It's finally in the books. Sanofi will acquire Genzyme in a deal valued at $20.1 B - agreeing to a price of $74 per share plus a CVR. The CVR provision was very important to reaching the final agreement and each CVR could ultimately be worth as much as $14 in cash. Most of the CVR value will rely on performance of Lemtrada (Genzyme's new MS drug) working its way through phase III and onto the market. Genzyme believes it could reach a peak sales value of $3.5 B annually within the next 5 years.
Initially the CVR will derive value from the production volumes achieved by Cerezyme and Fabrazyme in 2011. Patients for both drugs have had to suffer through shortages most of the ast two years due to production problems at Genzyme's Allston plant. Those problems are expected to abate in 2011.
Sanofi plans to make Genzyme its global center for excellence in rare diseases. Genzyme’s late-stage pipeline includes three products for which it projects regulatory approval by the end of 2013. These are alemtuzumab for multiple sclerosis, mipomersen for familial hypercholesterolemia, and eliglustat tartrate, for type 1 Gaucher disease. Regulatory approval of and sales milestones for alembuzumab for MS are central to the CVR agreement.
Posted by Bruce Lehr Feb 16th 2011