Genzyme 4Q Revenue Drops on Manufacturing Woes

From Associated Press (January 12, 2010)

NEW YORK_Genzyme Corp. said Tuesday its fourth-quarter revenue fell 7.7 percent because of lower sales of two key genetic disorder drugs, following manufacturing problems at a Boston facility.

The company said revenue fell to $1.08 billion during the quarter from $1.17 billion in 2008. Meanwhile, full-year sales fell 2 percent to $4.5 billion from $4.6 billion.

Analysts polled by Thomson Reuters expected fourth-quarter revenue of about $1.08 billion and full-year revenue of about $4.51 billion.

Genzyme plans to release full quarterly results and issue guidance for 2010 on Feb. 17.

In June, the company shut down its manufacturing plant in the Boston neighborhood of Allston to clean up viral contamination that had been slowing down production of Cerezyme and Fabrazyme. The virus was not harmful to people, but the shutdown cost the company millions in revenue. Production restarted in September.

Cerezyme treats a rare enzyme disorder called Gaucher disease and Fabrazyme treats Fabry disease, an inherited disorder caused by the buildup of a particular type of fat in the body's cells.

Meanwhile, in November, the Food and Drug Administration said it found tiny particles of trash in drugs made by Genzyme, including steel, rubber and fiber. The agency recommended that doctors closely inspect vials of Cerezyme, Fabrazyme, Myozyme, Aldurazyme and Thyrogen.

On Friday, the company hired a new head of quality control, Ron Branning, to oversee products made at 17 sites worldwide. That move follows an earlier announcement that the company will contract manufacturing for key products to Hospira.

Tuesday, Genzyme said sales of Cerezyme plunged 65 percent to $106 million from $306 million during the quarter, and dropped to $793 million from $1.2 billion for the year. Fabrazyme sales fell to $59 million from $126 million during the quarter and dropped to $431 million from $494 million during the year.

"We are managing through the supply interruption, getting beyond it, and moving into a period of recovery," said Chairman and CEO Henri A. Termeer, in a statement. "We are fundamentally strengthening the company, and in the coming year we will focus on building on our core capabilities, enhancing our leadership position in the genetic disease area, and advancing new products that will drive our growth beyond 2011."

The company also said it is boosting its sales force and adding manufacturing capacity.

The Cambridge, Mass., company is currently working with PTC Therapeutics Inc. on a potential new genetic disorder drug, ataluran. It is in various stages of development for muscular dystrophy, cystic fibrosis and hemophilia. Some late-stage products include alemtuzumab for multiple sclerosis and mipomersen for high blood cholesterol.

Shares of Genzyme fell 76 cents to $52.94 in afternoon trading.

Posted: January 2010


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