Roche, the Swiss drugs company, made a $43.7 billion (£22 billion) cash bid for the remaining stake in Genentech, its San Francisco-based partner, yesterday. The deal would be one of the most expensive acquisitions in the pharmaceutical sector for years.

Roche, which already owns 55.9 per cent of the cancer drug specialist, said that it would pay $89 a share - a 9 per cent premium to the biotech company's closing price on Friday.

Genentech would give Roche the entire revenues for expensive cancer drugs such as Avastin and Herceptin, as it comes under threat from generic competitors to several of its medicines.

Paul Diggle, an analyst for Nomura Code, the investment bank, said: “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. I suspect Amgen and Genzyme will be the two companies people think about next.”

The Basle-based Roche made the bid while unveiling a 2 per cent fall in first-half net profit to $5.62 billion, having been hit by a loss of sales of Tamiflu, its influenza drug, and the weak US dollar. Shares in Roche fell nearly 5 per cent to SwFr171.00.

The market reaction led some analysts to comment that the Swiss company might have to increase its offer.

Jay Markowitz, a research analyst at T. Rowe Price Associates, which owns about 16.5 million shares in Genentech, said: “I think the market is telling you that they view the offer as an inadequate reflection of Genentech's value.” Jason Zhang, an analyst for BMO Capital Markets, also said that he did not expect Roche to be able to pull off the Genentech deal at the price offered.

Roche, which has had a stake in Genentech since 1990, said that a combined entity would generate more than $15 billion in annual revenue and would employ about 25,000 people in the United States. The company did not specify how many of Genentech's 10,700 employees would be retained.

Roche expects the deal to be concluded “as soon as possible”, that it will generate annual pre-tax cost benefits of between $750 million and $850 million and to add to earnings per share in the first year.

Franz Humer, Roche's chairman, said that a takeover would improve operational efficiency by reducing complexity, eliminating duplications and increasing scale in the US. “Combining the strengths of Roche and Genentech will create significant value and result in benefits for patients, employees and shareholders,” he said.

Roche said that Genentech's San Francisco site would operate as an independent research and early development centre and become the headquarters of the combined American commercial operations.

Analysts said that Roche was taking advantage of a weak US dollar and a recent return to the sector by investors worried about financial stocks amid the present global economic gloom.

Snapshot

— Genentech, founded in 1976, claims to be the first biotech company

— Products include the cancer drugs Tarceva and Avastin

— Total second-quarter operating revenues $3.23 billion

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