Genzyme Misses Reduced Targets

Genzyme General

(GENZ)

reported lower first-quarter profits on Wednesday, hurt by previously announced plans to reduce inventory levels of its kidney dialysis drug Renagel.

But despite a first-quarter profit warning issued last month, the biotech firm still missed reduced Wall Street estimates.

Genzyme said first-quarter net income, excluding a laundry list of charges, fell to $45.5 million, or 21 cents a share, compared with $55.6 million or 28 cents in the year-ago quarter. Analysts were looking for earnings of 23 cents per share, according to consensus figures compiled by Thomson Financial/First Call.

On a reported basis, Genzyme's first-quarter net income totaled $30.7 million, or 14 cents per share.

First-quarter revenue rose 9% to $242.1 million, compared with $222.7 million a year earlier.

Sales of Renagel totaled $29.5 million in the first quarter, compared with $28.6 million one year earlier. In late March, Genzyme

warned of lower sales due to a reduction in the drug's wholesaler inventory levels. At that time, the company said it expected first-quarter Renagel sales of $30 million.

The company said Wednesday that patient demand for Renagel remains strong, and it reiterated previous sales guidance for Renagel of $260 million to $280 million for the year. Several analysts have questioned this guidance, believing that patient demand for Renagel is actually slowing.

Sales of Genzyme's other key drug, Cerezyme, rose 6% in the first quarter from a year earlier, to $148.1 million.

Genzyme said it expects second-quarter earnings to reach a range of 30 cents to 35 cents per share -- within current Wall Street estimates.

Shares of Genzyme were off $1.43, or 3%, to $42.75 in early Wednesday trading.