Biotechs Watching Sanofi Bid
Biotechs Watching Sanofi Bid [Boston Herald]
From Boston Herald (MA) (August 27, 2010)
Aug. 27--The current standoff over Sanofi-Aventis’ attempt to buy Cambridge-based Genzyme Corp. is raising concerns about how the Bay State’s biotech industry and enonomy will fare if Genzyme is purchased by a foreign firm.
The two sides in the drama continued to make moves yesterday. Genzyme said it was ramping up production of two key drugs, Cerezyme and Fabrazyme, it had previously scaled back due to woes at its Allston Landing manufacturing plant.
The announcement was seen as a signal by Genzyme to reassure investors that it’s getting its production act together.
Meanwhile, Sanofi suffered a legal setback when a U.S. judge refused to block the sale of a generic version of the French company’s anti-blood-clotting drug, though Sanofi immediately announced it planned to continue the fight to protect its lucrative financial interests. The generic drug will be sold by Cambridge-based Momenta Pharmaceuticals.
Sanofi is also sending signals, according to published reports, that it’s either going to move forward with a possible hostile takeover of Genzyme or simply back off of its offer to buy Genzyme at $69 a share. Genzyme is holding out for more money.
"There’s a lot of posturing going on," said Steven Silver, an equity analyst at Standard & Poor’s. Silver said he sees Sanofi ultimately offering about $75 a share for Genzyme, pushing the overall takeover price to nearly $20 billion.
But what would a Sanofi takeover mean for the Hub biotech cluster, which Gov. Deval Patrick made a keystone of his development agenda with a billion-dollar initiative?
Andre Mayer, research director at the Associated Industries of Massachusetts, pointed out that a Sanofi takeover of Genzyme would mean the loss of another locally headquartered company in Massachusetts -- with the loss of high-paying executive jobs.
Boston has already lost a number of company headquarters in recent years, including FleetBoston Financial, John Hancock and Gillette.
"It makes a difference," Mayer said.
Paul Guzzi, president of the Greater Boston Chamber of Commerce, said keeping a Fortune 500 company like Genzyme in Massachusetts is clearly preferable to its takeover by an out-of-state firm.
But he noted that previous foreign takeovers of biotech companies, such as Takeda Pharmaceutical’s purchase of Millennium Pharmaceuticals in 2008, have actually led to a positive outcome, with more jobs.
Bob Coughlin, head of industry group MassBio, predicted that the state’s life-science cluster would remain strong no matter what happens in the Sanofi-Genzyme case.
MassBio reported yesterday that employment in the Bay State’s biotechnology and pharmaceutical industries reached 46,553 in 2009. The number of jobs grew 19.7 percent from 2005 to 2009, the industry group reported.
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Posted: August 2010