Sanofi to acquire Genzyme for $20.1 Billion

Genzyme Centre Cambridge

Genzyme Centre Cambridge

Nine months of relentless pursuit seems to have paid off, with the French pharmaceutical giant, Sanofi-Aventis, being just hours away to finally acquiring U.S. contemporary Genzyme Corp., according to multiple media reports.

The deal, likely to be announced tomorrow morning, along with Genzyme’s scheduled quarterly earnings report, would state that the Cambridge biotech giant has reportedly reached a deal in principle to be acquired by Sanofi for $19.2 billion in cash, plus future payments based on sales of an experimental drug for multiple sclerosis.

Genzyme’s Rare Disease Treatments to Sanofi’s Rescue

Genzyme is the world’s largest maker of medicines for rare genetic disorders. Its acquisition will help Sanofi Chief Executive Officer Chris Viehbacher offset revenue losses as some of Sanofi’s biggest-selling products face competition from generic versions.

Since joining the company in December 2008, Viehbacher has been hunting outside Sanofi’s laboratories for products that will help replenish its pipeline of new drugs. Sanofi’s blood thinner Plavix and the cancer drug Taxotere are facing competition from generics.

As a result of its deal with Genzyme, Sanofi will gain treatments for Fabry, Gaucher and Pompe diseases.

Sanofi to acquire Genzyme for $20.1 Billion

Sanofi to acquire Genzyme for $20.1 Billion

Unlike the pills produced by traditional drug companies, Genzyme’s medicines are made using biological processes and can’t be readily copied by generic-drug makers. Genzyme garners premium prices from insurers and government payers because the therapies provide life-saving benefits.

Genzyme’s top-selling medicine, which garnered $722 million in sales in 2010, is Cerezyme, a mass-produced version of a human enzyme missing in patients with the inherited illness Gaucher disease. The medicine had sales of more than $1 billion in 2007 and 2008 before shortages caused by the plant contamination.

Fabrazyme, used to treat the genetic illness Fabry disease, and Myozyme and Lumizyme for Pompe disease, similarly provide patients with enzymes their bodies fail to make or produce adequately on their own.

Genzyme has projected peak sales of $3.5 billion for Lemtrada, known as Campath when used for blood cancer. Sanofi said in October that analysts’ estimates of about $700 million were a valuation “probably closer to the reality of the product.” Lemtrada is in the final stages of testing and Genzyme expects data from those trials this year.

Deal Details

Genzyme’s stockholders will get $74 a share in cash, the Paris-based company said today in an e-mailed statement. They also will receive so-called contingent value rights that entitle them to payments of as much as $14 a share depending on the performance of Genzyme’s experimental drug Lemtrada and production levels of two of the company’s other products, the company said.

“This agreement with Genzyme is both consistent with our long-term strategy and creates significant long-term value for our shareholders,” Viehbacher, 50, said in the statement.

Genzyme holders will receive one contingent value right per share. Sanofi will pay $1 per CVR if Genzyme produces specified levels of Cerezyme and Fabrazyme this year and another $1 if the U.S. Food and Drug Administration approves Lemtrada to treat multiple sclerosis. CVR owners will receive $2 if Lemtrada sales exceed $400 million within specified periods per territory, $3 if sales exceed $1.8 billion, $4 if they surpass $2.3 billion and $3 if they top $2.8 billion.

Genzyme has about 10,000 employees and 12 manufacturing facilities worldwide, according to the company’s website. Its products are available in almost 100 countries.

Avatar
Richard Meryn
Richard Meryn, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

Recent Posts

Babcock facing writedowns of £1.7 billion, plans to cut 1000 jobs

Babcock facing writedowns of £1.7 billion, plans to cut 1000 jobs

Babcock International Group PLC, the UK defense contractor, said that a comet review for the financial year ending March 21 had identified impairments and charges totaling approxim
18 hours ago
France’s water management utilities, Veolia and Suez, finally merge after long battle

France’s water management utilities, Veolia and Suez, finally merge after long battle

Veolia and arch-rival Suez, the two French waste management utility companies, have struck a deal worth nearly 13 billion euros ($15.44 billion)to merge after months of wrangling.
2 days ago
Impossible Foods mulling IPO at $10 billion valuation

Impossible Foods mulling IPO at $10 billion valuation

Impossible Foods, the makers of the widely popular plant-based burgers, plans to go public with a likely valuation of $10 billion. The vegan burger company was valued at $4 billion
2 days ago
Aramco sells minority stake to EIG Group-led consortium for $12.4 billion

Aramco sells minority stake to EIG Group-led consortium for $12.4 billion

Energy giant Saudi Aramco is selling a minority stake for 12.4-billion-dollar in a newly formed oil pipeline business to a consortium led by US-based EIG Global Energy Partners. Th
2 days ago
Elior acquires Nestor, the single meal food delivery startup

Elior acquires Nestor, the single meal food delivery startup

Elior, the corporate catering company, has acquired the French startup Nestor for an undisclosed amount. Nestor, a Paris, France-based food delivery service, started in 2015 with a
5 days ago
Axa gears to buy office space worth €800m in European cities

Axa gears to buy office space worth €800m in European cities

Axa Investment Managers, the French fund house, is not too worried about predictions that the post-pandemic world will see more people working from home and office real estates shr
5 days ago