Sanofi and Genzyme have been inching closer to a final merger agreement that centers on a $74 per share cash price and a contingent value right security that would be worth $5 or $6 if everything pans out in the big biotech's favor, according to a string of fresh news accounts. Insiders are saying that the two companies should complete the deal early this week.
The New York Times, Reuters and the Wall Street Journal, among other news organizations, are reporting that the two sides have hammered out the framework of a $19 billion deal that will make Genzyme a valuable subsidiary of Sanofi-Aventis. Genzyme will figure prominently in Sanofi's ambitious plans to expand its presence in the Boston R&D hub. But analysts have also been looking for potential synergies that will allow Sanofi to carve a significant chunk out of Genzyme's annual budget--a likely trigger for job cuts.
Quoting sources familiar with the deal, the Wall Street Journal notes that Sanofi's CVR for Lemtrada--Genzyme's ambitious, late-stage MS program--would start trading on its own at $2 and could reach $5 or $6 provided the drug lives up to Genzyme's rosy forecasts.
If the deal now closes as expected, Sanofi will be wrapping up talks that started back in August, when Genzyme initially shrugged off its $69 offer for the company. And Genzyme CEO Henri Termeer will end up with a deal worth about $80 a share in total, allowing him to cap his career with a successful buyout for investors. That's a dramatically different ending than many analysts were expecting about a year ago, when Genzyme's manufacturing woes triggered talk of a quick exit under a dark cloud.