Genzyme CEO Gets Vote of Confidence: BioBuzz - TheStreet

Genzyme CEO Gets Vote of Confidence: BioBuzz

Pact with large shareholder seems to insure Genzyme CEO Termeer keeps his job.
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CAMBRIDGE, Mass. (

TheStreet

) --One of

Genzyme's

(GENZ)

largest shareholders -- and most vocal critics -- has given embattled CEO Henri Termeer a vote of confidence.

Relational Investors, which owns about 4% of Genzyme, has agreed to hold off on its previous request for board seat and said it will support the company's current nominees and directors.

In exchange, Genzyme agreed to nominate Relational principal Ralph Whitworth to the board in November if he chooses to join.

Relational has been pressuring Genzyme to make changes to address a slew of manufacturing and regulatory setbacks. In December, the company appointed a former

Schering-Plough

executive to its board -- a move welcomed at the time by Whitworth, although he said more needed to be done to turn Genzyme around.

The "mutual cooperation agreement" announced Thursday suggests Relational is now satisfied with Termeer's plans to right his troubled company.

"While these are difficult and challenging times for Genzyme, we are confident its management is making significant improvements to drive short- and long-term value for shareholders," said Whitworth, in a statement. "The management and board remain open to ideas and are materially improving their manufacturing operation, compensation program, capital allocation discipline, and board composition."

Termeer has been CEO of Genzyme since the mid-1980s but the setbacks at the company over the past two years has angered shareholders and raised concerns about his leadership. Last month, the founder of Genzyme called on

Termeer to resign

.

Termeer has stated publicly that he has no intention of resigning. A source close to the company, however, says Termeer may consider retirement but only after Genzyme solves its drug manufacturing problems.

Genzyme shares closed Thursday at $48.97.

FDA to Review Amgen Drugs

(At 7:44 AM EST)

The safety of commonly used anemia drugs sold by

Amgen

(AMGN) - Get Report

and

Johnson & Johnson

(JNJ) - Get Report

are once again being examined by U.S. drug regulators, who may decide further restrict their use.

Officials from the U.S. Food and Drug Administration, writing in this week's

New England Journal of Medicine

, are calling for a re-evaluation about how popular drugs like Amgen's Epogen and Aranesp and Johnson & Johnson's Procrit are used in patients with chronic kidney disease.

FDA officials said they will convene a panel of outside experts later this year to re-examine the safety of these anemia drugs in light of previously disclosed studies which show that patients treated with anemia drugs are often at higher risk of strokes and heart attacks.

Similar advisory committees have already met over the past several years, leading the FDA to add new safety warnings to the labels of anemia drugs and place restrictions on the use of them in chronic kidney disease patients and in cancer patients.

Wall Street has largely factored in declining sales for Amgen's leading anemia drug Aranesp when thinking about the biotech firm's valuation. But the FDA's call for a new advisory panel meeting, coupled with a similar meeting already scheduled by Medicare, does raise the risk that analysts may have to go back and lower Aranesp sales estimates again.

"We, and we think most investors, were not expecting this editorial nor another FDA advisory panel, and Amgen stock is likely to trade down on this news," said Credit Suisse analyst Michael Aberman in a note to clients Thursday.

He added, "While this headline is likely to impact the stock, we believe Amgen's current price...already reflects the negative chronic kidney disease results and we stick by our thesis that denosumab approval in osteoporosis, and clinical data in oncology, will lead to multiple expansion and upside from current levels."

Amgen also faces new competitive risk to its Aranesp/Epogen franchise when

Affymax

(AFFY)

reveals results from phase III studies of its own anemia drug later this quarter. Affymax has said it intends to seek approval for Hematide in chronic kidney disease patients, and if approved, would sell the drug at a discount in order to gain market share.

Amgen shares closed Wednesday at $56.79. Johnson & Johnson closed at $64.45.

Vivus Weight-Loss Drug Aids Sleep Apnea

Vivus

(VVUS) - Get Report

said Thursday that its weight-loss drug Qnexa helped reduce sleep apnea in patients enrolled in a small mid-stage study.

Patients treated with Qnexa experienced a 69% reduction in the number of sleep apnea events compared to patients who were treated with a placebo, said Vivus. The Qnexa-treated patients also lost more weight and lowered their blood pressure more than patients treated with a placebo, the company added.

Sleep apnea is a condition by which a person's airflow is partially or completely blocked during sleep.

"These positive Qnexa data are encouraging, as there are currently no drug treatments available for the condition. Having a safe and effective oral pharmacologic therapy available to treat obstructive sleep apnea would be a welcome addition for patients," said Dr. David Winslow, the study's primary investigator.

Sleep apnea can be treated with a device worn by patients at night to promote breathing during sleep, but there are no drugs currently approved to treat the condition.

The FDA is currently reviewing Qnexa for the treatment of obesity, with an approval decision expected later this year.

Arena Pharmaceuticals

(ARNA) - Get Report

also has a weight-loss drug under FDA review, and

Orexigen Therapeutics

(OREX)

is expected to file its weight-loss drug with FDA later this year.

Vivus intends to discuss with FDA the results from this small mid-stage study of Qnexa in sleep apnea to determine what types of follow-up studies might be required for approval.

Vivus shares closed Thursday at $9.23.

-- Reported by Adam Feuerstein in Boston

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Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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