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Genzyme sees no supply disruption after FDA letter

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Wednesday, March 04, 2009

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BOSTON - Genzyme Corp (GENZ.O) said it does not expect production of its biggest-selling drugs to be disrupted by its receipt of a warning letter from U.S. regulators over flaws at one of its manufacturing facilities.

Shares of the Cambridge, Massachusetts-based biotechnology company fell 7 percent on Tuesday after the company said the U.S. Food and Drug Administration failed to approve the plant to produce Myozyme, its drug for the rare muscle disorder Pompe disease, in larger quantities.

The FDA issued a warning letter to the company related to deficiencies identified by FDA inspectors five months ago at the company's Allston facility in Boston.

The letter, announced late on Monday, came as a surprise to investors who fear the manufacturing deficiencies could interrupt production of several other big Genzyme drugs -- Cerezyme, for Gaucher disease and Fabrazyme, for Fabry disease, which are also made at the plant.

Mark Bamforth, Genzyme's senior vice president of corporate operations and pharmaceuticals, said in an interview that the FDA's manufacturing concerns fall into three categories. One relates to controls to protect against microbial contamination, the second to equipment maintenance, and the third to validation and checking of computer systems.

FDA inspectors first identified the flaws last year and Genzyme supplied a plan to fix the deficiencies, Bamforth said. Last week, Genzyme told the agency it had addressed 80 percent of its concerns and was on track to address the rest by the end of the first quarter.

However, Bamforth said, the FDA wants more details about the remedial plan. The company has agreed to meet with the agency later this week.

Bamforth, who said the company was surprised to receive the warning letter, said the company does not expect production of any of its drugs to be interrupted.

"We have had no impact on our supply since the inspection five months ago and we don't anticipate any impact on our supply," he said.

Still, some analysts are more cautious, saying the warning letter raises concern about supplies of Cerezyme and Fabrazyme.

"The risk of interruption to their supply is likely to be discounted into Genzyme's stock price until the warning letter is fully resolved," said Geoffrey Porges, an analyst at Sanford Bernstein.

BioMarin Pharmaceutical Inc (BMRN.O), whose drug Aldurazyme is finished at the Allston plant and marketed by Genzyme, said it does not expect the manufacturing deficiencies to affect supply of the drug, which is a treatment for a rare disorder known as mucopolysaccharidosis 1, or MPS 1.

"The warning letter does not require Genzyme to recall or quarantine product," the company said in a statement. "BioMarin and Genzyme have sufficient quantities of finished product on hand to meet current demand and can fill additional product at a qualified alternate fill finish supplier."

Genzyme is seeking approval to sell Myozyme in the United States based on a 2000-liter production process. The FDA is still seeking agreement on the design of a post-marketing trial and on steps needed to ensure the drug reaches the right patients and is administered properly.

Genzyme's shares fell $4.04, or 7.15 percent, to close at $52.48 on Nasdaq.

© Thomson Reuters 2009 All rights reserved

Author: By Toni Clarke
Source: Reuters
1.0 from 2 votes
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