By Marie Daghlian
The boards of Sanofi-Aventis (SNY) and Genzyme (GENZ) finally reached agreement on deal terms for the French pharma to acquire the American biotech, seven months after Sanofi made its intention public. After looking at Genzyme’s books, Sanofi agreed to pay $74 per share in cash, or approximately $20.1 billion, a step up from its original $69 per share offer.
Sanofi also agreed to give each Genzyme shareholder one contingent value right for each share they own, which will entitle the holder to additional cash payments tied to specified milestones related to Genzyme’s Lemtrada, Cerezyme, and Fabrazyme. Most of the milestones are based on the success of Lemtrada as a treatment for multiple sclerosis, a drug Genzyme CEO Henri Termeer has claimed has the potential to be a blockbuster. If all milestones are met, it will add as much as $3.8 billion to the total price of the deal.
The CVRs will be publicly traded and could be worth as much as $14 per share if all milestones are met. The value of the CVRs are tied to one-time payments of $1 per CVR if specified production levels of Genzyme’s two main drug products—Cerezyme and Fabrazyme—are met in 2011; $1 per CVR upon final U.S. Food and Drug Administration approval of Lemtrada as a treatment for multiple sclerosis; $2 per CVR if net sales after Lemtrada’s launch exceed an aggregate of $400 million within specified periods per territory; $3 per CVR if Lemtrada’s global net sales exceed $1.8 billion; $4 per CVR if its global net sales exceed $2.3 billion; and $3 per CVR if global net sales exceed $2.8 billion. The CVR will terminate on December 31, 2020 or earlier if the fourth product sales milestone has been achieved.
Based on realistic assumptions, the deal will be worth $78 per share, Marc Booty, an investment manager for Pictet Asset Manager in London, told The New York Times.
The deal is expected to close early in the second quarter of 2011, subject to customary closing conditions, and is expected to be accretive to Sanofi’s net earnings per share in the first year following closing, and accretive to net earnings per share in the range of $1 to $1.40 per share by 2013.
The acquisition makes good on CEO Chris Viehbacher’s strategy of looking externally for innovation and diversifying its business. The deal is the second largest acquisition of a biotech deal after Roche’s (OTCQX:RHHBY) purchase of Genentech, according to data from Thomson Reuters. Sanofi plans to make Genzyme its global center for excellence in rare diseases and the acquisition will reinforce its commitment to the greater Boston area, where it already has a sizeable presence. Genzyme will retain its corporate brand.
Aveo Pharmaceuticals (AVEO) signed a major cancer drug licensing deal with Astellas Pharma (OTCPK:ALPMF) that will net the biotech $125 million upfront and could be worth more than $1.3 billion if all milestones are met [See story]. The experimental drug, tivozanib, is currently in a late stage trial as a treatment for advanced renal carcinoma, and in other studies as a treatment for other solid tumors. It is designed to optimally block the VEGF pathway by inhibiting all three VEGF receptors, for the treatment of a broad range of cancers.
Astellas will pay Aveo $125 million upfront, which includes a $75 million license fee and $50 million in research and development funding. Aveo is also eligible to receive up to $1.3 billion in potential milestones that includes $575 million in clinical and regulatory milestones, as well as more than $780 million in commercial milestones. Subject to regulatory approval, Aveo will lead commercialization of tivozanib in North America and Astellas will lead commercialization of tivozanib in the European Union. The companies will share equally all North American and E.U. development and commercialization costs and profits for tivozanib. Astellas will be responsible for the development and commercialization costs of tivozanib outside of North America and European Union and will be obligated to pay Aveo a tiered, double-digit royalty on sales in those territories. Kyowa Hakko Kirin retains the rights to develop and commercialize tivozanib in Asia. Aveo will be responsible for the manufacturing of tivozanib.
DEALS FOR THE WEEK ENDING FEBRUARY 18, 2011
|Global Venture Financings|
|Company||Location||Amount Raised (USD M)||Principal Activity|
|Sonoma Orthopedic Products||Santa Rosa, CA||22.0||Medical devices|
|Versartis||Mountain View, CA||21.0||Endocrine|
|Conatus Pharmaceuticals||San Diego, CA||20.0||Inflammation|
|Ivivi Health Sciences||San Francisco, CA||9.5||Medical devices|
|CalciMedica||San Diego, CA||6.0||Autoimmune|
|Sermo||Cambridge, MA||3.5||Digital Health|
|Mobius Therapeutics||St Louis, MO||0.2||Ophthalmic|
|Diartis Pharmaceuticals||Mountain View, CA||N/A||Metabolic|
|Cappella||Galway, Ireland||14.3||Medical devices|
|Activaero||Gemunden, Germany||6.8||Medical devices|
|Marvao Medical Devices||Galway, Ireland||1.8||Medical devices|
|Total Raised US||135.2|
|Total Raised Non-US||28.0|
|Grants and Contracts|
|Company||Funding Agency||Amount Raised (USD M)||Principal Activity|
|Newron Pharmaceuticals||Italian government innovation grant||5.0||CNS, pain therapeutics|
|Aeolus Pharmaceuticals||BARDA (Total award value $118 million over 5 years)||10.4||Radiation syndrome|
|Chimerix||BARDA (Total award value $81.1 million over 3 years)||24.8||Antivirals, smallpox|
|Total Grants and Contracts||40.2|
Raised (USD M)
|e-Therapeutics (United Kingdom)||AIM:ETX||28.5||Placing|
|Rosetta Genomics (Israel)||ROSG||6.0||PIPE|
|Akers Biosciences (United Kingdom)||LSE:AKR||3.2||Placing|
|Sareum Holdings (United Kingdom)||LSE:SAR||0.8||Placing|
|Opexa Therapeutics||OPXA||8.5||Follow on|
|Discovery Laboratories||DSCO||23.5||Follow on|
|Impax Laboratories||IPXL||50.0||Credit facility|
|Poniard Pharmaceuticals||PARD||1.9||Equity-based line of credit|
|Somaxon Pharmaceuticals||SOMX||15.0||Revolving credit line|
|Angiotech Pharmaceuticals (Canada)||ANPI||28.0||Debtor-in-Possession credit facility|
|Total Public Financings-US||195.1|
|Total Public Financings-Non-US||206.6|
|Acquirer||Target||Deal Value |
|Sanofi Aventis (France)||Genzyme||20,100||Biopharmaceuticals|
|BioTime||Glycosan BioSystems||N/A||Tissue engineering|
|Adventrx||SynthRx||N/A||Sickle cell vascular|
|Company/Licenser||Company/Licensee||Deal Value |
|PositiveID||Connected Development||N/A||Digital Health partnership|
|InVivoScribe Technologies||Novartis (Switzerland)||N/A||Companion diagnostic collaboration|
|Apricus Biosciences||Neopharm Group (Israel)||4.4||Genitourinary drug license|
|Medivir (Sweden)||Janssen Pharmaceuticals (J&J)||N/A||Infectious therapeutic collaboraion|
|Partners HealthCare||Luminex||N/A||Personalized medicine collaboration|
|Covance; Quintiles||Takeda Pharmaceutical (Japan)||N/A||Outsourcing partnership|
|AVEO Pharmaceuticals||Astellas Pharma (Japan)||1,425.0||Cancer drug license|
|Biotica Technology (United Kingdom)||Amyris||N/A||Technology license|
|Golden Meditech (China)||Long Bon International (Taiwan)||N/A||Healthcare alliance|
|Xention (United Kingdom)||Grunenthal (Germany)||N/A||Pain drug discovery agreement|