Posting an 18 percent revenue hike over last year's figures, Cambridge, Mass.-based Genzyme Corp. soundly beat analyst estimates in its second quarter earnings.
The company reported total revenue of $933.4 million for the three months ending June 30, a significant jump from the $793.4 million reported for the second quarter of 2006. Non-GAAP net income was $238.7 million, or 88 cents per share, higher than the 81 cents per share estimated by analysts. GAAP net income came to $139.9 million, or 51 cents per share. The news pushed Genzyme's stock (NASDAQ:GENZ) up $3.49 Wednesday to close at $63.98.
The company, which now has posted higher-than expected earnings for the first six months of the year, expects to exceed its 2007 non-GAAP earnings guidance of $3.20 to $3.30 per share. More significantly, Genzyme said, it anticipates that its earnings will grow at a compound average of 20 percent annually from 2006 through 2011.
The second-quarter revenue boost primarily came from growing product sales in its enzyme replacement therapies and its renal business. Sales of Myozyme (alglucosidase alfa), which was launched last year for Pompe disease, totaled $46.7 million for the quarter, and Genzyme is working on gaining approval for that drug in additional markets. The company reported sales of $104.3 million for Fabrazyme (agalsidase beta) in Fabry's disease, $283 million for Cerezyme (imiglucerase) for Gaucher's disease and $29.1 million for Aldurazyme (laronidase) for mucopolysaccharidosis I.
In its renal business, Renagel (sevelamer hydrochloride) sales totaled $145 million and Hectorol (doxercalciferol) came in at $27.3 million.
Other revenue, including oncology revenue, totaled $71.4 million. Oncology products include Clolar, which Genzyme hopes to gain full rights to following an acquisition of partner Bioenvision Inc., of New York, in a proposed $345 million cash deal. A merger vote by Bioenvision shareholders is expected before the end of the year. In the meantime, Genzyme is working to expand the label for Clolar (clofarabine), which is approved for pediatric acute lymphoblastic leukemia, to adult acute myeloid leukemia. (See BioWorld Today, May 30, 2007.)
Over the next six to 12 months, Genzyme plans to seek approval for Mozobil (plerixafor), a product aimed at improving the outcome of stem cell transplantation procedures that recently demonstrated three times greater effect compared to standard of care in a Phase III trial involving patients with non-Hodgkin's lymphoma. The company awaits results from a similar study in multiple myeloma. It also is planning a U.S. launch for Renvela (sevelamer carbonate), a second-generation, buffered form of Renagel that can treat patients with chronic kidney disease who have not progressed to dialysis, and to gain approval of Campath (alemtuzumab) as a first-line treatment for B-cell chronic lymphocytic leukemia. Campath currently is approved for B-CLL patients who have been treated with alkylating agents and who have failed fludarabine therapy.
Genzyme's cash at the end of the quarter totaled about $1.5 billion, putting the company in position to continue its repurchasing program over the next three years. In the second quarter, Genzyme repurchased about 1 million shares.
Alexion Soars On Earnings Report
In other news, shares of Alexion Pharmaceuticals Inc. jumped more than $8 after the Cheshire, Conn.-based firm released its second-quarter earnings showing a smaller-than-expected loss.
Alexion reported total revenues of $9.8 million, all from sales of recently launched Soliris, and a net loss of $27.2 million, or 75 cents per share. Analyst estimates, in comparison, had predicted revenue of $4 million and an earnings-per-share loss of $1.03 for the quarter. Wall Street's reaction was clear, with Alexion's stock (NASDAQ:ALXN) gaining $8.70, or 17.5 percent, Wednesday to close at $58.38.
Soliris (eculizumab) hit the market in April for the treatment of paroxysmal nocturnal hemoglobinuria, a rare blood disorder believed to affect about 8,000 to 10,000 people across North America and Europe. Soliris is the first drug on the market to actually treat PNH, a disease that is characterized by hemolysis, or the chronic destruction of red blood cells. The product is designed to work by selectively blocking terminal complement, the part of the immune system implicated in PNH red blood cell destruction. (See BioWorld Today, March 19, 2007.)
The drug gained approval in Europe last month, and Alexion is working to complete the reimbursement procedures, which must be done on a country-by-country basis in the European Union. The company expects Soliris to be commercially available in Germany and the UK in the fourth quarter, followed by other regions. Soliris is under review in Australia.
As of June 30, Alexion had a cash position of $152.4 million.