Sanofi in pursuit of Genzyme
Paris-based drug company Sanofi-Aventis appears to be considering spending more than US-$20 billion for Genzyme Corp., the Wall Street Journal reported citing informed circles. This would be the biggest biotech acquisition after Roche's $46 billion deal to take over Genentech in 2009. The Journal said that talks between the companies are in their early stages and Genzyme executives are trying to establish what price Sanofi-Aventis would be willing to pay. Sanofi-Aventis is feeling the first serious signs of pipeline drought and on Friday, the French drug maker said profits may fall this year after U.S. regulators approved a generic rival to its Lovenox blood thinner that had been generating sales of about $4 billion a year.
Genzyme is a beauty which is apparently courted not only by French cavaliers but also British gentlemen. Wall Street Journal said the drugmaker GlaxoSmithKline also made a "very casual approach" to Genzyme Corp, asking to be notified if Genzyme considered selling itself, citing a person familiar with the matter. The time to buy Genzyme might never have been better.
The Massachusetts-based company had a market capitalization of about $17 billion as of July 23, having lost over one-third of its value in the past two years as it suffered from manufacturing woes that caused shortages of two of its biggest-selling drugs. For the quarter ended June 30, the company reported sales of $1.08 billion and for 2009, it generated $4.5 billion sales. As rumours about the takeover spread, share jumped from $53 on Friday to more than $66 on Monday. Sanofi as well as Genzyme decline any comment.