March 6, 2011

Genzyme acquired by Sanofi Aventis: A blockbuster Deal

French drugmaker Sanofi-Aventis SA clinched its long-sought deal for Genzyme Corp with a sweetened $20.1 billion cash offer, plus payments tied to the success of the U.S. biotech group's drugs.

The deal's announcement, marks the second-biggest acquisition in biotech history after Roche's $46.8 billion purchase of Genentech in 2009.(as per Reuters)

Sanofi will pay $74 a share in cash and offer a tradable contingent value right, or CVR, whose value will depend on Genzyme's experimental multiple sclerosis drug Lemtrada and production of two other medicines.

According to Bloomberg, the CVR payouts are these:

  • $1 if the MS hopeful Lemtrada wins FDA approval;
  • $2 if Lemtrada sales surpass $400 million by certain deadlines
  • $3 if sales top $1.8 billion;
  • $4 for $2.3 billion-plus;
  • $3 for more than $2.8 billion. 
( What is CVR:-- A Contingent Value Rights (CVR) is a type of option that can be issued by the buyer of a company to the sellers. It specifies an event,(here the success of the investigational products of genzyme) which, if triggered, lets the sellers acquire more shares in the target company.)

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