By Randall Osborne
Genzyme Corp. pledged up to $66 million for ongoing product development by its subsidiary, Genzyme Tissue Repair (GTR), which has scored one success in Carticel for knee damage, and is working on treatments for Huntington's and Parkinson's diseases.
The vote of confidence follows a first-quarter earnings report showing GTR's sales of Carticel, which uses autologous cultured chondrocytes to repair cartilage on the thigh bone part of the knee, jumped 33 percent from the fourth quarter of last year.
GTR, one of three divisions of Genzyme with separate tracking stock, won FDA approval of its biologics license application for Carticel last August.
Genzyme, of Cambridge, Mass., has increased the amount of equity credit available to GTR from $12 million to $50 million. Under terms of the equity line, GTR may draw down funds as needed quarterly in exchange for designated shares of its common stock.
The parent company also will buy GTR's Framingham, Mass., manufacturing facility — of which Genzyme currently leases about 60 percent for its own research and development — for $16 million.
GTR will lease back from Genzyme a portion of the plant now used for its Neurocell-PD and Neurocell-HD programs for treatment of advanced Parkinson's and Huntington's diseases, respectively. Those products are being developed in a partnership with Diacrin Inc., of Charlestown, Mass.
Phase II Growth Factor Trial Fully Enrolled
Patient accrual in a Phase II clinical trial testing another product, transforming growth factor-beta2 (TGF-Beta2) for chronic skin ulcers, is complete.
"It's a protein that helps promote wound healing by stimulating the growth of connecting tissue," said Bo Piela, spokesman for GTR. "We initiated the trial, involving 200 diabetic patients with foot ulcers, in the fourth quarter of 1995, and it will be completed by the end of this year."
GTR will seek a partner to push the treatment to market.
Thanks to the sale of the manufacturing facility coupled with the company's current resources, GTR does not anticipate needing the increased equity line until 1999. As of March 31, the company had $21.7 million in cash, with a net loss of $11.3 million for the quarter.
GTR's stock closed Wednesday at $6.562, up $0.062. Genzyme (NASDAQ:GENZ) ended the day at $25, down $1.437. *