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Genzyme to Pay $175M For Manufacturing Problems

From Boston Herald (MA) (May 25, 2010)

May 24--Genzyme Corp. will fork over $175 million of its profits to federal regulars because of manufacturing problems that forced the shutdown of its Allston facility last year.

The Cambridge-based biotech company, whose drug sales have been hard hit by the manufacturing woes, announced today the final terms of a consent decree with the U.S. Food and Drug Administration.

"We appreciate the guidance the FDA provided over the past year as we work to restore the agency’s confidence in our ability to operate the Allston plant at the highest standards, and return to reliable product supply for patients," Genzyme said in a statement.

Genzyme first disclosed the potential penalty in its first-quarter earnings announcement last month.

Under the agreement with the FDA, Genzyme must move the so-called fill/finish process for its drugs out of the Allston facility and complete a remediation plan with a third-party consultant, Quantic.

Genzyme faces further financial penalties if it misses deadlines for shifting the drug operations out of Allston or milestones in the remediation plans. The penalty for missed remediation milestones could be $15,000 per day, per affected drug.

Remediation will take two to three years to complete. After that, the FDA requires five years of oversight and annual reports on Genzyme to be submitted by Quantic.

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Posted: May 2010