The juxtaposition of Sanofi-Aventis headlines today is telling. On the one hand, a new court ruling virtually ensures that Sanofi's cancer drug Taxotere will face generic competition by the end of this year. On the other, the French drugmaker is considering a boost to its Genzyme buyout bid. The problem and the remedy, encapsulated.
Sanofi chief Chris Viehbacher (photo) has said repeatedly that he wants to focus on drugs that are tough to copy, so he doesn't have to stay awake nights worrying about, for instance, generic rivals for the $2.9 billion Taxotere. It's been noted that Genzyme's high-tech drugs for rare diseases fit that description. And as Bloomberg points out, Viehbacher has said he envisions improving Genzyme's troubled manufacturing operations and cutting costs post-merger.
Of course, to approach that vision Viehbacher has to get Genzyme to the table. That's why Sanofi's considering a $1- to $2-per-share increase in its $69 bid. "[I]t would match what the market is indicating at the moment Sanofi should be paying," Helvea analyst Karl Heinz Koch tells Reuters. "That by itself will put pressure on Genzyme management to at least sit around the table and explain why they believe $71 is not enough."
And it appears Genzyme management is more receptive to a buyout than previously thought. CEO Henri Termeer (photo) tells the Financial Times that he'd be willing to step aside as CEO next year if a deal goes through. "This is a process, a dance," Termeer explains. "Chris [Viehbacher] has indicated he's in no hurry and I'm not in a hurry."
- read the Bloomberg story
- check out the Reuters news
- see the FT article
- get more from Reuters
- find the Wall Street Journal's take