CAMBRIDGE, Mass.--(BUSINESS WIRE)--Genzyme
Corp. (NASDAQ: GENZ) today announced that its Board of Directors has
voted to pursue several actions to increase shareholder value. The
company will initiate a $2 billion stock buyback, under which $1 billion
of stock will be repurchased in the near term and financed with debt.
The additional $1 billion of stock will be repurchased during the next
“Over the past year, we have made many changes to strengthen the company
at both the operational and board levels, and the new steps we are
announcing today build on this plan”
The company also plans to pursue strategic alternatives for its Genetic
testing, Diagnostic products and Pharmaceutical intermediates
businesses. Options could include divestiture, spin-out, or management
These near-term initiatives are part of a five-point plan for
shareholder value creation outlined by Chairman and CEO Henri Termeer
today during the company’s Analyst Day meeting. Under this plan, which
covers the company’s growth outlook through 2015, Genzyme intends to:
Focus on its core businesses, which provide products that address
unmet medical needs, and establish operational excellence in
manufacturing. By pursuing strategic alternatives for three
businesses, the company is optimizing its business mix with a measure
that will be accretive to earnings and improve cash return on invested
Capitalize on near-term revenue growth drivers, including maximizing
the potential of products that are early in their launch stages, as
well as important therapies in development that are expected to be
launched over the next three to five years.
Balance revenue and earnings growth with cash flow return on
investment, which will now be disclosed at the business segment level.
These metrics are now key components of short and long-term
compensation plans for senior executives, to align company performance
with shareholder interest.
Improve its operating margins by reducing costs across the company.
Genzyme’s goal is to perform at a best-in-class level within its peer
group. The company is retaining independent advisors to assist with
benchmarking against peer companies and identifying potential
efficiencies and cost saving measures.
Optimize its capital structure by implementing the $2 billion stock
“Over the past year, we have made many changes to strengthen the company
at both the operational and board levels, and the new steps we are
announcing today build on this plan,” said Mr. Termeer. “Genetics and
Diagnostics are strong businesses that are both leaders in their fields.
However, as we evaluated our company to create a mix of businesses that
will deliver sustainable growth and stronger returns on invested
capital, it became clear that these businesses do not fit within this
strategy. Focusing on our core businesses will enable us to continue to
build a portfolio of high value therapies for patients.”
Genzyme Genetics is a top provider of reproductive and oncology testing
in the United States, with nine laboratories performing more than a
million tests a year. The business, which also has the largest
nationwide network of board-certified genetic counselors, had revenue of
$371 million in 2009.
Genzyme’s Diagnostics business offers a broad product portfolio,
including enzymes, clinical chemistry reagents and rapid tests covering
the areas of cardiovascular, diabetes, renal, and infectious diseases.
The business, which is a leading provider of HDL and LDL cholesterol
kits, manufactures and markets products to diagnostic companies,
clinical labs and physician offices on a worldwide basis for use by
health care providers. Diagnostics 2009 revenue was $167 million.
Genzyme Pharmaceuticals develops and manufactures chemically synthesized
pharmaceutical materials and technologies for the global pharmaceutical
industry and focuses on lipids, peptides, carbohydrates,
oligonucleotides, custom small molecules and drug delivery technologies.
The business includes a cGMP manufacturing facility in Liestal,
Genzyme has identified some potential strategic partners for the three
businesses, and has also received unsolicited inquiries. To assist in
this process, Genzyme has retained the services of Credit Suisse and
Goldman Sachs & Co. Genzyme does not plan to release additional
information about the status of this strategic alternative evaluation
until it enters definitive agreements or the process is otherwise
completed. The company expects transactions to be completed this year.
Strengthening the Foundation for Growth
Genzyme is renewing its organization by integrating new leaders into the
company, placing established leaders in new roles, and creating
positions to match the company’s growth. These changes are bringing
fresh perspective to the company and establishing the focus required to
achieve the objectives outlined through 2015.
Genzyme this year created the position of chief operating officer and
appointed Executive Vice President David Meeker to this role. Dr. Meeker
is charged with integrating all aspects of the company’s commercial
organization to improve operational efficiency and drive cost savings.
Genzyme also recently made the following leadership changes:
Geoff McDonough, who has demonstrated strong leadership of the
company’s Personalized Genetic Health business during a challenging
period, has been appointed to the newly created role of regional
president of the company’s organization in Europe, Genzyme’s largest
John Butler, who led the growth of Genzyme’s Renal business in a
highly competitive market, and also had responsibility for the
Endocrinology and Cardiovascular businesses, will become president of
Personalized Genetic Health. This business now includes the company’s
Cardiovascular products and programs.
Rogerio Vivaldi, an endocrinologist by training who built Genzyme’s
rapidly growing business in Latin America, including a strong Renal
franchise, will become president of the Renal and Endocrinology
Alison Lawton, who has demonstrated leadership across a broad range of
functions at Genzyme, including building the company’s global
regulatory organization, will become general manager of the Biosurgery
The operating team led by Dr. Meeker will oversee products in
early-stage launch that are key near-term growth drivers for the
Myozyme® (alglucosidase alfa), a first-in-class treatment
for Pompe disease. The therapy is approved in 40 countries globally,
and a U.S. PDUFA date for Lumizyme™ (alglucosidase alfa) is set for
Synvisc-One® (hylan G-F 20), which is gaining rapid
acceptance by patients and physicians because of its convenience: it
is the only single-injection viscosupplement for osteoarthritic knee
pain approved in the United States.
Mozobil® (plerixafor injection), which is used to prepare
certain cancer patients for stem cell transplantation, and offers
significant benefits for patients, providers, and payers.
This team will also oversee the development programs for three products
that are expected to be launched by the end of 2013, and serve as
significant growth drivers for the company:
Alemtuzumab in multiple sclerosis, which has the potential to
fundamentally change the standard-of-care for this disease. Genzyme
recently announced positive four-year follow-up data from the phase 2
study. Two phase 3 studies are fully enrolled and data are expected
Mipomersen, a novel treatment for patients with uncontrolled
LDL-cholesterol who are on maximally tolerated lipid lowering therapy.
The first two phase 3 studies met their primary endpoints, and
additional phase 3 data are expected this year.
Eliglustat tartrate, which has the potential to transform the
treatment experience for Gaucher disease patients by providing a daily
oral capsule option instead of bi-weekly infusions lasting several
hours or more. Enrollment is underway in two global, multi-center,
phase 3 trials of the treatment.
Over the past year, Genzyme has made a number of changes to transform
the company’s manufacturing operations and strengthen its board of
directors. In its manufacturing organization, the company has
implemented plans to reduce risk, increase capacity and bring in outside
experts, including two experienced senior leaders for its manufacturing
and quality operations.
At the board level, the company recently added two new directors who
bring significant industry and financial expertise; launched a search
for an additional board member with manufacturing expertise;
strengthened the role of its lead independent director; and created new
board committees to oversee capital allocation and risk management.
One of the world's leading biotechnology companies, Genzyme is dedicated
to making a major positive impact on the lives of people with serious
diseases. Since 1981, the company has grown from a small start-up to a
diversified enterprise with more than 12,000 employees in locations
spanning the globe and 2009 revenues of $4.5 billion. In 2010, Genzyme
was named to the Fortune 500.
With many established products and services helping patients in
approximately 100 countries, Genzyme is a leader in the effort to
develop and apply the most advanced technologies in the life sciences.
The company's products and services are focused on rare inherited
disorders, kidney disease, orthopaedics, cancer, transplant and immune
disease, and diagnostic testing. Genzyme's commitment to innovation
continues today with a substantial development program focused on these
fields, as well as cardiovascular disease, neurodegenerative diseases,
and other areas of unmet medical need.
Genzyme’s press releases and other company information are available at www.genzyme.com
and by calling Genzyme’s investor information line at 1-800-905-4369
within the United States or 1-678-999-4572 outside the United States.
On April 26, 2010, Genzyme filed a definitive proxy statement with the
SEC in connection with the company’s 2010 annual meeting of
shareholders. Genzyme shareholders are strongly advised to read
carefully the company's definitive proxy statement before making any
voting or investment decision because the definitive proxy statement
contains important information. The company’s definitive proxy statement
and any other reports filed by the company with the SEC can be obtained
free of charge at the SEC’s web site at www.sec.gov
or from Genzyme at www.genzyme.com
A copy of the company’s definitive proxy statement is available for free
by writing to Genzyme Corporation, 500 Kendall Street, Cambridge, MA
02142. In addition, copies of the proxy materials may be requested from
our proxy solicitor, Innisfree M&A Incorporated, 501 Madison Avenue,
20th Floor, New York, NY 10022, toll free at: (888) 750-5835.
This press release contains forward-looking statements regarding
Genzyme’s financial outlook and business plans including, without
limitation: its plans to optimize its capital structure by implementing
a $2B stock buyback, the timing and funding thereof, including plans for
a near-term debt financing; its plans to pursue strategic alternatives
for its Genetic testing, Diagnostic products and Pharmaceuticals
businesses and expectations that this plan will be accretive to earnings
and improve cash return on invested capital; its plans to create
shareholder value by focusing on its core businesses, capitalizing on
near term revenue growth drivers, balancing revenue and earnings growth
with cash flow return on investment (CFROI), disclosing CFROI on a
business segment level, and improving its operating margins to perform
in-line with peers; its plans to release additional information
regarding the strategic alternatives when definitive agreements are
reached or the process is otherwise complete; to complete the strategic
transactions this year; its plans to launch alemtuzumab for MS,
mipomersen and eliglustat tartrate by the end of 2013; its expectations
regarding the timing of the availability of data from the alemtuzumab-MS
and mipomersen trials; and its assessment of the potential for
alemtuzumab-MS and eliglustat tartrate. These statements are subject to
risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties include, among others: that
Genzyme does not repurchase any or all of the $2B worth of Genzyme stock
on the time frames indicated or at all; that Genzyme is unable to
complete a debt financing in the time frame indicated or in an amount
anticipated, or at all, due to an unfavorable credit rating, unfavorable
financing terms, unfavorable credit markets generally or any other
reason; that Genzyme is unable to generate cash from strategic
transactions involving its Genetic testing, Diagnostic products or
Pharmaceuticals business; that the cash it does generate is less than
expected, or that the timing of one or more of the strategic
transactions is later than expected; that any or all of Genzyme’s five
point plan to create shareholder value cannot be executed on or is
otherwise ineffective; that Genzyme is not able to successfully complete
clinical development and obtain regulatory approvals of its product
candidates within anticipated timeframes and for anticipated
indications, including eliglustat tartrate, alemtuzumab-MS and
mipomersen for any reason, including trial results that are not as
favorable as expected and safety profiles that reduce the potential
target population; our ability to conclude negotiation of a consent
decree with the FDA and the terms of such consent decree; and the risks
and uncertainties described in Genzyme's SEC reports filed under the
Securities Exchange Act of 1934, including the factors discussed under
the caption "Risk Factors" in Genzyme's Annual Report on Form 10-K for
the year ended December 31, 2009. Genzyme cautions investors not to
place substantial reliance on the forward-looking statements contained
in this press release. These statements speak only as of today’s date
and Genzyme undertakes no obligation to update or revise them.
Genzyme®, Myozyme®, Synvisc-One® and
Mozobil® are registered trademarks and Lumizyme™ is a
trademark of Genzyme Corporation or its subsidiaries. All rights
Genzyme will hold its annual Analyst and Investor Day today starting at
1 p.m. Eastern, which will be webcast live on the investor events
section of www.genzyme.com