Genzyme manufacturing upgrades again paying off

Genzyme's manufacturing improvements continue to pay off, allowing it to return to the market with a full supply of its thyroid cancer treatment, Thyrogen. The drug is being manufactured at Genzyme's new Boston-area plant that the FDA signed off on earlier this year.

Genzyme is now a unit of Sanofi ($SNY) and its Framingham, MA, plant where Thyrogen is manufactured figured significantly into the French drugmaker's most recent quarter. The facility also produces Fabrazyme, another drug that had been on shortages lists since Genzyme ran into manufacturing issues three years ago. With the new production capacity, Fabrazyme sales were up 146.9% to €87 million ($112.8 million), allowing Genzyme to deliver 22.5% sales growth in a quarter in which Sanofi saw net income fall 7.4%.

Shortages of Thyrogen and Fabrazyme, a treatment for the rare Fabry disease, are part of a saga of Genzyme quality issues that led to an FDA consent decree and influenced the destiny of the once independent biotech company. It started in 2009, when viral contamination was found at a Genzyme plant in Allston, MA, where Fabrazyme and Genzyme's Gaucher disease drug Cerezyme were made and where the fill/finish work on Thyrogen was done. The quality problems led to investor dissatisfaction for Genzyme. As it scrambled to clean up the facility, it drew buyout interest from Sanofi, which promised that its manufacturing expertise was what Genzyme needed. That led to a $20.1 billion deal loaded with extra payments to shareholders based on certain operational goals--including production targets for Fabrazyme and Cerezyme.

"There have been numerous improvements made to our global manufacturing operations over the past three years--on our own and as part of the consent decree," a Genzyme spokeswoman explained via email. "We have removed many of the bottlenecks that existed globally in our manufacturing operations, and simplified our operations at each plant." Supplies of Thyrogen have improved throughout 2012 and Genzyme has been able to manage its inventory to avoid disruptions. While manufactured at Framingham, Thyrogen currently is filled and finished at a Hospira ($HSP) plant.

- read the Genzyme release