Genzyme Shares Tank After FDA Discovers Bits of Steel, Rubber in Five Different Drugs
[Update: 6:22 pm Eastern, 11/13/09] Just when you thought it couldn’t get worse for Genzyme, it did. The FDA reported today that it has found tiny bits of garbage—steel, rubber, and fiber—in vials of five of the major drugs produced by the Cambridge, MA-based biotech company.
The agency said it found the new contamination in five of Genzyme’s top-selling products—imiglucerase (marketed as Cerezyme), agalsidase beta (Fabrazyme), alglucosidase alfa (Myozyme), laronidase (Aldurazyme), and thyrotropin alfa (Thyrogen), according to a report from the Associated Press. The FDA estimates the contamination only affects about 1 percent of Genzyme’s products, and the agency says that no serious side effects have been reported related to the latest contamination, according to the AP.
This is the latest major setback for Genzyme’s manufacturing operation, which was hit by a viral contamination in June that forced it to shut down production at its Allston Landing plant over the summer. That earlier contamination caused Genzyme to slash its sales estimates for the year, and created a new opportunity for competitors like Shire and Protalix Biotherapeutics.
Christopher Raymond, an analyst with private equity firm Robert W. Baird who covers Genzyme, said in a note to clients today that the latest contamination shouldn’t affect the company’s ability to start shipping new batches of imiglucerase and agalsidase beta to patients, but noted that “continued issues at Allston, and the fact that FDA inspection of Allston remains ongoing is not encouraging.” Fellow Baird analyst Tom Russo noted that “underscores the upside potential” of Shire to gain new market for its products.
[Updated comment from Genzyme, 6:22 pm Eastern, 11/13/09]
Genzyme issued a statement later Friday about the situation. The company says a global review of its safety database “has not identified any safety concerns to suggest that patients treated with Genzyme products have been exposed to foreign particles. However, a theoretical safety risk remains should a particle enter the bloodstream.”
The company added that doctors are being reminded to visually inspect vials for foreign particles before patients are injected. It says the rate of foreign particles in vials has not increased over time, although the company “remains committed to reducing the frequency of foreign particles in all of our products.”