Genzyme Corp’s fourth quarter profits have been savaged as a result of the supply problems its products have suffered, notably the Gaucher disease drug Cerezyme.
Net income fell 73% to $23.2 million, reflecting the aftermath since June when the company’s Allston Landing, Boston facility was temporarily shut down after a bioreactor was contaminated with a virus. Revenues fell 8% to $1.08 billion.
Sales of Cerezyme (imiglucerase) crashed 66% to $105.4 million while the Fabry disease drug Fabrazyme (agalsidase beta) also suffered from supply problems and fell 54% to $58.0 million. On the plus side, sales of Myozyme (alglucosidase alfa), Genzyme’s treatment for Pompe disease, climbed 23% to $91.9 million in the quarter, up 106.6%, and another strong contribution to turnover came from the sevelamer-based kidney disease treatments Renagel and Renvela. Sales of the two grew 6% to $178.9 million.
Aldurazyme (laronidase) used to treat the rare genetic disease mucopolysaccharidosis I, increased 3% to $38.7. million, while the thyroid cancer drug Thyrogen (thyrotropin alfa) grew 28% to $47.3 million.
However, Genzyme’s manufacturing problems are still dominating the headlines and chief executive Henri Termeer said “we are moving into a recovery period, regaining momentum and getting back to delivering sustainable growth this year”. The firm noted that Cerezyme manufacturing is continuing “with productivity levels above historical averages” and 85% of US patients have resumed therapy; “a similar percentage is estimated worldwide,” Genzyme added.
Things are trickier with Fabrazyme, however, and the combination of reduced productivity, the additional time needed to reestablish fill-finish operations for the drug at the Allston facility “and the need to build a small inventory buffer”, means that production of Fabrazyme will continue at a rate of 30% through April and May.
For 2010, Genzyme expects earnings in the range of $1.90-$2.27 per share on revenues of $5.23-$5.53 billion. This depends on the firm’s “ability to maintain a substantial portion of the market for Cerezyme,|” increase production of Fabrazyme and get US approval for Myozyme, to be called Lumizyme.
