Genzyme, Sanofi May Eventually Come to Terms: Focus on Biotech Deals

by: The Burrill Report

By Marie Daghlian

Sanofi-Aventis (NYSE:SNY) made a formal offer to acquire Genzyme (GENZ) for $69 per share, an offer that was unanimously rejected by Genzyme’s board of directors as unrealistic and opportunistic.

“Without exception, each member of the Genzyme board believes this is not the right time to sell the company, because your opportunistic takeover proposal does not begin to recognize the significant progress underway to rectify our manufacturing challenges or the potential for our new-product pipeline,” said Genzyme CEO Henri Termeer in a response letter to Sanofi CEO Chris Viehbacher.

In an interview, Termeer told Reuters that he didn’t think Sanofi would go hostile and he thought there was a good chance that the two companies could come to terms. Whether or not the two CEOs and their boards reach a meeting of the minds will be the subject of much speculation in the coming weeks and possibly months. Termeer says Genzyme’s board is not opposed in principle to a sale of the company, just not at $69 a share.

Some analysts feel Genzyme may be willing to consider opening its books to Sanofi if the offer is raised to $75 a share. So far, Sanofi’s board has authorized a bid of no more than $70 a share for the Cambridge, Massachusetts-based biotech.

Sanofi is staring at the loss of as much as 20 percent of its revenue by 2013 as its drugs lose patent protection, Sales of Genzyme’s drugs for rare diseases generated $4.5 billion in 2009. In his offering letter, Viehbacher told Termeer that Sanofi “would put its full resources behind Genzyme” and that its legacy within Sanofi would be assured.

In other dealmaking activity, Swedish specialty pharmaceutical Meda said it will acquire U.S. specialty pharmaceutical Alaven for $350 million in cash. The acquisition expands Meda’s U.S. presence in gastroenterology and women’s health, areas that the company already operates in outside the United States.

Alaven also has a strategic over-the-counter platform that accounts for approximately 25 percent of sales, a business that will further diversify Meda’s revenue base in this country, as well as serve as a platform for commercializing strategic pipeline opportunities. The acquisition of Alaven is expected to be accretive to Meda’s earnings per share already during 2011 and is expected to be completed by early October.

Pfizer (NYSE:PFE) is acquiring Massachusetts startup FoldRx Pharmaceuticals, a drug discovery and development company focused on small molecule therapeutics for diseases caused by protein misfolding, to expand its pipeline in rare diseases. FoldRx’s lead product candidate tafamidis has fast track designation in the United States for the treatment of TTR amyloid polyneuropathy, a progressively fatal genetic neurodegenerative disease, for which liver transplant is the only treatment option that is currently available. Although specific financial terms were not disclosed, Pfizer will make an upfront payment and contingent payments if certain milestones are achieved [see story].

Cellulosic biofuels developer Mascoma is acquiring SunOpta BioProcess from Canadian food and mineral processor SunOpta (NASDAQ:STKL) through a merger valued at $51 million. The combination, to be called Mascoma Canada, will integrate SunOpta BioProcess’ fiber preparation and pretreatment technology, the upstream component of cellulosic ethanol production, with Mascoma's consolidated bioprocessing technology, the downstream component of cellulosic ethanol production, for the effective conversion of non-food cellulose into ethanol and high-value co-products.

The transaction will be funded through a combination of preferred and common shares in Mascoma. The combined company will be approximately 73 percent owned by existing Mascoma shareholders, 18 percent by SunOpta, and the balance by other SunOpta BioProcess shareholders. Burrill & Company, the publisher of The Burrill Report, is an investor in Mascoma.

SunOpta BioProcess and Mascoma collectively have development partners in the United States, Canada, China, Brazil and South Africa. In early 2010, SunOpta BioProcess signed a major contract to supply its fiber preparation and pretreatment technology to one of the largest operators in the new energy sector in China. Mascoma, through a joint venture with forestry products company J.M. Longyear, is currently developing a commercial scale production facility in Kinross, Michigan scheduled to open in 2013. Mascoma is currently operating a demonstration facility in Rome, New York. SunOpta BioProcess has pilot operations in Waterdown and Brampton, Ontario.

Orexigen (NASDAQ:OREX) entered into an exclusive partnership with Takeda Pharmaceuticals (OTCPK:TKPHF) to develop and commercialize its investigational obesity treatment Contrave in the United States, Canada, and Mexico. The drug is under U.S. regulatory review with an action date set for the end of January 2011. The deal follows Japanese pharmaceutical Eisai’s billion dollar marketing deal with Arena Pharmaceuticals for its investigational obesity drug Lorqess. A U.S. Food and Drug Administration review panel will look at the drug in mid-September.

Takeda will pay Orexigen $50 million upfront for exclusive marketing rights in the United States, Canada, and Mexico while Orexigen will retain the right to co-promote with Takeda in the United States. Orexigen will be eligible to receive payments of over $1 billion upon achieving certain regulatory and sales-based milestones, and tiered double-digit royalties on sales if the drug is commercialized [see story].


Global Venture Financings
Company Location Amount Raised (USD M)) Principal Focus
Otonomy San Diego, CA 38.5 Ocular therapeutics
EndoGastric Solutions Redwood City, CA 30.0 Medical devices
Accumetrics San Diego, CA 24.0 Point-of-care diagnostics
Celator Pharmaceuticals Princeton, NJ 20.0 Cancer therapeutics
Cebix San Diego, CA 16.0 Diabetes therapeutics
Aptus Endosystems Sunnyvale, Ca 15.0 Medical devices
Lineagen Salt Lake City, UT 10.8 Genetic tests
Life Image Newton, MA 5.2 Healthcare IT
ClearCount Medical Solutions Pittsburgh, PA 5.0 Healthcare IT
VenX Nashville, TN N/A Medical devices
ImmunoSolv Edinburgh, Scotland 0.8 Immunology
Total Raised US 164.5
Total Raised Non-US 0.8
Grants and Contracts
Company Funding/Contracting Agency Amount Raised (USD M) Principal Focus
Propel Fuels U.S. Department of Energy 7.0 Renewable fuels
Propel Fuels California Energy Commission 4.0 Renewable fuels
Compendia Bioscience SBIR Fast Track 1.3 Data analysis tools
Ace Ethanol ARRA stimulus 0.6 Renewable fuels
Celsion NIH SBIR 0.2 Cancer therapeutics
Dynavax Technologies NIH NIAID N/A Infectious disease therapeutics
Bionovo NIH NCCAM STTP N/A Metabolic therapeutics
Cellerant Therapeutics US BARDA ($153M over 5 years) 63.3 Acute radiation syndrome
Achoagen US BARDA ($64M over five years) 27.0 Infectious
Emergent BioSolutions NIH NIAID 9.1 Anthrax Vaccine
Total Grants and Contracts 112.5
Company Ticker Amount
Raised (USD M)
Financing Type
PharmaGap (Canada) TSX-V:GAP 0.5 Follow on
KiOR Private 75.0 Mississippi loan
Endocyte Private 15.0 Credit facility
Orthofix International OFIX 300.0 Credit facility
Stem Cell Assurance SCLZ 1.0 Debt facilities
NON-US 0.5
Acquirer Target Deal Value
Veritas Capital PerkinElmer subsidiary 500.0 Tools/Technology
Meda (Sweden) Alaven Pharmaceutical 350.0 Gastrointestinal
Mascoma SunOpta BioProcess (SunOpta-Canada) 51.0 Renewable fuels
Erba Diagnostics Mannheim (Germany) Ivax Diagnostics 15.0 Diagnostics
Petroleo Brasileiro (Petrobras-Brazil) Bioleo Industrial e Comercial (Brazil) 8.8 Renewable fuels
Lonza (Switzerland) Vivante GMP Solutions N/A Contract manufacturing
Omnicare Continuing Care Rx N/A Healthcare
Pfizer FoldRx N/A Rare diseases
ImmunoSolv (Scotland) Grampian BioConsultants (Scotland) N/A Tools/Technology
Rejected Acquisition
Sanofi-Aventis (France) Genzyme 18,500.0 Biopharmaceuticals
Company/Licensee Company/Licenser Deal Value
Takeda Pharmaceuticals (Japan) Orexigen Therapeutics 1,000.0 Obesity drug license
Intendis (Bayer Healthcare-Germany) Kythera Biopharmaceuticals 373.0 Dermatology license
Ipsen (France) Santhera Pharmaceuticals (Switzerland) 168.5 Parkinson's disease data license
RedHill Biopharma (Israel) IntelGenx (Canada) 22.1 Migraine partnership
BTG (United Kingdom) Nycomed (Switzerland) 16.6 Marketed drugs agreement
Novadaq Technologies (Canada) LifeCell 5.0 Technology license
GE Healthcare iBio and Fraunhofer USA Center for Molecular Biology N/A Biomanufacturing collaboration
Monsanto InterGrain (Australia) N/A Improved crop traits collaboration
MorphoSys (Germany) Absynth Biologics (United Kingdom) N/A Infectious drugs license and collaboration
Zimmer Holdings Accentus Medical N/A Medical device technology license
NEC SomaLogic N/A Diagnostics collaboration

About this article:

Problem with this article? Please tell us. Disagree with this article? .