FDA Takes Enforcement Action on Genzyme’s Manufacturing

3/24/10

Genzyme’s manufacturing operations are facing further scrutiny in the aftermath of viral contamination found at its Allston Landing plant last June. The FDA informed the Cambridge, MA-based company (NASDAQ:GENZ) yesterday that the agency is taking action to make sure that the firm is making its products in compliance with manufacturing regulations, according to the company.

Genzyme, the world’s largest maker of enzyme-replacement therapies for rare diseases, is now expecting that the FDA will be reviewing operations at the Allston plant for “an extended period” and may require to the company to make payments to the government. However, the firm says that it doesn’t expect the agency’s actions to interrupt production of its Gaucher disease therapy imiglucerase (Cerezyme) and its Fabry disease treatment agalsidase beta (Fabrazyme), both big moneymakers for Genzyme that are produced at the Allston facility.

The Fabry drug has been in short supply since the viral contamination was discovered at the Allston plant in June, and Genzyme has only recently brought production of the Gaucher treatment up to normal levels after it too was scarce for the second half of 2009. The company is also hoping that the agency’s action doesn’t interrupt finishing work at the plant on alglucosidase alfa (Myozyme), a Pompe disease therapy, and thyrotropin alfa (Thyrogen), which is used in patients with thyroid cancer.

Over the next few weeks, Genzyme plans to discuss the extent of the FDA’s enforcement action with agency officials, said company spokesman Bo Piela. The agency is likely to require its own inspectors or a third party to monitor production at the plant, he said, but the duration of the inspections and how much they will cost the company will need to be worked out with regulators.

In pre-market trading, Genzyme’s stock was down $2.01 or 3.4 percent to $57.09 per share at 9:28 am Eastern time.

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