Biotech Takeover Talk Sends Genzyme Stock Soaring
Several media outlets, citing people familiar with the matter, said French pharmaceutical company Aventis has initiated talks with the Cambridge, Mass. drug-maker. Genzyme's stock finished the day's trading at $62.52, up 15.4% or $8.35.
Earlier in the day it set a 52-week high of $66.96, before retreating slightly. Sanofi's stock on the other hand took a hit, dropping 4%.
Both companies refused to comment on what they called market rumors. Sources said the takeover of Genzyme, which has a market capitalization of $17.2 billion, is under $20 billion.
Last month, there were reports that Sanofi was looking to make a large U.S. acquisition, further fueling Friday's trading volume of both companies. Genzyme had more than15 million shares traded, a five-fold from an average trading day.
Two of Genzym's most profitable drugs, Cerezyme and Fabrazyme, have been hampered due to manufacturing issues. In an earnings report Wednesday, it missed expectations and net income plummeted. It reported a second quarter profit of $23,000, compared to $187 million a year ago.
Paris-based Sanofi, the world's fourth-largest pharmaceutical company, makes isulin for diabetes and blood thinner Plavix, in a partnership with Bristol-Myers (BMY). Last year, it reported a revenue of $35.5 billion.
One of Genzyme's largest individual shareholders is its president and CEO Henri Termeer. He has been with the company since shortly after its founding in 1981. He reported in May of this year that he has 686,529 shares. At Friday's close, they were worth $43 million.