CAMBRIDGE, Mass (AP) -- Biotechnology company Genzyme Corp. said Wednesday its profit surged in the third quarter on sales of the key revenue driver Cerezyme, marking a recovery from damaging manufacturing problems last year.
Sales of the enzyme disorder drugs Cerezyme and Fabrazyme suffered over the last year as the company fixed manufacturing issues at its Boston-area facility. The production problems were prompted by viral contamination in the manufacturing process, which caused inventory shortfalls and a drop in sales.
Net income during the third quarter jumped to just under $69 million, or 26 cents per share, from just under $16 million, or 6 cents per share, during the same period a year prior. Revenue rose 8.4 percent to $1 billion from $923.8 million.
Excluding stock-compensation costs, discontinues operations and other charges, the company said it earned 42 cents per share. Analysts polled by Thomson Reuters expected net income of 50 cents per share on $1.08 billion in revenue.
In the third quarter we saw our financial recovery start to take effect, and we expect that this will accelerate during the fourth quarter as Cerezyme patients are able to return to normal dosing levels and we begin to increase shipments of Fabrazyme," said Chairman and CEO Henri A. Termeer, in a statement.
During the quarter, Cerezyme sales doubled to $179.8 million as the company reinstated a full supply of the drug. Cerezyme treats an enzyme disorder called Gaucher disease, which can result liver and neurological problems.
Meanwhile, Fabrazyme sales dropped 71 percent to $33.9 million. The drug treats Fabry disease, which is caused by the buildup of a type of fat in the body's cells.
Sales of another drug, Myozyme, rose 24 percent to $106.2 million. Myozyme treats Pompe disease, which interferes with muscle development. Revenue from Synvisc, which treats osteoarthritis of the knee, rose 14 percent to $100 million. Sales of Genzyme's kidney treatments Renvela and Renagel slipped 2 percent to $178.8 million.
Manufacturing issues had prompted the company to move some operations out of its plant in the Boston neighborhood of Allston. Changes included contracting with Hospira Inc. to handle some of the production while transferring some operations to a facility in Ireland. The company is in the regulatory process of getting clearance for manufacturing at a new plant in Framingham, Mass., late next year.
The company tightened its outlook for the fourth quarter profit to between 90 cents and 95 cents per share from prior guidance of 90 cents per share. Analysts expect 88 cents per share.
Genzyme is currently in a tussle with Sanofi-Aventis after the French drug developer initiated a hostile takeover bid for $69 per share. Genzyme's board had voted unanimously to recommend that shareholders reject the offer. Sanofi-Aventis initially made the offer privately in July, then repeated it publicly in late August, but was rebuffed by Sanofi's board twice.
Genzyme is holding an analyst and investor meeting in New York on Friday, where it plans to offer 2011 guidance and speak about Sanofi-Aventis' offer.
Shares of Genzyme rose 51 cents to $72.40 in morning trading.