Genzyme

Advertisement

Sanofi Agrees to Buy Genzyme for at Least $20.1 Billion

Sanofi-Aventis said on Wednesday that it has agreed to buy the biotech company Genzyme $ 74 per share in cash plus an additional amount pegged to the performance, with only advance payments worth $ 20.1 billion.

The announcement brings to end months of haggling, as the French giant drug manufacturers trying not succeed to get Genzyme of $ 18.5 billion, and the board of biotech dug in his heels.

The deal, which has the unanimous approval of both companies’ boards, is expected to close in the second quarter, provided the customary closing conditions are met. Sanofi has already had the deal cleared by the European Commission and the Federal Trade Commission.
Sanofi expects the deal to have a positive effect on its earnings per share by the end of the year, and accretive by up to 1 euro per share by 2013.
The deal hinges on a so-called contingent value right, or C.V.R., which promises an extra payout for Genzyme shareholders if certain drugs — Lemtrada, used to treat cancer under the name of Campath, as well as Cerezyme and Fabrazyme, which are for rare diseases — hit certain milestones in terms of sales and production.
Christopher A. Viehbacher, chief executive of Sanofi, said the C.V.R., “served as an important value bridge between our two companies,” and that it “rewards both Genzyme and sanofi-aventis shareholders, particularly if Lemtrada outperforms the market’s current expectations.”
One C.V.R. will be issued per Genzyme share, and it will yield up to $14 if all targets are hit, adding another $2.7 billion to the size of the deal.
“On realistic assumptions, this is going to pay out at $78” per share, said Marc Booty, who manages investments for Pictet Asset Management in London. “Sanofi investors were comfortable sub $80.”
Mr. Booty assumes that Genzyme treatments will hit their first aggregate target of $400 million net sales in a period determined, but not disclosed, by Sanofi, an achievement that would trigger just part of the C.V.R. payments.
He said the decision to acquire Genzyme, rather than conduct an enormous stock buyback, has assured the company’s long-term growth with a “duration asset.”
Set to be publicly traded, the C.V.R. will pay out $1 a piece if Genzyme meets its production targets for Cerezyme and Fabrazyme, the output of which was disastrously slowed because of viral contamination at its plant in 2009. It will pay out another $1 if Lemtrada wins F.D.A. approval to treat multiple sclerosis, and gradually step up if sales targets are met.
“This transaction represents a new beginning for Genzyme,” said Henri A. Termeer, head of the Boston-based biotech firm.
Genzyme shares traded above $83 in 2008, but plunged below $50 the following year on news of the contamination. The shares’ low price gave Sanofi an opportunity to expand its pipeline at a time when it faces sharp competition from generics as several of its treatments cross a so-called patent cliff.
The rare disease treatments that represent much of the biotech’s profits are more difficult to manufacture than small-molecule drugs, as Genzyme’s own experience shows.
“A biologic is not as easy to copy,” Mr. Booty said, which means that they are not as vulnerable to patent expirations, as other barriers limit competition.

The offer announced Wednesday is a 48 percent premium over the price of $49.86, where Genzyme was trading before Bloomberg News reported the biotech had been approached on July 2.
Sanofi shares rose 1.79 euros, or 3.59 percent, to 51.59 euros in late morning trading in Paris on Wednesday. Genzyme rose $0.70, or 0.94 percent, to $75 in pre-market trading on the Nasdaq, continuing its ascent after climbing 3.53 percent on Tuesday.

Genzyme will become a global center for Sanofi in the study of treating rare diseases, and the deal will increase the French drugmaker’s presence in the Boston area. Integration planning begins immediately.
Sanofi hired Evercore Partners and J.P. Morgan as financial advisers, and Weil, Gotshal & Manges as counsel. Genzyme hired Credit Suisse and Goldman Sachs as advisers, and Ropes & Gray as counsel, while Wachtell, Lipton, Rosen & Katz served as counsel for the biotech’s independent directors.

Reuters: Sanofi, Genzyme Have Acquisition Agreement in Principle 

By Miriam Gottfried

Sanofi-Aventis (SNY) has agreed in principle to acquire Genzyme (GENZ) for $19.2 billion in cash plus future payments for an experimental Genzyme drug, according to a report by Reuters.
Citing two sources with knowledge of the matter, Reuters reported that Genzyme investors will receive $74 per share in cash plus a contingent value right, or CVR, tied to Genzyme’s experimental multiple sclerosis drug Lemtrada.
Genzyme shares closed Monday at $71.77.
The sources told Reuters that the deal is expected to be announced tomorrow morning.
The deal would give Sanofi of France a position in the market to treat rare diseases and help it overcome an impending patent cliff.
Investors applauded the news, sending shares of Genzyme up 3.6% to $74.32 and American depositary shares of Sanofi up 2% to $34.51 in midday trading.


Tag: Genzyme,sanofi aventis, sanofi 

Relate post:
Serena Branson  Warung Bebas Videos