Sanofi-Aventis is making preparations for a hostile bid for Genzyme though it has not yet made the final decision to embark on such an offer, according to my sources.

In the last two days the firm has hired a proxy solicitor and its bankers have become more aggressive in seeking out the opinions of Genzyme

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[GENZ  Loading...      ()   ] shareholders about what price they would accept in a hostile offer.

A hostile bid would not be a surprise. When I first reported Sanofi’s interest in Genzyme, people close to Sanofi

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[SNY  Loading...      ()   ] made it clear the company was considering a hostile approach after brief talks about a deal failed to produce the desired outcome.

If Sanofi does moves ahead with an unsolicited offer for Genzyme, there will be plenty of biotech investors and investment bankers shaking their heads in wonderment, particularly if it is at a price well above Genzyme’s current level.

That’s because of the manufacturing problems that have plagued Genzyme’s yields on its key drugs (Cerezyme and Fabryzyme) and because the FDA continues to closely monitor Genzyme’s progress in solving its issues.

Even if Sanofi were able to do significant due diligence, (which it won’t if it launches an unsolicited bid) sources who have dealt with manufacturing issues in the production of drugs tell me it is still very difficult to assess whether those issues have been fully resolved.

Genzyme has begun to lose market share to competitors given its limited supply of drugs. But there is also another potential danger from the lack of supply—that doctors will find a smaller dosage of the drugs as effective as the usual dose.

Even if Genzyme were to get its supply up sharply and regain market share, if doctors find their patients get the same benefit from a lower dosage, it could cost Genzyme revenues.

And if you’re the new CEO of a giant French drug company considering doing a hostile acquisition that might force you to pay a big multiple of Genzyme’s peak earnings ($4.00 a share) you are certainly taking a bold, but risky step

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