Genzyme 2Q profit rises, outlook cut on production
Genzyme's 2nd-quarter profit rises on lower expenses, but outlook slashed on production woes
On Wednesday July 22, 2009, 3:51 pm EDT
CAMBRIDGE, Mass. (AP) -- Genzyme Corp.'s second-quarter profit more than doubled, mainly on lower charges and research and development expenses, but the company slashed its outlook because of production issues at a Boston facility.
On Wednesday, the company said it earned $192.2 million, or 70 cents per share, up from $69.6 million, or 25 cents per share, during the same period a year prior. Revenue rose 5 percent to $1.23 billion from $1.17 billion. A year prior, the company had a hefty charge for buying rights to an Isis Pharmaceuticals product.
Excluding charges in the most recent quarter, the company said it earned 85 cents per share. Analysts polled by Thomson Reuters expected profit of 85 cents per share on revenue of $1.26 billion.
The biotechnology company focuses on treatments for rare diseases, including Myozyme for Pompe disease. That rare disorder interferes with muscle development and can cause deadly respiratory problems. The company had been facing supply problems in both the U.S. and Europe, but said it is solving the issue. It recently received approval for a larger-scale production process in Europe, but doesn't expect similar approval in the U.S. until the first quarter of next year.
More recently, the company had to shut down a Boston facility making the genetic disorder treatments Fabrazyme and Cerezyme. The June shutdown of bioreactors at that facility followed the discovery that a virus was impairing cell growth of the drugs. The facility is expected to be operational in July, but the shutdown prompted deep cuts in full-year guidance.
Myozyme revenue rose slightly to $79.3 million during the quarter, while sales of the kidney-disease treatments Renagel and Renvela rose 4 percent to $175.4 million, and revenue from Fabrazyme rose 6 percent to $134.3 million. Fabrazyme treats an inherited disorder known as Fabry disease, which is caused by the buildup of a particular type of fat in the body's cells.
Operating costs and expenses fell 10 percent to $979.8 million, mainly on lower research and development costs.
The company slashed its 2009 outlook because of the temporary shutdown in Boston. It now expects adjusted profit between $2.35 and $2.90 per share, down from prior guidance of about $3.52 per share. Revenue guidance was cut to between $4.6 billion and $5 billion from a prior range of $5.15 billion to $5.35 billion.
Analysts expect full-year profit of $3.31 per share on revenue of $4.96 billion.
Shares of Genzyme fell $4.81, or 8.6 percent, to $51.10 in afternoon trading. The stock has traded between $50.05 and $83.97 over the past 52 weeks.
