Genzyme Corp. has initiated a $2 billion stock buyback, under which $1 billion of stock will be repurchased in the near term and financed with debt. The additional $1 billion of stock will be repurchased over the course of the next 12 months. The company also plans to divest its Genetic testing, Diagnostic products and Pharmaceutical intermediates businesses.

These initiatives are part of a five-point plan for shareholder value creation outlined by chairman and chief executive officer Henri Termeer. Genzyme’s strategy is aimed at focusing on its core businesses and establishing operational excellence in manufacturing, capitalizing on near-term revenue growth drivers (including products early in their launch stages, as well as therapies expected to launch), balancing revenue and earnings growth with cash flow return on investment, and improving operating margins by reducing costs across the company.

Genzyme Genetics provides reproductive and oncology testing in the U.S. with nine labs. This business had revenue of $371 million in 2009. The Diagnostics business offers a product portfolio, including enzymes, clinical chemistry reagents and rapid tests covering the areas of cardiovascular, diabetes, renal, and infectious diseases. Diagnostics revenue was $167 million in 2009. Genzyme Pharmaceuticals develops and manufactures chemically synthesized pharmaceutical materials and technologies for the global pharmaceutical industry and focuses on lipids, peptides, carbohydrates, oligonucleotides, custom small molecules and drug delivery technologies. The business includes a cGMP manufacturing facility in Liestal, Switzerland. Genzyme has identified some potential strategic partners for the three businesses, and expects transactions to be completed this year.

“Over the past year, we have made many changes to strengthen the company at both the operational and board levels, and the new steps we are announcing today build on this plan,” said Mr. Termeer. “Genetics and Diagnostics are strong businesses that are both leaders in their fields. However, 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. Focusing on our core businesses will enable us to continue to build a portfolio of high value therapies for patients.”

Dr. David Meeker, recently appointed to the newly created position of chief operating officer and executive vice president, is charged with integrating all aspects of the company’s commercial organization to improve operational efficiency and drive cost savings.

Additional leadership changes were announced: Geoff McDonough will serve as regional president of the company’s organization in Europe, John Butler will become president of Personalized Genetic Health, Rogerio Vivaldi will become president of the Renal and Endocrinology businesses, and Alison Lawton will become general manager of the Biosurgery business.

The operating team led by Dr. Meeker will oversee products in early-stage launch that are near-term growth drivers for the company, including: Myozyme for Pompe disease, Synvisc-One for osteoarthritic knee pain, and Mozobil, which is used to prepare certain cancer patients for stem cell transplantation. This team will also oversee the development programs for three products that are expected to launch by the end of 2013, including: Alemtuzumab in multiple sclerosis, Mipomersen for patients with uncontrolled LDL-cholesterol, and Eliglustat tartrate for Gaucher disease.