Genzyme Corp. beat many analysts' estimates for the second quarteras the company Thursday reported earnings of 55 cents per share.
The Cambridge, Mass., company's earnings increased from the 46cents reported in the comparable period last year and came in 3 centsabove the consensus estimate of 52 cents. Net income increased 56percent from a year ago, to $20.3 million, on revenues of $114million.
Leading the way was sales of Ceredase and Cerezyme for Gaucher'sdisease at $64 million, a quarterly record and 21 percent higher thana year ago. International sales increased 37 percent.
Chairman and CEO Henri Termeer said Genzyme now is projectingthat sales of the products could reach $300 million per year, $50million more than the company had been estimating. A fourth-quarterlaunch in Japan should spur that growth, he said.
"The numbers are right on target with our year-long estimates," saidEdmund Debler, a Mehta & Isaly analyst who is expecting Genzymeto post earnings per share of $2.10 to $2.15 for the year.
Mehta & Isaly, of New York, was bearish on the stock(NASDAQ:GENZ) earlier this year when it was trading at more than$60. In the $44 range, where it is now, "the stock is getting ratherattractive," Debler said.
The earnings concerns going forward, he said, come from pressurerelated to stock dilution and questions about eventual revenues fromGenzyme's products to reduce surgical adhesions. The recent $250million purchase of the surgical products company DeknatelSnowden Pencer Inc., of Fall River, Mass., could prove to be a goodmove as far as helping sales, Debler said.
An FDA advisory panel recommended approval of the lead productfrom the line, Seprafilm, in March 1996, and approval could come atany time, said Genzyme spokeswoman Cheryl Greenhouse. Aproduct market application on another product, Sepracoat, was filedlast January. Testing on a third product from the line, Sepragel, isexpected to begin this quarter.
Genzyme's stock will undergo a 2-for-1 split today. The company'soutstanding shares will double, from about 37 million to 74 million.Genzyme shareholders on Wednesday approved an increase of thenumber of authorized shares by 100 million, bringing the number upto 200 million. n
-- Jim Shrine
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