Genzyme CEO to Sanofi: “We are not a fixer upper…we’re beachfront property!”

Henri Termeer finds himself at a crossroads.  The biotech industry pioneer and CEO of Genzyme the verge of losing control of the company he transformed from a start-up in 1983 into a $4.5 billion biotechnology powerhouse.  Those who know Henri can share how much he loves managing Genzyme. They can also share how difficult the past few years have been.

Now, pressured by an $18.5 billion buyout offer from Sanofi Aventis & antagonistic shareholders, Termeer says he will consider selling, if he can get the right price.  Termeer stands to make about $300 million from a sale to Sanofi.  At the same time, Termeer is under siege.  Billionaire investor Carl Icahn controls two seats on the board and would like nothing more than a quick transaction to realize gains from his investment.  What else?  Genzyme is racked with manufacturing & quality issues that have led to product shortages that devalued the stock.

Thus far, Genzyme has rejected Sanofi’s initial offer, saying it undervalues Genzyme’s pipeline of potential products.  And, the deal centers on a Genzyme share price that is already depressed, down 43% from a 2008 high.  Still, this is not a one sided deal.  Sanofi Aventis & new CEO Chris Viehbacher need new products to help replace revenue that will be lost in 2013 due to generic competition.

Most in the industry believe, like Roche-Genentech, it’s only a matter of time…and money. But be sure that ‘Biotech Hank’ will not sell out for one penny less than what he believes his company to be worth.  Let the posturing begin…


2 Responses

  1. Beachfront has fixer uppers too and in this case it will take some years before they clear the view to the ocean.

  2. Genzyme was able to make it big before all of its recent problems because Hank was smart to take advantage of the orphan drug act of 1983. It would be interesting to know if other companies have tried to make it like Genzyme by taking advantage of the orphan drug act.

    Also, how would these companies do in light of the new regulations in health and finance by the federal gov’t since Obama’s taken office? Like most in the field, I think it’s only a matter of time and price before Genzyme is no longer.

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