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TIMELINE-Key dates in Genzyme's manufacturing crisis
August 13, 2010 / 10:10 PM / 7 years ago

TIMELINE-Key dates in Genzyme's manufacturing crisis

Aug 13 (Reuters) - U.S. biotechnology company Genzyme Corp GENZ.O, a maker of extremely expensive lifesaving medicines for rare genetic disorders, is considering an acquisition offer by French drugmaker Sanofi-Aventis (SASY.PA).

A key focus of any talks will be Genzyme’s ability to move past a viral contamination at its main plant that caused severe shortages of its most important products. [ID:nN12260234]

The manufacturing crisis has punished Genzyme’s earnings and share price and made it more vulnerable to dissident investors. Analysts say it may also strengthen Sanofi’s case that a deal price reflect the risk in fixing those problems.

The following is a timeline of significant developments:

2009:

March 2 - Company discloses FDA warning letter identifying manufacturing deficiencies at Allston, Massachusetts plant.

June 16 - Discloses viral contamination leading to shutdown and severe shortages of key drugs Cerezyme and Fabrazyme.

July 16 - Due to Cerezyme shortage, Shire (SHP.L) gets FDA fast track designation for experimental Gaucher treatment.

July 31 - FDA says will reinspect Allston after company fails to take sufficient action on process control problems.

Aug. 14 - Only those in most need get Cerezyme in Europe.

Aug. 25 - FDA grants fast track review to Protalix BioTherapeutics (PLX.A) experimental Gaucher disease drug to help address shortage; Pfizer (PFE.N) later acquires rights.

Nov. 13 - FDA says five drugs made at Allston have unacceptable levels of steel fragments, other contaminants.

Dec. 1 - Newly made Cerezyme begins shipping from Allston.

2010:

Jan. 4 - Genzyme announces deal for Hospira Inc HSP.N to take on some filling and packaging for several products.

Jan. 7 - Genzyme agrees to appoint activist investor Ralph Whitworth of Relational Investors to board; reports surface that billionaire investor Carl Icahn may mount a proxy battle.

Jan. 8 - Ron Branning appointed to head global quality.

Jan. 12 - Newly made Fabrazyme beings shipping.

Feb. 3 - Company appoints former Eli Lilly (LLY.N) executive Scott Canute as global manufacturing chief.

Feb. 22 - Company receives notice that Icahn intends to nominate four candidates to board.

Feb. 26 - FDA approves Shire Gaucher disease drug.

March 24 - Genzyme says FDA to take enforcement action, likely including imposing fines, over manufacturing crisis.

April 15 - Whitworth joins board in move to rebuff Icahn.

April 21 - Genzyme says expects to pay $175 million penalty from past profits and possibly future fines under draft consent decree deal; discloses a March power outage affecting water at Allston, worsening Cerezyme and Fabrazyme supply shortage.

May 6 - Under pressure from investors Genzyme says will look into selling three non-core businesses -- genetic testing, diagnostic products and pharmaceutical materials.

May 17 - Icahn doubles stake to about 10.5 million shares.

May 24 - Consent decree finalized. In addition to $175 million penalty, company to move filling and packaging out of Allston, place manufacturing under oversight of a third party.

May 26 - Icahn urges board to remove CEO Henri Termeer.

June 9 - Icahn reaches accord with Genzyme, abandons proxy fight and gets two representatives on board.

June 29 - Still struggling with supply shortages, Genzyme says expects to meet 50 percent of Cerezyme demand for July.

July 21 - Genzyme takes $21.9 million write-off in second quarter due to products discarded over quality issues.

July 23 - Sources tell Reuters that French drugmaker Sanofi-Aventis made acquisition approach to Genzyme.

July 28 - Sanofi votes to move ahead with formal offer of up to $18.7 billion to acquire Genzyme, sources say.

Aug. 2 - Sanofi sends $69/share takeover proposal to Genzyme, sides discussing offer, sources say.

Aug. 9 - Company discloses additional $6.5 million write-off for discarded products due to quality issues that turn second quarter results from flat to a loss.

Aug. 10 - Company says it will take three to four years to rectify manufacturing problems at Allston.

FUTURE BENCHMARKS

Nov. 28, 2010 - Genzyme must finish transition of filling and finishing of products intended for U.S. from Allston; to be done in Genzyme plant in Ireland, Hospira plant in Kansas.

Aug. 31, 2011 - Filling and finishing of products intended for sale outside U.S. must transfer from Allston; While bulk of Cerezyme, Fabrazyme manufacturing will continue in Allston, filling and packaging will cease there.

Late 2011: Genzyme anticipates FDA approval of new plant in Framingham, Massachusetts that will expand manufacturing capacity for Fabrazyme and later Cerezyme. (Compiled by Bill Berkrot. Editing by Michele Gershberg)

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