FDA Delays Genzyme's Lumizyme, Manufacturing Problems Blamed

Last Updated Nov 19, 2009 10:56 AM EST

Figure 1Genzyme announced that the FDA is delaying final approval of the company's application to market Lumizyme (alglucosidase alfa) for the treatment of Pompe disease. Not unexpected, given FDA regulators had sent out a memo last Friday warning healthcare providers that enzyme replacement drugs made at the Allston Landing plant might be contaminated with foreign particles, including stainless steel fragments, non-latex rubber, and fiber-like materials. Given production had previously been transitioned to a larger scale facility in Belgium, regulators' hesitancy speaks loudly to ongoing concerns about the quality control of Genzyme's "brewing" processes.

Prescriptions to past successes at Genzyme depended on market domination of ultra-niche markets, such as enzyme replacement treatments for rare genetic enzyme disorders: Pompe disease, a progressively debilitating and fatal muscle condition, and the blockbuster Cerazyme (imiglucerase injection) for Gaucher disease -- a condition that causes fatty substances to accumulate in the liver, spleen, and other organs -- and which contributed 28 percent of the company's $4.6 billion in 2008 sales.

The company already has a treatment for Pompe disease, a drug called Myozyme (alglucosidase alfa), which costs about $300,00 per year and had sales of $232.6 million for the first nine months of 2009, up five percent from a year ago.

Anticipating growing global demand, the company was moving production of Myozyme from Allston and a smaller facility in Framingham, Mass to a larger 4000 liter bioreactor scale in Geel, Belgium. However, upping production from 160 liter bioreactors to 2000L and 4000L scale-vats required that Genzyme submit supplemental Biologics License Application (BLA) to both FDA and European regulators, as the agencies insist that similar biologics produced in dissimilar bioreactors cannot be considered identical products, due to differences in the carbohydrate structures of the molecules in the so-called brews. Confused? That's OK: the bigger tubs of alglucosidase alfa will continue to be sold under the Myozyme brand in Europe and under the Lumizyme title stateside.

Genzyme has already spent more than $1 billion in the last two years to build new and bigger bioreactors -- notably in the U.S., Ireland, and Belgium. Eventual plans call for total perfusion bioreactor capacity to climb from 20,000 Liters to 32,000 Liters by 2012 (see the figure above and to the right; click for a larger version).

Chairman and chief executive officer Henri Termeer remains upbeat, citing a willingness by the FDA to work with the company to address existing deficiencies. The FDA's plan to address existing deficiencies includes additional internal controls and updating fill/finish capabilities in Allston, transferring additional filling activities to existing Genzyme contract manufacturers, and utilizing excess capacity at the company's manufacturing facility in Waterford, Ireland. That said, until U.S. regulators are confident that Genzyme has put the "good" back in current manufacturing practices (known as cGMP), the company will have to settle for selling smaller amounts of Myozyme here at home.
  • David Phillips

    David Phillips has more than 25 years' experience on Wall Street, first as a financial consultant and then as an equity analyst for several investment banking firms. He sifts through SEC filings for his blog The 10Q Detective, looking for financial statement soft spots, such as depreciation policies, warranty reserves and restructuring charges. He has been widely quoted in outlets such as BusinessWeek, The International Herald Tribune, Investor's Business Daily, Kiplinger's Personal Finance, and The Wall Street Journal.

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