American Home Products Corp. surprised the world last week when it exercised its option to buy the 40 percent of Genetics Institute Inc. it didn't already own for $1 billion net of cash. Unlike the period leading up to the expiration of Roche's option to purchase the remainder of Genentech Inc., the months leading up to AHP's option deadline were relatively quiet and free of speculation. Indeed, the $85 buyout price represented a 38 percent premium to the market on the day of the announcement. And unlike GNE, which put some effort into raising its stock price to levels that would make the buyout attractive, GENIZ was content to let matters take their own course.

BioCentury talked to Gabriel Schmergel, GENIZ's retiring president and CEO, about the company's philosophy and its relationship with AHP, which acquired a 60 percent stake in 1992.