Genzyme Corp has received a warning letter from US regulators about manufacturing problems at its facility in Lyon, France where the company produces a treatment for transplant patients.

The US Food and Drug Administration said the site was inspected in June and an agency investigator “documented significant deviations from current good manufacturing practice” in the production of Thymoglobulin (anti-thymocyte globulin [rabbit]), which is used to treat acute rejection in organ transplant patients. Although Genzyme was told about the problems, the FDA letter addressed to chief executive Henri Termeer states that “on several occasions you continued to use components and intermediates that failed your in-process limit for bioburden and presence of pathogenic microorganisms and you did not conduct sufficiently comprehensive investigations of these failures”.

The agency acknowledged that the final Thymoglobulin product did in fact meet all the necessary specifications but added that “based on FDA's experience, there is a high probability that the observed deviations, if not corrected, would substantially increase the risk of future product failures”.

Genzyme wrote to the FDA at the end of July to address the manufacturing problems highlighted and while the agency’s letter notes that the firm had responded to some of the inspectors' observations, “we believe that your response did not provide sufficient detail to fully assess the adequacy of the corrective actions". The letter ended by stating that “failure to promptly correct these deviations may result in FDA initiating regulatory action without further notice. Such action may include licence suspension and/or revocation”. Genzyme says it will continue manufacturing Thymoglobulin as it addresses the issues in the warning letter and is working with the FDA to ensure that the quality of the product is not compromised.

Bioenvision shareholder group unhappy with offer

In fact it has been a bad start to the week for Genzyme as its $345 million acquisition of Bioenvision would appear to be hanging in the balance after one of the latter firm’s major shareholder in Bioenvision, SCO Capital, said that the price being offered is too low.

SCO chairman Steven Rouhandeh sent a letter to Bioenvision's board, claiming that “the $5.60 offer is extremely inadequate and the result of a poorly managed and ill-timed sales process". SCO, which holds a 13% stake in Bioenvision, will move to change the directors of the firm at its next shareholder meeting, and says that a new board will be better able to renegotiate any sale and get a higher price based on the likelihood of the leukaemia drug Clolar (clofarabine) getting US approval in 2008.

Mr Rouhandeh also noted that three proxy advisory firms all felt the offer undervalues the company but this has left Genzyme unmoved. The company said last week that it will not be raising its $5.60 per share bid.