Leading biotech banker Frederick Frank has assessed the playing field for Sanofi-Aventis' ($SNY) $18.5 billion offer for Genzyme ($GENZ) and concluded that the big biotech company "is history. "It's only a question of when and at what price," he said at the Reuters Health Summit. But Genzyme will be sold.
Frank, the former vice chairman of Lehman Brothers, says that there's ultimately no way for Genzyme to avoid Sanofi's unwelcome $69-per-share offer for the company. "I would estimate that 40 to 50 percent of the shares are held in the arbitrage community," said Frank, citing investors who are looking for a quick return from an investment in a takeover target. "That's a big load to be sold." And the end of takeover talks would trigger a sharp drop in the value of Genzyme's shares.
Frank was quick to predict the end of the Big Biotech, noting that once Biogen Idec ($BIIB) and its ilk are gone, no one else will grow to fill those shoes. "Today, venture capitalists are willing to finance a company through mid-stage trials but with the goal of selling it at that point," he said. "You're not going to see a lot of new Amgens or Genentechs."
- here's the story from Reuters