Genzyme Corp, which is deep in talks with Sanofi-Aventis over a possible takeover, has posted a reasonable set of figures for the fourth quarter, suggesting that is on the road to recovery after its manufacturing woes.
The preliminary results show that revenues grew 23% on the like, year-earlier period to $1.15 billion, while fourth-quarter sales for its "personalised genetic health business grew 46% compared with the same period in 2009, and 26% from the third quarter of 2010. This growth reflects increasing supplies of Cerezyme (imiglucerase) for Gaucher disease and Fabrazyme (agalsidase beta) for Fabry disease, which have been severely affected by the temporary closure of the firm's Allston Landing, Boston facility in June 2009, and the US launch of Lumizyme (alglucosidase alfa) for Pompe disease.
There are still problems, however, and Cerezyme revenues were lower than anticipated due to the delay of orders in Brazil, shipping delays in December due to bad weather and the loss of a specific lot for Japan.
Fourth-quarter earnings are expected to be between $0.80-$0.85 per share, down from a previous forecast of $0.90-$0.95, though chief executive Henri Termeer noted that this represents almost double Genzyme's earnings for the third quarter. He added that the business is "returning to pre-disruption levels experienced in the first half of 2009", and "we expect to maintain this earnings level in the first quarter and grow from there beginning in the second quarter."
Having completed the $925 million sale of its genetic testing business to Laboratory Corporation of America, and with the $265 million sale of its diagnostics unit to Sekisui Chemical Co due to close this quarter, Genzyme also plans to continue to "divest or partner additional non-core businesses", including its cell therapy and regenerative medicine units.
The company confirmed it hopes to enter into "an agreement for the sale of its pharmaceuticals business" and talks with Sanofi are progressing. However, speaking at the JPMorgan healthcare conference in San Francisco, Mr Termeer noted that negotiations are at the early stages still.
His counterpart at Sanofi, Chris Viehbacher, also in San Francisco, said that "we don't know how far we're going to get" with the takeover bid and any deal must come at the "right price". The French drugmaker's offer of $18.50 billion, or $69 per share, has been repeatedly rejected by Genzyme but the firms are now talking about a contingent value right by which Sanofi could make additional payments if future milestones linked to Genzyme's leukaemia drug Campath (alemtuzumab), which is also in late-stage development for multiple sclerosis, are reached.
