Genzyme's Big Bet on Cancer

That's not so bad, Malloy said in a research report last month, because it shows Genzyme is diversifying its product offerings. She has an in-line rating on the stock. (She doesn't own shares, but her firm is a market maker in the stock and has had an investment banking relationship with the company.)

One big challenge, Malloy added, is the growth potential of Renagel, a drug for patients with end-stage kidney disease undergoing hemodialysis. Malloy said Renagel's sales could come under pressure from new drugs as well as from proposed changes in Medicare reimbursement policies due to take effect in 2006. She is looking for full-year sales of $330 million, at the low end of Genzyme's guidance for $325 million to $345 million.

In another complication, Genzyme four weeks ago said it was restating 2003 results because of an adverse ruling by a British government agency involving a company drug.

As a result, Genzyme revised its fourth-quarter GAAP net income to $57.3 million, or 25 cents a share, compared to the first-reported net income of $66.7 million, or 29 cents a share. Fourth-quarter revenue was revised to $476.1 million from $481.2 million.

The company also said full-year 2003 income was reduced to $94.3 million, or 42 cents a share, compared to $103.7 million, or 46 cents a share, as previously announced. Total revenue was revised downward to $1.574 billion from $1.579 billion.