LONDON (Reuters) - A Sanofi-Aventis takeover of Genzyme would not upset the high-margin market in drugs for rare diseases, given the specialised nature of the business, Shire’s
chief executive said.
“I’m not sure it changes anything in regards to competition,” Angus Russell told reporters Wednesday after the British company, a rival for Genzyme, unveiled forecast-beating quarterly results.
“These markets are never about size and scale. It’s really important to understand that just because you are big doesn’t bring any inherent benefit.”
Shire has gained from production problems at Genzyme, which have driven unexpected demand for its drugs against Fabry and Gaucher disease, two rare hereditary disorders. Still, Russell said Genzyme remained a formidable competitor with a rare skill-set in developing and marketing its complex products.
Rare diseases, which may affect only a few thousand people worldwide, have been shunned in the past by large drugmakers as too small.
Sanofi’s bid for Genzyme is the clearest sign yet of a major rethink, as firms scour the globe for assets to plug holes in their product line-up.
The French drugmaker has offered $18.4 billion for the U.S. biotech company, although Genzyme is holding out for more, according to sources familiar with the situation. Neither company has commented.
Russell said the move by Sanofi — along with lower-key plans by Pfizer and GlaxoSmithKline to enter the space — was unsurprising.
“They (Big Pharma) are buying everything and anything, including branded generics all over the world, to try and plug these revenue gaps,” he said.
“There is no reason why they wouldn’t look at this space. Clearly it’s been very successful for companies like us and Genzyme and I guess Big Pharma is looking at that success and deciding it would like to share in it.”
Editing by David Cowell