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Print Edition StoriesWednesday, October 21, 2009
Genzyme Q3 net income plummets amid plant shutdown woes
By Julie M. Donnelly
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Genzyme Corp. said net income took an 87 percent nosedive in the third quarter amid contamination and subsequent production problems at a local drug-manufacturing site.
The Cambridge-based biotechnology company blamed the dismal results on the six-week shutdown of its Allston manufacturing plant over the summer due to the discovery of a virus. The shutdown has resulted in shortages of two drugs to treat rare, serious diseases — Fabrazyme for Fabry disease and Cerezyme for Gaucher disease.
Genzyme said net income for the most-recent quarter was $16 million, compared with $119.6 million for the corresponding period last year.
Genzyme booked revenue of $1.06 billion in the third quarter, down from $1.16 billion during the third quarter of 2008.
The company said the plant shutdown and associated de-contamination costs totaled $23.7 million dollars.
The developments prompted the company to lower its non-GAAP earnings guidance for 2009, following the decision to write-off a half-finished batch of Cerezyme that had been in progress prior to the shutdown. Genzyme now expects earnings per share to be $2.26 for the year, down from a prior prediction of $2.35 per share to $2.90 per share.
Genzyme said it is filling vials of newly manufactured Cerezyme and will begin shipments next month. But officials said the company would not be able to meet full demand until January. Shipments of new batches of Fabrazyme will begin in December.
Genzyme’s (Nasdaq: GENZ) stock was trading at $53.50 a share in morning trading Wednesday, down from $54.85 a share at the previous day’s close.
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