Termeer Touts Campath-Linked CVRs

While the US digests its Thanksgiving turkeys, life, work and...yes, pre-takeover posturing continues on this side of the pond. We're talking Sanofi-Aventis' attempt -- thus far too cheap -- to buy Genzyme, naturellement.

Speaking to French national daily Le Figaro (in his first interview with the French press), Genzyme chief Henri Termeer confirmed a report in the Wall Street Journal a couple of weeks ago that he's willing to explore Campath-linked contingent value rights (CVRs) in any future negotiations with Sanofi-Aventis. (We say 'future' coz they haven't started yet; "we have nothing on which to base a discussion," as Termeer insists).

Having CVRs pop up is not much of a surprise, though, is it. They're becoming part of the deal-making landscape, after all; soon enough they'll be as unremarkable as option-based structures. And wind-turbines.

You see, Termeer isn't opposed to selling Genzyme (shareholder value 'n all that). He's just opposed to selling it at $69/share (shareholder value 'n all that). It's all about price, he confirmed to the French newspaper.

The fact that Termeer is the one suggesting Campath-linked ways out of this stalemate hints that he's keen to squeeze more money out of his predator and get things sorted (so do the recent sales of the genetic testing and diagostics units); after all, he doesn't want his shareholders (particularly the newer ones) getting fed up and just turning over. He may say (he did say) that "we have time on our side, because our production issues are resolving themselves." But perhaps not that much time. Not more than Sanofi does, anyway.

So while Termeer sketches down his list of poison pills to buy time while the company rights itself, the valuation battle-ground may shift to Campath, and just what that drug could be worth.

There's a huge difference (surprise!) between what Sanofi thinks ($700m) and what Genzmye thinks ($3.5 billion). In Termeer's view, "this will be the most effective, cheapest and most convenient treatment for MS patients."

The Phase III trials, due next June and next autumn, may show who's right. They may also be the trigger-points for Campath-linked contingent value notes/rights/widgets to ex-Genzyme shareholders....if Genzyme is to become "a Sanofi-Aventis Rare Disease Company" by next Thanksgiving...

image by flikrer Chuck Coker, with permission