe when manufacturing facilities will
become operational could be affected by a number of factors including FDA or other
regulatory actions or delays, failure to receive FDA approval and other delays or
manufacturing issues. Please refer to Genentech’s periodic reports filed with the Securities and Exchange Commission. Such reports contain and identify important factors that could cause actual results to differ materially from those contained in our forward-looking statements. All such
risk factors, including those found in our most recent Form 10-Q, are incorporated
by reference into this transcript. We undertake no obligation to update or revise any
forward-looking statements in the future. |
 #16 Thank You Thank You |
 #17 Q&A Session Q&A Session |
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, our expectations regarding the closing of the acquisition and the integration of the operations of Tanox, our future product development plans with regard to Tanox’s pipeline, our expectations regarding the timing of our evaluations and decisions for transition plans, planned manufacturing expansions and our manufacturing capacity, including expected timeframes for FDA filings and approval for licensure of manufacturing facilities and expected timeframe for facilities to become operational; and FDA approvals of yield improvements. Actual results could differ materially. Among other things, the transaction and its timing could be affected or prevented by failure of certain closing conditions to occur, including FTC or other regulatory actions or delays; integration of the Tanox business (including the timing of our decisions regarding such integration) could be affected by failures in our due diligence review of the Tanox business and failure to retain certain key employees; future development plans may be affected by changes in our corporate strategy, increased competition, regulatory actions or delays, unsuccessful clinical trials or third party intellectual property rights; and the expected FDA filings and licensure timeframes, planned manufacturing expansions, manufacturing capacity, timeframes for FDA approvals of yield improvements and timeframe when manufacturing facilities will become operational could be affected by a number of factors including FDA or other regulatory actions or delays, failure to receive FDA approval and other delays or manufacturing issues. Please refer to Genentech’s periodic reports filed with the Securities and Exchange Commission. Such reports contain and identify important factors that could cause actual results to differ materially from those contained in our forward-looking statements. All such risk factors, including those found in our most recent Form 10-Q filed with the Securities and Exchange Commission, are incorporated by reference into this transcript. We undertake no obligation to update or revise any forward-looking statements in this presentation in the future.