Genzyme's 2nd-qtr 2010 profits plunge on continuing Cerezyme and Fabrazyme supply problems

Troubled US biotechnology firm Genzyme yesterday revealed that net profit for the second quarter of 2010 fell to $23,000, or nil per share, from $187.6 million, or $0.68 per share, a year before. Excluding one-time items, the company earned $0.18 a share. Analysts had on average expected earnings of $0.51 a share, according to Thomson Reuters. Revenue fell to $1.08 billion from $1.23 billion a year ago, compared with analysts' consensus forecasts of $1.16 billion.

The nub of the matter is Genzyme's ongoing supply shortages for its leading drugs to treat rare diseases due to now well-documented production facility problems (The Pharma Letters passim). Chief executive Henri Termeer noted it was a "difficult quarter," in which the drugmaker's revenue fell below analysts' estimates and last year's figure of $1.2 billion, to $1.1 billion, although he said the "outlook for the second half of 2010 is promising." In particular, he noted that the company expects increased revenue from restored supplies of Cerezyme (imiglucerase for injection for Gaucher's disease) and Fabrazyme (agalsidase beta, for Fabry disease), which fell 53% in sales to $138.7 million and 71% to $39.5 million, respectively, in the quarter.'

The company said it expects earnings excluding one-time items in full-year 2010 of $1.90 a share to $2.00 a share. The company previously said it expected earnings of $2.80 to $3.20. Analysts had been expecting full-year earnings of $2.74 a share. The company said it expects revenue in 2010 of $4.4 billion to $4.5 billion. Previously it said it expected revenue of $5.23 billion to $5.53 billion. Analysts had been expecting revenue of $4.95 billion.