InvestorsHub Logo
Post# of 252474
Next 10
Followers 29
Posts 5148
Boards Moderated 0
Alias Born 05/24/2006

Re: DewDiligence post# 88904

Wednesday, 02/24/2010 1:32:42 PM

Wednesday, February 24, 2010 1:32:42 PM

Post# of 252474
Icahn aims to "fix" Genzyme, alludes to sale

http://www.marketwatch.com/story/icahn-aims-to-fix-genzyme-alludes-to-sale-2010-02-23

By Val Brickates Kennedy, MarketWatch

BOSTON (MarketWatch) - One day after announcing he plans to nominate himself for the board of directors of Genzyme Corp., activist investor Carl Icahn said he aims to "fix" the ailing biotech company, which could include pushing for a sale.

On Monday, Genzyme said that it had received notice that Icahn, who holds about a 1.8% stake in the company, plans to nominate himself and three associates to the board at the company's annual meeting on May 20. All of Genzyme's nine directors are up for re-election at the meeting.

"Given that Genzyme's management has performed so poorly in the past, our first task will be to attempt to help fix what is broken," said Icahn, in a statement. "We have heard from a number of shareholders that they have very little faith in the current board and believe that there should be a major shake-up in its composition."

Genzyme shares were down 13 cents at $55.91 in late trading Tuesday, after initially spiking on the news.

Genzyme's management has been under pressure in recent months because of the temporary shut-down of a critical manufacturing facility due to contamination issues. The shut-down resulted in a worldwide shortage of two of its best-selling products, Cerezyme and Fabrazyme, both treatments for extremely rare genetics disorders.

Icahn's announcement also comes as Genzyme faces impending competition for Cerezyme, which is used to treat Gaucher disease, and Fabrazyme, a therapy for Fabry disease. Israel's Protalix Biotherapeutics (AMEX:PLX) and the U.K.'s Shire plc (NASDAQ:SHPG.Y) both have Gaucher treatments awaiting approval by the U.S. Food and Drug Administration, while Shire hopes to file for U.S. approval of its Fabry disease therapy later this year.

Icahn said his slate of board nominees includes Alexander Denner, Richard Mulligan and Steven Burakoff. He noted that he, Denner and Mulligan also worked together on the board of troubled biotech group ImClone Systems, which was later bought by Eli Lilly & Co. (NYSE:LLY) for $6.5 billion in cash, or $70 a share.

"Our team, on becoming members of the ImClone board, worked diligently to resuscitate the company and achieve great returns for all shareholders. We would hope to achieve the same result for Genzyme shareholders," Icahn said.

On Monday, Genzyme Chairman and Chief Executive Officer Henri Termeer, who has run the biotech pioneer since 1985, indicated he was open to working with Icahn. However, Termeer has also said in recent months that he did not think a management shift would be wise for the company while it was busy resolving its production problems.

"Our actions demonstrate that we are open and responsive to shareholder input, and we welcome a constructive dialogue with Mr. Icahn," said Termeer, in a statement on Monday.

"Genzyme is regaining its momentum and will return to delivering sustainable growth this year," Termeer added.

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.