Letter to the Editor in Barron's

Following is my (extensively edited!) letter in the 9/20/10 Barron's:

The Sept. 6 Follow-Up article on the French drug company Sanofi's proposal to buy Genzyme ("How Not to Spend $18.5 Billion") quoted Sanofi CEO Chris Viehbacher as saying, "I personally don't believe that buybacks add any shareholder value." Apparently, Viehbacher has looked at the stock prices of Sanofi and other drug companies after buybacks and has decided that repurchases "don't work" because the stocks didn't climb afterward. But this ignores other factors that also affect share value and investor return, including anticipated changes in free cash flow, total debt, dividends and acquisitions. The net change in all of these factors–not just buybacks–will eventually be reflected in the stock price.