Genzyme Corp. said revenues for the third quarter of 1996 soaredalmost 50 percent over the same quarter a year ago with increasedsales of its Gaucher's disease drugs, Ceredase and Cerezyme, and theaddition of a line of surgical products from a buyout of DeknatelSnowden Pencer.
Genzyme, of Cambridge, Mass., said total revenues topped $140million compared with $94.5 million in the third quarter of 1995.
Genzyme posted a net income of $21.6 million, or 29 cents per share,excluding one-time charges associated with the $250 millionpurchase of Deknatel Snowden Pencer, of Fall River, Mass. Theprivately held surgical instruments firm was acquired to help boostmarket introduction of Genzyme's post-operative anti-adhesiondevices, Seprafilm and Sepracoat.
The 29 cents per share earnings beat Wall Street analysts' estimatesby 2 cents.
Subtracting the Deknatel Snowden Pencer acquisition charges of$27.5 million, or 38 cents per share, Genzyme recorded a net loss of$6 million, or 9 cents per share. For the third quarter of 1995,Genzyme's net income was $16 million, or 27 cents per share.
Nine-month figures for 1996 reveal a net income of $33.4 million, or46 cents per share, including the charges for the surgical productsfirm buyout. For the same three quarters of 1995, Genzyme recordeda profit of $41 million, or 71 cents per share.
Genzyme credited product sales from Deknatel Snowden Pencer anda boost in Ceredase and Cerezyme sales for the increase in totalrevenues for the third quarter of 1996.
Revenues from surgical products were $25.2 million, including salesof Seprafilm, which was approved in the U.S. in August.
Ceredase and Cerezyme revenues for the quarter reached $69 million,which the company said was a record. The sales total was 24 percenthigher than the $55.6 million in the same quarter of 1995.
Gaucher's disease is a potentially fatal genetic disorder caused by adeficiency in the enzyme, glucocerebrosidase, which results in avariety of problems, including anemia, bleeding and enlarged liver orspleen. An estimated one in 40,000 to 60,000 people worldwide areafflicted with the disease.
The high annual cost of treatment with Ceredase, about $150,000 perpatient, has been a source of controversy. Ceredase is derived fromhuman placental tissue. Cerezyme is a recombinant form of theenzyme, which has been produced on a small scale.
In addition to releasing its quarterly fiscal report, Genzyme Thursdaysaid the FDA has approved the manufacture of Cerezyme at thecompany's large-scale production plant in Boston. The process oftransferring patients from Ceredase to Cerezyme will begin this yearand continue through 1997.
Switching patients from Ceredase to Cerezyme is not expected toalter the price of the drug, but it is expected to boost the company'sprofit margin. The cost of manufacturing the recombinant enzyme isless than the cost of extracting it from natural tissue.
Genzyme has estimated 1996 revenues from Ceredase and Cerezymeof more than $260 million.
Reijer Lenstra, an analyst with Smith Barney in New York, saidgreater use of Cerezyme is expected to boost sales by attracting morepatients _ particularly in Europe _ who did not want to useCeredase. He has estimated 1997 sales of the Gaucher's diseasetreatment at $305 million.
Although the Ceredase and Cerezyme news was positive, Lenstra saidother product sales were weak, such as those in Genzyme'sdiagnostic and pharmaceutical groups. In addition, he noted DeknatelSnowden Pencer's sales appear to account for nearly all of thesurgical products revenues, suggesting Seprafilm sales are slow.
Genzyme did not separate its first month of Seprafilm sales from thetotal amount of surgical products revenues. The company has said itspost-surgical anti-adhesion products have the potential to be itsbiggest revenue producer.
Also in the third quarter of this year, Genzyme offered to buy back itscystic fibrosis research spin-off, Neozyme II Corp., for $109 million.The research company, formed in 1992, has focused on developmentof gene therapies for cystic fibrosis.
Genzyme's stock (NASDAQ:GENZ) closed Thursday at $24.25, up$0.75 n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.