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Genzyme Reports Progress Related to Allston Plant

Thursday, June 25, 2009 11:30 am EDT

Dateline:

CAMBRIDGE, Mass.

Public Company Information:

NASDAQ:
GENZ
US3729171047

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Genzyme Corporation (NASDAQ: GENZ) today provided an update on its progress toward restoring production at its Allston Landing manufacturing facility and in implementing temporary supply management measures. The company announced last week that it had interrupted production of Cerezyme® (imiglucerase for injection) and Fabrazyme® (agalsidase beta) at the plant to sanitize the facility, after identifying a virus in a bioreactor used for Cerezyme production. The virus impairs the viability of cells used in the manufacturing process and is not known to cause infection in humans.

Following a collaborative interaction with FDA and EMEA, Genzyme has begun shipping product from finished lots of Cerezyme held in inventory, after PCR testing detected no evidence of Vesivirus 2117. Shipments of Fabrazyme were not put on hold.

“We continue to make strong progress toward resolving this situation as quickly as possible, thanks to a broad group of employees across the company who have been working around the clock,” said Henri A. Termeer, Genzyme’s chairman and chief executive officer. “We are confident that the Allston plant will be back online later next month, that we will be able to minimize the impact of constrained supply, and that the measures we are implementing will prevent this issue from occurring again. The support we have received from regulatory authorities, patients, suppliers, and from our industry peers who have shared their experiences and offered expertise and resources, has been heartening.”

Because Cerezyme and Fabrazyme inventories are not sufficient to avoid shortages during the period of suspended production and recovery, Genzyme has begun working with regulatory authorities, physicians and patient organizations to carefully manage product supply, with the goal of protecting the most vulnerable patients. The company met this week with the National Gaucher Foundation’s medical advisory board to formulate clinical guidelines for use by U.S. and other physicians during the period of Cerezyme supply constraint. Genzyme will also convene meetings to facilitate the creation of guidelines for managing Fabrazyme supply. In Europe, following the recommendations of the EMEA, Genzyme will issue a letter to health care providers establishing an approach for the use of Cerezyme and Fabrazyme throughout the European Union during the anticipated period of supply constraint.

At the Allston plant, Genzyme is following a well-established and proven method for removing viruses, which includes disassembly and removal of equipment, cleaning, disinfection of cell culture and downstream production suites with vaporous hydrogen peroxide, installation of new air filters and insulation, and other measures. The disinfection process has begun, and the company remains on track to complete this work and restore operations in all cell culture suites and downstream processing areas by the end of July. Once the sanitization of the plant has concluded, equipment will be reassembled, tested and brought back into operation, and production will resume on a rolling basis. Genzyme will not have to perform process validation runs in order to resume production.

Genzyme continues to evaluate the impact of the interruption in production on the timing and magnitude of constraints on Cerezyme and Fabrazyme supply. The company currently expects the period of constraint for each product to last approximately 6-8 weeks. This period is expected to begin in August for Cerezyme and October for Fabrazyme. Genzyme will provide updated financial guidance reflecting the impact of this situation as soon as possible.

Genzyme has now confirmed that the Vesivirus 2117 strain identified at the Allston facility also contaminated production twice in 2008, once at the Allston plant and once at Genzyme’s biologics plant in Belgium. Although Genzyme was not able to detect and identify the virus until this year after it developed a highly specific assay, it took precautionary measures in 2008 and sanitized both facilities at the time. The virus was likely introduced through a raw material used in the manufacturing process, and the company is collaborating with its suppliers to address this issue and implement steps to protect against recurrence. Genzyme is also evaluating adding steps to its raw-materials screening and virus-removal processes to make them more robust, including testing all of its raw materials for the presence of Vesivirus 2117 using the highly specific assay it developed.

In addition, Genzyme is collaborating with other biologics manufacturers to learn from their experience and apply this knowledge to resolve the current situation and implement enhanced safeguards. Genzyme intends to share its own experience with this virus through appropriate mechanisms so that others within the industry may benefit. This includes working to ensure that an assay for Vesivirus 2117 becomes widely available to the industry.

Genzyme has been operating with lower than usual inventories of Cerezyme and Fabrazyme because it has allocated capacity for Myozyme® (alglucosidase alfa) production at the Allston plant. Myozyme’s worldwide growth has been rapid and strong, and the capacity requirements for the product are substantial because its approved dosage is significantly higher than for similar therapies. Genzyme has been executing a plan to provide additional capacity to support the long-term growth of these three products. Recently, the company received approval in the EU for manufacturing Myozyme at the 4000-liter bioreactor scale at its plant in Belgium. The company is in the process of transitioning all Myozyme production to this plant, which is currently being expanded with the addition of a third 4000-liter bioreactor that is scheduled to come on line in 2011. This will bring Genzyme’s total investment in the plant to nearly $500 million since 2001.

In addition, Genzyme is in the late stages of construction on a new plant in Framingham, Massachusetts, for the production of Cerezyme and Fabrazyme. This plant, which will include four 2000-liter bioreactors, will provide substantial additional capacity to support the growth of the two products. Genzyme is investing approximately $300 million to build this facility. It expects to begin qualification runs next year and anticipates regulatory approval for the production of Fabrazyme in 2011 and for the production of Cerezyme in 2012.

Genzyme has created a Web site for physicians and patients where it is summarizing progress toward restoring production at the Allston facility and posting information related to product supply. Visitors to the site may subscribe to receive notification when new information is posted. The address for the site is www.genzyme.com/supplyupdate.

About Genzyme

One of the world's leading biotechnology companies, Genzyme is dedicated to making a major positive impact on the lives of people with serious diseases. Since 1981, the company has grown from a small start-up to a diversified enterprise with more than 11,000 employees in locations spanning the globe and 2008 revenues of $4.6 billion.

With many established products and services helping patients in approximately 100 countries, Genzyme is a leader in the effort to develop and apply the most advanced technologies in the life sciences. The company's products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune disease, and diagnostic testing. Genzyme's commitment to innovation continues today with a substantial development program focused on these fields, as well as cardiovascular disease, neurodegenerative diseases, and other areas of unmet medical need.

This press release contains forward-looking statements regarding Genzyme’s business, including without limitation: the expected duration of production interruption at its Allston manufacturing facility, the expected timing and duration of Cerezyme and Fabrazyme supply constraints and its ability to minimize the impact of this supply constraint, its ability to prevent a similar manufacturing issue from occurring again, and its expectations regarding additional manufacturing capacity and the timing thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those forecasted. These risks and uncertainties include, among others: that Genzyme is unable to resume production of Fabrazyme and Cerezyme by the end of July due to its failure to sanitize the facility, concerns from regulatory authorities regarding production at the facility, or any other reason; that lots of Cerezyme cannot be released; the accuracy of Genzyme’s product demand estimates; whether the needed number of patients and their physicians cooperate with the recommendations made in order to conserve supply and whether they do so in a timely manner; Genzyme’s ability to successfully further develop and validate the highly specific assay used to detect the presence of Vesivirus 2117; Genzyme’s ability to complete capacity expansions and secure regulatory approval for new capacity in the expected timeframes; and the risks and uncertainties described in Genzyme's SEC reports filed under the Securities Exchange Act of 1934, including the factors discussed under the caption "Risk Factors" in Genzyme's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of today’s date and Genzyme undertakes no obligation to update or revise the statements, except as provided in this press release.

Genzyme®, Cerezyme®, Fabrazyme® and Myozyme® are registered trademarks of Genzyme Corporation or its subsidiaries. All rights reserved.

Genzyme’s press releases and other company information are available at www.genzyme.com and by calling Genzyme’s investor information line at 1-800-905-4369 within the United States or 1-678-999-4572 outside the United States.

Contact:

Media Contact:
Genzyme Corporation
Bo Piela, 617-768-6579
or
Investor Contact:
Patrick Flanigan, 617-768-6563

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