CAMBRIDGE, Mass. (TheStreet) - Genzyme (GENZ) shares declined more than 6% Wednesday after the biotech company received notice from the Food and Drug Administration that the agency would take action to forestall further problems at a manufacturing plant.

Genzyme, which has spent the better part of the last year attempting to remedy a series of operational snags, said in a press release Wednesday that it will be required to "make payments to the government and could incur other costs." It wasn't more specific about what financial damage, if any, could result from the FDA action.

Late Tuesday, the FDA told Genzyme that it would likely install a third-party group "for an extended period" to inspect, review and certify the drugs produced at the company's Boston plant, where the FDA had in November found traces of pollutants, including steel and rubber.

Combined with a viral contamination that forced the shutdown last summer of the same plant, located in Boston's Allston neighborhood, the snafus have prodded Genzyme into revamping its manufacturing processes. It has replaced executives and contracted out production of some of its drugs.

In a statement Wednesday, the company said it will "work cooperatively with the FDA to restore the agency's confidence in its ability to operate the Allston plant at the highest standards, building on the progress it has made over the past year to address the manufacturing deficiencies."

Shares of Genzyme -- whose longtime CEO, Henri Termeer, has been facing off against activist investor Carl Icahn for control of the company -- ended trading Wednesday at $55.33, down $3.77, or 6.4%. Volume reached 14.5 million shares, more than five times the daily average turnover in the name.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.

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