How badly does Sanofi-Aventis (NYSE: SNY) want Genzyme (NASDAQ: GENZ)? Only CEO Chris Viehbacher (photo) knows for sure. But analysts and other observers seem to think Sanofi needs just the kind of cash-flow boost that Genzyme might provide--and if Genzyme is interested in selling, Sanofi is really the company's best bet.
Genzyme posted $4.5 billion in revenue last year, and that number could grow to $6.6 billion by 2013, Sanford C. Bernstein's Geoff Porges tells Bloomberg. Sanofi is staring down the patent cliff, and could really use that kind of revenue--and revenue growth--over the next several years to make up the deficit. And as BNet Pharma points out, Genzyme's experimental multiple sclerosis treatment, Campath, is a potential blockbuster, something Sanofi could really use for its pipeline.
At this point, there are conflicting reports about Genzyme's response to Sanofi's initial approach: Bloomberg's sources say Genzyme said "Thanks, but no thanks;" Reuters' sources are saying that Genzyme hasn't given the French drugmaker any indication yet. Either way, it's obvious that this potential deal is at a very early stage. The Wall Street Journal reports that Sanofi may write Genzyme expressing formal interest in a buyout later this week--a clear step forward.
Sources are saying that Genzyme chief Henri Termeer (photo) isn't interested in selling, but the activist investors who've recently gained seats on the company's board are. Other big Genzyme shareholders say that newer investors in the company would be willing to sell, too. Sanofi could end up in a takeover bid that's opposed by management. But that takeover might be welcomed by major shareholders. Few people still think a bidding war could emerge, but it's not impossible.
If the French drugmaker wants to buy Genzyme badly enough, such obstacles are just that. But if Sanofi isn't so enamored, then the obstacles could be reason to walk away altogether.
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