Sanofi due diligence last hurdle in Genzyme deal

Sanofi-Aventis has thwarted those optimistic sources expecting a deal announcement Monday morning. The French drugmaker's review of Genzyme's books and manufacturing operations is taking a bit longer than expected, people close to the deal now say. Cash price agreed, follow-up payments agreed, but all subject to Sanofi's due diligence, they say.

In fact, the Boston Globe reports, the companies' boards were scheduled to meet over the weekend to approve a merger, but that plan was scrapped to give Sanofi more time to comb through Genzyme's records. Of particular concern, the Globe's sources say, is Genzyme's ongoing recovery from a plague of manufacturing problems over the past couple of years.

Sources are telling the Wall Street Journal that the tentative deal includes $74 per share in cash up front, with a contingent value right initially worth $2. That CVR could end up paying a maximum of $5 to $6 per share, depending upon performance targets for the experimental multiple sclerosis drug Lemtrada.

So, in cash, we're looking at $19.2 billion or so; that's less than Viehbacher's $20 billion deal cap, but hundreds of millions more than the initial bid of $69 per share. And then there are the CVR payments down the road, which, if they end up coming through, would bring the deal up to as much as $80 per share--just about the number Genzyme shareholders were tossing around early on.

- check out the WSJ story
- get more from Reuters
- see the Globe piece

Suggested Articles

Last year at ESMO, AZ and Merck showed Lynparza topped its rivals at fending off prostate cancer. Now, Lynparza has helped patients live longer, too.

Merck and Eisai are trying to take their Keytruda-Lenvima combo into additional cancers, and new data provide a glimpse of where it might go next.

Bristol-Myers already has one Opdivo combo approved in kidney cancer, but it’s going for another—and new trial data could be just the ticket.