Genzyme fined $175m for manufacturing problems
pharmafile | April 22, 2010 | News story | Manufacturing and Production |Â Â Cerezyme, Cerezyme Fabrazyme Gaucher's Genzyme, Fabrazyme, Gaucher's, Genzyme, manufacturing complianceÂ
The FDA seems to have lost patience with biotechnology company Genzyme over contamination problems at its manufacturing facilities, levying a hefty fine that has driven the company into a first-quarter loss.
Last month the US regulator said it was considering “enforcement action” in the form of a consent decree, which effectively means that a company is given a deadline to resolve compliance problems and faces fines if it fails to do so.
Yesterday, Genzyme said in its quarterly results statement that it had received a draft consent decree with a fine of $175 million, which has already been added into the first-quarter accounts “because it is a likely outcome”.
The consent decree also sets a deadline for the transfer of fill and finish activities at Allston Landing to another US Genzyme facility in Framingham, and if this is not met the firm will forfeit 18.5% of any revenues from products made at the troubled plant.
The Framingham plant is “mechanically complete” according to Genzyme, but is unlikely to be fully operational and validated until 2011. The company will face a liability of $15,000 a day in 2011 and 2012 if it fails to bring the plant fully into compliance with FDA standards.
Adding to its misery, Genzyme also announced fresh delays in restoring supplies of Gaucher disease drug Cerezyme (imiglucerase), one of the products most affected by contamination issues at Allston Landing.
The company said it is currently supplying only about 50% of Cerezyme demand because an electrical power outage hit the plant in the first quarter which exacerbated a problem with the water system at the facility. Another product affected by the manufacturing problems – Fabrazyme (agalsidase beta) for Fabry disease – is running at just 30% of demand.
It is not clear yet whether material in production at the time of the power outage will be able to be finished and distributed, according to the firm.
As a result, Cerezyme revenue dropped 39% in the first quarter to $179 million while Fabrazyme fell 56% to $53m. Overall, Genzyme’s revenue fell to $1.07 billion from $1.15bn a year earlier, which along with the fine pushed the company into the red with a $115m net loss.
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