Billionaire investor Carl C. Icahn has notified Genzyme Corp that he will nominate four candidates -- including himself -- for seats on its board, placing the Cambridge biotechnology company in the crosshairs of one of the nation's most feared corporate raiders.
The move, disclosed by the company today, increases the pressure on Genzyme as it labors to regain its footing after a series of costly setbacks last year. They included the discovery of a virus that forced a temporary shutdown of the Allston Landing plant where it makes two of its best-selling drugs for rare genetic disorders.
Icahn won two seats on the board of Genzyme's Kendall Square neighbor Biogen Idec Inc. last June, and pushed successfully for the resignation of its chief executive, James C. Mullen. Icahn has been slowly accumulating shares of Genzyme as they fell more than 20 percent over the past year. He boosted his stake in Genzyme to 4.8 million shares, just under 2 percent of the company, during the fourth quarter of 2009, according to a recent regulatory filing.
Genzyme responded to Icahn's move yesterday by issuing a statement pointing to a number of steps it has taken to shore up its business and put its production problems behind it, including senior management and board changes. "Our actions demonstrate that we are open and responsive to shareholder input, and we welcome a constructive dialogue with Mr. Icahn," Henri Termeer, the chief executive of Genzyme, said in the statement.
Termeer was not available for comment yesterday, while Icahn and his associates did not return calls to his New York office.
In an interview last month, Termeer was asked about Icahn's purchases of Genzyme stock. "Carl is in it for the investment," he said. "Our stock has been trading down. He made an investment, like a lot of other people. He will get a good return on it... His most important thing is not to create real disruption, it's to create a return. And if he studies it, he will find the best way to create real return is to let us recover."
Since the 1970s, when he first rose to prominence as a corporate raider, Icahn has been known for purchasing large or controlling interests in companies ranging from RJR Nabisco to Trans World Airlines to, more recently, New York biotechnology company ImClone Systems. He then has often used his clout to replace top management and break up or sell the companies, typically for a substantial profit. Today, Jeffrey Buchalter, chief executive of Enzon Pharmaceuticals Inc. in Bridgewater, N.J., resigned after being pressured by Icahn to divest company assets.
Shares of Genzyme edged up 7 cents to $56.04 in Nasdaq composite trading today, a gain of 0.1 percent.
Even if all four of his hand-picked candidates are elected as Genzyme directors at the company's May 20 annual shareholders meeting, Icahn would control less than half of the nine-member board. All nine seats are up for re-election, and the company has yet to nominate its own slate of candidates. Icahn did not disclose his intentions yesterday, but the fact that he is seeking only four seats suggests he is not trying to take over the company this year.
"Carl Icahn is in the business of trying to get a return on his investment," said John L. Sullivan, director of research for health care investment bank Leerink Swann in Boston. "He probably has decent business advice for most CEOs, but that doesn't mean he deserves four seats on the Genzyme board. Genzyme's problems in the manufacturing area are well known, but it's taking steps to improve its operations."
To read some recent Globe coverage of Genzyme and Icahn, please click here. Icahn is shown in an Associated Press photo.