Shares in Sanifi-Aventis shot up to the highest level in weeks yesterday as rumours abounded that the world’s number one pharmaceutical company Pfizer could be on the verge of snapping up Total SA’s shares in the French firm.
Sanofi has tumbled 11% after a tricky year culminating in the US Food and Drug Administration’s rejection of its antiobesity drug Acomplia (rimonabant) saying it was linked with depression and suicidal thoughts. Analysts also failed to be overly inspired by Sanofi’s R&D presentation last month and its stock sank on the day.
But yesterday saw its biggest gains since mid-September, jumping 1.8% to 62.20 euros at the close of trading in Paris. New York too saw a 1.7% boost to $43.76.
Total has a 13% stake in Sanofi-Aventis and has always said it would sell at some point; earlier this year it acknowledged it would wait until the culmination of lawsuits to determine whether Sanofi’s top-selling clotbuster Plavix (clopidogrel) would see off a generic challenger from Apotex and retain its patent coverage until its 2012 expiration.
The rumours started after Total’s chief executive Christophe de Margerie reportedly said it planned to offload the Sanofi stake by 2012. And what of the pairing with Pfizer? The latter has also experienced a turbulent time, with generic competition to major products setting it up for a major revenue reduction in the coming years, so some believe it could be a good fit. The effect of patent losses on Pfizer's revenues is expected to be around $20 billion by 2011 as patent expirations and generic competition on a number of blockbusters, including the antihypertensive Norvasc (amlodipine), the antidepressant Zoloft (sertraline) and the antibiotic Zithromax (azithromycin), start savaging earnings.
Pfizer, which last week announced a new R&D chief and the launch of a new biotech centre as it looks to address its issues, has previously said it will consider every potential strategic acquisition.