Genzyme Corp. shares rose 3 percent yesterday after billionaire investor Carl Icahn bought a small stake in the Cambridge biotech company, sparking speculation it could become a takeover target.
Icahn reports interest in Genzyme
Icahn, 71, has already prompted two other major US biotech companies this year to look for buyers. In April, AstraZeneca PLC scooped up MedImmune Inc. for $15.6 billion, after Icahn threatened to launch a shareholder fight at MedImmune to force a sale. And last month, Biogen Idec Inc. of Cambridge said it would consider formal bids for the company, after receiving expressions of interest from Icahn and others.
"Given Mr. Icahn's success in prodding the management of both MedImmune and Biogen Idec into putting their companies up for sale, we think it's at least possible that Genzyme may ultimately do the same," said Bear Stearns & Co. Inc. analyst Mark Schoenebaum in a note to investors.
But some analysts were more skeptical Icahn's investment would lead to a sale.
"Unlike MedImmune and Biogen Idec, whose management are more willing sellers, we don't think Genzyme's management team is inclined to be acquired by a larger drug company," Alex To, an analyst with Natixis Bleichroeder Inc., wrote to investors. "Shareholder activists who attempt to force the issue could easily trigger a protracted legal fight."
Icahn's investment firm, Icahn Capital Management LP, reported Wednesday that it purchased 1.5 million shares of Genzyme stock in the third quarter. The investment, worth $94 million at the time, amounts to 0.6 percent of Genzyme's shares. But Icahn initially took small stakes in Biogen Idec and MedImmune as well, before investing more heavily. Genzyme shares rose $2.08 to $72.84 yesterday on the news.
Icahn hasn't publicly said what he plans to do with the Genzyme investment and he didn't return calls this week seeking comment. Genzyme, which said Wednesday it does not comment on actions of individual shareholders, declined to comment further yesterday.
The investment comes at a time when some major drug companies already have signaled interest in buying biotechs to replenish their drug pipelines and improve their ability to develop new medicines.
Among large biotechs, Schoenebaum said, Genzyme "seems to make the most sense as a potential target for a major pharma company looking to bulk up its biologics capabilities." He said the company could fetch $70 to $90 per share. But Schoenebaum also said he believes Genzyme's stock should be valued in the mid-$80s, even if it isn't sold, based on the stock prices of other biotech companies.
Rather than being acquired, To said, it's more likely Genzyme will try to take advantage of its rising stock price by making an acquisition.
Genzyme, one of the state's largest life sciences companies, has 10,000 employees worldwide, including 4,500 in Massachusetts. The company, with a market value of close to $19 billion, generates billions of dollars in sales from treatments for rare disorders, including Gaucher's disease and Pompe disease. Why Genzyme's Unlikely to be the Next Target
The Boston Globe reported yesterday that Carl Icahn has taken a sub-1% stake in Genzyme. Is this company his next target for a sale or restructure, the article asks, after the billionaire investor more or less forced the sale of MedImmune to AstraZeneca, and more recently put Biogen Idec on the block?
It's a reasonable question. But there are reasons why Genzyme is less likely to be acquired than Biogen or MedImmune. For one thing, it’s not a big blockbuster company like most of its Big Biotech peers. Notwithstanding its one $1 billion-plus drug, rare disease treatment Cerezyme, Genzyme, in one of its own executive’s words, “is a company of many small ideas, rather than one big one.”
Sure, small, specialist ideas are cool these days, and small ideas add up. Genzyme's had over $3 billion in revenue last year (and is on track for as much as $3.8 billion this year). But Big Pharma at least needs more than a diverse bunch of highly niche and often highly complex products to solve its near-term problems.
And then there’s Genzyme’s structure—it’s organized as half-a-dozen quasi-autonomous business units, operating in area like transplant, surgery, or rare diseases. That means Genzyme “would not be the easiest company to incorporate,” notes Stelios Papadopoulos, former vice chairman of Cowen & Co.
So maybe Icahn’s idea is to split it all up and sell off the divisions? Analysts will certainly point you to one or two under-performing ones. But that would miss the point—the leverage, de-risking, and choice of where and when to compete for deals that Genzyme’s diversified model offers the corporate whole. (And anyway, the company tried issuing separately-listed tracking stocks during the 90’s and it was a disaster.)
Granted, the Street hasn’t considered Genzyme as the sexiest of Big Biotechs—call it the diversification discount. But as purists like Biogen and Amgen stumble, Genzyme’s breadth and global reach begin to look smart, as does its long embrace of external R&D. (You can read more about this in the forthcoming IN VIVO.) Maybe that’s why Icahn’s jumping on board—to enjoy the ride (Genzyme’s promising 20% compounded earnings growth or thereabouts over the next five years).
作者:admin@医学,生命科学 2011-03-31 17:11