For Genzyme, consent decree causes $3B+ value hit

In calculating the cost of a manufacturing-driven consent decree, there are more factors to consider than FDA fines, consultant fees and training and equipment costs. In the case of Genzyme, there is also the $11 gap between what Sanofi has offered for the company ($69 per share), which likely contains some consent decree adjustment, and how Genzyme CEO Henri Termeer (photo) values the company, in which the consent decree is perhaps viewed as a temporary matter and therefore removed from the equation ($80).

That difference is $3 billion. Add to it the $175 million "disgorgement" fine from FDA, plus fines for missing any consent decree deadlines, and the consultant, training and equipment costs, and then you have a clearer sense of the impact of manufacturing ops upkeep.

Termeer tells the Financial Times that Genzyme "is recovering in a significant way, and pulling in value." Bids for the company need to reflect that. "It's not that complex an equation to figure out," he says.

He hints that he may be thinking of retiring in mid- to late 2011. His departure "would ease a takeover of the biotechnology business by Sanofi-Aventis," the Times speculates.

- here's the article