M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Wednesday, February 16, 2011

Genzyme gets its CVR

The Sanofi-Genzyme deal was announced this morning: $74/share cash plus a tradeable CVR:

Terms of the CVR agreement call for additional cash payments under certain circumstances.  The CVR will be publicly traded. The agreement is structured such that the economic upside at each milestone is shared between sanofi-aventis and Genzyme shareholders. The CVR terminates on December 31, 2020 or earlier if the fourth product sales milestone has been achieved.

The one-time milestones and payments can be summarized as follows:

* $1.00 per CVR if specified Cerezyme®/Fabrazyme® production levels are met in 2011
* $1.00 per CVR upon final FDA approval of Lemtrada™ for multiple sclerosis (MS) indication
* $2.00 per CVR if net sales post launch exceed an aggregate of $400 million within specified periods per territory
* $3.00 per CVR if global net sales exceed $1.8 billion
* $4.00 per CVR if global net sales exceed $2.3 billion
* $3.00 per CVR if global net sales exceed $2.8 billion.

Sanofi will be filing a registration statement to register the CVRs with the SEC in the next couple of weeks. 



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