NEW YORK—Biotechnology giant Genzyme on Monday announced that it has sold its genetics testing business for $925 million in cash to Laboratory Corporation of America.
Genzyme, which focuses on rare diseases research, recently was under takeover pressure from French pharmaceutical giant Sanofi-Aventis SA—it recently rejected an $18.5 billion ($69 per share) takeover bid in order to stay independent.
The Cambridge, Mass.-based Genzyme will likely use the cash generated from the sale to buy back stock to fend off more takeover pressure from rivals, and also boost the company’s value in the eyes of any potential suitors.
The sale is part of a “five-point plan” vision laid out by Chief Executive Henri Termeer earlier this year to increase shareholder value.
“Our management team is uniquely positioned to unlock the underappreciated value of Genzyme’s diverse businesses for shareholders,” Termeer said in a statement. “The completion of this sale allows us to focus our resources on core growth areas and create stronger returns on invested capital.”
Genzyme Genetics specializes in cancer testing and “esoteric” reproductive research, according to the company’s website. It has the largest board-certified genetic counselors in the United States and had revenues of $371 million, the company says.
So far, Sanofi has not indicated that it would raise its offer price to purchase Genzyme. Termeer in the past has said that he would not accept a bid lower than $75 per share.
The Boston Globe reported last week that Genzyme would cut 1,000 positions, or around 8 percent of its total workforce, over the next five years.
Genzyme, which focuses on rare diseases research, recently was under takeover pressure from French pharmaceutical giant Sanofi-Aventis SA—it recently rejected an $18.5 billion ($69 per share) takeover bid in order to stay independent.
The Cambridge, Mass.-based Genzyme will likely use the cash generated from the sale to buy back stock to fend off more takeover pressure from rivals, and also boost the company’s value in the eyes of any potential suitors.
The sale is part of a “five-point plan” vision laid out by Chief Executive Henri Termeer earlier this year to increase shareholder value.
“Our management team is uniquely positioned to unlock the underappreciated value of Genzyme’s diverse businesses for shareholders,” Termeer said in a statement. “The completion of this sale allows us to focus our resources on core growth areas and create stronger returns on invested capital.”
Genzyme Genetics specializes in cancer testing and “esoteric” reproductive research, according to the company’s website. It has the largest board-certified genetic counselors in the United States and had revenues of $371 million, the company says.
So far, Sanofi has not indicated that it would raise its offer price to purchase Genzyme. Termeer in the past has said that he would not accept a bid lower than $75 per share.
The Boston Globe reported last week that Genzyme would cut 1,000 positions, or around 8 percent of its total workforce, over the next five years.
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