Genzyme Nabs Two Key Regulatory Approvals, Expected to Trigger Revenue Growth
Genzyme has picked up a pair of long-awaited regulatory approvals for two products that are key to the firm’s growth. The Cambridge, MA-based biotech powerhouse (NASDAQ:GENZ) says that the European Commission has approved its Belgium plant to produce Pompe disease drug alglucosidase alfa (Myozyme) in 4,000-liter batches. Separately, the firm garnered FDA approval of its long-lasting injection hylan G-F 20 (Synvisc-One) for treating pain from osteoarthritis of the knee.
The company says that the European approval will make larger supplies of alglucosidase available immediately, and the boosted supplies are expected to increase sales of the treatment in the second quarter of this year. Specific financial forecasts weren’t given. The firm said last year that 2008 sales of the treatment were expected to be in the range of $275 million to $285 million.
Last spring Genzyme cut its 2008 sales forecasts for alglucosidase by $45 million after the FDA told the company that supplies of the treatment made in a larger, 2,000-liter bioreactors—rather than the 160-liter reactors for which the treatment was first approved—should be considered different products. There are slight differences in the carbohydrate structure of the drug made in the larger reactor. In November, the company said that the FDA is expected to say whether it can sell the treatment made in larger batches by February 28.
Alglucosidase is the only approved treatment for Pompe disease, which is a genetic disease that can cause debilitating muscle weakness and fatal respiratory failure.
On the knee-pain front, the U.S. approval of hylan G-F 20 is two months overdue, as the FDA action date was set for December 23. The approval is important to Genzyme in part because a single shot of the treatment—intended to replace the loss of pressure-absorbing synovial fluid—can last for up to six months, while the firm’s earlier version of the treatment requires three injections. This added convenience is expected to give the company a new competitive edge in the market. The firm says that the latest version, already approved in parts of Europe, Asia, and Latin America, was used to treat about 10,000 patients last year.
Robert W. Baird analyst Christopher Raymond, who reiterated his “outperform” rating on Genzyme’s stock this morning, said that he expected revenue on alglucosidase to jump 49 percent this year to $440 million. He also forecasted revenue from hylan G-F 20 injections would grow from an estimated $321 million this year to $339 million in 2010.