Genzyme Jumps on Positive Test Results, Takeover Rumors

Shares of Genzyme surged Monday to a 52-week high because of positive results for its multiple sclerosis drug and rumors it could be a takeover target. Genzyme reported Sunday that based on three years of data from a Phase II clinical trial, its MS drug candidate, alemtuzumab, was just as effective as Merck's MS drug Rebif. Genzyme was also the focus of a lot of takeover speculation after its rival, Biogen, put itself up for sale last week (full story). "I think the share gain reflects both these things," said Christopher Raymond, an analyst at Robert W. Baird & Co. "There's a lot of speculation that Genzyme might be next, and I think they've got better growth prospects than Biogen Idec." Genzyme has a market cap of about $18.8 billion. Its shares closed up 4.3% to $74.77 Monday.

Sources: Reuters, MarketWatch
Commentary: Genzyme Breaks Out On Good News • Expecting Genzyme to Rise on Baird Note
Stocks to watch: GENZ, BIIB. Competitors: GSK, PFE. ETFs: IBB, XBI
Earnings call transcript: Genzyme Q2 2007

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Comments

[Burns:]

It's interesting that rumors of Pfizer making moves against both Biogen and Genzyme came out the same day. Which would be a better deal? In my opinion Genzyme is the better fit. It seems to have a higher growth potential and the recent success of its new MS drug is great news to investors. It also doesn't hurt that many of the execs at both Pfizer and Genzyme are on the faculty at Harvard Medical School www.newsvisual.com/new... , making initial negotiations fairly easy. As far as Biogen goes, Pfizer might be interested, but then they would have to go up against Carl Icahn. However it is possible that Icahn could support a takeover of Biogen by Pfizer.

2007 Oct 15 07:21 PM