Genzyme Corp (GENZ)

LTBH.

*Pioneer of the orphan disease development strategy. Beautifully executed and with perfect timing, it's unlikely any new companies will be able to pursue this strategy today. Have successfully priced marketed drugs at ridiculous levels to achieve revenue streams similar to other drug companies drugs for widespread diseases, but got the advantages of orphan drug designation. Has been extremely successful at identifying orphan diseases their technology can address and outcompeting/buying anyone who tries to enter the space.

*I don't think biosimilars will be a real threat for a long time, if ever, meaning their revenue stream is relatively sturdy. The fact that the FDA made them file the scaled-up version of Myozyme separately had to terrify generics companies. If you're looking to start picking off expired/expiring biologics and then see that they made the original company test the scaled-up version with a separate trial (~$50M in revenue missed this year + the cost of the trial) you're probably going to stick with small molecules.

* They're doing a nice job at bringing along new drugs, including aldurazyme, myozyme, renvela, sinvisc, clolar, hectoral, mozobil, and expanding their approach to include more traditional technologies as well as emerging technologies in addition to their niche of expertise. Recent/upcoming approvals should be producing nearly half of their revenue by 2014.

* Carl Icahn took a stake in January ($94M, or 0.6%). He successfully forced 2 large biotechs to look for buyers last year (MedImmune, which was bought by AstraZeneca, and Biogen Idec, which failed to find a buyer), although I consider GENZ to be significantly better than both of those companies. Would be a great addition to any large pharma company, particularly ones that are trying to shift gears from small molecules into biologics.