Did anyone catch the webcast? I didn't listen live and the replay is not available yet. My guess is the deal gets done in the low 70's and SNY adds a kicker for Campath MS.
By Meg Tirrell - Dec 20, 2010 4:32 PM ET
Genzyme Corp., the target of a hostile takeover by Paris-based Sanofi-Aventis SA, is spending more than $2 million a week to develop alemtuzumab for multiple sclerosis, Chief Executive Officer Henri Termeer said today.
Currently approved as a therapy for blood cancer and sold under the name Campath, alemtuzumab produced revenue of less than $150 million last year, according to Cambridge, Massachusetts-based Genzyme. The company predicts sales of $3 billion to $3.5 billion by 2017 with an added use in multiple sclerosis, and expects to see the first results in six months from the final stage of clinical trials. Mark Schoenebaum, an analyst with ISI Group Inc. in New York, estimates peak sales of $2.3 billion.
Sanofi on Dec. 13 extended the deadline for Genzyme’s investors to tender stock at $69 a share, or about $18.5 billion, to Jan. 21, 2011, from Dec. 10. The French drugmaker took its offer to shareholders on Oct. 4, after Termeer spurned the bid as too low, in part because it failed to consider alemtuzumab’s future value. Sanofi cites analysts’ estimates for peak sales of the drug from multiple sclerosis of $700 million.
“Alemtuzumab for MS is probably the largest single program we’ve ever undertaken,” Termeer said today at a meeting with shareholders in New York. “We’ve been investing more than $2 million a week to get to where we are today.”
Genzyme declined 14 cents to $69.65 at 4 p.m. New York time in Nasdaq Stock Market composite trading.
New Name
The company said today the medicine will be marketed for MS as Lemtrada, a combination of alemtuzumab and the Spanish word for “entrance.”
Genzyme and Sanofi have discussed a clause known as a contingent value right, or CVR, structured around Lemtrada, under which Genzyme stockholders would receive more money from the French drugmaker if sales goals are reached.
“CVRs are useful because people take different views,” Termeer told reporters today after the presentation. “Shareholders have been very supportive of the CVR idea.”
Jean-Marc Podvin, a spokesman for Sanofi, declined to comment.
Termeer estimated about a quarter of Genzyme’s current shareholders are short-term investors who bought the stock after Sanofi made its offer.
“Most bought at $71 or $72 a share,” Termeer said. “They don’t want to sell at $69.”
To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net
To contact the editor responsible for this story: Reg Gale in New York at rgale5@bloomberg.net
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