Clock ticking down on Sanofi bid for Genzyme

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A bid by French pharmaceutical giant Sanofi-Aventis for US biotechnology group Genzyme was approaching a Friday deadline with the parties still at odds.

Sanofi's offer, launched October 4 after months of fruitless talks with Genzyme, was to expire at US midnight Friday (6:00 am Saturday Paris time), although under US regulations Sanofi could extend the bid.

Genzyme has rejected the 18.5-billion-dollar offer (14 billion euros), or 69 dollars a share, on grounds that it undervalues the group.

Genzyme since September has pressed for a higher bid as a condition for taking part in formal talks, an overture Sanofi has resisted.

The dispute over the financial value of Genzyme reflects the difficulty in determining how quickly the company can recover from serious production problems with two of its leading treatments, which stem from contamination at a Genzyme plant.

Another stumbling block has been an assessment of future sales of Campath, a treatment for multiple sclerosis marketed by Genzyme.

The head of Genzyme, Henri Termeer, has said he would be open to providing "guaranteed value certificates" to Genzyme shareholders enabling them to receive price supplements based on the success of Campath, thereby boosting the Sanofi offer.

Sanofi has so far had no official comment on the proposal.

Analysts at Citigroup said it was unlikely that Sanofi would abandon its bid, with the market expecting it to raise its offer to 75-77 dollars a share.

Industry analysts have said that acquiring Genzyme would be a major step for Sanofi in a drive by big pharmaceutical groups to become active in biotechnology and treatments for rare diseases.

Such treatments require specific knowledge to develop but can be marketed at high prices and are difficult to copy by generic drug makers.

© 2010 AFP

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