an agreement in June that gave Icahn two seats on Genzyme’s board of directors. However, Icahn agreed to back Termeer and the company’s slate for re-election to the board of directors. So when the CEO presided over Genzyme’s annual shareholders meeting in June, he did so in the confident manner of a patriarch in full control.
“I think [Termeer] actually showed his skills during the proxy battle and he actually kind of won that,” said the former Genzyme executive. “He knuckled down, went on the road, talked to all the shareholders, and actually negotiated adding people to the board under the right circumstances for him.”
It’s fair to ask what more Termeer hopes to accomplish at Genzyme, which had 2009 revenue of $4.5 billion and has drugs in its pipeline such as alemtuzumab for multiple sclerosis that offer the promise of future business growth. Former Genzyme executives say Termeer is taking full responsibility for the manufacturing snafus in Allston and wants to lead the company through the process of fixing the problems—which includes bringing its operations there into compliance with FDA standards after turning over to the agency $175 million in profits from drugs made at the plant.
“Henri wants to stay long enough to fix all the problems at Genzyme so he can go out on a really high note,” the former Genzyme executive said.
If Genzyme is sold, Termeer stands to make a fortune. His more than 4.1 million shares of the firm’s stock as of April 9 were worth $292.8 million based on the $71.20 closing price today. In addition, his contract with the company includes a change-of-control clause that would pay him what is likely to be well north of $20 million in the form of a cash payment, stock award, and other benefits if the company is bought. Yet Termeer seems unmoved by such financial incentives to sell the company.
A prize-winning geneticist and biotech pioneer in the Boston area described Genzyme’s CEO as someone who sees no limit to the company’s potential.
“I think he believes that the Genzyme organization, with his leadership, is capable of doing even more important things in the next decade and growing value in the next decade for his stockholders,” said the renowned geneticist, who asked not to be named.
The Dutch-born CEO is known for his tight control of decisions made at Genzyme, even to a fault. So, naturally, there have been questions about how well the firm would function in his absence.
“Everybody who’s dealt with Genzyme or knows much about Genzyme knows that the ultimate decision always came to Henri’s desk,” the biologist said. “He is central to the decision making at Genzyme. In the public’s eye, Genzyme lost some of its performance credibility with this infection in its production facility. When you’re running an organization the size of Genzyme, you really can’t take your eye off anything.”
It’s no secret that Termeer strives for perfection. In a May 2008 profile in Boston Magazine, Termeer said, “I like perfection and courage and innovation.” Termeer’s statement makes it sound like leaving Genzyme before it completely moves beyond the deficiencies in Allston would be a disappointing end to his long tenure at the firm. But if Sanofi or some other suitor succeeds in taking over Genzyme, as many people expect to happen, Termeer will most likely leave the company before he feels that his work there is done.
“I think he wants that challenge,” the geneticist said, “but that’s not what he’s been presented with.”
