Genzyme’s 4th-quarter profit falls on lingering impact from supply problems at Boston facility

Genzyme 4Q profit plunges on supply issues

CAMBRIDGE, Mass. — The residual impact from supply problems at Genzyme Corp.’s Boston facility continued cutting into profit during the biotechnology company’s fourth quarter.

Profit dropped to $23.2 million, or 9 cents per share, from $86.7 million, or 31 cents per share, in the year-earlier period. Revenue fell 8 percent to $1.08 billion from $1.17 billion.

Excluding charges, the company said it earned 31 cents per share. Analysts polled by Thomson Reuters expected profit of 29 cents per share on revenue of $1.08 billion.

In June, the company shut down its manufacturing plant in the Boston neighborhood of Allston to clean up viral contamination that had been slowing down production of Cerezyme and Fabrazyme. The virus was not harmful to people, but the shutdown has been costly. Production restarted in September

Meanwhile, in November, the Food and Drug Administration said it found tiny particles of trash in drugs made by Genzyme, including steel, rubber and fiber. The agency recommended that doctors closely inspect vials of Cerezyme, Fabrazyme, Myozyme, Aldurazyme and Thyrogen.

“We are moving into a recovery period, regaining momentum and getting back to delivering sustainable growth this year,” said Chairman and CEO Henri A. Termeer, in a statement. “As we work to smooth the resupply of Cerezyme and Fabrazyme, our diverse product portfolio is contributing meaningfully. At the same time, we are strengthening the company by making changes, bringing in new talent, and investing in existing businesses.”

Sales of Cerezyme plunged to $105.4 million from $306 million a year prior. The drug treats Gaucher disease, an enzyme disorder that can result in liver and neurological problems. Sales of Fabrazyme plunged to $58 million from $125.6 million. That drug 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.

Meanwhile, sales of Myozyme rose 23 percent to $91.9 million. The drug treats Pompe disease, which is a rare disorder that interferes with muscle development and can cause deadly respiratory problems.

For the full year, the company’s profit edged up to $422.3 million, or $1.54 per share, from $421.1 million, or $1.50 per share, in 2008. Revenue fell to $4.52 billion from $4.61 billion.

Looking ahead, the company expects adjusted profit of between $2.80 and $3.20 per share in 2010 on revenue between $5.23 billion and $5.53 billion. Analysts expect profit of about $3.34 per share on revenue of about $5.28 billion.

Since January, the company made several changes to its manufacturing operations, naming Scott Canute president of global manufacturing and corporate operations. He previously lead manufacturing at Eli Lilly & Co.

The company also hired Ron Branning as senior vice president of global product quality and contracted manufacturing for some of its key products to Hospira Inc.

Shares of Genzyme fell 7 cents to $55.44 in midday trading.