Sanofi-Aventis signs second-largest biotech deal ever
Paris/Cambridge (Mass.) – French pharma giant Sanofi-Aventis is set to take-over US biotech specialist Genzyme in a $20.1bn deal, the biggest corporate acquisition worldwide so far this year and the second-largest in the history of the biotech industry (after Roche-Genentech in 2009). The deal fuels Sanofi’s drug pipeline that will be hurt by low-cost generic competition and expiring patents, i.e the company’s blockbuster Plavix (clopidogrel bisulfate) in 2012. Genzyme, which will yield $74 per share in cash along with payments linked to sales and production milestones, has built a multi-billion dollar business around high-priced medicines for rare diseases along with potential blockbuster drugs, such as the experimental Parkinson’s treatment Lemtrada (alemtuzumab) that is marketed under the brand name Campath as treatment for blood cancers and currently is being compared in two pivotal Phase III head-to-head studies with Bayer HealthCare’s Rebif. “This is a great deal for Sanofi, paying close to their original budget of $20 bn, with extra contingency payments only coming if Genzyme's multiple sclerosis drug Lemtrada exceeds Sanofi's expectations“ commented John Shortmoor, independent analyst at Datamonitor. “Through the acquisition, Sanofi has successfully gained access to niche markets where competition is limited by more than just patent protection - a stated aim of the company's CEO, Christopher Viehbacher - providing a platform for long-term sales growth and diversifying away from the traditional blockbuster model.“ The acquisition, if confirmed by Genzyme’s stockholders, is to improve the geographic reach of Genzyme's drug portfolio, bolstering the company's long-term sales potential.