SANOFI-AVENTIS brought an end to its protracted pursuit of Genzyme with an agreed $20.1 billion (€14.8 billion) cash takeover of the US biotech company, coupled with additional conditional payments over the next decade.
The deal, at $74 a share paid upfront and up to $14 extra by 2020, sweetens the French pharmaceutical group’s proposed $69 bid to which it had stuck since October, when it appealed to Genzyme’s investors after the board refused to negotiate.
It signals the biggest takeover in the pharmaceutical sector since 2009, when Sanofi-Aventis and several of its larger peers were left behind by the large-scale takeovers of Wyeth by Pfizer; Schering-Plough by Merck; and Genentech by Roche.
The deal will help strengthen Sanofi-Aventis, which was struggling to find replacement income to compensate for expiring blockbuster drugs such as the blood thinner Plavix, and expand its product range notably into Genzyme’s franchise of high-priced treatments for rare or “orphan” diseases.
It also marks an effort to bridge conflicting interpretations over Genzyme’s value through a series of future “conditional value right” (CVR) payments.
Sanofi-Aventis will allocate one CVR to each Genzyme share, paying $1 if the US company meets production targets this year for its “orphan” treatment Cerezyme; $1 if Lemtrada, its experimental multiple sclerosis drug, is approved by regulators; and up to $12 if it achieves future global annual sales targets of up to $2.8bn.
Genzyme’s Irish business, based in Waterford, was established in 2001 and employs about 500 people. It supplies seven of the company’s products to more than 60 markets worldwide and is undergoing expansion to accommodate additional fill-finish operations. Sanofi-Aventis has no manufacturing business in Ireland but does have a sales and marketing team here.
