Genzyme Corp. Wednesday reported the results of a bleak first quarter, results made even worse by revelation of a draft consent decree relating to its Allston plant troubles that would require the firm to disgorge $175 million in past profits.

The Cambridge, Mass.-based firm reported revenue of $1.07 billion, compared to $1.15 billion during the same period last year. Much of the blame falls in the supply woes with its Cerezyme (imiglucerase for injection) and Fabrazyme (agalsidase beta) franchises.

First-quarter sales of Cerezyme were $179.1 million compared with $296 million in the first quarter of last year. Fabrazyme sales fell from $122.2 million last year to $53.2 million in the past quarter.

Genzyme shares were actually up slightly in Wednesday trading, perhaps out of relief that the $175 million penalty for the Allston plant problems wasn't higher. Noting that that amount is the "likely outcome," the firm went ahead and booked that expense in the first quarter.

If the Allston facility is still operating after deadlines for moving operations, the draft decree provides for penalties of 18.5 percent of revenues from sales of products manufactured there after the deadline.

The company said it and the FDA are still in discussions on the deadlines as well as the details of the disgorgement provisions.

Genzyme said it also faces potential fines of $15,000 per day if certain remediation action deadlines are missed.

The company's financial announcement said it achieved its goal of building a small inventory buffer for Cerezyme during the first quarter. However, it said it will have to continue shipping only 50 percent of demand for the next two to three months because of interruptions caused by an unexpected city electrical power failure that compounded issues with the plant's water system. That problem has been corrected, the firm said.

There was somewhat better news concerning the Fabrazyme manufacturing process. The first run of a new working cell bank resulted in a 30 percent productivity increase, and a second run is under way.

The company's goal is to increase productivity an additional 30 percent, but it still forecasts shipping only 30 percent of demand through the third quarter.

That bodes ill for Genzyme, which will likely continue to lose market share to Shire plc, of Basingstoke, UK, for Vpriv (velaglucerase) in Gaucher's disease. Also Carmiel, Israel-based Protalix BioTherapeutics Inc. and partner Pfizer Inc. expect a review date for their Gaucher's treatment Uplyso (taliglucerase) later this year.

Genzyme said it will continue to work with minimal levels of inventory for Cerezyme and Fabrazyme until the company's new Framingham, Mass., manufacturing facility is approved (probably late 2011) "and any additional manufacturing delays will likely impact supply of these products."

Genzyme shares (NASDAQ:GENZ) gained 87 cents, closing at $54.45 Wednesday.