Of Genzyme, Sanofi-Aventis, Biotech Buyout Gossip, and Angry Patients

8/5/10

Genzyme (NASDAQ:GENZ) and Sanofi-Aventis (NYSE:SNY) have continued to be tight-lipped about their rumored buyout talks, making no official comments about Paris-based Sanofi’s reported efforts to scoop up the largest biotech company in Massachusetts.

But the two companies’ silence hasn’t kept unnamed insiders from whispering updates on the Genzyme-Sanofi talks into the eager ears of the business press. And there are plenty of opinions among Wall Street types about the true value of Cambridge, MA-based Genzyme, the world’s largest maker of drugs for rare diseases. There’s also been talk about how much Sanofi, a drug behemoth facing revenue loss due to competition from generic products, would be willing to pay for Genzyme to fill its expected revenue gap.

Bloomberg News reported this week that Sanofi has made an offer to pay between $67 and $70 per share for Genzyme, which would put the buyout at up to $18.7 billion. But sources tell the business wire that Genzyme—whose stock price jumped from less than $55 per share before the buyout rumors surfaced last month to a Wednesday close of $69.41 per share—is seeking an offer in range of $80 per share or more. (Xconomy readers thought that $76.29 per share was the right price.) Analysts have also speculated that Sanofi could mount a hostile takeover of Genzyme if its offer is rejected.

Genzyme spokesman Bo Piela declined to comment on the buyout topic yesterday, and he also assured me that leaks from unnamed sources on this matter weren’t coming from his office. But reporters from all over the world are calling Piela about potential buyout of Genzyme, one of the few large independent biotech companies left after its peers like Genentech, Millennium Pharmaceuticals, and MedImmune have been gobbled up by giant drugmakers in recent years.

On Wall Street, investors have largely shrugged off normally major news events on Genzyme that are unrelated to the buyout rumors. Yesterday, for example, the company and its Carlsbad, CA-based partner Isis Pharmaceuticals (NASDAQ:ISIS) reported that their cholesterol-lowering drug, mipomersen, passed muster in a pair of pivotal clinical trials, giving the two companies the clinical evidence they need to seek regulatory approval for the drug in the U.S. and Europe. On the whole, Genzyme’s stock price hasn’t significantly moved since the news came out. Maybe it’s because of lingering safety concerns about the drug.

Genzyme’s stock also didn’t budge much when a New York Times blog reported on Monday that patients were challenging the patents for the firm’s second-biggest seller, agalsidase beta (Fabrazyme), over shortages of the drug.

Right now, investors only seem to care about how much money Sanofi or some other company is willing to pay for Genzyme in a buyout—all the other stuff seems to be immaterial. So stay tuned for more action on the takeover front.

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