Genzyme Case Study
Genzyme Case Study:
Table of Contents
Problem Identification......................................................................................................3
Alternative Solutions.........................................................................................................4
Recommendations.............................................................................................................5
Problem Identification
Henri Termeer started Genzyme Corporation with ten employees and then grew it to a corporation that now has four billion in sales per year. Genzyme is a biotechnology company that specializes in finding orphan drugs, which specifically cure enzyme deficiency conditions. To offer a brief explanation, an orphan drug is a pharmaceutical agent developed to cure a rare, orphan, disease. In order to find the cures for these rare diseases, technology using living biological systems and living organisms is used, which is known as biotechnology. In order for a biotechnology firm to succeed time is needed to give the firm the opportunity to find a successful product. According to Mr. Termeer, this requires that upon investing in a biotechnology firm you wait for results and the investment is long term. Genzyme’s business model was to run the company just like a laboratory. The company aimed to avoid blockbuster drugs and focus on the treatment of genetic disorders. This causes the board of the company to be made up of other scientists, like Termeer. The company’s financial strategy is to reinvest gains into other biotechnology companies through capital allocation. Termeer’s motivation behind the acquisitions was to create medicines to cure more common diseases and to create a bigger group of people being aided by the company’s discoveries. The executives of the company are awarded bonuses based on their revenue generation and
Table of Contents
Problem Identification......................................................................................................3
Alternative Solutions.........................................................................................................4
Recommendations.............................................................................................................5
Problem Identification
Henri Termeer started Genzyme Corporation with ten employees and then grew it to a corporation that now has four billion in sales per year. Genzyme is a biotechnology company that specializes in finding orphan drugs, which specifically cure enzyme deficiency conditions. To offer a brief explanation, an orphan drug is a pharmaceutical agent developed to cure a rare, orphan, disease. In order to find the cures for these rare diseases, technology using living biological systems and living organisms is used, which is known as biotechnology. In order for a biotechnology firm to succeed time is needed to give the firm the opportunity to find a successful product. According to Mr. Termeer, this requires that upon investing in a biotechnology firm you wait for results and the investment is long term. Genzyme’s business model was to run the company just like a laboratory. The company aimed to avoid blockbuster drugs and focus on the treatment of genetic disorders. This causes the board of the company to be made up of other scientists, like Termeer. The company’s financial strategy is to reinvest gains into other biotechnology companies through capital allocation. Termeer’s motivation behind the acquisitions was to create medicines to cure more common diseases and to create a bigger group of people being aided by the company’s discoveries. The executives of the company are awarded bonuses based on their revenue generation and