By Toni Clarke
BOSTON (Reuters) - Genzyme Corp
Profit fell short of Wall Street expectations, but investors were heartened by the company's progress in resolving its manufacturing problems, and its shares rose 0.5 percent to $72.24 in early trading.
Last year Genzyme was forced to temporarily close its manufacturing plant in Boston due to a viral contamination. The interruption lead to shortages of two key drugs: Cerezyme for Gaucher disease and Fabrazyme for Fabry disease.
Third-quarter sales of Cerezyme, the company's top drug, rose to $179.8 million from $93.6 million a year earlier, beating analysts' average forecast of $175 million.
"In the third quarter we saw our financial recovery start to take effect, and we expect that this will accelerate during the fourth quarter as Cerezyme patients are able to return to normal dosing levels and we begin to increase shipments of Fabrazyme," Genzyme CEO Henri Termeer said in a statement.
The Cambridge, Massachusetts-based biotech company said net profit rose to $69 million, or 26 cents a share, from $16 million, or 6 cents a share, a year ago. Revenue excluding divested businesses rose 8 percent to $1 billion.
Earnings excluding one-time items were 42 cents a share. Analysts on average expected 50 cents, according to Thomson Reuters I/B/E/S.
Sales of Fabrazyme fell to $33.9 million from $115.2 million, reflecting continued supply constraints. Analysts had expected $43 million.
Inventory of both Cerezyme and Fabrazyme will remain tight until the company can get its new manufacturing plant, in Framingham, Massachusetts, up and running. Genzyme said the facility is operational and Fabrazyme engineering runs are under way. The company expects the plant to receive regulatory approval in late 2011.
The company said it is also on track to meet November deadlines for moving certain finishing processes out of the Boston plant. The deadlines were imposed by regulatory authorities under a consent decree that placed the plant under third-party supervision.
Sales of the company's Pompe disease drugs Myozyme and Lumizyme were $106 million in the third quarter, below the average analyst forecast of $111 million.
The company lowered the top end of its fourth-quarter adjusted earnings forecast. It now expects 90 cents to 95 cents a share, compared with a previous range of 90 cents to $1.00.
The company said it expects Cerezyme revenue in the fourth quarter of $235-$245 million and Fabrazyme revenue of $70-$75 million, based on currently anticipated product release dates.
(Reporting by Toni Clarke; editing by Gerald E. McCormick and John Wallace)
