Sanofi digs in for long siege of Genzyme

GENZYME boss Henri Termeer has barely had time to catch his breath.

Less than three months ago, the chief executive of the largest biotechnology specialist in Massachusetts saved his skin by settling a prolonged tug-of-war with activist investor Carl Icahn. Icahn, a tough character with a record of forcing management changes at portfolio companies, had demanded Termeer’s removal after a series of health and safety disasters.

Termeer survived by appointing two of Icahn’s associates, Steven Burakoff and Eric Ende, to the board. But Termeer’s position remains far from comfortable. After 25 years at the helm he is unavoidably linked to Genzyme’s longstanding manufacturing difficulties, and several other shareholders – including New York-based Matrix Asset Advisors – are known to want him out.

Sanofi-Aventis’ aggressive $18.4bn (£11.9bn) bid has now sent Termeer reeling again. At a time when his stock is so low with Genzyme’s investors, the top man will not relish the increasingly likely prospect of the French predator turning hostile.

Sanofi may have made its name selling fast-acting drugs such as Plavix, which prevents heart attacks, but insiders say chief executive Chris Viehbacher will dig in and take his time. On Sunday, he sent Termeer a “bear hug” letter reiterating his $69-per-share offer and warning that refusal to engage would “serve only to further delay” the realisation of value for Genzyme’s shareholders.