[Through the Glass Door] Roche’s Genentech Purchase: Why June 30th is NOT Juneteenth

The news of President Abraham Lincoln’s order to free African-Americans held as slaves in the Confederate states during the US Civil War tooks weeks, months and even years to spread. Slave owners, as you might imagine, were not particularly keen to share the news that their "property" had been liberated. It was June 19, 1865, when African-Americans who had been enslaved in the Galveston, Texas area were liberated by Union solders and received the news of their freedom – 2 1/2 year’s after Lincoln’s Emancipation Proclamation freed slaves in Confederate states on January 1, 1862.  This June 19th date is marked as the epicenter of a widely noted marker in the US African-American community.

There is no real comparison between the physical horror and personal degradation caused by slavery, whether it’s the version practiced at one point in the United States or anywhere else, and the relatively very minor discomfort of working in a job or organization that may stifle the best in you.

But the fact of the matter is that the news of freedom celebrated every year on June 19th speaks to the end of an era, and the opening of the door of possibilities to a brighter future.

For employees at Roche’s recently acquired Genentech subsidiary, June 30th will mark a financial celebration day when they will receive the first half of a two-part retention bonus payment. The cash is the result of a retention scheme put into effect right after Roche announced, without notice last fall, that they would be seeking to buy the balance of Genentech they did not already own. The second half of the retention bonus is due next June 2010.

The total cost of the plan as originally conceived is estimated to be $371 million, and extends to almost all employees. More senior employees lead the list of prospective payouts. These employees are not enslaved, and on a relative basis are living a pretty amazing life. Still, though, things are likely to be different under the new owner Roche.

Work life under the new Swiss-based management is still early and it will be interesting to see who leaves and how long key people stay. When Novartis purchased the balance of Chiron Corporation – similar to Roche’s purchase of the balance of Genentech it did not own – a few years ago employees departed en masse. The issue for many remaining Genentech employees will be in part around culture and control: biotech in general, and the San Francisco Bay area business culture in specific, tends to favor collegial, quicker moving, less rules based environments found in big companies.  In another sector – technology – a current clash is being played out with the acquisition battle for between East Coast based EMC and Silicon Valley based NetApp for a company called Data Domain where culture and entrapreneurial freedom appear to be a piece of the battle.

"There’s an East Coast-West Coast thing ," says Peter Falvey, an investment banker with Revolution Partners, in Boston, who isn’t involved in the battle. He says similar fears developed as Sun Microsystems Inc. workers contemplated reports that their company was about to be acquired by International Business Machines Corp. Sun ended up going to nearby Oracle Corp. for a slightly better price after Sun Chairman Scott McNealy turned to his Valley neighbor.

Biotech observer Steven Brill notes that “By and large, the Genentech leadership will move on, staying as long as their golden handcuffs require them to. The spirit of entrepreneurship won’t be the same. People who were excited by entrepreneurship will find new homes and those that are comfortable with a large corporate structure will stay.”

Good jobs in biotech are harder to find these days, with something like 44% of current public biotechs estimated to have 12 months of cash or less on hand. But they can be found for folks with the requisite skills who are flexible about where they work, and willing to do what it takes to get the job done.

Even in the tight funding environment, though, there are people with entrapreneurial spirts such as my former Chiron colleagues Jim Knighton at AvidBiotics or Helen Kim at TRF Phama, Inc . who have foregone the relative comfort of big company opportunities to work in the hands-on environments of start-ups.

While you may feel like you work like a slave in those start-up environments, you do so with the joy of knowing that you have the freedom of working for a small group and yourself, and have the ability to take things as far as your skills and hard work will carry you.