Chapter 2

A Biotechnology Entrepreneur’s Legacy -

Henri A. Termeer’s Story and his Advice
to Entrepreneurs
Henri A. Termeer, MBA
Former CEO, Genzyme Corporation, Cambridge, MA, United States

Chapter Outline
Path to entrepreneurship 18 In touch with events outside the company 22
Risks of joining a biotechnology company 18 Good fortune and success 23
Genzyme in the early days 19 Closing advice 23
The importance of understanding business and finance 19 Reference 23
Raising capital 20 A Tribute to Henri A. Termeer 24
Managing the uncertainty of biotechnology 20 The Henri Termeer I knew 24
Core values 21 A Tribute to Henri A. Termeer 24
Integrating the science and business 21 Empathy, generosity, discipline, and engagement:
The value of a business background and experience 21 reflections on the life of Henri Termeer 26
Driven from within 22

Henri A. Termeer served as one of the longest tenured

entrepreneurial CEO of any company in the biotechnology
industry. His innovative approaches, achievements, and
successes transposed Genzyme from a fledgling start-up to
an international biopharmaceutical company with more
than $4.5 billion in revenue annually. Termeer was a com-
passionate, caring, and generous individual with a driving
passion to find innovative ways of bringing new therapies
for rare diseases to those who so desperately need them.
Genzyme remains the world’s leading developer and manu-
facturer of orphan drugs. In February 2011, Genzyme was
acquired by the Paris-based pharmaceutical company,
Sanofi, for more than $20 billion. That transaction was the
second largest sale of a biotechnology company in history,
following only Roche’s acquisition of Genentech in 2009.
Henri passed away on May 12, 2017 at age 71, in his
Marblehead home in Massachusetts.

FIGURE 2.1 Henri A. Termeer.

Biotechnology Entrepreneurship. DOI: https://doi.org/10.1016/B978-0-12-815585-1.00002-4

Copyright © 2020 Elsevier Inc. All rights reserved. 17
18 SECTION | I Understanding Biotechnology Entrepreneurship
There is an age-old question about whether entrepre-
neurs are “made” or “born.” The theory is, if you are not
born an entrepreneur, you cannot learn to become one. I am
not certain about the correct answer to this frequently asked
question; however, I believe that regardless of whether or
not you are “born” an entrepreneur, you still must “learn”
to be a good one if you want to be successful.
For me, while growing up, I had a natural interest in
entrepreneurship and I seemed to gravitate toward
entrepreneurial activities. I followed my natural interests
with passion, and through this process, I learned entrepre-
neurial skills in the areas I enjoyed. I grew up in the
Netherlands and studied economics at the Erasmus
University in Rotterdam. Even while I was studying eco-
nomics, I was simultaneously involved in activities that
allowed me to learn about the early commercialization
process of companies. Throughout my formal education
years, I continued to follow my interests, even when it
meant leaving my home in Holland to study in England.
From a very young age, I always had a sense within
myself that one day I would be an entrepreneur and be
involved in starting a business on my own.
Path to Entrepreneurship
My educational and early career years were characterized
by following my passions and being involved in things that
were exciting to me, especially entrepreneurial activities.
Because of my interest in the commercialization process of
companies, I decided to pursue an MBA, so I moved to
Virginia to attend the Darden School of Business. While at
Darden in the early 1970s, Baxter (then Baxter Travenol
Laboratories) approached me with an offer for an exciting
opportunity within their organization after my graduation
in 1973. During their recruitment process, Baxter described
themselves as a fast-growing healthcare company. At that
time, they were a small-to-medium-sized company with
about $200 $300 million in revenue. Baxter told me that
they needed someone to become a General Manager in
Europe who spoke European languages and understood
their culture. This opportunity really interested me, coupled
with the possibility that one day I could return to Europe to
run one of their companies there.
After graduating, I joined Baxter, and it was at that
time that I was first introduced to the medical world.
Baxter was headquartered in Chicago, so I moved there
from Virginia. After 3 years of training and grooming, I
was sent to Europe as a General Manager to run Travenol
GmbH in Germany. This was a great experience for me as
I was only 29 then, and yet had complete responsibility for
all the operations and success of this company’s products.
Travenol was a premier company and had world-class clin-
ical research and treatment programs for hemophilia. It
was a wonderful learning experience and opportunity as I
had the freedom to develop and grow an organization in
Germany, and I had the latitude to expand and manage the
market for these products. In 1979 I returned to the United
States where I was stationed in Los Angeles as the
Executive Vice President of Baxter’s new Biological
Division, with responsibility for all global research and
development, marketing, and regulatory affairs.
In the early 1980s, Baxter was engaged in the beginning
stages of the new biotechnology industry, and we were pro-
ducing Factor VIII, blood-clotting proteins, and other blood
products. Our source of starting material was plasma, which
we obtained by extraction from human blood. At that time,
we were just learning how to replace plasma extraction
with newer biotechnology methods of production for
our products. During this time, several early biotech compa-
nies such as Genentech, Genetics Institute, Genex, and
Hybritech had already formed, and I had the opportunity
to negotiate deals on behalf of Baxter with these young
biotechnology companies. Throughout these activities, I
acquired valuable knowledge about the emerging world of
biotechnology, which was still in its infancy. This was a
very exciting phase for me, and I had a strong intuition that
the possibilities were great for developing unique and novel
products through biotechnology.
Interestingly, Baxter had also acquired a reputation as
a company with great entrepreneurial instincts, where
young people were given the chance to do something
great. As a result, many Baxter alums were sought after
and became instrumental in starting and growing many
biotechnology companies, such as Genetics Institute,
Hybritech, and Integrated Genetics (IG). One reason for
this concentration of biotech leaders from Baxter was that
fledgling biotechnology companies desperately needed
experienced management, and they looked for leaders in
existing companies that had a good reputation. Harvard
Business School published a book by Monica Higgins
about the “Baxter Boys” [1] that chronicled the large
number of biotechnology entrepreneurs that emerged
from that company.
Risks of Joining a Biotechnology
Company
In 1983, while at Baxter, I was approached by venture
capitalists at Oak Ventures who invited me to become
involved in the beginnings of Genzyme, a small biologics
company, they recently seeded with capital in Boston.
After carefully considering the opportunity, I decided
to make the move. I gave up what was a relatively
comfortable role at Baxter, after having worked there for
10 years, leaving a stable corporation for a new start-up
in the emerging industry of biotechnology. Many others
may have thought this move to be tenuous; however, I did
 A Biotechnology Entrepreneur’s Legacy - Henri A. Termeer’s Story and his Advice to Entrepreneurs Chapter | 2
not consider this to be as big a risk as others might have.
I had the distinct advantage in that Baxter produced
human proteins, not through genetic engineering but
through extraction of human plasma. Because of this
experience, I was keenly aware of the medical signifi-
cance of producing human proteins, and I also understood
the risks and problems of acquiring them from human
sources. Fortunately, protein-production risks had already
been a part of my life for some time, so I felt very
comfortable with my decision to move to a start-up com-
pany that would ultimately focus on orphan diseases. My
thought process was that the first human-protein product
at Baxter, Factor VIII, was extracted from plasma and
could have been thought of in some way as an orphan-
type disease also. When I compared all the product devel-
opment and manufacturing risks we experienced at
Baxter, such as the HIV and hepatitis contamination risks,
the risk of not finding enough plasma, the difficulties of
storing plasma, and the product development and
manufacturing risks, then moving to Genzyme did not
seem to be an enormous leap to me.
There were also other reasons that convinced me to
start from a clean slate at Genzyme. We had access to
eight very enthusiastic full professors—seven from MIT
and one from Harvard. We also decided to look for sup-
port from the top-tier group of venture capitalists to sup-
port our activities. Even though many others may have
viewed this career move as risky, I was not tentative in
my decision at all because I did not feel that the risks
were enormous. In fact it was quite the opposite; I saw
that an alternative way of producing human-derived pro-
teins as very attractive, and to me, this was the “Holy
Grail” kind-of-world.
Genzyme in the Early Days
Developing and growing a biotechnology company has
never been easy, which was especially so in the early
1980s when there were no successful biotechnology
business models to follow. When I started at Genzyme,
there was nothing much, just a few very impressive
scientists and the beginnings of a business infrastructure
(Fig. 2.2). However, we had the latitude and freedom
to chart our own course and build something special.
I reached out to other companies and became involved
in discussions with biotechnology companies that were
ahead of us, such as Genetics Institute, Hybritech,
Genentech, and others; we were much impressed by their
knowledge of the subject.
During the early days of Genzyme, we sold a few
diagnostic enzymes, having quite less income; but in real-
ity, we had no real sustainable capital. In addition, we
had no real cash reserves to speak of, so I spent a dispro-
portionate amount of my time in the early years raising
19
FIGURE 2.2 Early Genzyme office location.
75 Kneeland Street, Boston, MA. From LoopNet.
money. I raised money any way I could. Because biotech-
nology was new, I even had to find new ways to raise
money, along with creating cost-effective ways to get
things done. During the first 2 years, we raised just
enough money to sustain ourselves for the following year,
and we obtained two or three very small equity rounds. In
the beginning, I thought I would go to pharmaceutical
companies to secure our capital. After doing this, I real-
ized that this was a very costly route because pharmaceu-
tical companies were not really interested in us as a
company; they wanted to acquire our products and, of
course, I wanted to keep our products for our company.
Later, we decided to raise money through selling equity.
We tried many different routes to accomplish that, until
we eventually went out with our IPO in 1986 and raised
more than $28 million. That capital reserve became the
financial basis for us to accomplish all the rest of the
activities at Genzyme.
The Importance of Understanding
Business and Finance
For a scientist without any financial experience or busi-
ness background, starting a company can be very chal-
lenging. If you do not understand how financial systems
operate, or what the company financial goals are, or you
do not understand what are reasonable terms to ask for
during negotiations, you will feel extremely uncomfort-
able. In order to be successful, an entrepreneur must have
confidence in both business and finance. Biotech entre-
preneurs do not necessarily need to be accountants or
financial analysts, but they do need to understand what is
appropriate for a financial deal structure, including the
best approach for all aspects of accounting and financing
of the company, understanding the impact on the
20 SECTION | I Understanding Biotechnology Entrepreneurship
company when giving up equity, the cost of capital, and
the burn-rate risk to the company. Unfortunately, the con-
sequences of raising capital and capital planning are often
enormously underestimated, or even ignored by young
biotechnology companies and their entrepreneurs.
Raising Capital
The single most important value creator for a biotechnol-
ogy company is sustainability. You not only need to con-
duct great science but also need to have a time continuum
long enough to research the problem and complete the
work so you can make it successful. The length of time
you have to do this is ultimately determined by your
financial strength. In order for biotechnology companies
to raise capital, they must give up something in return. It
is critical to recognize what you are willing to give up
because it may prove to be very costly to the company.
Obviously, the best asset a biotechnology company has is
their first product which creates their equity value.
Unfortunately, young biotechnology companies often give
up their best asset in order to raise the capital they need. I
believe that a better approach is to use your second-best
asset rather than giving up your most important asset.
Another way of saying this in simple English is as fol-
lows: Don’t give up your “first-born.” Or at the very least,
if you must give it up, do it in such a way that the deal is
so good for the company and shareholders that it cannot
be refused. Young biotechnology companies are tempted
to become shortsighted because they easily become
focused on raising just enough money for the next day.
On top of that, the asset they use to raise the money is the
one that is the most advanced and the one with the great-
est value to the company.
Young companies often presume that they must relin-
quish their first product in order to raise capital, and then
they can create a follow-on second product. However,
what they do not appreciate is the enormous uncertainty
and risks involved in creating a second product, not to
mention the enormous amount of time and money
required to accomplish that goal. Often companies end up
being completely unsustainable because their first product
has been “mortgaged” so to speak, and later they find
themselves still in need of capital. It is important for the
leader to recognize what it took for the first product to
reach that stage of development and create its existing
value. The flaw is that people presume that they can eas-
ily develop a second successful product, which is an unre-
alistic assumption because you do not always know
whether or not you can discover or accomplish that goal.
Moreover, most likely these steps often take 5, 10, or 15
years. I would venture to say that if you conducted a
study on the thousands of companies that have had a rela-
tively short life, often, almost all of them have some kind
of collaboration early with a major company, and then
they are unable to create a successful follow-on product.
The truth is that the entrepreneur really does not know
whether the company can create and successfully develop
a second product. Unfortunately, that is why many start-
up companies have limited existence.
There are, of course, different strategies of building a
biotechnology company. Some entrepreneurs may just
want to develop one product and find an exit for them-
selves. If your purpose and goal is to simply begin devel-
opment for a short period of time and have an early exit,
then that is a different objective. However, if you want to
build sustainability into your company and grow a strong
business, do not give up your “first-born,” give up your
“second-born” instead. From the beginning at Genzyme,
we intended to establish a sustainable business with rev-
enues generated by our own products, and we sought to
retain full rights to them. There are different beliefs on
how to build a sustainable biotechnology company, but
this is how we approached it at Genzyme.
Managing the Uncertainty of
Biotechnology
It is not uncommon for young leaders to look for and fol-
low tried-and-true methods of success. However, building
a biotechnology company and developing biotechnology
products do not have straightforward prescriptive paths.
Every biotechnology company’s path to success is in
some way different from each other. I believe that any
leader who does not recognize the enormous uncertainty
of product development and the need to constantly learn
and adapt should not be in this business. In order to be
successful in this industry, one must always be circum-
spect and never lose sight of the ultimate purpose and
mission of the company; otherwise, you may simply fol-
low the path of least resistance. Successful entrepreneurs
understand the principle of “hedging your bets.” They
plan for alternatives and think about “What would happen
if this approach fails?” However, please do not take this
as an endorsement for pessimism. You need to identify
alternatives without losing the energy necessary to moti-
vate your team and provide your idea or approach with
the best possible opportunity for success. Managing the
risks in the biotechnology industry is an important respon-
sibility of the biotechnology entrepreneur. We know that
the odds of picking successes are very small because even
pharmaceutical companies with billions of dollars of
R&D money cannot pick successes at a predicable rate.
Big Pharma has a lot of experience, a lot of money, and
yet they still often fail in their product development. They
fail at trying to select what can be done better by thou-
sands of smaller companies. Remember, you do not
 A Biotechnology Entrepreneur’s Legacy - Henri A. Termeer’s Story and his Advice to Entrepreneurs Chapter | 2
overcome this type of risk, you simply live with it and
manage it. As an entrepreneur, you are destined to fail if
you believe that biotechnology product development is
not a risky business. Biotechnology is inherently a risky
business; however, it is still enormously exciting and you
can succeed at if you learn to adapt to and have well-
thought-out alternative plans.
Core Values
One of the most important things for an entrepreneur is to
develop and establish a foundational purpose for the com-
pany. At Genzyme, we created a very purpose-driven cul-
ture that came with important breakthroughs as we
developed and began to understand unique medical solu-
tions; this purpose was larger than any single individual.
When you work toward an important purpose, everyone
gains a sense of urgency. Although this may seem
strange, it is not about me just having some fun. It is
about us making progress; it is about working together as
a cohesive team and seeing needs in other areas of the
company not necessarily assigned to you. The leader is
the key to spreading these shared core values. If the
leader does not possess good core values, good core
values will not be emulated by employees. It is vital for
the leader to create a culture of cooperation, shared values
and responsibility, and the passion to meet unmet medical
needs for patients.
Integrating the Science and Business
I am a firm believer in having every stakeholder partici-
pate in examining what we did as a company, including
the scientists, the business people, the receptionist, and
even the person in the warehouse. This shared responsibil-
ity created a collective sense of purpose, because we were
all aligned to one goal. I made sure that our scientists
never had separation between what they were thinking
and doing, and what the business people were thinking
and doing. We were an integrated company, and we kept
it that way. As we grew in size, we naturally became
quite diversified, but we still created ways for scientists
and product development individuals to stay closely con-
nected, even after our products reached the market. One
cannot forget that there is always a certain amount of
inherent natural tension created between the business and
the science. But there is less tension if you do not allow
separation between these disciplines. Companies naturally
grow in size and diversification; however, it is more prob-
lematic to allow separation between functions within
companies. When employees feel engaged, it is more
enjoyable for everyone within the company. When every-
one feels connected, they experience an enormous sense
of value being able to do something special for patients,
21
especially when employees are involved throughout the
entire project.
Earlier in the development of any project, when the
product is making its way through the process to become
a lead compound for a particular disease, we brought
patients into the company. We exposed our scientists to
the patient and the patient’s environment and the patient
advocacy organization, if one existed. Whenever there
was an important meeting for that particular disease, we
did not just have the marketing people sitting in the room
to discuss this, we included the scientists. Even after the
product reached the clinic, we included the basic scien-
tists and asked them to listen and make judgments about
the progress; I encouraged our scientists to become
involved in all these activities. As one can imagine, there
were some scientists who preferred not to be involved in
marketing discussions, and I accepted that. However, I
would still invite scientists who were interested, to get
close to the project and experience the entire process,
because I understood the value of having collective inter-
action and participation from all disciplines. If an idea did
not work or it just failed outright, it became a disappoint-
ment to the entire team. But they experienced this respon-
sibility in a practical manner together as a team. If a
project or idea did not work out, each team member
learned something valuable, which allowed them to crea-
tively think about alternative options to make it success-
ful. Unless an individual is close to a project, it is very
difficult for them to have the necessary motivation and
understanding to attempt something new. Human nature
is such that you do not learn much from an experience if
you are not close to it. This is how I dealt with integrating
the business and the science, for good or bad—there is no
perfect formula.
The Value of a Business Background and
Experience
Building and growing a biotechnology company is a com-
bination of business and science. Successful entrepreneurs
understand the important aspects of each discipline. I came
into this industry as a businessman and had gained many
years of training at a very successful health sciences com-
pany. I had previously run several different large busi-
nesses at Baxter, including R&D at the divisional or
country level and at the sales and marketing and
manufacturing level. By the time I started with Genzyme,
my business background was fairly extensive and as a
result, I was able to utilize my business experiences.
Consequently, as the company grew, I did not need to sec-
ond guess my experiences and did not have a feeling that I
would outgrow my ability to manage this business. I also
made sure that the composition of the Board of Directors
22 SECTION | I Understanding Biotechnology Entrepreneurship
kept increasing in experience by bringing different people
onto the board over time. Also, when we hired new
employees, I made sure that people came with the right
experience. We also did a lot of things that allowed people
to continue their education. I knew we would experience
growing pains, so we had regular meetings to try to iden-
tify how we could become a billion-dollar company and
still be a company where all of us wanted to work. As we
grew, we added different business units, but we set up a
system where we never really lost touch with people, and
we allowed them to stay engaged with what the company
as a whole was doing. We grew as new people came in,
and a large company has a different feel than a smaller
young one. However, our turnover was always very
small—we had a very low turnover rate for a biotech com-
pany. We tried to be wise with regards to compensation,
and we gave incentive compensation with options to every-
one no matter what level they were in the company.
Spanning almost three decades that I was there, Genzyme
continued to retain an environment where people appre-
ciated belonging, and up to the time I left, we had approxi-
mately 12,500 full-time employees. If you are the CEO of
a start-up biotechnology company, your responsibility is to
bring out good ideas from your team, inspire them, and
provide the overarching vision that guides them to success.
One big flaw that can occur is when young entrepre-
neurs receive a lot of enthusiastic early financial and moral
support from investors. As the company quickly develops,
the support that was there in the beginning is no longer
there later in the same way. Because of this, some entrepre-
neurs are surprised when suddenly they receive critical
questions from these same investors, and the entrepreneur
has no answers. Entrepreneurs must expect hard questions
because that is the only way an investor can stay in touch
with the company and its progress. Successful entrepre-
neurs are not easily discouraged because they have broad
shoulders and accept responsibility and feel in charge. If
you do not feel in charge because strong investors seem to
be the ones in charge, you need to ask yourself the ques-
tion “can I overcome this issue?” If you become too irri-
tated by having hard questions asked of you, you will not
succeed. Always remember that the questions will never
stop, especially when more development obstacles come. If
this bothers you, you may not be the right person, or you
may not be ready to lead a company.
Driven from Within
There is no formula for building a company and develop-
ing a biotechnology product, nor is it something you sim-
ply fill in the blanks to succeed. Every entrepreneur must
have an internal navigation system and a high degree of
self-motivation. I absolutely believe that you cannot be
successful without being driven from within yourself. You
have to feel it. It requires total sensitivity 24/7. You live it.
You think it. You must follow your instincts all the time
because there are no universal predictable ways for success
in this industry. Entrepreneurs must have these instincts
and be connected with what is inside of them. If entrepre-
neurs need to wait for instruction from a board member as
to what they can say, or be told what to do, they are in a
problematic position. Investors and board members will
want to tell you what to do because that is their business
and it is their money. However, you should not wait for
this to occur; you need to take your own cues and take the
initiative before others begin telling you what to do. Yes,
you can and should receive guidance from mentors and
other entrepreneurs. You can, and should, bring other expe-
rienced people into your shop and listen to all the best
advice and experience they have. Brainstorming can be
very constructive; however, you must not sit back and wait
for problems to occur before you do something. You
should always take the initiative to actively lead your com-
pany from within. The entrepreneur must understand that
he or she is the leader. You must take the initiative. It is a
lonesome job in many ways because at the end of the day
you cannot blame anyone else. Therefore having self-
confidence is important for entrepreneurs because their
own instincts are critical to navigating through the chal-
lenges of building a company.
In Touch with Events Outside the
Company
All entrepreneurs need to be able to work effectively with
the world outside of the company’s four walls. I believe
that this is the most decisive factor in facilitating your
company’s success. For instance, what do you need to do
about reimbursement? What do you need to do about cer-
tain FDA regulations? What regulatory action needs to
occur in order to get your product approved? What impact
does the pricing for your product have? What is the
impact of competition around the world? These are some
of the things the CEO has to think about and have a feel
for, even at the time of start-up. These outside issues
must become a part of the entrepreneur’s overall plan.
Biotech CEOs also need to be engaged with indivi-
duals outside of their company. Leaders need to become
engaged in important meetings at the Biotechnology
Innovation Organization; they need to have colleagues
they can talk to and exchange thoughts with. The entre-
preneur needs to understand that these different elements
of the outside world ultimately determine the economic
success of the company. Recognize that the events which
occur outside the company impact the inside success.
Successful entrepreneurs become part of that outside
world on a continuous basis.
 A Biotechnology Entrepreneur’s Legacy - Henri A. Termeer’s Story and his Advice to Entrepreneurs Chapter | 2 23

Good Fortune and Success

Occasionally, good things happen to companies, such that
when they look back at an event, they can say “that was a
fortunate break!” The entrepreneur must not forget that
the opposite situation can also happen. Fortunate breaks
occur when you create an environment that has ample
opportunity and foresight to capture them; in other words,
create a big umbrella. Companies that do not plan for
contingencies or alternate events rarely have a chance to
take advantage of fortunate breaks. It is probably true that
in almost every instance of great success in companies,
there were some fortunate series of events that catapulted
them to succeed. Entrepreneurs need to know that they
can increase their chances of “fortunate breaks” by incor-
porating foresight and planning for alternative events and
being prepared to take advantage of opportunities happen-
ing outside their company.

Closing Advice
My advice to biotech entrepreneurs is “make a differ-
ence!” Work to create solutions for patients and help
them with physical limitations improves their life. We
cannot afford not to come up with better treatments for
diseases. As a society, this is where we should spend our FIGURE 2.3 Henri A. Termeer: A biotech pioneer who will be dearly
best energy, use our best people, and focus on our best missed (February 28, 1946 May 12, 2017).
efforts. Supporters of the biotechnology industry believe
this is worth it. As a biotech entrepreneur, you can bring
value and make a difference for these people. Look for a forward, learn to take calculated risks. The ability to pio-
place to make a difference. Learn to do which is impor- neer something, and go places that no one else has ever
tant and operate by a different set of criteria than others. been, is unique. Almost anyone can do things that are pre-
I believe that one of the greatest characteristics to dictable. Remember, most initiatives will fail, but if you
become a successful entrepreneur is that you must be have the courage to take things forward and can identify
very humble. Everything of great worth requires the help alternatives, you can make your ultimate goal successful.
of other people. Don’t limit yourself to your own I wish each of you the very best of success in your
resources. While you do this, live and operate with pas- endeavors!
sion. Passion is what makes us who we are. Passion trans-
lates into a need to do something about a difficult
situation. Successful entrepreneurs also have a vision. Reference
Learn to see things that others do not. What you can visu- [1] Higgins MC. How the Baxter boys built the biotech industry.
alize, you can carry forward. Ideas are simply an opportu- Career imprints: creating leaders across an industry. San Francisco,
nity. Once you have the proof-of-concept, you have a CA: Jossey-Bass; 2005.
responsibility to take it forward. As you move things
24 SECTION | I Understanding Biotechnology Entrepreneurship

A Tribute to Henri A. Termeer

by Stelios Papadopoulos, PhD

Our first big idea was to merge Genzyme with

The Henri Termeer I Knew another local biotech company, Integrated Genetics (IG).
IG would bring biology, particularly recombinant DNA
expertise, along with a variety of therapeutic protein pro-
Most people knew Henri Termeer, the biotech industry
grams, protein production capability, and a diagnostics
pioneer, the wise leader of Genzyme, and the mentor of
initiative to complement Genzyme’s chemistry and its
young entrepreneurs. I knew him too. I also knew Henri,
other businesses. In 1987 the IG board did not find the
the visionary and the fighter.
terms of the proposed merger attractive enough to do the
Shortly after the June 1986 IPO of Genzyme, I
deal. However, after a couple of disappointments, they
decided to visit the company in my capacity as a Wall
reconsidered, and the merger finally took place in the
Street biotech analyst. Sandwiched between the high-
summer of 1989. For the rest of the year, we proceeded
profile Genetics Institute IPO and the Cytogen hot deal,
to raise capital through the sale of equity and by struc-
Genzyme had attracted a lot of attention albeit without
turing a Research & Development Limited Partnership
the obligatory exciting projects in recombinant DNA
(R&DLP) to fund the clinical development of hyaluronic
technology. Instead, the prospectus described a variety
acid for a variety of applications.
of apparently disconnected businesses and research pro-
The moment of truth and a turning point for the com-
grams. Among them, was a manufacturing contract to
pany came a year later. In the summer of 1989 a new
supply the NIH with glucocerebrocidase to be used by
financing vehicle had been introduced in biotech
researchers at the NIH in clinical trials for Gaucher dis-
designed to facilitate the funding of product development
ease. That inconspicuous component of the early busi-
without burdening the company’s financial statements
ness of Genzyme ultimately led to the billion-dollar
with the expenses associated with R&D. The first such
Ceredase Cerezyme franchise and the real genesis of
structure, Tocor, sponsored by Centocor, was used to
the orphan drug business.
finance the development of several products. If Centocor
In those days, Genzyme was in an old building on 75
were to choose to reclaim ownership of the programs
Kneeland Street, not exactly a high-rent district of
from Tocor, it would have to compensate the holders of
Boston. The ancient cast iron radiators hissed, and the
Tocor shares with a stream of royalties. Alternatively,
bathroom windows did not close, but nothing seemed to
Centocor could decide to exercise its option anytime dur-
take Henri away from his focus—describing his vision of
ing the first 5 years and buy back the shares of Tocor at
how he was going to build a great company but without
preagreed upon prices. With some notable differences,
waiting for the science to deliver at some indeterminate
this instrument resembled an R&DLP except that it was
point in the future. All along the way, he would be trying
organized as a public corporation, and its shares were
to graft money-making businesses onto the company, all
freely trading in the market.
aiming toward creating a diversified health-care product
In the summer of 1990 when Henri had to make a
company. It was not as if the concept was terribly novel.
choice of what financial structure to use for the purpose of
It was straightforward but also quite risky. Except that
funding development of six different research programs, he
Henri, with his conviction and enthusiasm, made you
opted for the Tocor structure rather than the conventional
believe that he could do it. It was almost as if he pos-
R&DLP. Except that he was astute enough to realize that
sessed a collection of secret passwords that would get him
the presence of royalties in the individual product buy-
out of whatever business jams he would encounter along
backs was an unnatural legacy from the R&DLP structure
the way. Wall Street signed up on the vision and stayed
and demanded that we devise a novel structure without
with Henri for a very long time. I was fascinated. And
royalties. Our initial reaction was to disagree, until we
once I switched from equity research to investment bank-
realized that Henri had a deeper intuitive understanding of
ing the following year, I started working with Genzyme
our investment banking business than we did. So we cre-
as one of their investment bankers.
ated the final version of the financial structure that became
 A Biotechnology Entrepreneur’s Legacy - Henri A. Termeer’s Story and his Advice to Entrepreneurs Chapter | 2
the model that was copied many times after that. That was
Neozyme, and the structure came to be known as Special
Purpose Accelerated Research Corporation.
Devising the financial structure for Neozyme and writ-
ing the prospectus was the easy part. Selling the deal
turned out to be next to impossible. The preliminary pro-
spectus was filed with the SEC on August 13, 1990 less
than 2 weeks after the Iraqi invasion in Kuwait. As time
went on, the occupation of Kuwait appeared irreversible
unless the United States were to mount an invasion. In the
fall of 1990 the financial markets came to a grinding halt.
It was against that sentiment that we were trying to gener-
ate enthusiasm for the Neozyme offering.
As the market resistance, or better yet the lack of inter-
est, was becoming more pronounced, Henri became more
determined. He was focused and passionate as he offered
compelling arguments to anyone who would agree to hear
the story. Behind his determination was his long-term
vision for the company. Henri expected the approval of
Ceredase early the following year and had correctly antici-
pated that the product launch would become all-consuming
for the young company. Now was the time to lay the foun-
dation and protect the investment in the diverse programs
that would represent distinct pillars of the diversified
25
health-care products company he wanted to build. The six
programs in Neozyme were, indeed, in diverse areas: a
cancer diagnostic and therapeutic product, a cholesterol
diagnostic, pharmaceutical intermediates, a wound-repair
product, devices and reagents for prenatal testing, and pro-
tein replacement as a cystic fibrosis treatment.
Finally, more than 2 months later, we launched the
transaction, and after we had sweetened the terms, we
scraped barely enough orders to put a deal together. The
evening we priced the deal, we sat exhausted on the floor
of a small office off the trading floor. In the next morning
the market took a double take astonished at the news of
the deal, because no financing had been priced on Wall
Street for more than a week.
Henri had concluded that these programs represented
substantial future options for Genzyme, and he felt that it
was imperative to get them off the ground well ahead of
the impending launch of Ceredase. He had the vision, the
foresight, and the passion to get the deal done.
Henri was a visionary and he was a fighter.
Stelios Papadopoulos, PhD, is a former biotech analyst
and investment banker. He is currently the Chairman of
the Board of Biogen, Exelixis and Regulus Therapeutics.
26 SECTION | I Understanding Biotechnology Entrepreneurship

A Tribute to Henri A. Termeer

by Peter Wirth, JD

leading Genzyme, but also he somehow managed to

Empathy, Generosity, spend a full measure of time on the many other things
Discipline, and Engagement: that mattered most to him: his family, the many people
inside and outside Genzyme that he mentored, the
Reflections on the Life of patients Genzyme served, and all the civic, cultural, and
educational institutions where he served as an advisor
Henri Termeer and board member.
So what mattered most to Henri? I think his family
came first. Henri led an incredibly busy professional life.
As I reread Henri’s advice to biotech entrepreneurs for
Getting his attention during the day was nearly impossi-
the umpteenth time, many of the themes are familiar to
ble. And yet I could always catch him before 6:00 a.m.
me. Henri’s focus on making a difference through some
He would be in the car, being driven to work, and on the
combination of passion, humility, vision, and calculated
phone with our European offices or getting ready for his
risk-taking captures the essence of his worldview and his
jam-packed day. He always made time to talk between
management style. In fact, they are stated here with a
calls. Good luck getting his attention after 6:00 p.m. or on
clarity and succinctness that Henri seldom resorted to in
weekends. That was time reserved for his wife Belinda,
real life. And yet, even as this chapter can serve as a sort
his children, Adriana and Nicholas, and Woody, the fam-
of catechism for entrepreneurship, it does not fully cap-
ily dog. Nothing except the direst emergency could
ture what made Henri so special to so many people.
intrude on that time.
I have been thinking a lot about that question since
Of course, Henri cared deeply about Genzyme and all
Henri’s untimely death in May 2017 and have come to
the people who worked there, from the C-level executives
believe that Henri’s defining characteristic was his natu-
to the maintenance crew that took care of Genzyme
ral, instinctive ability to empathize and genuinely engage
Centre, our environmental friendly but somewhat temper-
with people. Whether he was talking to a patient about
amental corporate headquarters. Within Genzyme, Henri
their desperate need for access to an effective drug to treat
was admired not only for his special genius as a leader
an illness that affected only 1 person in 40,000, or sitting
who could take our company where no one had ventured
down in the Genzyme cafeteria with a group of unsus-
before, but also he was in equal measure loved for his
pecting young MBAs for an impromptu review of their
extraordinary empathy for each person that he took on
latest corporate development project, or calmly talking to
that journey. Everyone at Genzyme felt that they had a
a first-time CEO through some mystifying and terrifying
special relationship with Henri, such that they mattered to
confrontation with her/his board of directors, Henri was
him as a person. Hardly anyone ever left Genzyme for a
unselfconsciously but intensely present with that individ-
“better opportunity”; our employee turnover rate was one
ual. You had the feeling, at that moment in time, that you
of the lowest in our industry. And although he did not
were the most important person in Henri’s life, and that
make a fuss about it, Henri was deeply committed to
feeling somehow left you with a sense of comfort, confi-
redefining gender stereotypes. He went out of his way to
dence, and renewed optimism.
give women an equal chance at career advancement by
In addition to his world-class Menschengefühl, Henri
assigning them P&L responsibility or other leadership
embodied the lessons that Clayton Christensen teaches
roles. As a result, Genzyme produced more female CEOs
in his marvelous book, How Will You Measure Your
than any other company that I know of: Mara Aspinall,
Life. In a nutshell, Christensen points out that most of us
Gail Maderis, Ann Merrifield, Paula Regan, Paula
talk about what is important to us (family, friends, and
Soteropoulos, Alison Lawton, and Alicia Secor each
service to community) but then allocate our time in a
benefited from Henri’s mentorship and inspiration and
completely different manner (mostly to work). Henri
went on to lead their own companies.
walked the walk, not only was he deeply immersed in
 A Biotechnology Entrepreneur’s Legacy - Henri A. Termeer’s Story and his Advice to Entrepreneurs Chapter | 2
Patients were also extraordinarily important to Henri.
One of the most difficult periods in his career was when
we were unable to supply Cerezyme to Gaucher patients
because of the failure of our Allston Landing manufactur-
ing plant. Although he felt the pain of this failure in a
very personal way, Henri was unequivocal that our lim-
ited supply of drug be allocated on the basis of medical
need rather than ability to pay, with patients on free drug
programs receiving equal priority to those whose treat-
ment costs were fully reimbursed. Henri was also commit-
ted to connecting “our” patients with alternative sources
of supply offered by our competitors. Many of those
patients repaid Henri’s loyalty by returning to Cerezyme
treatment after we overcame our supply issues.
One key lesson we learned from Henri was that com-
panies had to do well financially in order to create a sus-
tainable ability to do good. Cerezyme, and its predecessor
Ceredase, were extremely expensive drugs. They estab-
lished the paradigm for the ultraorphan drug industry.
Over the years, Genzyme was strongly criticized for these
high drug prices. Yet Henri understood that only by
charging high prices could we bring these life-altering
drugs to all patients who could benefit. Genzyme had two
prices for its ultraorphan drugs: a universally applicable
commercial price, and free. By treating all patients who
could benefit regardless of ability to pay, Henri gained
the moral authority to insist that health-care systems that
could afford to pay for these drugs do so. Only by gener-
ating “pharmaceutical margins” could Genzyme afford
the investments in research and provide support and
patient outreach that made our drugs available globally
regardless of ability to pay. I believe that patients ulti-
mately understood that their interest in access to effective
27
therapies was completely aligned with Genzyme’s finan-
cial discipline and business objectives.
Beyond Genzyme, Henri was a true Renaissance man.
Yes, he was a giant in our industry, and yes he did pio-
neer the ultraorphan disease business model that under-
pins much of the industry today. But Henri was also
deeply committed to serving the community in which he
lived. Whether it was as a Director of the Massachusetts
General Hospital or the Boston Ballet, on the Executive
Committee of the Massachusetts Institute of Technology
or as Chairman of the Federal Reserve Bank of Boston or
BIO, Henri made enormous contributions to every institu-
tion that he was involved with. Engagement with the
community was an essential part of Henri’s life.
I feel extremely fortunate that Henri was an important
part of my life for so many years. Of course, I will miss
his kindness, wisdom, optimism, and commitment to mak-
ing the world a better place. But his legacy and spirit will
nurture and inspire many of us for years to come, so he
really is not entirely gone from our lives. If there is any
message we should take from Henri’s example, it would
be that we should spend our time on the people and things
that matter most to us, that we should be fully present in
all of our personal interactions, and that as a result we
will lead happier and more productive lives, and the
world will indeed become a better place.
Peter Wirth serves on the board of directors of a number
of public and private biotechnology companies and is a ven-
ture partner with Quan Capital Management, a global ven-
ture capital company. While at Genzyme, he was Executive
Vice President, Legal and Corporate Development, Chief
Risk Officer, and Corporate Secretary.