Reports: Sanofi and Genzyme agree on upper $70s, wrangle over cash vs CVR

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Sanofi and Genzyme may have agreed on a merger deal in principle, but they still seem to have a ways to go before agreeing on a final price, as talks center on how much cash will be on the table and how much will be reserved for milestones.

Several news outlets are reporting that Sanofi-Aventis has raised its base price for Genzyme to the low-$70s as the two sides try to hammer out a final price-plus-milestone package for the big Boston biotech company. The insiders, however, are all using different formulas to describe the deal.

Sources told Reuters that Sanofi had to add a few dollars to its initial lowball bid of $69 a share in order to get access to Genzyme's books. And another insider whispered to the news wire that the final price could be in the high $70s, once you factor in a contingent value right deal for the promising MS drug Lemtrada.

Bloomberg's sources, meanwhile, fingered a final price in the $76 to $77 per share range, with a new bid of $71 a share in cash plus $6 a share for the Lemtrada CVR. And the Wall Street Journal, meanwhile, pegged the new base price at $74 a share plus $2 for the CVR. Analysts, meanwhile, began to count the potential savings Sanofi could achieve with cuts to Genzyme's operations.

"Aggressive cost cutting across the Genzyme oncology and cardio-renal segments alone offer substantial cost synergy opportunities that would drive potential upside to our analysis," Leerink Swann noted. "We continue to view resolution of this event as the key catalyst for Sanofi shares in 2011."

- here's the story from Reuters
- get the Bloomberg piece
- see the Wall Street Journal report

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