...The Price of Expansion Executive Summary This report equips our audience with broader approaches to the case of Genzyme and Relational Investor. After an examination of existing issues and accountability of companies operating framework, it can be concluded that companies have a primary responsibility to their shareholders. Nevertheless, this case has a lot of nuances that are relevant to the analysis that we will point out. This analysis is expected to showcase for upcoming and existing organizations to adopt operations and management practices that are more benefic to shareholder even when science is involved. This report consists of an introduction to the case. This is followed by recommendations and alternatives that individually provide different implications to the case and conclude with some recommendations for the company. Introducing the case, the first section of this report examines current issue of Genzyme, such as diversification and its implications. Science sits at the most basic level of a biotechnology company, followed by diversification, a trend where businesses integrate its daily operation. The development of the issue shows clearly its source. The recommendations are based on the analysis made by an external company, Relational Investor that suggested a path to follow to lift up the decline in the stock price and the business in general. The alternatives are presented in the case as the dilemma the current CEO faces as a response to the...
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...Name: Aparna Gopalaswamy PG ID: 61610392 Session No.: 5 Word Count of Text: 500 Overall Word Count: 515 REACTION PAPER GENZYME: ENGINEERING THE MARKET FOR ORPHAN DRUGS & BDSS CHP 11 & 12 The Case Study is centered about Genzyme Corporation, a biotechnological firm which successfully leverages the exclusivity and policy regulatory benefits offered by the R&D and subsequent commercialization of Orphan Drugs in the pharmaceutical market. These drugs are not usually developed by the firms as the small volumes of sales in specialized markets are not economically lucrative, but are essential to promote public health. In recent years, the entry of competition, in these small niche markets, is threatening the company’s pricing strategy based on its Benefit Advantage and path-breaking early mover advantage for its more effective product with lower side effects, while other manufacturers focus on Cost Advantage is traded off against product efficacy. The company must retain its focus on the Orphan Drugs market and renew its efforts in sustaining its capabilities. The important factors affecting research productivity – research portfolio composition, firm’s scientific know-how & distinctive capabilities – were all strongly in Genzyme’s favor. The strategic logic behind sustaining Genzyme’s Benefit leadership would be to maintain their price levels and concentrate their marketing and communication efforts towards emphasizing their product’s superior efficacy and lower...
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...Genzyme Memo Genzyme is interested in a joint venture with Geltex to market GelTex’s first product, RenaGel. GelTex was an early-stage biotech research company with two products in its pipeline. GelTex had neither the capital nor the marketing organization to launch RenaGel. Therefore, the company had been looking for a partner that would contribute cash and marketing expertise in exchange for a share of profits in a joint venture. Genzyme had revenues of $518 million in 1996, and had grown rapidly through the innovative use of joint ventures and alliances. In addition to the benefit of increasing earnings through the sale of RenaGel, the joint venture would represent an excellent fit for Genzyme’s specialty therapeutics and allow the firm to tap new markets. Also, building a strong partnership with GelTex might enable Genzyme to strike the same kind of deal for GelTex’s second product, CholestaGel, which was targeting a much larger segment, the multibillion-dollar market of anticholesterol drugs. Overall, the joint venture was very attractive for Genzyme which would lead the firm in capturing a larger market share and capitalizing on the synergies associated with this venture. A joint venture is a partnership between two or more companies which is usually for strategic reasons or to combine capabilities which is beyond the realm of each individual company. On the other hand, an acquisition involves one company buying a controlling interest in the securities of another...
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...Introduction Genzyme is a biotechnology company with a leading role in the world’s treatment for Orphan and neglected diseases. At the moment its Senior VP, Mr. Geragthy faces a time for decisions. The analysis momentum is over and he must propose the best direction for the company. I will go deeply inside the company and analyse the inside and outside scenario to be able to run the VRIO model and give my preference to Mr. Geragthy. 2. Genzyme’s history All started with the supply of enzymes, fine chemicals and reagents to research and pharmaceutical companies. Its founder, Mr. Henry Blair since the beginning had a vision to become a world leader and always focused by identifying patient’s needs, targeting a focused technology capability, and developing a set of values that clearly defined its role as a corporation society. Since the beginning the strategy was on orphaned diseases and it reflected in its portfolio of drugs and achieving the leadership with revenues of almost $4 billion in 2007. In 1983 Mr. Blair felt the need for help and brought on board Mr. Henri Termeer who had a very important role on the company’s development and together they have taken the company public and launched the orphan drug application for the enzyme that turned to be a turn around point for Genzyme. Since the beginning Mr. Termeer saw the importance of R & D to build a diversified pipeline of products. 3. The Corporate Social Responsibility importance Genzyme decided to take...
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...Genzyme and Relational Investors Case Section 1- Introduction to Genzyme and Relational Investors Case Genzyme Corporation, founded in 1981, is one of the largest biotechnology companies in the United States. Under the guidance of its long-term CEO, Henri Termeer, Genzyme has been able to grow substantially since its inception in 1981. More importantly to Termeer, because of its breakthroughs in creating medicine for rare diseases, Genzyme has also been able to change the lives of numerous individuals suffering from these diseases by developing a cure for some of them. Relational Investors, one of Genzyme’s primary stockholders, believes that even though Genzyme had a very good growth rate when compared to the rest of the biotechnology industry, Genzyme stock was still significantly undervalued. To fix this, Ralph Whitworth, the CEO of Relational Investors, offered some recommendations as to how Genzyme could fix this problem. These recommendations were: improve capital allocation decision making, either implement a share-buyback program or issue a dividend, add more board members to the Genzyme board of directors who had more financial expertise, and change board member compensation to reflect the performance of Genzyme. Termeer was very familiar with how ‘activist investors’ such as Ralph Whitworth operated. Having already fought of Carl Icahn, who sought major changes in the way Genzyme operated, Termeer knew how important his negotiations would be with Ralph Whitworth....
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...UNIVERSITY OF WASHINGTON Graduate School of Business Administration Finance 553 CAPITAL INVESTMENT PLANNING Winter 2003 Professor Robert C. (Rocky) Higgins 306 Mackenzie Hall Tel: 543-4379 E-mail: rhiggins@u.washington.edu Homepage: http://us.badm.washington.edu/higgins/ (From here you’re one click from the class page) Office Hours: M, W: 10:30 – 12:00 COURSE OBJECTIVE Capital Investment Planning is a case course examining corporate investment decisions and related issues in financial strategy. The course is intended as a continuation of Finance 552, Corporate Planning and Financing, and is suitable for generalists and finance specialists who seek a solid grounding in corporate financial management. Finance 555 may be substituted for Finance 552 as a prerequisite. Principal topics include: use of discounted cash flow analysis to evaluate investment opportunities, estimating capital costs, or discount rates, capital budgeting systems and their affect on resource allocation decisions, valuing a company or division, merger analysis, corporate restructuring including leveraged buyouts, and issues in financial strategy. When you complete this course, you should be able to: Estimate an investment’s relevant costs and benefits Estimate a company's weighted-average cost of capital and understand its role in investment decision making Use discounted cash flow techniques, decision trees, and simulation to analyze investment opportunities Value (i...
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...seeking to stay ahead of competition and to facilitate innovation. As such, corporate entrepreneurship or intrapreneurship has largely grown and companies are quickly learning to adopt the trend. Companies are integrating intrapreneurship programs and creating startup cultures because these ventures act as recruiting and branding tools thereby, facilitating new ideas and products. More so, corporate entrepreneurship caters for employees or rather individuals who are entrepreneurial but do not have access to sufficient resources. Prior to hiring Nancy as the new product manager at Genzyme, the company had more experience in diagnostics than most biotech companies at the time. However, the company had high expectation of its new product manager. Despite their interests, the company was not planning on providing dedicated R&D resources to the diagnostic segment. Using the established clinical links, Genzyme provided unrelated testing services through their own clinical laboratories. Corporate entrepreneurship uptake by big companies is not entirely destined to succeed without challenges. In fact, big corporations are faced with internal pressure to ever operate efficiently and deliver billion-dollar growth businesses every year. The pressure imposed requires the organization to attain multiple efficiencies and satisfy existing customers without threatening the existent net income levels. The disadvantage lies in the organizational pursuit for increase in profits as opposed to disruptive...
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...Cracks in the Pharmaceutical Supply Chain http://www.cio.com/article/print/16565 Print Article Close Window From: www.cio.com Cracks in the Pharmaceutical Supply Chain – Susannah Patton, CIO January 15, 2006 As an undercover agent with the Drug Enforcement Administration and the Food and Drug Administration, Aaron Graham saw firsthand how counterfeit drugs can slip into the pharmaceutical supply chain. Graham, now VP and chief security officer for Purdue Pharma, once posed as the manager of an "institutional pharmacy" selling drugs at a discount to secondary wholesalers who were then supposed to sell them to nursing homes. Soon after he began, his phone started ringing. Dozens of smaller pharmaceutical wholesale companies were calling, desperate to buy his drugs. These secondary or "gray market" wholesalers scour the country and the world for low-price drugs they can sell back to major wholesalers for a profit. In addition to trawling for institutional pharmacies, some secondary wholesalers have been known to purchase counterfeit drugs from criminal organizations in places such as China, Thailand or Colombia. Graham, who was part of a two-year FDA sting operation known as "operation gray pill," helped expose a system in which large and small wholesalers were taking advantage of multitiered pricing in the industry. Prescription drugs are sold at discounts to subsidized groups such as nursing homes and also exported at lower prices. Graham and his colleagues found...
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...Introduction The world is a cold place these days for businesses seeking profitable international growth. In a few industries, firms have to be global if they are to achieve leadership. Implementing a global expansion strategy is crucial to the growth of a business from small start-up to international brand name. Companies such as McDonald's, Home Depot, Starbucks and more have made their presence known around the world over the past few decades. However, each global expansion presents its own set of obstacles which the parent company must tackle, in order to be successful in their global expansion. In a borderless world, companies need to compete on a global level in order to succeed. In today's world of financial uncertainty, it is important for businesses to have a clear idea of what stability involves for their company. One concept that more and more businesses are exploring is one of taking their business to a global level. Using an international strategy is not for every company, but with the availability of the Internet it is becoming easier to take your business to that next level. Global expansion may enable a firm to earn greater returns by transferring the product offerings derived from its core competencies to markets where indigenous competitors lack those product offerings and competencies. One of the global expansion strategies is merger and acquisition. Five waves of mergers and acquisitions took place in the 20th century, with the last two occurring...
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...which is becoming 8% of SANOFI research and development. The company has a diversified offer therefor they don't just make drugs but also healthcare solutions, devices and vaccines. SANOFI is present in 100 countries including Saudi Arabia. It has over 110.00 employees all over the world and with a 112.00 industrial site. SANOFI has a long heritage it established in 1718 and it went through a lot of merges with other companies. It went from SANOFI to Sanofi-Synthélabo to Sanofi-Aventis in 2004 and finally it settled back again to SANOFI in 2011. SANOFI also acquired a lot of companies like Genzyme for rare diseases, Merial for animal health, Zentiva for generics, and Global pharma in the Middle East. SANOFI has 7 growth platforms which are emerging markets (except Europe and the United States since they are the markets driving the growth), rare diseases (through the acquisition of Genzyme),...
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...COUNTRY ANALYSIS REPORT: MEXICO VS U.S.A HEALTHCARE MERCK - DIABETES Group 14 – Campus Santa Fe: Angelica Hidalgo 1461526 Alejandro Meza 1464801 Cinthia Merlos 1462113 Juan José Ibarra 1465263 April 10th, 2012 INDEX 1. INTRODUCTION 2. ECONOMIC VARIABLES 3. POLITICAL VARIABLES 4. SOCIO –CULTURAL AND DEMOGRAPHIC VARIABLES 5. COUNTRY ATTRACTIVENESS SCORE 6. THE DECISION 7. EXHIBITS 8. BIBLIOGRAPHY 1. INTRODUCTION 2. ECONOMIC VARIABLES The total economic impact of diabetes worldwide In the world the economic impact about the diabetes was 376 billion dollar in 2010, this is the 11.6% of the total healthcare budget in the world. This facts give us an idea about how is important to analyze the impact in economies of this disease and we are going to go deeper for the analysis of Mexico and United States of America. MEXICO In Mexico the economic impact due to diabetes cost more than 7 billion dollars in 2011 according to the Instituto Nacional de Salud Publica. And is expected an increase of 15% this year of 2012 this impact is really huge because 50% of this expense was made by families and the other 50% was made by government in Latin America Mexico is the country...
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...Pompe Disease “Extraordinary Measures” is an inspirational movie filmed in Portland, Oregon that is inspired by a true story. The movie is about a father who takes extraordinary measures in hopes of finding a cure for Pompe disease, which two of his children suffer from. Pompe Disease is a serious disease that can be life threatening. Pathophysiology According to the Genetics Home Reference, Pompe Disease, also known as glycogen storage disease type 2 is an autosomal recessive disease. Autosomal recessive means that each parent carries one copy of the mutated gene but they do not show any signs or symptoms of the disease (GHR, 2014, May, 26). According to the Pompe Community: Pompe Disease is a rare, multisystemic progressive, debilitating, and often fatal neuromuscular disorder. Pompe Disease is linked to a deficiency of the lysosomal enzyme, acid alpha-glucosidase (GAA), which is responsible for the breakdown of glycogen (a stored form of sugar that the body uses for energy) inside of the cells. Without GAA present there is an intralysomal accumulation of glycogen in the muscle cells which leads to a loss of muscle function (Pompe Community, 2014). According to the National Institute of Neurological Disorders and Stroke, Pompe Disease affects all muscle cells in the body but skeletal muscle and cardiac muscle are most seriously affected (NINDS, 2013, February 20). According to the Pompe Community, when there is a continuous accumulation of glycogen it causes lysosomes...
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...Market intelligence > Top ten global pharma Top ten global pharma Dr Vishal Agrawal, project manager, and Sunehli Jamwal, analyst, from GlobalData, highlight the top ten pharmaceutical companies by 2011 revenue. Pfizer 1 Johnson & Johnson 2 US pharmaceutical giant Pfizer maintained its top position in 2011 with stipulated revenue of $67.4 billion, up by 1% compared with $67.1 billion in 2010. The company’s new marketing strategy, coupled with focused organisational, financial and R&D restructuring efforts, compensated for the losses caused by Lipitor’s patent expiry. The approval of Xalkori for lung cancer, Inlyta and pneumococcal vaccine Prevnar 13 have proved to be a real lifeline for Pfizer. Moving ahead, the steady progress of the late-stage pipeline (with 22 projects in phase III and 11 under registration) will be a primary source of confidence for the company. The key strategy of the group is now to advance experimental drugs towards approval: these include Bosutinib, Tofacitinib, experimental clot-preventing drug Eliquis and its many pipeline drugs to make up for the inevitable decline in Lipitor revenue. With a view to reducing costs, Pfizer’s huge research budget has been cut by 12%. In 2012, Pfizer will focus on small to mid-sized deals and effective research partnerships to strengthen its portfolio in all therapeutic segments. Johnson & Johnson (J&J) reported 2011 revenues of $65 billion, a 5.6% increase over 2010. In 2011, the company generated...
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...question Development of the argument (including critical analysis of business model concept; understanding of the specific deal chosen) Comments Good, clear introduction Concise conclusion provides an overview of the deal – what about the Q ie the usefulness of the BM approach. A brief overview of some approaches to BM. You provide a clear statement about how you intend to use the concept. In practice, this gets a bit confused later as you don’t follow through in an entirely coherent way. Try to keep focused on the idea of the BM. You discuss Sanofi’s BM in various ways to explain basic principles and how things have been changing. What is a ‘more diversified and continuous’ BM (p.4) can you explain this a bit more to help introduce the Genzyme deal. You outline various explanations for the deal, include the specific problems of Sanofi – these points are very nicely developed. Generally very clearly written. Your analysis is precise and authoritative. Some useful charts. Figure 3 seems to be missing. You could look at Sanofi’s performance in a bit more detail eg growth rates, margins, shareholder returns ie what was happening to viability and credibility in the run up to the deal? Generally you have a good analytical style, incorporating evidence into your argument. You could draw more widely on other commentaries about the deal eg analysts – to note what they like and/or dislike. Is it all a good new story or are there concerns? – this would help...
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...Going Green with Leadership in Energy and Environmental Design Course Description: This course defines green buildings, explains the mission of the US Green Building Council and the requirements of the Leadership in Energy and Environmental Design (LEED) rating system. Schneider Electric solutions for meeting the LEED requirements will also be explained. Course Outline: Learning Objectives At the completion of this course, you will be able to: • Define the characteristics of Green Buildings • Explain the mission of the US Green Building Council • Identify the Leadership in Energy and Environmental Design rating system • Describe Schneider Electric products and services which satisfy LEED requirements Agenda • Introduction • Impacts of US Buildings on the Environment • Advantages of building green • Review the Mission of the US Green Building Council • Discuss the LEED rating system • Discuss Schneider Electric products and services that satisfy LEED requirements • Introduce Case Studies • Summary Course Content or Material 1) Introduction a) Green Building b) Design of Leadership in Energy and Environmental Design (LEED) c) Who makes up the LEED team d) LEED reach e) Point of the LEED point based system f) Why is there a demand 2) Impacts of US Buildings on the Environment a) Impacts of US buildings on resources b) US Energy Consumption c) US Electricity Consumption 3) Advantages of Building Green a) Demand for Green Building ...
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