Genzyme will not up $5.60/share offer for Bioenvision

US biotechnology major Genzyme says that it will not change its purchase price for Bioenvision at $5.60 in cash per outstanding common share as set forth in the merger agreement between the two companies (Marketletter June 4), valuing the latter at some $345.0 million. Genzyme already owns around 22% of Bioenvision common stock on an as-converted basis, including 100% of its preferred stock that carry a unique set of rights and privileges.

"$5.60 per share is our best and final offer," stated Mark Enyedy, president of Genzyme Oncology, a business unit of the group. "It reflects the full and fair value for Bioenvision common stock based on our extensive due diligence on the company, and our detailed understanding of the risks associated with, and investment required for, the further development of clofarabine. We now all know that clofarabine will not be approved in adult [acute myeloid leukemia] in the European Union until 2008, at the earliest," he explained.

Genzyme added that the merger agreement represents the culmination of a thorough auction process undertaken by the Bioenvision board of directors, during which more than 20 companies were contacted regarding a potential sale of the Bioenvision. No other offer was made prior to or following the announcement of the merger agreement with Genzyme. The biotechnology firm also noted several of the risks associated with Bioenvision remaining an independent public company have been disclosed in recent weeks, including the need to finance more than $100 million in operating losses through 2011. In addition, since the merger agreement was signed in May, capital market conditions have deteriorated and Bioenvision has become subject to several potentially costly law suits.