Shire, and specifically its Fabry disease drug Replagal, have benefited from Genzyme Corp's manufacturing woes, but that advantage will lessen now that the Sanofi-owned firm has received the all-clear from European regulators for a US facility where it produces a rival treatment.
Sanofi says the European Medicines Agency (EMA) has approved its manufacturing plant in Framingham, Massachusetts for the production of Fabrazyme (agalsidase beta). Supplies of the Fabry disease drug have been severely affected since the temporary closure of Genzyme's Allston Landing, Boston facility in June 2009.
Genzyme’s chief executive David Meeker said the approval by the EMA "represents an important milestone in our manufacturing recovery and path toward unconstrained supply for all patients". However the firm noted that "the complete return to normal supply levels of Fabrazyme globally will not be immediate, as it will take time to obtain all global regulatory approvals throughout the year and due to production lead times".
Nevertheless, this will make life more difficult for Shire, which saw third-quarter sales of Replagal rocket 40% to $129.0 million. The product had a 45% share of the market outside the USA in 2008, but this has now leapt to more than 80%.
In an investor note, Savvas Neophytou at Panmure Gordon said the news from Genzyme "should result in significant headwinds" for the Shire drug. Noting that Replagal contributes around 12% of the company's profits, the analyst has reiterated his 'sell' recommendation.