Agreement Between Genzyme and San Diego Activist Shareholder Suggests Truce
(Page 2 of 2)
representative on Genzyme’s board, the biotech says it will appoint Whitworth to its board in November 2010.
Genzyme has had its share of troubles. Shares of the company’s stock fell by more than 25 percent in 2009, and the stock hit a five-year low of $47.09 in August. As Ryan noted in December, Genzyme lost ground last year after halting production at its Allston plant of its best-selling drug for Gaucher’s disease after viral contamination was discovered there last June. The ensuing shortages of that drug, imiglucerase (Cerezyme), and Genzyme’s drug for Fabry disease, agalsidase beta (Fabrazyme), prompted the Cambridge biotech to lower its sales forecasts and urge doctors to conserve their supplies of the drugs. Sylvie Gregoire, president of Shire Human Genetic Therapies, told Ryan that Genzyme’s missteps enabled her firm to make inroads in the U.S. markets for Fabry and Gaucher’s diseases. In another setback, Genzyme halted development of its next-generation drug for kidney disease in November.
In its statement, Genzyme says it has made progress “overcoming manufacturing challenges, strengthening its operating structure, and enhancing its board composition.”
But Whitworth is not the only major shareholder calling for additional changes. Indeed, a source cited today by Reuters indicates that activist investor Carl Icahn—who has been lobbying for control of Genzyme’s Cambridge neighbor Biogen Idec (NASDAQ: BIIB) for the last couple of years—might now be considering launching a proxy battle against Genzyme as well. Reuters’ Toni Clarke speculates that Genzyme’s agreement with Whitworth might be “a pre-emptive strike against Icahn.”
Meanwhile, Genzyme Chairman and CEO Henri Termeer, who has headed Genzyme since the mid-1980s has come under increasing pressure to step down. After TheStreet.com columnist Adam Feuerstein named Genzyme’s Termeer “worst biotech CEO of 2009,” he reported that Genzyme founder Sheridan Snyder agreed, and called him to say, “a CEO change at Genzyme would be a good idea.”