In addition to the cash payment, each Genzyme shareholder will receive one contingent value right (CVR) for each share they own, entitling the holder to receive additional cash payments if specified milestones related to Lemtrada (alemtuzumab MS) are achieved over time or a milestone related to production volumes in 2011 for Cerezyme and Fabrazyme is achieved.
The one-time milestones and payments are as follows:
- $1 per CVR if specified Cerezyme®/Fabrazyme production levels are met in 2011
- $1 per CVR upon final FDA approval of Lemtrada for multiple sclerosis (MS) indication
- $2 per CVR if net sales post launch exceed an aggregate of $400 million within specified periods per territory
- $3 per CVR if global net sales exceed $1.8 billion
- $4 per CVR if global net sales exceed $2.3 billion
- $3 per CVR if global net sales exceed $2.8 billion
"This transaction represents a new beginning for Genzyme," adds Henri A. Termeer, chairman, president and CEO of Genzyme, noting that sanofi "believes in what we do, in our people and in our potential."
"Genzyme has a record of innovation and a unique and pioneering approach to serving patients," Termeer continues. "We also share an exciting vision of the future, one in which Genzyme and sanofi-aventis grow and innovate by developing breakthrough treatments that change the lives of people with serious diseases. sanofi-aventis We look forward to building a sustainable future together."
The companies expect that sanofi-aventis' global footprint, significant resources and track record of successfully expanding franchises will create new long-term growth opportunities for the combined company, particularly in emerging markets. They say that Genzyme will become "an important new platform in sanofi-aventis' sustainable growth strategy" and expand the company's presence in biotechnology.
In addition, sanofi-aventis intends to make Genzyme its global center for excellence in rare diseases and the acquisition will reinforce sanofi-aventis' commitment to the greater Boston area, where it already has a sizeable presence.
In addition to rare diseases, Genzyme has built strong renal-endocrinology, hematology-oncology and biosurgery businesses that are reportedly complementary to existing sanofi-aventis businesses and "include highly differentiated, market-leading products that provide significant benefit to patients."
Consistent with sanofi-aventis' approach in other transactions, Genzyme will retain its corporate brand.
Genzyme and sanofi-aventis have already begun integration planning, including the formation of a joint steering committee to manage the integration. Termeer will resign from his current roles at Genzyme following the close of the transaction, but will advise on the integration in his new role as co-chairman of the Integration Steering Committee with Viehbacher.
(Some additional commentary and more editorially-minded thoughts at our blog. Click here to read that post)
