UPDATE 2-Genzyme gets notice of FDA inspection; stock falls

* Says working with FDA to schedule inspection

* Shares down more than 8 percent (Adds analyst comment)

By Toni Clarke

BOSTON, July 31 (Reuters) - The U.S. Food and Drug Administration has notified Genzyme Corp GENZ.O that it will re-inspect a key manufacturing plant because the biotechnology company did not take sufficient action to correct equipment maintenance and process control problems.

Genzyme shares tumbled more than 8 percent on the news. The company said it was notified of the planned re-inspection late on Thursday.

Genzyme received an FDA warning letter in February citing manufacturing deficiencies at the Allston Landing manufacturing plant in Boston. The company said it took corrective action, and the FDA inspected the plant in May.

According to Bo Piela, a Genzyme spokesman, the company was verbally informed by an FDA field officer after the inspection that the agency's requirements had been satisfied.

On a recent conference call with investors, Genzyme said it had not been informed that a new inspection was required but that it was possible the FDA would conduct a routine investigation.

On Friday, Genzyme said it received a letter from the agency on Thursday saying that in May inspection, the FDA found that not all actions promised by the company had been fully or adequately implemented. The letter said a new inspection would be required to ensure that corrective actions had been taken.

"This runs counter to what they said to us verbally and was unexpected," said Piela.

The company said the agency would also review Genzyme's remediation efforts related to a virus at the plant that required the company to temporarily halt production.

Genzyme said it had sanitized the facility and production of its drugs Cerezyme and Fabrazyme, two treatments for rare diseases, had resumed.

"Genzyme previously believed that it had addressed the outstanding items in the warning letter and there would be no inspection necessary related to the contamination," said Geoffrey Meacham, an analyst at JP Morgan. "Genzyme indicated today that production of Cerezyme and Fabrazyme at the Allston plant has resumed, but it is reasonable to think that the re-inspection could delay production further."

Genzyme's ongoing production problems are hurting management's credibility at a time the company faces growing competition to its key products, which are some of the most expensive drugs the world.

Genzyme shares were down $4.75, or 8.4 percent, to $51.50 in afternoon Nasdaq trading. (Reporting by Toni Clarke; editing by John Wallace)