Aug 7 Goldman Sachs added Genzyme Corp GENZ.O
to its Americas conviction sell list, and said manufacturing
setbacks at one of its plants may impair long-term growth at
the company and near-term shortage of its drug Cerezyme may be
more severe than expected.
In June, the biotechnology company halted production of two
of its top-selling drugs, Cerezyme and Fabrazyme, after
detecting a virus at a Boston plant that U.S. regulators had
already cited for deficiencies.
By the end of July, the U.S. Food and Drug Administration
notified Genzyme that it will re-inspect the plant because the
company did not take sufficient action to correct equipment
maintenance and process control problems.
Cerezyme, which was being manufactured in the plant, is
approved for Gaucher disease -- a rare disorder in which
patients are deficient in an enzyme that breaks down a type of
Genzyme may not be able to meet the demand for Cerezyme in
2009 and the shortage might have long lasting negative impact
due to persistent dose reduction and possible share erosion to
competitors such as Shire, Goldman Sachs said and reduced its
price target on the stock by $8 to $44.
Earlier this month, rival Shire Plc (SHP.L) reported
positive trial results of its Gaucher drug.
The risk of single source manufacturing until at least 2011
could pressure multiples, the brokerage added.
Genzyme shares closed at $48.81 Thursday on Nasdaq.
(Reporting by Jennifer Robin Raj in Bangalore; Editing by