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Jul 26, 2010

Sanofi-Aventis Reportedly Makes a Play for Genzyme

Sanofi-Aventis Reportedly Makes a Play for Genzyme

Deal could help sanofi as its third largest drug by sales faces generic competition. [© frenta - Fotolia.com]

  • Genzyme’s stock rose over 22% during afternoon trading on Friday, July 23, after newspapers reported that sanofi-aventis had made an acquisition offer. The potential deal likely represents sanofi-aventis’ need to pad its bottom line as it faces generic competition.

    Of immediate concern is its third biggest drug by sales, Lovenox, a low molecular weight heparin. News that Momenta Pharmaceuticals won FDA approval for its generic Lovenox came alongside rumors of the Genzyme takeover. Lovenox has been available since 1987 and is used in the prophylaxis and treatment of deep vein thrombosis and in acute coronary syndromes.

    The drug brought in €3.04 billion (about $3.93 billion) last year, behind insulin therapy, Lantus, which made €3.08 billion (approximately $3.98 billion), and blood thinner Plavix, marketed with Bristol-Myers Squibb, which achieved €6.78 billion (roughly $8.78 billion) in sales.

    Sanofi-aventis has aired concerns with FDA’s sanction of Momenta’s drug since it did not go through clinical trials. Introduction of another version of Lovenox in the U.S. would impact less than 60% of overall sales, the firm says. Sales outside the U.S. have reportedly been growing faster than in the U.S. The company also points out that regulations for comparative studies to be conducted for biosimilars like low molecular weight heparins exist in Europe and Australia.

    An offer for Genzyme would give sanofi-aventis entrance into developing and marketing biologics for rare genetic diseases. Genzyme has had its share of problems over the last year and its share price has not gone much above $60 since June 2009, when it first reported contamination issues at its manufacturing facility in Allston Landing, MA. Reports of sanofi-aventis’ purchase proposal sent the shares up to $66.28 on Friday afternoon, after opening the day at $54.17. Genzyme’s shares are around $66 in early morning trading today.

    Facility closure last year affected Cerezyme for Gaucher disease, Fabrazyme for Fabry disease, Thyrogen for the diagnosis of thyroid cancer, and Myozyme for Pompe disease. Last month the firm reported that second quarter revenue for 2010 was $1.08 billion, 13.89% down from $1.23 billion in the same period last year. The drop is mainly due to limited shipments of Cerezyme and Fabrazyme.

    In May of this year Genzyme said that it would have to pay a $175 million disgorgement fee and inked a consent decree with the FDA to correct violations at its Allston Landing facility. Further fees will be doled out if the company does not adhere to a timetable set up by the FDA to ensure that the plant meets the agency’s requirements.

    Later in May Genzyme achieved some success with FDA approval of Lumizyme produced at the 4000 L scale at a plant in Geel, Belgium. The drug will treat patients ages eight years and older with late-onset Pompe disease.

    The firm’s research pipeline includes candidates for genetic diseases like Duchenne and Becker muscular dystrophy, Niemann-Pick type B, and Parkinson disease. It also has drugs in development for cardiometabolic, renal, transplant, and immune diseases, as well as hematologic oncology.


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