Tuesday, April 27, 2010
Icahn aims to help fix what is "broken" at Genzyme: It expects to be fined at least $175 million by U.S. regulators for manufacturing violations"
(Posted By: Josi Creek)
BOSTON, April 27 (Reuters) - If elected to the board of Genzyme Corp, billionaire investor Carl Icahn will work to understand and help the company fix what is "broken," according to proxy documents filed on Tuesday with the U.S. Securities and Exchange Commission.
Icahn is seeking representation for himself and three other nominees on Genzyme's board. He said in the documents he believes his nominees' knowledge of science, medicine, finance and business will "significantly improve the science and business expertise of the board of directors of Genzyme."
Cambridge, Massachusetts-based Genzyme will hold its annual meeting on June 16th. The biotech company is struggling to emerge from a manufacturing crisis that lead to shortages of two of its drugs for rare diseases. It expects to be fined at least $175 million by U.S. regulators for manufacturing violations.
The Icahn nominees "believe that Genzyme's inability to fully manufacture and supply certain of its products leads to the conclusion that the manufacturing system at Genzyme is 'broken'," according to the filing.
Genzyme, however, said that none of Icahn's nominees have experience in manufacturing and that it is taking steps of its own to put the right people in place.
"We are rapidly executing a comprehensive plan to strengthen our manufacturing operations, including the recent hiring of two veteran leaders to oversee our worldwide manufacturing and quality programs," said John Lacey, a spokesman for Genzyme, in an email. "We are also actively recruiting a new board member with specific manufacturing and operations experience."
In addition to Icahn himself, Icahn has also nominated Dr. Stephen Burakoff, Professor of Medicine, Hematology and Medical Oncology at the Mount Sinai School of Medicine; Alexander Denner, managing director of Icahn Partners; and Dr. Richard Mulligan, Professor of Genetics at Harvard Medical School.
"The Icahn parties believe that a change in board composition is necessary to bring new ideas and ways of looking at problems to the existing board," Icahn said in his proxy filing.
Genzyme, which makes drugs for rare and chronic diseases, is moving on multiple fronts to keep Icahn at bay. It recently appointed Ralph Whitworth, an activist investor who runs the $6 billion investment firm Relational Investors LLC, to its board.
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