Genzyme in “Tough Spot” with Icahn Proxy Challenge—CEO Termeer Courting Key Shareholders
With his leadership under attack and FDA regulators cracking down on his company’s manufacturing, Genzyme chairman and CEO Henri Termeer is traveling to meet with the firm’s top 30 shareholders over the next month.
The road trip, discussed yesterday in an interview with Genzyme spokesman Bo Piela, comes just over a month before the company’s annual meeting on June 16. At the meeting, the billionaire investor Carl Icahn aims to unseat Termeer and three others on the firm’s board of directors. And Icahn, who has a 4.9 percent stake in the firm and a record of ousting executives from troubled companies, holds plenty of ammo for his campaign to gain greater control of Genzyme.
A litany of mishaps has riddled Cambridge, MA-based Genzyme (NASDAQ:GENZ), the world’s largest maker of rare disease drugs, during the past year. Viral contamination caused a temporary shutdown at its Allston, MA, drug plant. Shortages of key products have slowed sales. The FDA has slapped fines on the firm for manufacturing violations. And some unhappy investors, Icahn the most vocal among them, want changes—including an end to Termeer’s nearly three-decade reign at the company.
David Meeker, Genzyme’s chief operating officer, candidly summarized the situation at his company when, during his speech at an industry meeting in Cambridge last month, he said: “We’re obviously in a tough spot.”
Many of Genzyme’s problems stem from its manufacturing problems. In June, the company revealed that it was temporarily closing the Allston Landing plant because a virus was found in a bioreactor needed to produce the firm’s top-selling product, imiglucerase (Cerezyme), which is used to treat a rare genetic illness called Gaucher’s disease. Sales of the drug fell from $1.23 billion in 2008 to … Next Page »