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Sanofi to Buy Genzyme in $20.1 Billion Deal

by Douglas McIntyre Feb 16th 2011 6:30AM
Updated Feb 16th 2011 8:15AM
SanofiFrench drug company Sanofi-Aventis (SNY) has finally made a deal to buy biotech company Genzyme (GENZ) for $20.1 billion, about $74 a share. Genzyme shareholders will get a contingent value right that represents potential future payments if Lemtrada, the company's multiple sclerosis drug, is a success. Sanofi has tried to close a deal for about nine months as the Genzyme board lobbied for a higher price.

The reasons for the buyout are similar to those of all purchases of biotech firms by big pharma. Patents on blockbuster drugs, which provide much of their earnings, are expiring or have already done so.

Genzyme's shares traded just above $47 last June. Sanofi must assume that the smaller company is undervalued by nearly 60%. Its shares rose above the offer price for two brief periods in 2008, but Wall Street clearly thought that valuation was too high as traders pushed the price lower in late 2008.

Genzyme's sales prospects have also been spotty as revenue dropped from quarter to quarter for most of the last year.

Sanofi may realize the value that it will pay as part of the premium price for Genzyme, but if the biotech is not a blockbuster machine, the French firm will have overpaid.

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20 Comments

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hi bev

Many will disagree with me but that is their right to do so. God put everything we need on earth to stay well. Its time we looked into more natural cures rather than popping a pill for everything. Pill companies and Doctors want us depended on pills. Get back to nature and find natural cures instead of pill dependency.

February 17 2011 at 8:47 PM Report abuse +1 rate up rate down Reply
Yosh

More and more US ICON companies were bought by the foreign countries. It's ALL started by this Obama and Obama's administrations.

February 17 2011 at 1:05 PM Report abuse +2 rate up rate down Reply
Marcie

A drug company has $20 BILLION to throw around? Gee, maybe those meds for $10 and $20 PER PILL don't really need to cost that much. They are a bunch of gougers. They want to have their hands in every pie. They already own the politicians and the medical industry...and that's what it is, an industry. Notice I said medical, not healthcare...because there is very little health or care involved. It is designed to take every last dime from every American for drugs and treatments that only make you sicker and more miserable, so they can give you MORE drugs and treatments to make you sicker etc. Take care of your body or you are toast.

February 17 2011 at 12:43 PM Report abuse +3 rate up rate down Reply
Gumby

GEnzyme shareholders can vote NO !! genzyme stock can go much higher in the coming years!!!! it is a steal that you can vote against!

February 17 2011 at 12:26 PM Report abuse +2 rate up rate down Reply
DAN KILLION

just 1 more way for the drug companys to stick it in the ass of american citzens while useing us as ginny pigs...the rich get richer while the american familys loose there homes and lives to greeeedy politicians and drug companys

February 17 2011 at 11:47 AM Report abuse +6 rate up rate down Reply
bobby91257

there is so much confusing information out there about cures. one person says this and another person says that. some say money suppresses the truth and there are also the "ocashional nut job" trying to convince you of some cure. one thing a friend told me. he said everything is bullshit, you just pick the bullshit you like. i find this to be true for alot of things in life. take this as you like.

February 17 2011 at 11:15 AM Report abuse +1 rate up rate down Reply
Gina

I'm fed up with these companies GOUGING us on our meds. They put a 200% mark up on drugs and we have to go broke trying to get the medicine we need to stay alive! It's unfair! Are they feeling the crunch like we are these days? We're going to lose our HOME this year because my husband lost his job of almost 30 years! We have to decide between house payment and our meds. We should be getting ready to retire and enjoy our kids and grandkids but instead of that scenerio, we are getting boxes to start packing because we know this is the last year in our home that we worked so hard for! The banks don't care, the pharm companies don't care and this is happening not just to us, but to millions of AMERICANS! We need to get OUR COUNTRY'S people in a stable place first and then go out and help the world. Not only that, we also need to crack down on people coming to this country and getting on gov aid! We have people here that have lived here their whole lives and have to get LAWYERS to fight for their SS once they are sick or disabled! Things need to change before people start rising up and FORCE that change to happen!

February 17 2011 at 10:39 AM Report abuse +9 rate up rate down Reply
1 reply to Gina's comment
Sloedanzin

200% markup? OMG! GINA...get real girl! where in the world did you get your data? It is flawed to the max! The drug comapanies can produce a 55gallon drum of a drug for around 100 to 200 dollars! as for how many pills one drum can produce...your guess is as good as mine.2 million? three million? then multiply that by ten dollars a pill!

February 17 2011 at 4:00 PM Report abuse rate up rate down Reply
scottee

let's consider the Physicians for a National Health Program....pnhp.org...HR676....it's all spelled out and it makes sense!

February 17 2011 at 8:18 AM Report abuse -2 rate up rate down Reply
1 reply to scottee's comment
teb829

Physicians for a National Health Plan support a single-payer system for the United States. It has been studied by Universities and economists and is said to be the best solution for the American Healthcare system.. Why then,was it left off the table during the healthcare debate in Washington?? It's because the insurance companies own the poiticians who could put a single payer system in place and put the insurance company blood suckers out of business!! The biggest contributors to the Republican Party are health insurance and pharmaceutical companies...What a country we live in..By far,we are NOT the greatest country in the world when it comes to providing access to healthcare to it's citizens.. We are at the bottom of the list!!!

February 17 2011 at 11:09 AM Report abuse +2 rate up rate down Reply
hi bev

I have always thought there should be a cure by now for cancer etc. If there was a cure I am sure it would be kept well hidden due to how many would be unemployed because of it. Pharm companies have way too much say and money not to be able to pay to have people shut up. I know people that have to make choices whether to buy food or their meds. I know people that have ended up in the hospital because they had no money for their meds. The government wants to stick their nose in everything about our lives lately - why don't they stick their nose where it belongs and help us with these pharm companies that are bleeding us dry.

February 17 2011 at 6:31 AM Report abuse +3 rate up rate down Reply
Randy

Drug Cos aren't interest5ed in cures. They produce drugs to treat the symtoms. If they found cures, profits go to zip

February 17 2011 at 5:56 AM Report abuse +8 rate up rate down Reply
1 reply to Randy's comment
Gumby

YOU KNOW WHAT THE CURE IS??? QUIT BURNING FIREWOOD AND ******* SMOKE !!! DONT LAUGH AT ME!! IT IS TRUE AND IT IS NEVER STUDIED AND PROVEN BECUASE IT IS A FACT THAT WILL DESTROY A LOT OF DRUG PEDDLING!!!! FIREWOOD SMOKE DULLEN YOUR MINDS!!! CLOGS UP YOUR LUNGS WITH UNSEEN SOOT AND PARTICULATES.. BOY SCOUTS, TAKE NOTICE!!! USE PROPANE INSTEAD! OCCASSIONAL CEREMONIAL USES OF FIREWOOD IS OK BUT NOT MAINSTAY EVERYDAY USES FOR HOME HEATING AS A UTILTY, no nonononononnnoooooooooooooooooooooooooooo!!!!!!!!!!!!!!!!!!!

February 17 2011 at 12:24 PM Report abuse +1 rate up rate down Reply