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Genzyme Corp. has confirmed that activist investor Carl Icahn intends to nominate four individuals — including himself — for election to the company’s board despite mounting efforts to ward off such a move.
Officials at the Cambridge-based biotech company said its board’s nominating and governance committee will evaluate the nominees and make a recommendation that is in the best interests of all of the company’s shareholders. Genzyme’s board consists of nine directors, all of whom are up for election at the 2010 annual meeting scheduled for May 20.
In addition to Icahn, the other presumptive nominees are Steven Burakoff, Alexander J. Denner and Richard Mulligan.
“Our actions demonstrate that we are open and responsive to shareholder input, and we welcome a constructive dialogue with Mr. Icahn,” said Henri A. Termeer, Genzyme’s chairman and chief executive officer, in a statement. “Genzyme is regaining its momentum and will return to delivering sustainable growth this year. We have made significant changes to strengthen the company by investing in existing businesses, bringing in new senior leadership and improving corporate governance. We are completely focused on generating short- and long-term value for shareholders.”
Genzyme has in recent months taken steps to fend off an Icahn board raid in the midst of continuing manufacturing problems that temporarily shuttered its Allston plant. That move resulted in shortages of two drugs for rare diseases and caused the company’s earnings to plummet 73 percent year-over-year in the fourth quarter of 2009.
In December, Robert J. Bertolini, the former executive vice president and chief financial officer at Schering Plough, was elected to Genzyme’s board and appointed to chair its audit committee.
The company has also agreed to appoint another activist investor, Ralph Whitworth, principal and co-founder of Relational Investors, to its board in November.
Genzyme has also made two strategic hires designed to quell investor concern over manufacturing quality control. Scott Canute, the former manufacturing head at Eli Lilly & Co., will join Genzyme March 1 as president of Global Manufacturing and Corporate Operations. Ron Branning, a long-time executive with other large biotech company’s including Gilead and Genentech, recently joined Genzyme as senior vice president of global product quality.
Icahn first bought 1.5 million shares in Genzyme in 2007, giving him less than a 1 percent share in the company. At the time, Termeer responded to the move be reiterating that the company was not for sale.
Icahn stake in the company as of Dec. 31 was 4.8 million shares, or slightly less than 2 percent of the company.
Icahn has been involved in similar board activity with drug developer Biogen Idec Inc. In January, Biogen said had been notified that Icahn intended to nominate three candidates for the company’s board of directors. Icahn’s also submitted a proposal to freeze Biogen’s board at 12 members, according to a regulatory filing.
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