A proxy battle for control of Genzyme is unlikely, given the progress being made in discussions with Sanofi-Aventis, the U.S. biotech group's chief executive said on Thursday.

Teams from both companies have been meeting to discuss a negotiated deal after Sanofi's $18.5 billion offer, worth $69 per share, was rejected by Genzyme as too low. Sanofi could ultimately seek to force the issue through a board fight.

"It's not so likely that approach will be used (by Sanofi)," Genzyme's Henri Termeer told Reuters on the sidelines of the World Economic Forum in Davos.

"If we were not talking, if we were blocking everything, then maybe that is the only course you can go. But when you have two parties that are constructively engaged, you try to get to an agreement."

Sources familiar with the situation said on Monday that Sanofi had hired a search firm to look for potential candidates to nominate to Genzyme's board - a strategy viewed as a back-up if talks break down.

Termeer said he expected to meet Sanofi CEO Chris Viehbacher while both are in Davos this week.

"This may not be the best place to really have negotiations but certainly it's a good place to just meet each other in a constructive way," he said.

Termeer's comments follow positive remarks from Viehbacher on Wednesday, who said "some progress" had been made.

The pivotal issue under discussion is the idea of adding a tradable contingent value right (CVR) that would pay out if Genzyme's experimental multiple sclerosis treatment Lemtrada hits certain targets.

Termeer said a CVR could help bridge the gap between the two sides but Genzyme shareholders were also looking for more cash.

"Shareholders are looking for value and I don't think simply a CVR can do this," he said.

Some investors have expressed frustration at the drawn-out nature of Sanofi's bid for Genzyme, with the French drugmaker this week extending its tender offer once again at the same price until Feb. 15.

But Termeer said the negotiations were complex and inevitably took time.

"Deadlines are not very helpful. Both parties have said - Chris has said and I have said - that this will take some time. These are complex subjects. It's not widgets. It is R&D that has been conducted for years."

Buying Genzyme would give Sanofi a new area for growth in the high-margin business of rare diseases as it seeks to diversify to make up for patent losses that will take out roughly a third of its 2008 sales base through to 2013.