Genzyme cuts forecasts on production problems
pharmafile | July 29, 2009 | News story | Manufacturing and Production, Sales and Marketing | Genzyme
The contamination problems at Genzyme's Allston Landing production plants have caused the firm to scale back its revenue forecasts for the year by upwards of $500 million.
Genzyme now expects full-year revenues to be in the range of $4.6 to $5 billion, down from its earlier prediction of $5.2 to $5.4 billion.
Last month, the company said it discovered a virus that impairs cell growth in one of its bioreactors at the Allston Landing plant, forcing it to close down the entire facility for decontamination. Genzyme made three products at the plant, including Cerezyme (imiglucerase for injection) its top-selling treatment for Gaucher disease.
"Genzyme has now completed the sanitisation and is on-track to resume production at Allston this month," said the firm in its second quarter results statement.
The impact of the suspension was limited in the second quarter as Genzyme was able to rely on existing inventory to meet demand. Revenues grew 5% to $1.2 billion, with around $13 million in lost revenue due to interruption in Cerezyme supply.
However, over the remainder of the year the impact will be felt more deeply, according to the company. Genzyme now says sales of Cerezyme will be pegged back to the $750 million to $1 billion range, from earlier forecasts of $1.250 to $1.275 billion.
When it reopens the plant will resume production of Cerezyme and Fabrazyme (agalsidase beta) for Fabry disease, but Genzyme will no longer make the third product, Myozyme (alglucosidase alfa) as production for this is now undertaken at a facility in Belgium. The free capacity will be used to hike production of Cerezyme and Fabrazyme, it said.
"Genzyme has already taken the initial steps in the cell culture process necessary for the re-start of production of Cerezyme and Fabrazyme at Allston," the company said. "The first release of both products is expected before the end of this year."
Sales forecasts for Fabrazyme have been cut by around $50 million to $510-$520 million, with around $40 million trimmed off Myozyme revenue guidance, which is now put at $330 to $340 million.
An opportunity for rivals
Meanwhile, Genzyme's woes have been an opportunity for rival companies developing treatments for Gaucher and Fabry disease, including Shire, Amicus Therapeutics and Protalix.
Mindful of the impending shortages, the US Food and Drug Administration (FDA) asked Shire and Protalix to file treatment access protocols for their products in the hope that they can be made available to patients ahead of marketing approval.
Shire has already made the application for its velaglucerase alfa product, while Protalix says it will do so as soon as possible for its candidate prGCD.
Meanwhile, Amicus' shares have been on the up as a result of the Genzyme news, as the company is developing a Gaucher treatment called Plicera (afegostat tartrate), which is in phase II studies in partnership with Shire, and it also has a Fabry disease drug, Amigal (migalastat HCl) in phase III testing.
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