Going Up Against Henri—Genzyme Not For Sale
“I’d hate to go up against Henri.”
That was the view of Sirtris Pharmaceuticals CEO Christoph Westphal when asked at Xconomy’s Forum last night about recent speculation that two other Cambridge-based biotech firms, Biogen Idec and Genzyme, might be targets of takeover bids after investor Carl Icahn had taken stakes in both firms. The Henri in this case was Genzyme CEO Henri Termeer. And, from the looks of an interview Termeer did for today’s Wall Street Journal, that’s exactly what Icahn or any other Genzyme suitor would have to do: go up against Henri.
“To integrate us to into a very large entity is not that attractive,” Termeer told the Journal. “It is not that good a logical fit. It is much stronger as it is right now—as a stand-alone rather than as part of a company 10 times our size.”
Genzyme, with $3.2 billion in revenues last year, has focused its business on rare disorders, developing treatments that have often been designated “orphan drugs” by the FDA. The orphan drug status allows the company to operate without competition for longer periods of time than usual—and that, combined with the efficacy of the drugs and the limited treatment options available, allows Genzyme to charge premium prices. Termeer said in the interview that Genzyme’s kind of business, and its specialized sales force, wouldn’t fit well in a Big Pharma concern.
Termeer also said he has not communicated with Icahn after initially learning of the maverick investor’s stake in Genzyme last month when Icahn reported in his quarterly SEC filings that he had purchased 1.5 million shares of the company. That stake is less than 1 percent of the outstanding shares.
Genzyme’s stance is in contrast to that of Biogen Idec, another large Cambridge biotech. After Icahn’s interest in Biogen was made public in August—he now has a roughly 3 percent stake in the company—the firm’s board of directors announced it would entertain offers. But, given Genzyme’s reputation—and Termeer’s—for hard-nosed business, it is hardly a surprise that the company would dig in its heels against any takeover bid. That was Westphal’s point last night at the Xconomy Forum: The Future of Innovation in New England (Genzyme and Termeer are significant investors in Sirtris, and Westphal is friends with the Genzyme CEO). Westphal had one other piece of insight to offer in regards to Biogen Idec: he said he hoped that if it is acquired whomever buys the company has enough sense to let it operate largely independently, rather than trying to absorb it into a larger concern.