Is a bidding war for Genzyme looming?
The Wall Street Journal stirred up considerable market buzz over the weekend with its report that GlaxoSmithKline had casually asked Genzyme to keep it posted if it ever decides to put the company on the auction block. But GSK chief Andrew Witty quickly doused the speculation with his insistence that the Big Pharma company is really on the lookout for small "bolt-on" acquisitions. And some top industry experts quickly shifted the attention back to Sanofi-Aventis, which they believe is far more likely to make a serious bid for Genzyme and its considerable biotech assets.
"We may do small targeted deals, but nothing big. We will not do a large transaction in pharma nor in generics," Andrew Witty told La Tribune in France. The Wall Street Journal speculated that Johnson & Johnson could also get into a bidding war for Genzyme, which helped boost the Boston biotech's share price. GENZ shares gained 17 percent on Friday and jumped another six percent this morning on all the buyout talk. But there is a limited group of potential players, considering that Merck and Pfizer are still fully engaged in digesting big acquisitions.
On Friday press reports that Sanofi is actively sounding out Genzyme grabbed investors' attention. And Glaxo has made it plain for some time now that it's not in the hunt for a big deal like a Genzyme buyout.
"The question is: who wants Genzyme the most?" UBS analyst Gbola Amusa tells Reuters. "Our view is that Sanofi is likely to emerge, simply because they are relatively deficient in biotech capabilities versus their peers and they need to better globally diversify their R&D engine."