Biotechnology firm Genzyme Corp is exploring a new deal structure with Sanofi-Aventis SA that might help break a months-long acquisition deadlock, even as it continues to assess options with other parties, says a media report.
"Genzyme Corp is exploring a new deal structure that might help break a months-long acquisition deadlock with Sanofi-Aventis SA, as it also continues to assess options with other parties," The Wall Street Journal reported.
Sanofi-Aventis has significant presence in India and employs over 1,800 people in the country.
The company is considering contingent value rights (CVR), which gives shareholders an additional benefit once an acquired company hits a future benchmark, the report said, attributing the news to people familiar with the matter.
CVRs are typically used when buyers and sellers can't agree on a purchase price, and often kick in after an acquired company meets sales or regulatory targets.
In Genzyme's case, the CVR would be largely tied to the performance of Campath, a Genzyme drug that at present is used to treat leukemia, but is being tested for use on multiple sclerosis, the report noted.
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A CVR structure would allow Sanofi to pay a lower price for Genzyme on the condition that it makes additional future payments if Campath hits certain sales targets or other criteria, it added.
According to the publication, Sanofi has indicated it would be open to a CVR. Still, Genzyme says the CVR won't break the impasse if Sanofi's offer remains at $69 a share.
Genzyme continues to rebuff Sanofi's hostile $18.5 billion tender offer, saying it undervalues the company. But after months of entreaties, the CVR structure is being raised as one possible way the two companies might have a breakthrough.