UPDATE 4-Steel, rubber found in some Genzyme drugs

* Particles found in less than 1 pct of affected drugs

* Potential for adverse reactions but none reported

* Genzyme shares drop more than 7 percent (Updates with comments from company, analysts, FDA)

WASHINGTON/BOSTON, Nov 13 (Reuters) - Stainless steel fragments, non-latex rubber and fiber-like material have been found in some drugs made by Genzyme Corp GENZ.O, dealing another blow to a company already struggling with manufacturing problems.

The U.S. Food and Drug Administration said in a statement on Friday it had found the foreign particles in less than 1 percent of the products, based on the number of batches tested to date.

The FDA said the objects could cause potentially serious reactions in patients, including blood vessel blockages and life-threatening allergic reactions. So far, no such events have been reported.

Cambridge, Massachusetts-based Genzyme said it has looked through its safety database and found no indication of a problem.

“We have not had any adverse events related to the presence of foreign particles,” said Bo Piela, a company spokesman.

The affected products include Cerezyme, Genzyme’s treatment for Gaucher disease, a rare genetic disorder that can lead to life-threatening organ damage. Cerezyme is the world’s leading treatment for the disease and Genzyme’s biggest selling product.

Cerezyme and Fabrazyme, the company’s treatment for Fabry disease, are already in short supply after viral contamination forced the company to close its Allston Landing plant in Boston in June. The plant is now up and running and Genzyme says it expects to supply patients fully by early next year.

But further interruption of supply could be devastating to patients, something the FDA said weighed heavily in its decision to allow the products to remain on the market.

“The Agency is acutely aware of the critical need for patients to have continued access to these important products,” it said in its statement.

By contrast, the FDA recently directed Hospira Inc HSP.N, a specialty pharmaceutical and medication delivery company, to recall several products due to the presence of foreign particles.

Like Genzyme, Hospira said it had not received any reports of adverse events related to the particles.

Analysts said the news casts a cloud over the likelihood the FDA will promptly approve the company’s application to sell a 2,000-liter version of Myozyme, its treatment for the muscle disorder Pompe disease, in the United States.

At the 2,000-liter production scale, Myozyme will be known as Lumizyme. The FDA is scheduled to rule on whether to approve the product on Nov. 14.

“This will likely raise regulatory scrutiny on a facility already under review,” said Brian Abrahams, an analyst at Oppenheimer & Co.

At the behest of the FDA, Genzyme has sent a letter to doctors reminding them of the guidelines for administering the drugs, which include the need to visually inspect vials.

Piela said that the risk of foreign particles entering into biologic drugs -- those made using living cells -- is present throughout the biotechnology industry. He said Genzyme’s own inspections turn up foreign bodies in about 1 percent of its finished products, consistent with the industry norm.

Only 0.02 percent of all products are returned by customers because of foreign particles, he said.

Piela said that rate has not increased, and he could not explain why the FDA has chosen to address the issue now.

Other Genzyme products included in the letter are Aldurazyme, for a life-threatening disease known as MPS 1, and Thyrogen, which is used in the treatment of cancer.

“We do not believe this is a wide-scale problem, but we do not have information that fully defines the scope of the problem,” said Jason Woo, associate director for scientific and medical affairs in the office of compliance at FDA.

Cerezyme generated sales of $1.2 billion in 2008, roughly a quarter of Genzyme’s total 2008 revenue of $4.6 billion.

Shares of Cambridge, Massachusetts-based Genzyme closed down 7.3 percent at $49.28 on Nasdaq on Friday.

Genzyme's manufacturing problems have given a boost to rival Gaucher disease drugs being developed by British drugmaker Shire Plc SHP.L and Israeli drugmaker Protalix BioTherapeutics Inc PLX.A. Earlier this year the FDA said it would allow patients access to their drugs even though they have not yet been approved.

Shire’s shares rose 1.4 percent on Friday, while Protalix stock rose 4.5 percent to $10.71. (Additional reporting by Deepa Seetharaman; Editing by Tim Dobbyn)