Tag Archives: Sanofi CVR

Contingent Value Rights (CVRs) – The case of the Sanofi/Genzyme CVR

As I was trying to research a little bit how to value a pipeline of drugs still in development (Actelion spin-off), I stumbled across the so-called “Contingent Value Rights” (CVRs) which are often used in Pharma takeovers.

A CVR is somehow similar to a tracking stock with the exception that the CVR often tracks a more specific item such as a single product or in case of many Pharma M&A transactions, the outcome of a certain drug development project.

Acquirers and sellers sometimes use this instrument if they cannot agree on the value of an under development drug. The idea behind is that the seller keeps the upside and the buyer doesn’t need to pay upfront for some very risky future cashflows.

Sanofi/Genzyme Lemtrada CVR

When Sanofi took over Gynzme in 2011 such a situation crystalized. This is from a 2015 NYT story:

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