Genzyme considers options, including selling non-core units, and initiates $2 billion stock buyback, as Icahn pushes to depose directors

Troubled US biotech firm Genzyme, threatened with board changes by billionaire investor Carl Icahn, says that its board of directors has voted to pursue several actions to increase shareholder value, including the disposal of non-core businesses.

Genzyme has seen its sales and earnings, as well as its share price slump, largely as a result of manufacturing problems which have led to supply problems for its leading drugs notably the rare disease treatments Cerezyme (imiglucerase for injection), for Gaucher's, and Fabrazyme (agalsidase beta), for Fabry disease. The latest setback was a decision by the US Food and Drug Administration to take enforcement action, including a financial penalty of at least $175 million (The Pharma Letters passim).

The company says it plans to pursue strategic alternatives for its Genetic testing, Diagnostic products and Pharmaceutical intermediates businesses, which could include divestiture, spin-out or management buy-out. It will also initiate a $2 billion stock buyback, under which $1 billion will be repurchased in the near term and financed with debt. The additional $1 billion of stock will be repurchased during the next 12 months.