The Big Red Biotech Blog

Xconomy Readers Set $20B Pricetag on Genzyme;Is That Too Rich for Sanofi-Aventis?

When the Sanofi rumored bid for Genzyme became public last week, Ryan Mcbride asked Xconomy readers to weigh in with their thoughts on how much Genzyme was worth -- or should be worth. 

Xconomy Readers Set $20B Pricetag on Genzyme;Is That Too Rich for Sanofi-Aventis?.

Readers quickly coalesced at a price approaching $20 B at $76.30 per share.  However, Sanofi reportedly made a formal offer to get negotiations started at a low ball $69 per share.  Reports are also circulating that Sanofi CEO Christopher Viehbacher has only been authorized by his board to go to $70 share - and has been similarly urged not to exceed that figure by Sanofi's two largest institutional investors.

Meanwhile, the Genzyme board is expected to hold out for at least $80 per share or about $21.3 B. Several analysts are said to be in agreement that Genzyme should be worth at least that amount -- and in fact carried a valuation in that ballpark in 2008 before their manufacturing issues with Cerezyme and Fabrazyme.

Icahn is said to be pushing for as high a price as possible in the 80's per share.  There is also speculation that he may want to get a bidding war going with possibly GSK and/or J&J joining the party. It is unclear if either company is truly interested however. 

Genzyme sitting CEO Henry Termeer is supposed to be against any sale -- certainly at the prices offered so far.  So we sit and wait.

Here's several articles commenting on the action to date - from today's WSJ, from Fierce Biotech, from Business Week via PharmaGossip, Fierce Biotech commentary on WSJ story, and Michael Fitzhugh from Seeking Alpha.

Posted by Bruce Lehr August 3rd 2010.

Genzyme Rumor Update

Read latest from Fierce Biotech here.  

And the latest from WSJ Health blog here.

Bottom line is Sanofi is making formal offer to acquire Genzyme reportedly around $75 per share.

Posted by Bruce Lehr July 29th 2010.

WSJ Reports Sanofi Making Formal Bid for Genzyme

This report just in from the WSJ.  It reports that Sanofi will send a "bear hug" letter to Genzyme directors to get the process moving.  The deal is expected to be in the range of $20-21 B.

Posted by Bruce Lehr July 28th 2010.

How Much Should Genzyme be Worth?

The Xconomy post below notes that Genzyme may now be the target of several Big Pharma companies eager to add its biological drugs (and $4.5 B in sales) for rare diseases to their portfolios.

Xconomy: How much would you pay for Genzyme?

The post also notes all the troubles that Genzyme has experienced in the past year with various and sundry manufacturing mishaps - particularly at its Alston, MA plant.  It failed to meet demand for its two highest sellers throughout 2009 and isn't expected to fully recover in 2010 either.

It's stock price rose to $67.07 on Friday's run up following acquisition rumors by Sanofi-Aventis.  Over the weekend, both GSK and J&J's names were added to the list of potential suitors.  Thus, the possibility of a small bidding war perhaps.

Ryan Mcbride of Xconomy is asking its readers to put forth their price ideas.  Analysts have weighed in between low 60's and high 70's price per share range.  Where do you believe the price should land?  And, who will be the winning suitor?

Posted by Bruce Lehr July 26th 2010.

Breaking News: Genzyme rebuffs Sanofi bid - PharmaGossip

According to a report from 'Reuters via PharmaGossip, Genzyme has rejected Sanofi's initial bid to buy the company.

PharmaGossip: Genzyme rebuffs Sanofi bid: report | Reuters.

Does that leave GSK or J&J to make their pitch next?

Posted by Bruce Lehr July 26th 2010.

EU majors reported to be looking at Genzyme

 
  

EU majors reported to be looking at Genzyme.

European drugmakers Sanofi-Aventis and GlaxoSmithKline (GSK) are rumored to be looking at a possible acquisition of US biotechnology group Genzyme. 

Reportedly Sanofi had made an offer for Genzyme at about the time it was reported publicly that they were in the market to make a US biotech acquisition in the $15-20 B range. 

GSK has reported to have been much more circumspect in their advances. Reportedly, their CEO, Andrew Witty, has merely asked Genzyme to keep him informed if they decide to put themselves on the block. Witty has since denied having any interest in making a major acquisition.

Some analysts have also mentioned J&J as a possibly interested party to an acquisition but company spokemen have declined to comment.

The waiting game commences. It is likely that Genzyme's celebrated manufacturing issues in the past couple of years have opened it up as an acquisition target.  Genzyme id report an earnings drop last week although its stock price rose by more than 17% on Friday based on these takeover rumors.

Posted by Bruce Lehr July 26th 2010.

Genzyme in Play with Offer from Sanofi-Aventis

Fierce Biotech and the WSJ both report that Sanofi-Aventis has made a pitch to buy Genzyme - current market cap lies between $13-14 B.  Genzymes shares reacted strongly with a 19% increase on the news.  Sanofi's fell by 5% - although they were also hit with news of the FDA's approval of Momenta's Lovenox generic today. 

Posted by Bruce Lehr July 23rd 2010.

Too Much Sanofi Cash! That's a problem?

From FT.com via the PharmaGossip blog, one reason that Sanofi is on a purported spending spree is that it has too much cash on hand.  It generated $10.7 B from operations in 2010 and now analysts and investors want the company to do something with it.

CEO Chris Viehbacher is under pressure to spend, spend, spend.  We should all have such troubles. Would he rather be on the edge of a big patent cliff with a gaping hole in his pipeline and have ZERO to spend to get out? 

At least he has money levers to pull, and seems to be diversifying the portfolio through acquisition of small and leaner companies - thus not adding a mega-merger bloat to contend with. 

Recent rumors have Sanofi chasing either Allergan, BiogenIdec, Genzyme, Celgene or Gilead -- and at least one analyst has mentioned Amgen too. 

As I said, it is good to have the cash on hand and to at least have spending options. 

Posted by Bruce Lehr July 4th 2010.

Sanofi Acquisition Rumors Inspiring Bets

The PharmaGossip blog says that options action is hot and heavy for BiogenIdec, Genzyme and Allergan based on Sanofi rumored major acquisition of a US company for up to $20 B. 

Step up and place your bets.

 Maybe not all on one number.

Posted by Bruce Lehr July 3rd 2010.