Bioenvision Inc. lower, Genzyme reaffirms offer

Shares of Bioenvision Inc. (Nasdaq: BIVN) are sagging today following news after the start of trading that biopharmaceutical heavyweight Genzyme Corp. (Nasdaq: GENZ) has reaffirmed its intention to buy the small-cap company for about $365 million.

“$5.60 per share is our best and final offer,” said Mark Enyedy, president of Genzyme Oncology, a business unit of Cambridge, Mass.-based Genzyme, in a statement. “It reflects the full and fair value for Bioenvision common stock based on our extensive due diligence on the company.”

New York-based Bioenvision is developing clofarabine, a drug for the treatment of acute lymphoblastic leukemia.

Genzyme announced that it has sent a letter to Bioenvision’s board confirming its stance. The two companies originally agreed to merge on May 29, and shortly thereafter Genzyme bought 22% of Bioenvision in a tender offer. The merger has been unanimously approved by Bioenvision’s board.

The transaction carries risks for Genzyme, the company said. Bioenvision has been losing money for the past three years and needs more than $100 million through 2011 to finance its operating losses.

“Bioenvision is selling out of a position of weakness,” commented David Garrett, a biotech analyst from Fortis Securities, in a phone interview.

“Genzyme is looking to become a global player in oncology,” he said, explaining that the company considers the drug clofarabine a promising project worth developing.

Owners of Bioenvision’s stock have scheduled a special meeting on Oct. 4 to vote on the merger.

“Bioenvision’s shareholders should take their money and be done with it,” Garrett said. He is maintaining a “sell” rating on the stock.

At 2:16 p.m. ET, Bioenvision (BIVN) shares were down $0.26, or 5%, to $5.17.

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