Genzyme (Nasdaq:GENZ) Buying Back Stock, Selling Non-core Businesses

Genzyme (Nasdaq:GENZ) announced it is planning to buy back about $2 billion of its stock, while preparing to sell off three of its non-core business segments.

Concerning buying back stock, Genzyme will finance $1 billion of those purchases with debt in the short term, and over the next year will acquire another $1 billion worth.

Chief Financial Officer Michael Wyzga said at an annual meeting, "We believe, right now, that our stock is undervalued and this is the best use of capital for the corporation."

Segments the company is looking to sell include genetic-testing, diagnostics and pharmaceutical intermediates businesses. Other options could be a spin-off or a buyout from management.

Chief Executive and Chairman Henri Termeer said in a statement about selling the three business segments, "As we evaluated our company to create a mix of businesses that will deliver sustainable growth and stronger returns on invested capital, it became clear that these businesses do not fit within this strategy."

Genzyme continues to be under shareholder pressure from its failure to pass regulatory inspections over the last two years at its Allston plan in Massachusetts.

Major drugs Cerezyme and Fabrazyme are produced only at that plant, and shortages continue to haunt the company, which have hit the bottom line of the company in a major way.