Sanofi – Genzyme deal edges closer

pharmafile | February 1, 2011 | News story | Sales and Marketing |  Genzyme, Lemtrada, Sanofi 

Sanofi-Aventis has entered into a confidentiality agreement with Genzyme to discuss the prospects of Lemtrada, which suggests a deal could finally be imminent.

Sanofi has been seeking to acquire Genzyme since July, but the US biotech company rejected its initial $18.5 billion, or $69 a share deal.

The value of Genzyme could hinge on the success or otherwise of MS treatment Lemtrada (alemtuzumab) and so the companies are looking to use a contingent value right (CVR) as a compromise.

Lemtrada is currently in phase III development, but results won’t be ready until around May.

Sanofi will now be privy to non-public information on Lemtrada, but wrangling over value is likely to cue wrangling over value on both sides.

The CVR would see Genzyme shareholders receive further returns if the drug is a success in the market place.

The CVR was proffered as a means to close the gap between Sanofi’s offer of $69 a share, and Genzyme’s expectations that are closer to $80 a share.

 “There are still gaps but I think we have made some progress,” Viehbacher told Reuters whilst attending the Davos world economy forum.

“Whether that is enough to entirely close the gap we will have to wait and see. But I think we would expect that given the forecasts, which we don’t necessarily share, that it could be of significant value to Genzyme shareholders,” Viehbacher said.

Genzyme has predicted that peak sales of Lemtrada – already licensed to treat leukemia under the name Campath – could earn as much as $3.5 billion a year.

Sanofi has been less optimistic and has forecast a more modest $700 million given the nature of the evolving MS market.

Ben Adams