Friday, April 28, 2006

Drug Approval For Genzyme

Genzyme received some good news today with the FDA approval of Myozyme, which is used to treat patients with Pompe’s disease. Myozyme is an enzyme replacement therapy and essentially replaces the missing enzyme, acid alphaglucosidase, in these patients. This is an orphan drug with ~ 5,000 to 10,000 patients affected with this disease and the company has exclusive marketing rights in the US for 7 years with no competition. The company has already received EU approval. The pricing for this drug will be ~ $175,000 to $250,000 per year. Analysts are expecting this drug to generate revenues of $27 million this year, $84 in 2007, $145 in 2008 and $193 in 2009. The drug has potential blockbuster status with $1 billion in peak sales, but it will take awhile. The next potential market moving news for Genzyme will be Analyst Day, which will be held on May 12th.

With the Q1 revenues and earnings short fall, I would not buy this stock until I see the Q2 numbers.


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