Biotech firm Shire plc. (NASDAQ: SHPGY) is preparing to purchase Movetis for $565 million. The deal was struck recently after Shire saw the belgian biotech company as a lucrative investment. Movetis’ board agreed to the offered price of 19 Euros per share. The acquisition plan involves absorbing staff from the purchased company into Shire’s offices in Belgium, Germany, and the UK.
Shire is down 2.86% today at $68.16, but is close to its 52-week high of $71. Shire reported a second-quarter profit today of $160 million. That number is nearly triple the year-ago second quarterly value of $44 million.
-Michael B. Sauter
Genzyme Corporation (NASDAQ: GENZ) has been one of the top biotech companies in history. Its drug pipeline and then its drug portfolio have helped lead it to exponential rewards for shareholders through time. But nothing lasts forever, and management often has to pay the price. The calls for the ouster of Henri A. Termeer as Chairman, President and Chief Executive Officer have started gathering some speed here in recent days and weeks. Despite all-time highs being briefly hit in 2008, the stock had really been range-bound already for most of the 2005 to 2008 period. Calling for a CEO to be fired is not something that can only be based upon share price alone. But the recent quality control issues have added significant fuel to the fire here. CEO Henri Termeer may end up on the pyre of the witch burning.
There is one issue to consider as far as what may happen in the ongoing management shuffles in Corporate America. Termeer has been CEO of Genzyme for 25 years, and it is not as though an old CEO gets run over by the peasant riots at the first sign of trouble in a company. Old CEOs can usually withstand many revolts. Still, it is very possible that Henri Termeer could be stripped of one title rather than be marched out entirely. If that occurs, he would lose the President or CEO role, or both… and still potentially maintain the Chairman position. This is a thought that is far from new. As far as our own call, Genzyme has been a part of CEO WATCH since 2009 and the FDA action this week made this come up front and center.
As far as a background of the issues in 2009… A rare virus shut down production of its lucrative and life saving, then came foreign products in its liquid drugs. The company now has more competition from Protalix BioTherapeutics, Inc. (AMEX: PLX), Shire plc (NASDAQ: SHPGY), and Pfizer Inc. (NYSE: PFE). The recent woes at Genzyme have allowed for these competitors to have perhaps a stronger footing than what might have been expected.
BioHealth Upgrades & Downgrades on Wall Street (GHDX, GENZ, GSK, ISPH, LXRX, MEDX, MRK, QLTI, SHPGY)
There have been other calls in drug, biotech, and healthcare stocks today but these are the key standouts that have been seen making an impact on stocks after the open of trading:
- Genomic Health (GHDX) Cut To Hold at Canaccord.
- Genzyme (GENZ) Started as Overweight at Morgan Stanley.
- GlaxoSmithKline (GSK) Cut to Sell at Goldman Sachs.
- Inspire Pharma (ISPH) Cut To Underweight at Morgan Stanley.
- Lexicon Pharma (LXRX) Cut to Underweight at Morgan Stanley.
- Medarex (MEDX) Cut to Equalweight at Morgan Stanley.
- Merck (MRK) Raised to Buy at Goldman Sachs.
- QLT (QLTI) Cut to Underweight at Morgan Stanley.
- Shire (SHPGY) Cut to Neutral from Buy at Goldman Sachs.
Jon C. Ogg
September 8, 2008