Genzyme Corp has been speaking with investors and analysts in a bid to convince them that the $69 per share being offered by Sanofi-Aventis is way off the value of the company.
At a presentation in New York, Genzyme gave details of its "accelerating financial recovery and other factors underpinning its value". The biotech has issued earnings guidance for 2011 of $4.30-$4.60 per share, way ahead (some 20%) of analyst estimates and revenues are predicted to reach $5-$5.1 billion, up around $1 billion on 2010.
Genzyme said it is well on the way to resolving its well-documented manufacturing problems and "supply recovery is on track" for Cerezyme (imiglucerase) and Fabrazyme (agalsidase beta) for Gaucher and Fabry disease, respectively. It also expects peak sales of the cancer drug Campath (alemtuzumab) as a treatment for multiple sclerosis to reach nearly $3 billion and is targeting $385 million "in sustainable annual savings by 2012".
The company's lead independent director Bob Carpenter said that the timing of Sanofi's offer "deprives Genzyme shareholders of the opportunity to fully benefit from the company’s manufacturing recovery". The French drugmaker has stated that its offer represents a multiple of 20 times consensus earnings estimates but applying this to the midpoint of Genzyme’s 2011 guidance would yield an offer price of $89 per share, he noted.
Similarly, Mr Carpenter said the proposed 31% premium "is the lowest one-month premium for any relevant biopharmaceutical transaction", the average of which is 73%. He added that more than half of the transactions cited by Sanofi as precedents are not relevant because they involved stock consideration and were significantly larger, or because the acquiring company already held a significant ownership position".
Mr Carpenter concluded by saying that "we have initiated activities to better inform ourselves of all available options to deliver shareholder value”, though no other suitors for Genzyme appear to be on the horizon.