Alliance Bernstein Maintains Outperform Rating On Genzyme (GENZ)

Analysts from Alliance Bernstein released a research report today highlighting Genzyme's (NASDAQ: GENZ) investor manufacturing day, which took place on Wednesday. The investment firm wrote that the event "both exceeded expectations and fell short of its potential."

The analysts had "the opportunity to meet and talk to a broad array of senior and mid-level executives involved in manufacturing and quality operations at the company. In this respect the day should be judged a success for the company and its relationship to the investor community."

They expressed disappointment, however, about the fact that the "company provided no new information about the implications of the FDA consent decree, or even the potential implications." On March 24, Genzyme (GENZ) announced that the FDA had told the company that they intended to take enforcement action to ensure that products manufactured at the plant are made in compliance with good manufacturing practice regulations.

Alliance Bernstein is maintaining their Outperform rating and $66 price target on GENZ shares, but with significant caveats. The report stated that, "Having watched this situation unfold, we now believe that only a wholesale restructuring of the company, including changes in management, governance, staff and product and business mix will realize full value for shareholders. While we believe the potential for value from the sum of the company's components is significant, the changes required to unlock this value may not materialize. For that reason our Outperform rating on GENZ is most appropriate for longer term investors."

It should be noted that billionaire activist investor Carl Icahn is trying to gain four seats on Genzyme's Board of Directors. In light of the recent problems at the company, it would appear that Icahn's position has been strengthened. If anybody can shakeup the company and unlock shareholder value, it is Icahn.