Genzyme v. Sanofi-Aventis: The Plot Thickens
Yesterday, Genzyme announced it would cut about 1,000 jobs worldwide as part of a restructuring plan. In addition, company spokespersons indicated that the company may outsource some of the eliminated permanent position and impose a hiring freeze. As part of its restructuring plan, the company plans on eliminating about 10 percent of its 12,800-employee workforce by 2012. It is unclear how many of the 4,500 US employees will lose their jobs.
In addition to the job cuts, the company announced that it had agreed to sell its diagnostic testing unit (reproductive and genetic testing) to Laboratory Corp of America for $925 million in cash. Henri Termeer, Genzyme’s beleaguered CEO also announced that the company’s other two units, molecular diagnostics and pharmaceutical ingredient manufacturing on also on the block and will be sold.
While Termeer insists that the job cuts and sale of non-core business units has nothing to do with Sanofi-Aventis’ attempt to purchase the company, many analysts believe that these measures are being taken to induce Sanofi to sweeten its $69 per share takeover bid. The additional monies garnered from the layoffs and division sales, will allow Genzyme to strengthen its stock position and bolster its cash reserves to defend against a possible hostile takeover attempt by Sanofi.
The demise of Genzyme, once one of the most highly regarded and ethical biotechnology company in the world is directly linked to manufacturing problems at its Boston-based facility. The ongoing and protracted quality problems at the plant resulted in a consent decree by the US FDA and penalties totaling about $175 million. As most quality experts will tell you, systemic quality control and assurance issues generally stem from a lack of commitment to quality by senior management; in this case Termeer!
Despite repeated request for his resignation, Termeer, who has run Genzyme for the past 25 years or so, has steadfastly refused to relinquish his post. Instead of stepping down to save the company, Termeer has chosen to “take the ship” down with him; the sure sign of an out-of-touch CEO who apparently was willing to sacrifice the reputation and worth of a company for entirely self-serving reasons.
Until next time...
Good Luck and Good Job Hunting
For those of you who can’t tear yourselves away from the ongoing, nail-biting Sanofi Aventis-Genzyme saga, the head of GlaxoSmithKline (GSK) R&D, Moncef Slaoui told a French newspaper that GSK will not “step in as a rival bidder for the US biotech Genzyme.”
The New York Times
Bristol-Myers Squibb (BMS) announced Tuesday that its board authorized the
Biogen Idec
Merck of Germany
Carl Ichan, the billionaire, activist investor
While Genzyme has begun to address its
Just when you thought things couldn’t get much worse for New Jersey, Merck and Pfizer
The Belgian chemical manufacturer Solvay
According to a
Chalk up one for the good guys (good is a relative term).
which is estimated to be worth around $7-$9 billion. 