Finally, Sanofi-Aventis ($SNY) and Genzyme ($GENZ) are actually talking about a deal. After six months of dancing around their difference in price--and at least two months of hints about adding contingent value rights to the mix--the two companies are debating their terms face-to-face. Sanofi issued a statement emphasizing that the two companies aren't even close to an agreement yet. But still, the fact that actual company executives are actually negotiating is a step forward.
Price has been a sticking point ever since Sanofi pitched its initial $69-per-share offer for Genzyme. The Boston company has consistently rebuffed that offer and urged shareholders to do the same when Sanofi went hostile.
But a glimmer of potential agreement appeared after Genzyme and Sanofi each met with investors to present widely varying predictions for the eventual performance of Genzyme's potential multiple sclerosis drug Lemtrada (sold for leukemia as Campath). Genzyme said $3 billion to $3.5 billion; Sanofi said $700 million. And that spawned the notion of adding CVRs--which would pay off depending upon Lemtrada's performance--to the price.
Apparently, the two companies are still wrangling over how much those CVRs should be worth; sources tell Bloomberg $5 or $6 per share are some numbers under discussion, while the Wall Street Journal is talking $80 per share including CVRs. Sanofi chief Chris Viehbacher (photo) told the Boston Globe sees the Genzyme transaction as crucial to his company's future. "Both companies need this deal," Raymond James analyst Eric Le Berrigaud told Bloomberg. "I think an agreement has a chance of being reached before Jan. 21." That date is when Sanofi's current offer expires.