Genzyme Corporation (GENZ)

Q2 2010 Earnings Conference Call

July 21, 2010 11:00 AM ET


Patrick Flanigan – Senior Director, IR

Henri Termeer – Executive Chairman, CEO, President

Mike Wyzga – CFO

Ron Branning – SVP, Global Product Quality

Scott Canute – President of Manufacturing & Corporate Operations

John Butler – SVP; President, Cardiometabolic & Renal

Pamela Williamson -- Head of Global Regulatory Affairs

Mark Enyedy – SVP and President Genzyme Oncology


Jim Birchenough – Barclays Capital

Eun Yang – Jefferies

Michael Yee – RBC Capital Markets

Brian Abrahams – Oppenheimer

Josh Schimmer – Leerink Swann

Yaron Werber – Citi

Geoff Meacham – JP Morgan

Ian Somaiya – Piper Jaffray

Geoffrey Porges – Bernstein

Chris Raymond – Robert Baird

Rachel McMinn – Merrill Lynch

Mark Schoenebaum – ISI Group

Phil Nadeau – Cowen & Co.

Jon Stephenson – Summer Street Research

Shiv Kapoor – Morgan Joseph

Salveen Kochnover – Collins Stewart



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Welcome to Genzyme Corp. Second Quarter Financial Results Conference Call. (Operator Instructions) I would now like to turn the call over to Mr. Patrick Flanigan, Senior Director of Investor Relations. Sir you may begin.

Patrick Flanigan

Thanks, (Scott), and welcome everyone to Genzyme Corp.'s second quarter earnings conference call. As a reminder on this call we will be making forward-looking statements, including those regarding our 2010 financial guidance, our Cerezyme and Fabrazyme shipping plans and product allocations, the shareholder value creation plan that we outlined last May, our manufacturing operations, our product development plans and time table and our assessment of the future of the business.

These statements are subject to risks and uncertainties that may cause actual results to be different from those forecasted. Please refer to the Risk Factors section of our March 31st 10-K on file with SEC for more information on these risks. These statements speak only as of today's date and we undertake no duty to update or revise them.

I will now hand the call over to Genzyme's Chairman and CEO, Henri Termeer.

Henri Termeer

Thank you, Patrick, and thank you everybody participating this morning. As usual we have a number of Senior Executives here who can respond to – in the Q&A session. Mike Wyzga's here, our Chief Financial Officer; Scott Canute will talk about present manufacturing operations, we'll talk about where we are in the recovery of our manufacturing capacity; Ron Branning, our Senior Vice President, Global Quality, is here for a Cabarticle Degree; John Butler will talk about where we are at DGH and managing this tough moment very calm, quite supply of Cerezyme and Fabrazyme that needs in the marketplace and of course he will talk about Lumizyme introduction. David Meeker's not here but he's on the call and he's available for response. He's in Singapore. He's our Chief Operating Officer and he can chime in as we go along.

And a number of senior executives are here for this comp to till the Q&A.

The second quarter, as expected, was a difficult quarter financially. At the beginning of the quarter, we guided that we would supply Cerezyme at 50% of demand through July and Fabrazyme is 70% of demands through September, and the results to be reported today are consistently set.

We see supply constraints ease, currently for Cerezyme and in the next quarter for Fabrazyme, and we have attached a new guidance accordingly. We also adjusted guidance for the divestitures and exchange rate, changes in Health Care Reform impact and the (percent) degree impact from a number of (various) details that were attached to the press release. But I think in a very detailed way gets us to where we were in the beginning of the year intentions guidance to where we now are expected to be for the total year. We also took into account the revenues for to be the best of businesses for the second half.

We are very focused on the value creation activities that we've spoken about in recent calls of this kind. There's clearly no more impactful element here is to resupply the Cerezyme and Fabrazyme market needs. And we will get in a picturesque where are – it is encouraging where we are. We are seeing the kind of progress that we're hoping for since our becoming much more novelized. We are working our way risk this product to the point that can become released and can be – supply patients around the world. It's a very encouraging moment. We are at the tail end of this very, very tough year that lift all together.

Very exciting is of course the launch of Lumizyme. It's as expected to go with the ramps and setting up the ramps and certifying et cetera, et cetera. It is a little bit – it takes a little while to get that going. But you'll not (inaudible) if you pull updates. It's obviously quite exciting to be able to bring that product to all patients in the United States and not having the limitations that we've lived on that for two years.

We deeply engaged in an effort to really understand all the costs and cooperation and ways to work more efficiently and stream line operations. And in the full, we will be communicating with you what the impacts of the actions that will follow this review. We're very much engaged in preparing for the Alemtuzumab (MS story). This is a very important driver. It's not just a new product but this is a major new element for the corporation. We are now half way through the clinical trials. We'll see the results next year summer for the first trial, a few months later for the second trial. We have many meetings reviewing the regulatory approach, the regulatory standard use and the cause of due trials. Well, the (inaudible) faster than we expected. And then so close together, we will be filing for regulatory actions dispose trials at once. This is a very exciting program that is taking increasing resources in the preparation of the launch that you would now expect late 2012 and abroad 2013.

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