Genzyme's 3rd-qtr 2010 profits surge as Cerezyme shipments back on track

US biotech major Genzyme (Nasdaq: GENZ), which is the target of a hostile $69/share or $18.5 billion takeover offer from France’s Sanofi-Aventis (Euronext: SAN), pleased investors yesterday with its third-quarter 2010 results showing significant earnings growth driven by increased shipments of Gaucher disease drug Cerezyme (imiglucerase for injection), which, along with other products, has been hit by production problems (The Pharma Letters passim). Earnings growth in the third quarter was also driven by strong revenue from Lumizyme (alglucosidase alfa) and cost reduction measures, the company said.

Third-quarter revenue was $1.0 billion, compared with $923.8 million in the same period last year. Operating results for the third quarter of 2009 have been revised to exclude the Genetics and Diagnostics businesses, which the company is planning to divest by the end of this year to Laboratory Corporation of America (TPL September 14).

GAAP net income was $69.0 million, or $0.26 per diluted share, compared with $16.0 million, or $0.06 per diluted share, in the third quarter of 2009. Non-GAAP net income was $111.5 million, or $0.42 per diluted share, in line with the company’s guidance, compared with $77.9 million, or $0.28 per diluted share, in the same period last year. Non-GAAP net income excludes stock compensation expenses, costs associated with the acquisition of oncology products from Bayer, and the operations of the Genetics and Diagnostics businesses, as they meet the criteria of discontinued operations. At the end of the third quarter, Genzyme’s cash balance was around $1.2 billion.