Case5_Genzyme questions

 The business model for Genzyme involves a focus on smaller area or disease towards which it directs its resources for research and development.  The firm focuses of treatment of diseases such as genetic disorders which has seen it perform above other firms (Green, 2012).  For a biotech firm to succeed in the industry, it has to shift from focusing on the biggest areas of diseases and related drugs and specialize in a specific area.

The Orphan Drug Act was a legislation passed by the U.S Congress with aim of assisting the biotechnology firms to attract funds they need in their research and development in the treatment process for a rare disease. It serves as an incentive for firms in this industry to increase their efforts in researching on and developing treatment for rare diseases. The incentive is in form of monopoly for sales over a seven-year period if a firm successfully comes up with such drugs (Green, 2012).

The business model for Relations Investors is defined by the fact that it was an Activist Investment Fund.  Its business model involves a focus on profits by way of equity portfolio of its clients.  The firm targeted other organizations whose asset allocation and corporation governance were not effective with an aim of having an aim of gaining significant influence in their management.  Relational Investors would then be able to have an influence on important decisions made through its representatives as board members (Green, 2012). This influence is evidenced by the resignation of CEOs once Whitworth gained contact with firms by becoming a board member. The RI targeted Genzyme because it saw an opportunity to influence decision on issues relating to quality in the production process.

Termeer should embark on managing Whitworth by offering some of items he demands while not giving into demands that would jeopardize the core mission of the firm. Through this the CEO would be able to manage the various production issues highlighted by Whitworth for the benefit of Genzyme relations with regulators and overall performance. This means that Whitworth would not be allowed to hamper the continued high performance of the firm.

 Reference

Green, K., (2012).Genzyme and relational investors: science and business collide? Darden Business Publishing.