Genzyme Corp. on Wednesday reported a 40 percent increase inoperating profit from a year earlier and record sales from productsand services for the quarter that ended March 31.
The Cambridge, Mass., company's after-tax profit increased 18percent to $12 million, or 43 cents per share, 1 cent more thananalysts' consensus projection. Product and service sales were arecord $80.7 million, an increase of 20 percent from the same periodlast year.
"The quarterly numbers came in better than expected," David Stone,a managing director in Cowen & Co.'s Boston office, told BioWorld."Product sales were right in line with our model. Gross margin washigher than we expected, and operating costs were somewhat lowerthan we projected. Revenues are growing and costs are under control.The news is good."
Sales of the company's lead products, Ceredase and Cerezyme forGaucher disease, were $49 million for the quarter, 29 percent higherthan in the first quarter of 1994.
Stephen Push, Genzyme's vice president for corporatecommunications, said the company is projecting 1995 sales of $200million for the Gaucher products. Increased sales of Ceredase andCerezyme were responsible for much of the company's recordrevenue, and international sales of the products helped fuel thatincrease.
International sales of the drugs increased 69 percent from thecomparable 1994 quarter to about $19 million, which representsabout 39 percent of total sales of Ceredase and Cerezyme.
"We've reached many of the [Gaucher] patients in the U.S.," Pushtold BioWorld. "That's why most of the growth is outside the U.S.We estimate the potential market in Europe is about equal to theU.S., but we've only begun to tap that market."
Cerezyme (recombinant glucocerebrosidase) eventually will replaceCeredase, the natural version of the enzyme, which is derived fromhuman placenta. A Cerezyme manufacturing facility being builtoutside Boston is expected to be ready in the latter part of 1995,easing the supply constraints on the recombinant drug. But Push saidsupplies of Ceredase are adequate now.
"The good numbers were a result of healthy revenue growth andtightly controlled expenses, and we are going to continue that strategyfor the time being," Push said. "I don't see any significant changes inthe company's direction until we get the HAL-F product approved."
HAL-F is a synthetic membrane used to prevent adhesions followingsurgery. Company officials said it has the potential to be their biggestproduct. Results from a second trial of HAL-F are expected thissummer, which, if positive, would be followed by regulatory approvalfiling. Among other HAL products in development is HAL-C, acoating solution designed to prevent adhesions. It also is in pivotalclinical studies.
Genzyme has about 27.9 million shares outstanding. It released itsfirst quarter numbers after the market closed Wednesday. Genzyme'sstock (NASDAQ:GENZ) closed at $38.50 Wednesday, down 25cents. n
-- Jim Shrine
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