Genzyme Corp., of Cambridge, Mass., released its fourth-quarter andannual results for the year ended Dec. 31, 1994 on Wednesday. Thecompany's General Division reported after-tax profits of $14.1million or 37 cents per share for the fourth quarter, excluding one-time special charges.
One-time fourth quarter charges included a $9.4 million write-downof investment portfolio losses (including losses on investments inArgus Pharmaceuticals Inc. of The Woodlands, Texas, and CeltrixPharmaceuticals Inc. of Santa Clara, Calif.) and a lawsuit settlementof $2 million. Net income after the special charges was $2.2 millionor 9 cents per share as compared to a net loss for the fourth quarter of1993 of $16.5 million, or 68 cents per share.
Revenues for 1994 totaled $310.7 million, an increase of 17 percentover 1993's $265.7 million. Net income for the year, before specialcharges, totaled $39.5 million or $1.51 per share. After charges, netincome was reduced to $32.1 million or $1.22 per share as comparedto net income of $17.8 million or $0.68 per share in 1993.Ceredase/Cerezyme sales for 1994 totaled $172 million, representingan annual increase of 38 percent.
According to David Stone, an analyst at Cowen & Co. in Boston,Genzyme's General Division results were "in line with what wasexpected." Analysts' consensus estimate for after-tax profits was 38cents per share. However, while Stone had predicted a gross marginon product sales of 56 percent, the company reported margins of 55percent.
Stone said that results from clinical trials of Genzyme's hyaluronicacid (HA) surgical products, known as HAL-F and HAL-C, will becritical to the company. Those products, designed to prevent theformation of scar tissue during various kinds of surgery, have thepotential to generate as much as $500 million per year by Stone'sreckoning and they represent the company's future earnings growth.
Key results from clinical trials testing the devices will be made publiclater this year at scientific meetings. In a conference call with analystson Wednesday, Genzyme CEO Henri Termeer predicted thatCeredase/Cerezyme sales would top $200 million in 1995.
Genzyme stock (NASDAQ:GENZ) closed on Thursday at $41.13, up$2.38 a share. n
-- Lisa Piercey Washington Editor
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