Sanofi-Aventis' bid to acquire Genzyme Corp has moved a step closer with the news that the US biotech is ready to open its books.
Genzyme says that ongoing discussions with the French drugmaker have progressed to the point where its board has entered into a confidentiality agreement with Sanofi in order to allow the latter to conduct due diligence. This marks a major milestone in Sanofi's pursuit of Genzyme which began last summer but got bogged down as the Paris-headquartered firm refused to raise its $18.50 billion, or $69 per share, offer.
The firms have been engaged in direct talks through January but Genzyme noted that those discussions "have focused to a significant degree on the potential use of a contingent value right (CVR) for alemtuzumab" to resolve the differences in valuation between the parties. The drug in question is in late-stage trials for multiple sclerosis and is already sold as Campath for leukaemia.
Genzyme concluded by saying that "other potential terms for a negotiated transaction" have been talked about. However, the firm stressed that "it can provide no assurance that discussions with Sanofi will result in a transaction that will be determined by its board to be in the best interests of the company and its shareholders".
News of due diligence was swiftly followed by a host of reports, citing people familiar with the situation but mentioning no names, that the companies have already agreed a deal in principle. Furthermore, the Boston Globe, quoting two people "briefed on the negotiations", claims that Sanofi has actually raised its bid, but no specific figures were mentioned.