Sanofi-Aventis (NYSE: SNY) has approached Genzyme (NASDAQ: GENZ) regarding a potential buyout deal, causing the beleaguered biotech's stock to surge Friday afternoon. Citing people familiar with the matter, the Wall Street Journal reports the two sides are in the early stages of assessing each other's interest in the deal, including the appropriate price for Genzyme. The rare disease company has a market cap of $13 billion.
Genzyme CEO Henri Termeer (photo) said in April that the company was open to selling off some of its noncore businesses. The company has been struggling for 15 months to resolve all its manufacturing issues, agreeing to pay a $175 million federal fine and operate under FDA supervision for an expected seven or eight years. Virus contamination at a Boston plant touched off shortages of Genzyme's drugs for rare genetic disorders Gaucher disease and Fabry disease, causing the company's sales and stock prices to take a hit.
Bloomberg earlier this month reported that Sanofi was mulling a potential $20 billion deal with a U.S. company. Industry watchers immediately began to speculate what biotechs would fit the deal, noting that Genzyme, Biogen Idec ($13 billion), Celgene ($23 billion) or Gilead Sciences could be targets. Since Chris Viebacher (photo) was tapped as Sanofi CEO in September 2008, the company has inked more than $17 billion in deals.
- here's the WSJ report
- click here to see a timline of recent Sanofi deals