"Genzyme is strongly positioned in a number of niche markets, which are very lucrative despite low patient numbers," said Sarah Terry, president, global managing director, Life Science Analytics, a Datamonitor company.
"Furthermore, a number of key brands in its portfolio have been granted orphan drug status thereby providing a period of market exclusivity-7 years in the United States and 10 years in the European Union
Drugs that are currently in Genzyme's rare disease pipeline include Genz-112638 oral therapy for Gaucher disease; Ataluren for Duchenne and Becker muscular dystrophy; Acid Sphingomyelinase for Neimann-Pick Type B; gene therapy for Parkinson's disease; and Neo-GAA for next-generation Pompe disease treatment.
Last May, Genzyme
won FDA approval for alglucosidase alfa (Lumizyme), for the treatment of late-onset Pompe disease.
"Cerezyme [for treatment of Gaucher disease], Fabrazyme [for Fabry disease], and Myozyme/Lumizyme [for Pompe disease] are the key growth drivers-all for rare genetic disorders," Terry
"Specialty and niche markets are areas of high unmet need with little to no competition, and with orphan status, longer periods of exclusivity," said Terry
"All of these mean greater growth prospects for pharma whose growth has been stalled by patent expiries and generic incursion."
Biologics are one of the top growth areas, experiencing growth of 8% to 10% per year, according to Terry
In 2002, small molecules comprised 91% of pharmaceutical sales, in 2014 they will only account for 71% while biologics will have grown to 22%.
Merger and acquisition activity remains at very high levels in the pharmaceutical and biotech industry, agreed Berger.
"The last few years have seen a record amount of biopharma M&A activity, and [this] transaction suggests that trend continues."
This acquisition also means other things, according to Terry
"Based on some of the manufacturing issues Genzyme
has faced in the past, providers can have greater confidence in the safety and sourcing of their products and the reputation and standards that Sanofi-aventis
brings to the table," she
"And, with the financial backing of Sanofi-aventis
, faster development of products is possible, or, more simply, bringing products to the market faster to the patients who need them the most."
The fallout from Genzyme's
manufacturing issues-lowering the company's share price-coupled with an impressive sales growth projection, has made Genzyme
a prime acquisition target and could make it the largest buyout since Roche's
acquisition of Genentech
, added Terry