Genzyme, a US-based biotech company that makes drugs for rare diseases, maintains that its Campath drug could generate peak annual sales of $3.5bn.
France’s Sanofi sees peak annual sales closer to $700m. The discrepancy is central to Genzyme’s argument that it is worth more than the $69 a share being offered by Sanofi.
To break the deadlock, Genzyme and Sanofi advisers have discussed using contingent value rights (CVR) in a potential deal structure. The rights would give Genzyme investors an extra payout if the drug reached certain targets.
“I think that’s the way it’s going to go,” said William Tanner, an analyst at Lazard Capital Markets. “I imagine there will be a figure in the low $70s with an earn-out based on how this drug actually does.”
Sanofi’s hostile tender offer expires on 21 January. Sanofi had extended that deadline earlier this month to buy time for an agreement, though it has not ruled out more aggressive options, including a proxy battle for Genzyme.
Few analysts believe that Campath, which is already sold as a cancer treatment and known generically as alemtuzumab, will generate the kind of sales projected by Genzyme. Independent market research group BioMedTracker has forecast Campath sales of about $1.6bn in 2019.
Genzyme first presented its argument for a higher value at an investor event in New York two months ago.