"We do not believe the offer adequately reflects the value and future potential of Genentech's business," Chief Executive Arthur D. Levinson said.
The Food and Drug Administration is reviewing the company's drug for patients with recurring glioblastoma multiforme, a form of brain cancer that is generally fatal within six months.
That designation gives market access based on promising early results.
However regulators said in documents posted online that they are unsure that the company's results are strong enough to rush out the new indication.
The company's application relies on imaging scans that claim to show a reduction in tumor size.
Patients were considered responsive to the drug if their tumor shrunk at least 50 percent over the course of two consecutive visits to their physician.
In two separate studies, Genentech reported that roughly 25 percent and 20 percent of brain cancer patients responded successfully to the drug.
However, FDA reviewers said they have never used "response rate" as a measurement to grant accelerated approval for drug to treat glioblastoma multiforme.
They noted the difficulty of measuring tumor size via medical imaging.