Monday, October 22, 2001
Trading in Genzyme (GENZ) provided for some read as to how the market weighs current EPS vs. potential future profits. GENZ's solid third quarter results and a boost in revenue projections for its Renagel phosphate binder product weren't enough to buoy the stock. GENZ fell $6.25 (12%) to $46.78 on the week as investors chose to focus on positive news from two potentially competing products.
The stock fell $1.88 to $48.38 on 8.3 million shares on Tuesday after AnorMed (TSE:AOM) published positive Phase III data on its phosphate binder. GENZ then dropped $4.21 to $44.17 on 7.3 million shares on Wednesday's news that the FDA has accepted for filing the NDA for Vevesca, a treatment of Type 1 Gaucher disease from Oxford GlycoSciences (LSE:OGS; OGSI), which would compete with GENZ's Cerezyme enzyme replacement therapy (see "Milestone Watch").
GENZ's earnings news on Thursday was enough to get back $0.84 to $45.01 on 8.2 million shares. The company beat the Street's EPS by a penny on revenues that exceeded estimates by $18.1 million.
After the earnings release, GENZ upped its 2001 guidance for Renagel to $177 million from $150-$160 million. Third quarter sales were $52.4 million - more than triple the $13.8 million in the 2000 quarter. Meanwhile, third quarter Cerezyme sales were $143 million, up 5% from $136.7 million for the 2000 quarter.
GENZ soon could have a chance to recapture some lost ground, as the FDA's PDUFA decision is now due for the company's Fabrazyme agalsidase beta for Fabre disease. The company made no announcements on Friday.
In any case, GENZ should not necessarily feel singled out: Six profitable product companies reported earnings last week, and only three of the five that beat expectations traded up on the week (see "Earnings Season", below).
Venture news continues to make up for a lack of public equity activity: Oxford Biosciences raised its fourth fund, while Ebb & Flow has learned that MPM Capital is planning to raise a third fund.