Genzyme and Icahn agree compromise deal
pharmafile | June 10, 2010 | News story | Research and Development, Sales and Marketing | Genzyme
Carl Icahn has won his battle with Genzyme to have his associates given a place on the company’s board.
The US biotech company has been beset with manufacturing problems since March 2009, which have hit the company’s sales and share price hard.
The company has now agreed a deal with shareholder Carl Icahn, who is known for his aggressive takeover tactics in the biotech field, and will now nominate two of his business partners to the board.
The deal is a compromise, however, as Icahn had wanted a total of four representatives elected to the board, including himself, but has settled for just two.
Icahn will now have a more direct influence on the future of the company, but has agreed to end his proxy shareholder battle.
Genzyme will appoint Dr Steven Burakoff and Dr Eric Ende to serve as directors immediately following its annual meeting of shareholders on 16 June.
Dr Burakoff, one of the Icahn Funds’ nominees, is Professor of Medicine, Haematology and Medical Oncology at the Mount Sinai School of Medicine and Dr Ende is a former biotechnology analyst with Merrill Lynch.
The truce means Genzyme’s founder, chairman and chief executive Henri Termeer remains in place, and the company now hopes its can resolve its manufacturing problems and focus on restoring its commercial position.
“Over the past year, we have made substantial progress in enacting operational and organisational changes to return to our historical path of sustainable growth,” said Termeer. “This agreement provides a pragmatic and constructive solution that allows us to focus on continuing to strengthen and build the company to create value for our shareholders.”
Carl Icahn said: “I am always pleased when a proxy fight can be avoided. I believe Drs Burakoff and Ende will add significant medical and financial expertise to the Genzyme board. I am also very heartened that the Genzyme board recently brought on Ralph Whitworth, a longtime activist, as a director, and announced that Dennis Fenton will shortly be added to the board as well.”
Icahn added that the four new directors represented a good outcome for shareholders, who are now better represented on Genzyme’s board. “New oversight at the director level will help this great company achieve its full potential,” said Icahn.
Andrew McConaghie
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