Sanofi Plans Autonomy for Part of Genzyme Business
From Associated Press (March 2, 2011)
French drug maker Sanofi-Aventis SA plans to give Genzyme Corp.'s orphan drug business, which focuses on rare diseases, some autonomy once it completes its $20.1 billion acquisition of the specialty drug maker.
Sanofi, the world's fourth-largest drug maker, said last month it will buy Genzyme, a Cambridge, Mass.-based biotech drug maker, for $74 a share plus additional cash payments pending the success of several drugs. The deal ended months of haggling between the two companies over a possible acquisition.
Sanofi, like other large pharmaceutical companies, faces pressure from the expiration of patents protecting key drugs from generic competition. It loses protection next year for its blood-thinner Plavix, the second-best selling drug in the world. Genzyme, in contrast, specializes in high-tech injectable drugs that are difficult to make and come with orphan drug status that offers extra patent protections.
Buying Genzyme is a good step to "further de-risk" the Sanofi business, Global Operations President Hanspeter Spek said Tuesday at the Citi Global Healthcare Conference in New York.
He said the Genzyme business that focuses on rare diseases is unique and will remain a standalone organization that receives "a large extent of autonomy." But Sanofi will look for cost savings from other parts of Genzyme that overlap with its operations.
Shares of Sanofi climbed 29 cents to $35.51 in Wednesday
afternoon trading, while Genzyme stock rose 3 cents to
Posted: March 2011