Genzyme continues to divest non-core businesses

Genzyme announced Thursday an agreement to sell its diagnostic products business to long-term partner Sekisui Chemical for $265 million, as the biotechnology company continues with its plan to increase shareholder value in the face of a hostile takeover bid from sanofi-aventis. Genzyme had previously announced in May its strategy to divest its non-core businesses.

Under the deal, Sekisui indicated that it agreed to offer employment to the unit’s 575 employees and maintain operations in all of the business’ current locations upon closing of the transaction, which is expected by the end of the year. In September, Genzyme agreed to sell its genetics business for $925 million to LabCorp.

In other news regarding sanofi-aventis' bid for Genzyme, Geoffrey Hsu of OrbiMed Advisors, a Genzyme shareholder, noted that "there's a little bit of risk" in waiting for a higher takeover offer, considering Genzyme doesn't have "a great record in manufacturing." He added that November 28 constitutes a "very important date for Genzyme," when some work at its Allston Landing facility must be transferred to other plants under the terms of an FDA consent decree.

According to Hsu, sanofi-aventis CEO Chris Viehbacher has spoken to OrbiMed twice since making its $69 per share offer for Genzyme. "He’s pretty committed to the deal, but he doesn’t want to pay more than he has to," Hsu noted, adding that he expects the deal to go through at around $77 to $78 per share. "We would hope another bid turns up," Hsu commented, citing both Takeda and GlaxoSmithKline as "on the table" for potential offers. Reports suggest that Genzyme has entered into talks with Takeda about a possible deal.

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