) --

Shire Pharmaceuticals


will seek U.S. regulatory approval for its Gaucher drug following the release Monday of positive phase III study results.

The Shire drug, known as velaglucerase, represents a significant competitive challenge to the biopharmaceutical firm



and its Gaucher drug, Cerezyme -- the company's top-selling product.

Gaucher is a rare genetic disease in which patients are missing an enzyme needed to break down a certain type of fat. As a result, that fat accumulates in cells and organs of the body, including the spleen, liver and lungs. Patients with Gaucher are treated with drugs that essentially replace the missing enzyme.

Shire reported positive results Monday from the first of three phase IIII studies of velaglucerase. In the trial, the primary endpoint was reached with patients benefiting from a clinically important and statistically significant increase in mean hemoglobin concentration compared with baseline after receiving velaglucerase every other week for 12 months.

The company said it has begun the process of seeking formal approval for the drug from the U.S.

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Food and Drug Administration

. The agency has already allowed Shire to provide velaglucerase to Gaucher patients free of charge due to supply shortages of Cerezyme caused by problems at a manufacturing plant owned by Genzyme.

Cerezyme sales totaled $1.2 billion in 2008, about half of the genetic disease revenue generated by Genzyme last year.

Genzyme was forced to halt production of Cerezyme and another drug recently at its manufacturing plant outside Boston due to a viral contamination. The FDA and the company are still working to resolve the issue and re-inspect the facility.

The phase III results released Monday for velaglucerase were from patients who had never been treated for Gaucher previously. Shire is running a separate phase III study that pits velaglucerase directly against Cerezyme, with results expected later this year.

A small biotech firm,

Protalix Biotherapeutics

(PLX) - Get Protalix Biotherapeutics, Inc. Report

, is also developing a Gaucher drug.

-- Reported by Adam Feuerstein in Boston

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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