Genzyme Shares Tank After FDA Discovers Bits of Steel, Rubber in Five Different Drugs

[Update: 6:22 pm Eastern, 11/13/09] Just when you thought it couldn’t get worse for Genzyme, it did. The FDA reported today that it has found tiny bits of garbage—steel, rubber, and fiber—in vials of five of the major drugs produced by the Cambridge, MA-based biotech company.

Genzyme (NASDAQ: GENZ) shares fell $3.89, or about 7 percent, to $49.28 at the close of trading today after the FDA made its disclosure on its website.

The agency said it found the new contamination in five of Genzyme’s top-selling products—imiglucerase (marketed as Cerezyme), agalsidase beta (Fabrazyme), alglucosidase alfa (Myozyme), laronidase (Aldurazyme), and thyrotropin alfa (Thyrogen), according to a report from the Associated Press. The FDA estimates the contamination only affects about 1 percent of Genzyme’s products, and the agency says that no serious side effects have been reported related to the latest contamination, according to the AP.

This is the latest major setback for Genzyme’s manufacturing operation, which was hit by a viral contamination in June that forced it to shut down production at its Allston Landing plant over the summer. That earlier contamination caused Genzyme to slash its sales estimates for the year, and created a new opportunity for competitors like Shire and Protalix Biotherapeutics.

Christopher Raymond, an analyst with private equity firm Robert W. Baird who covers Genzyme, said in a note to clients today that the latest contamination shouldn’t affect the company’s ability to start shipping new batches of imiglucerase and agalsidase beta to patients, but noted that “continued issues at Allston, and the fact that FDA inspection of Allston remains ongoing is not encouraging.” Fellow Baird analyst Tom Russo noted that “underscores the upside potential” of Shire to gain new market for its products.

[Updated comment from Genzyme, 6:22 pm Eastern, 11/13/09]

Genzyme issued a statement later Friday about the situation. The company says a global review of its safety database “has not identified any safety concerns to suggest that patients treated with Genzyme products have been exposed to foreign particles. However, a theoretical safety risk remains should a particle enter the bloodstream.”

The company added that doctors are being reminded to visually inspect vials for foreign particles before patients are injected. It says the rate of foreign particles in vials has not increased over time, although the company “remains committed to reducing the frequency of foreign particles in all of our products.”

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One response to “Genzyme Shares Tank After FDA Discovers Bits of Steel, Rubber in Five Different Drugs”

  1. biotech guy says:

    This is truly a bit of muckraking as others have suggested. Why aren’t reporters digging a little deeper into this story? Why has the FDA chosen to leak information it has held on to for more than 10 years? Why are they reporting that the particulates found are <1% of manufactured lots when the numbers are closer to <0.01%? This is far lower than the foreign matter threshold for injectable drugs in the industry. Particulates are common in injectable drugs, that is why there is a published threshold for them (in the USP). This smacks not only of sensationalism, but also poor journalism. Did you know that the former Director of Quality from the Genzyme Plant is now the VP of Manufacturing at Shire Pharmaceuticals? Why is it then, that now, after decades of "not taking sides" between pharmaceutical brands, the FDA advocates (yes, outright recommendation) for Shire drugs which compete with Genzyme markets to be approved without clinical trials? Does that sound safe or even positive for the industry? It smells of corruption and dirty politics to me. That is very well the probable source of this "garbage" your so-called journalists allude to.