DealZone

London’s bankers were hardly in celebratory mood last night, post-Darling, but Financial Times unit mergermarket persevered with their 2009 M&A awards, crowning Lazard financial adviser of the year for working on deals such as BGI-Blackrock and Glaxo-Stiefel, and lauding Swiss drugmaker Roche for its $47 billion buyout of Genentech. See the extensive list of winners — including Financial Adviser of the Year, Visegrad Group [that's the Czech Republic, Poland, Hungary and Slovakia] — here.

Curiously, though, there was nothing for Morgan Stanley — the No. 1 bank year-to-date for announced M&A globally and in the United States, according to Thomson Reuters data. And arch-rival Goldman Sachs was awarded just for its work in Germany, while Europe’s top M&A house in 2009, Deutsche Bank, also went empty handed.

Thomson Reuters magazine Acquisitions Monthly hosts its bash in January.

Roche shareholders must feel as though they got some bad stuff when they handed over $46.8 billion to buy Genentech in March. In a major study, Avastin, Genentech’s colon cancer drug, failed to prevent the recurrence of colon cancer in patients who had undergone surgery. Roche shares promptly tumbled.

Roche investors were thinking Avastin sales would double from $4.4 billion, and Roche still sounds confident that the drug will do about that well treating colon cancer in its earlier stages, as it was designed to do. Roche said a positive result on the study was not a foregone conclusion, calling its success a “coin toss.” But this is unlikely to placate its stockholders because it implies Roche didn’t adequately account for the risk.

In fact, it looks increasingly like Roche was high on Avastin’s prospects when it raised its offer for Genentech, apparently trying to get in before a would-be positive result from the study drove Genentech’s stock any higher.

As dealmakers everywhere struggle to get deals done, the healthcare industry seals yet another one.

Express Scripts has agreed to buy health insurer WellPoint’s prescription business for $4.68 billion in a significant expansion for the U.S. pharmacy beenfit manager. The deal will be a concoction of cash and up to $1.4 billion in common stock, and will generate more than $1 billion of incremental EBITDA.

This comes on the heels of Pfizer’s $68 billion acquisition of Wyeth, Merck’s $41.1 billion takeover of Schering Plough and Roche Holding’s $46.8 billion buyout of Genentech. Granted, this isn’t a pharma deal, but it still falls under the umbrella of the healthcare sector.

Morgan Stanley‘s jump from 10th to first in our M&A league table should put them on cloud nine. The first quarter was busy with drug deals, and Morgan Stanley was in on the biggies: advising Wyeth on its $64.5 billion acquisition by Pfizer, and Schering Plough on its $46 billion takeover by Merck. And with the ink still to arrive on the paper of both deals, more good stuff could be on the horizon. The trick for Morgan Stanley, and anyone wanting to take down the king of the hill, is to spot and exploit the trend.******If drug deals remain du jour — and many expect the sector to stay hot, despite all the swallowing going on — the trend will certainly be toward Biotech. The markets for biologics and pipeline-filling cancer treatments have been strong in the face of expected government action to lower doctor and drug bills.******The heightened merger activity in Big Pharma has switched the tables a bit in the sector. After Roche’s nearly $47 billion acquisition of Genentech, analysts became increasingly convinced that the remaining big biotechs like Celgene, Gilead, Genzyme, Biogen Idec and Amgen could emerge as buyers, given that traditional Big Pharma is either digesting deals or just not so big anymore.******Christopher Kaufman; DealZone Editor******Deals of the Day:******* Drug maker Lupin Ltd said it has acquired a 51 percent stake in Multicare Pharmaceuticals Philippines Inc, marking the Indian firm’s foray into the $2.5 billion Philippines pharmaceuticals market.******* Britain-based dairy products maker Dairy Crest said it had sold its 49 percent stake in Yoplait Dairy Crest (YDC) to the Yoplait Group for 63.5 million pounds ($92.66 million) and that it would use the cash to reduce debts.******* Austrian steelmaker Voestalpine said its North American unit, VAE Nortrak had acquired U.S-based Leading Enterprises Inc, a supplier of speciality components for railway tracks, as part of a plan by the company to expand its railway division.******(PHOTO: A sign is pictured on Wall St. near the New York Stock Exchange in New York November 25, 2008. REUTERS/Lucas Jackson )

It wasn’t quite the market response Genentech CEO Arthur Levinson was looking for.

Levinson and his team worked hard to make the bull case for the biotech group by providing long-term forecasts to prove it is worth far more than Roche is willing to pay. Yet Genentech shares still ended down 4.6 percent, or nearly $4, in line with a grim market on March 2.

Roche investors, by contrast, were in distinctly chipper mood on March 3, marking up the Swiss group’s stock by more than 5 percent. 

Expect a bruising fight.

In the battle for control of the world’s most valuable biotech company, Roche CEO Severin Schwan is playing hard ball. The reason is simple: he needs to clinch a deal that clearly enhances earnings.

The Swiss drugmaker has been the most highly rated Big Pharma company for years but financial results last week suggest it may be losing its mojo. Certainly, its premium rating is slipping.

Genentech had wanted $112 a share but Roche’s tender offer for the 44 percent of Genentech it doesn’t already own actually cuts the price to $86.50, or about $42 billion, from the $89 proposed last July.

The credit crisis may just be the leverage Roche needs in its bid for Genentech.

The Swiss drug maker went hostile with its bid to buy the 44 percent of Genentech it doesn’t already own. But in a rather unusual move, it has gone to shareholders with an offer that is actually lower than the $44 billion bid it initially made for the U.S. biotech group.

Investors now have a public tender offer at $86.50 per share in cash, valuing the deal at $42 billion, down from $89 per share earlier.

After the initial announcement in July, Genentech shares rose to a high of $99.05, but later fell back below the offer price as the credit crisis bit, giving Roche the leeway to lower its bid.

Pity the guys who dreamt up two of Wall Street’s coolest tickers — DNA and BUD — both of which look set to be consigned to the dustbin of history.

Genentech grabbed the three letters synonymous with biotechnology by being in on the ground floor of the gene revolution. Anheuser-Busch was lucky enough to have a beer brand known everywhere by one syllable. Now both look doomed.

Genentech faces a $43.7 billion bid from Roche for the 44 percent of the Californian biotech group that it doesn’t already own. Genentech is expected to succomb, albeit after a possibly sweetened offer. Anheuser has already agreed to a $52 billion takeover by InBev.

While credit problems plague private equity buyouts and other corners of the M&A world, we’ve seen plenty of strategic deals going through and the Biotech sector is starting to look downright buoyant. Roche‘s $43.7 billion bid to buy out the remainder of Genentech is set to be the largest biotechnology acquisition ever and comes on the heels of a spate of big-ticket purchases. Industry analysts expect more to follow. “Just about every major drug company you talk to says they are devoting a much higher proportion of their own research and investment in stuff they are buying to biotech,” said Paul Diggle, an analyst at Nomura Code. “I suspect Amgen and Genzyme will be the two companies people think about next.” Big biotech deals over the recent past include Takeda Pharmaceutical‘s agreement to buy Millennium Pharmaceuticals for $8.8 billion, AstraZeneca’s purchase of MedImmune last year for $15.6 billion, Novartis‘s purchase of Speedel for about $880 million and GlaxoSmithKline’s record $3.3 billion insomnia drug licensing deal with Actelion.

Senior Goldman Sachs investment banker Ken Wilson will take a leave of absence to advise U.S. Treasury Secretary Henry Paulson on the nation’s banking crisis, people familiar with the matter said, while The Deal hinted the position may be less temporary. Wilson is a vice chairman of investment banking and chairman of financial institutions business at Goldman, where Paulson was CEO until 2006. Wilson has played a key role advising banks on capital raising and reorganizations. He is expected to help address the crisis gripping banks, Wall Street firms and mortgage lenders, the sources said. He is expected to serve without pay through January, when President George Bush’s second term ends.

Other deals of the day:

* British fund manager F&C Asset Management announced a tie-up that will create a UK-owned business with 8.5 billion pounds ($17 billion) of property assets under management.