After taking a good hard look at its troubled Allston plant, Genzyme (GENZ) has extended the scope of its repair mission to up to four years--which could extend federal oversight until late in the decade. And that whiff of lingering trouble could smell sweet to Sanofi, which would like nothing better than to be the only bidder at Genzyme's M&A party.
Pictet Asset's Marc Booty tells Bloomberg that the new timeline on remediation at Genzyme could let Sanofi cap its solo bid at $70, well below the $80 threshold that Genzyme would need to celebrate. After all, who wants to get stuck with Genzyme at $50 again if Sanofi walks away anytime soon? According to Booty: "It's a game of chicken."
The Boston Globe, meanwhile, turns the spotlight back to Genzyme's rivals, Shire and Protalix, which are seeing a big opportunity for their competing therapies while Genzyme grapples with its seemingly endless production woes. "People understand there will be two or three treatments out there," says Protalix CEO David Aviezer. "They all work, they all do the job, and that's a good thing.'' It's a particularly good thing for a company competing with a weakened market leader.
Genzyme has been playing a delicate balancing act--often not doing a very good job of it. The new production timeline was outlined in documents filed with the feds and quickly spotted by a pack of journalists who are closely following every step the company makes. Any stumble it makes now will trigger headlines that can only hurt the big biotech.