Genzyme ( GENZ), a maker of treatments for rare diseases, exceeded analysts' expectations for second-quarter earnings and revenue, sending its shares up more than 7% Wednesday. Earnings totaled $134.5 million, or 49 cents a share, in the second quarter, up from $123.6 million, or 46 cents a share, in the year-ago quarter. The latest quarter's results include a $42 million gain related to Genzyme's tender of its investment in biopharmaceutical company Cambridge Antibody Technology, which is being acquired by European pharmaceuticals concern AstraZeneca ( GENZ). Additionally, Genzyme's most recent quarter reflects stock-compensation expenses of $55.3 million, or 20 cents a share. Last year's earnings didn't have any stock-compensation costs. Excluding stock compensation and other items, Genzyme would have earned 68 cents a share, 2 cents better than the average profit expected by analysts surveyed by Thomson First Call. Revenue of $793.4 million was nearly $15 million better than the consensus estimate. The stock was up $4.43 to $62.41 in recent trading. "We had a strong quarter with excellent progress throughout the business, including solid results in the three product areas that were below expectations in the first quarter," said Henri Termeer, Genzyme's chief executive. The company reiterated its full-year guidance of $3.1 billion to $3.3 billion in revenue and earnings, before items, of $2.65 to $2.75 a share. For the second quarter, sales of the Fabry disease drug Fabrazyme were up 20% to $89 million, boosted by the number of new patients on the drug. Sales of Gaucher disease drug Cerezyme were $254 million, up 8%, and revenue from Aldurazyme, a treatment for a genetic disease called MPS I, were $23.5 million, up 23%. Aldurazyme is comarketed with BioMarin Pharmaceutical ( BMRN). The Pompe disease drug Myozyme, which was approved in April and launched the next month, had sales of $6.5 million through the end of the second quarter.
Among its kidney-disease drugs, second-quarter sales of Renagel were up 26% to $126.6 million, and sales of Hectorol, a treatment for secondary hyperparathyroidism in patients on dialysis or who have earlier stages of chronic kidney disease, were $22.4 million in the second quarter. Genzyme gained Hectorol through its acquisition of Bone Care International last July and says it's implementing a global commercialization strategy for the drug. Executives expect Hectorol to "become an increasingly important contributor" to the company's future sales growth. Overall, Genzyme said it saw strong earnings growth across all business lines with research and development spending increasing at a similar rate as its earnings growth. The company said on a conference call that it plans to use its strong cash position to support its pipeline, including usage extensions for its cancer drugs Campath and Clolar and potential acquisitions. Genzyme is seeking reimbursement approvals both for patients with infantile and late-onset Pompe disease and says sales are expected to increase throughout this year and have a material impact on the company in 2007. Genzyme is seeking approval of the drug in Japan and Canada and expects to apply for approval in additional countries in the coming months.