Genzyme Posts Lower Profits, Says Renagel Worries Nearly Over

Genzyme (GENZ Quote - Cramer on GENZ - Stock Picks) posted lower third-quarter profits Wednesday, hurt as expected by slumping sales of its drug Renagel.

Genzyme was expected to post poor results based on a hefty sales and profit warning issued last month. In fact, the Cambridge, Mass.-based firm has lowered guidance three times this year.

But Genzyme insists that its Renagel troubles -- too much of the drug sitting on warehouse shelves -- are nearing an end. And the company is feeling a bit more confident about approval of its experimental Fabry disease drug, Fabrazyme, now that a rival drug from Transkaryotic Therapies (TKTX Quote - Cramer on TKTX - Stock Picks) has run into a regulatory roadblock.

On a reported basis, Genzyme earned $53.4 million, or 25 cents per share, in the third quarter.

Pro forma income in the quarter totaled $57.9 million, or 27 cents per diluted share, before certain charges and special items. This compares to pro forma net income of $64.1 million, or 30 cents per share, in the third quarter last year. Analysts were expecting pro forma third-quarter earnings of 28 cents per share, down from expectations of 33 cents per share last month, according to Thomson Financial/First Call.

Revenue in the quarter rose 7% to $272.8 million, compared to $255.1 million in the third quarter last year. Sales of Renagel, a drug used by patients undergoing kidney dialysis, totaled $37 million, well off sales from the year-ago quarter but within reduced guidance of $36 million to $40 million.

Cerezyme, a treatment for Gaucher disease, racked up third-quarter sales of $157.5 million, an increase of 10% over the comparable year-ago period.

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