Genzyme (GENZ) moved to consolidate its grip in the enzyme replacement space, but wasn't instantly rewarded for its plans to acquire protein engineering play Novazyme for $137.5 million in stock.

After pushing GENZ up $0.26 to $56.90 on 4 million shares on Tuesday's news, investors looked past any potential long-term benefits and keyed in on the near-term dilution and the drop in EPS. The stock then retreated to close Friday at $54.44, down $4.31 on the week.

GENZ estimated the deal will reduce its '01 EPS by $0.03 (excluding amortization) to $1.12-$1.17. The company expects Novazyme's NZ-1001 recombinant human alpha-glucosidase for the treatment of Pompe's disease to enter Phase I trials this year (see Technology Briefing, A10).

Pharming (EASD:PHAR), the transgenics company which also is developing an enzyme replacement therapy for Pompe's with GENZ, threw in the towel and filed for protection from its creditors on Friday, even though GENZ made a point of saying that it would continue its Phase II trials of the product.