beat first-quarter targets and boosted full-year guidance, but investors worried about possible competition for a key kidney drug.
The Cambridge, Mass., biotech company reported first-quarter net income of $95.6 million, or 36 cents a share, compared with $67.9 million, or 29 cents a share, a year ago. The latest quarter was hit by charges related to the company's acquisition of Verigen AG, a German cell-therapy company with proprietary technology used in cartilage repair.
Excluding charges, latest-quarter earnings were 51 cents a share, which beat Genzyme's guidance of 45 cents to 48 cents a share. Revenue rose 28% to $629.9 million.
For the second quarter, Genzyme expects to post earnings of 51 cents to 53 cents a share before charges and 41 cents to 43 cents after charges. Those figures are in line with analyst estimates.
The company raised its full-year guidance to $2.12-$2.18 per diluted share from its previously expected $2.08 to $2.16.
But the stock sank after the company's earnings call Thursday, when Genzyme downplayed the prospect that
Fosrenol would eat into sales of Genzyme's kidney disease drug Renagel. Shares were down $1.23, or 2%, to $59.59.
Although Renagel prescriptions increased 19% during the first quarter, the company said competition from Fosrenol limited new Renagel prescriptions. John Butler, president of Genzyme's renal division, says Fosrenol didn't take share from Renagel, but it limited the drug's prescription growth rate, considering the significant growth in the product's market size.
In the first quarter, Renagel brought in $99.4 million in revenue, compared with $83.5 million a year ago. Renagel revenue includes product sales, royalties and sales of sevelamer, the generic form of the drug.
Renagel is currently in trials comparing the phosphate binder to calcium-based products. Positive results could secure a place on commercial formulary lists, expanding insurance coverage for the drug. A place on formulary lists is vital to drug sales and Genzyme's assistance programs that helps patients appeal to insurance companies for coverage of the drug.
Enzyme replacement therapy Cerezyme led the pack in sales for the first quarter, bringing in $226 million, 11% higher than in the year-earlier quarter. Cerezyme is a treatment for Type 1 Gaucher disease, which causes fat buildup within organs and bones.
Sales of Fabrazyme, Genzyme's enzyme replacement therapy for Fabry disease, rose 84% to $70 million. Genzyme has submitted proposed labeling changes to the European Medicines Agency based on findings from a phase IV study of the drug's clinical benefits. The company should shortly make a similar submission to the FDA.
The company reported revenue for its oncology business at $11.5 million. This included royalties for leukemia drugs Campath and Clolar. Campath is marketed by
and its U.S. affiliate Berlex. Genzyme's newly established oncology sales force will begin promoting Clolar, which is slated for an official U.S. launch in May 14.