Roche announced on Friday that it plans to sell an additional 20 million shares of Genentech (DNA) in a secondary offering, which would reduce its holdings to the 65 stake it had before it decided in June to acquire the remaining shares of the biotech company for $82.50 a share.

Investors dumped DNA shares on the news, with the stock losing $15.063 to $157.75 on 1.1 million shares traded. But even at this price, Roche would suck another $3.16 billion out of its $7 billion investment in DNA (excluding any proceeds from the 2 million-share greenshoe). That's on top of the $1.94 billion Roche raised through DNA's "second coming" in July, when 20 million shares were sold at $97 (see BioCentury Extra, July 21).

Roche could further reduce its holdings, as it plans to issue bonds exchangeable for up to 5.5 million of its DNA shares.

In addition to Roche's impressive ability to monetize its investment in DNA, it's worth noting that the pharma company also has succeeded in sweetening its opt-in rights for licensing DNA products. As part of the June transaction, the companies agreed to extend Roche's opt in rights for 10 years to 2015.

In addition to adding more Roche shares to the public float, DNA's board last week authorized a 2-for-1 split, to occur after the completion of the Roche offering.

Despite the Friday sell-off, DNA was up $13.125 on the week, giving it a market cap of $20.2 billion. On Friday, the company also reported that product sales were up 64 percent in the third quarter to $267 million from $163.1 million in the 1998 period, driven primarily by sales of Herceptin for breast cancer and of Rituxan, partnered with Idec (IDPH), for non-Hodgkin's lymphoma.

DNA began recording charges in the quarter related to the Roche buyback, amounting to about $156.7 million, which resulted in a net loss of $62.8 million ($0.49 a share). Excluding the charges, net in the quarter would have been $66.9 million ($0.51), compared to $63.4 million ($0.49) in the 1998 quarter.

What a long, strange trip it's been

Biotech's strong run is generating to some wild price swings, to which Genzyme (GENZ) and CV Therapeutics (CVTX) can attest.