Genzyme Corp. (NASDAQ: GENZ) today reported third-quarter
earnings growth driven by increased shipments of Cerezyme®
(imiglucerase for injection). Patients in the United States began
returning to normal dosing levels last month, and patients globally
are expected to be able to do so this quarter. Earnings growth in
the third quarter was also driven by strong revenue from Lumizyme™
(alglucosidase alfa) and cost reduction measures.
Third-quarter revenue was $1.0 billion, compared with $923.8
million in the same period last year. Operating results for the
third quarter of 2009 have been revised to exclude the Genetics and
Diagnostics businesses, which the company is planning to divest by
the end of this year.
GAAP net income was $69.0 million, or $0.26 per diluted share,
compared with $16.0 million, or $0.06 per diluted share, in the
third quarter of 2009. Non-GAAP net income was $111.5 million, or
$0.42 per diluted share, in line with the company’s guidance,
compared with $77.9 million, or $0.28 per diluted share, in the
same period last year. Non-GAAP net income excludes stock
compensation expenses, costs associated with the acquisition of
oncology products from Bayer, and the operations of the Genetics
and Diagnostics businesses, as they meet the criteria of
discontinued operations. At the end of the third quarter, Genzyme’s
cash balance was approximately $1.2 billion.
“In the third quarter we saw our financial recovery start to
take effect, and we expect that this will accelerate during the
fourth quarter as Cerezyme patients are able to return to normal
dosing levels and we begin to increase shipments of Fabrazyme,”
said Henri A. Termeer, Genzyme’s chairman and chief executive
officer. “We are also implementing measures to reduce our operating
costs, while remaining focused on the priorities of transforming
our manufacturing operations, strengthening our core genetic
disease business, and advancing key pipeline programs to ensure
sustainable long-term growth.”
During the third quarter, Genzyme made progress in executing its
plan to increase shareholder value. The company last month
announced that it entered into an asset purchase agreement under
which Laboratory Corporation of America Holdings will acquire
Genzyme Genetics for $925 million in cash. Plans to divest the
Diagnostics and Pharmaceuticals businesses remain on track.
Genzyme completed the first half of a planned $2 billion share
repurchase, financed by a $1 billion debt offering. The company has
repurchased approximately 15.7 million shares at an approximate
average price of $63.90. At the end of the second quarter, the
company had 265.3 million basic weighted average shares
outstanding. As a result of the buyback, this was reduced to 255.4
million at the end of the third quarter. Approximately 4 million
shares of the repurchase were offset by the exercise of stock
options. Proceeds from the divestitures of the Genetics,
Diagnostics and Pharmaceuticals businesses may be used to finance
the second half of the repurchase.
Cerezyme revenue in the fourth quarter is expected to be $235 –
$245 million and Fabrazyme® (agalsidase beta) revenue is expected
to be $70 – $75 million, based on currently anticipated product
release dates. Non-GAAP EPS is expected to be $0.90 - $0.95 per
diluted share in the fourth quarter.
Product Supply and Consent Decree Updates
Cerezyme’s recovery passed a major milestone with the return to
full supply. Patients in the United States were able to begin
returning to normal dosing levels in September, and patients
globally are expected to be able to do so during the fourth
quarter. Genzyme has begun the process of doubling allocations of
Fabrazyme, starting in the United States, and will do so globally
throughout the fourth quarter. The company expects to be able to
fully supply the global market during the first half of 2011.
Since levels of demand, ordering patterns and dose regimens vary
by region, Genzyme staff in countries around the world will provide
patients and physicians with more information on the local impact
of this guidance for each product. Because inventories remain
limited, any manufacturing disruptions or delays in product release
can impact availability of Cerezyme and Fabrazyme.
Genzyme is on schedule to meet the November consent-decree
deadlines for ceasing fill/finish at its Allston plant for products
sold in the United States. The company has transferred a
significant portion of this work to its state-of-the-art facility
in Waterford, Ireland, and is in the process of transferring the
remainder to a third-party manufacturer, where initial lot release
has begun.
The company’s new Framingham manufacturing facility is
operational with Fabrazyme engineering runs underway, and approval
is anticipated in late 2011. Engineering runs are ongoing at the
newly expanded fill/finish operations in Waterford, and regulatory
approval is expected in the second half of 2011.
Third Quarter Results and Business Updates
Within the Personalized Genetic Health segment, third-quarter
sales of Myozyme/Lumizyme increased 24 percent to $106.2 million
from $86.0 million in the same period in 2009, reflecting the
recent U.S. launch of Lumizyme. Third-quarter revenue increased 15
percent from second-quarter sales of $92.1 million. U.S.
Myozyme/Lumizyme sales increased from $4.4 million in the second
quarter to $19.1 million in the third quarter, and are expected to
reach $30 million in the fourth quarter.
Third-quarter sales of Cerezyme nearly doubled to $179.8 million
from $93.6 million in the same period in 2009, and grew 30 percent
from $138.7 in the second quarter of this year, reflecting
increasing shipments. Sales of Fabrazyme were $33.9 million,
compared with $115.2 million in the third quarter of last year,
reflecting supply constraints and the timing of lot releases during
the quarter.
Within the Biosurgery segment, sales of Synvisc® (hylan G-F 20)
increased 14 percent to $100.0 million from $87.5 million in last
year’s third quarter. Synvisc, which is impacted by seasonal
variability, continues to gain market share, and now represents 46
percent of the U.S. viscosupplement market. The single injection
product, Synvisc-One® (hylan G-F 20), was launched in March 2009
and currently comprises more than two-thirds of all U.S. Synvisc
revenue. During the third quarter, Genzyme also received regulatory
approval of Synvisc in Japan, the largest market in the world for
viscosupplement products.
Total revenue for the Renal and Endocrinology segment grew to
$270.4 million from $260.4 million in the same period last year.
Within this segment, sales of Genzyme’s sevelamer therapies,
Renvela® (sevelamer carbonate) and Renagel® (sevelamer
hydrochloride), were $178.8 million, compared with $181.7 million
during the third quarter of 2009, reflecting the product mix shift
from Renagel to Renvela.
U.S. sevelamer volume increased by nearly 8 percent compared to
the third quarter of 2009. Genzyme remains the market leader in the
United States, with approximately 52 percent of the phosphate
binder market. In July, U.S. Medicare and Medicaid Services issued
its final rule regarding bundling; oral medications without IV
equivalents, including Renvela, will not be included in the bundle
until January 1, 2014.
Genzyme recently won a highly competitive, $28 million tender
over generic manufacturers in Brazil, the second-largest market for
Renagel outside of the United States. This is the second
consecutive year that Genzyme has won this federal tender, which
will begin impacting revenue starting this quarter. The European
launch of Renvela continues to progress well; the product was
introduced in Spain last month and in the key markets of France,
Italy and the U.K. this month.
Sales of Thyrogen were $42.3 million compared with $41.7 million
in the third quarter of 2009, despite the limitations on the
promotion of Thyrogen in the U.S. that are contained in the consent
decree. Once fill/finish operations are successfully transferred to
a third-party manufacturer and fill/finish for Thyrogen for the U.S
market is no longer occurring at the Allston facility, the
promotional limitations will no longer be in effect and Genzyme
will resume normal U.S. promotional work. This is expected to occur
by the end of next month.
Total revenue for the Hematology and Oncology segment increased
17 percent to $167.3 million from $143.6 million in last year’s
third quarter. Growth was driven by sales of Mozobil® (plerixafor
injection), which increased 83 percent to $23.6 million from $12.9
million in the third quarter last year, reflecting a strong
increase in U.S. sales and the ongoing launch in Europe.
Third-quarter growth in this segment was also driven by sales of
Clolar® (clofarabine injection), which increased 23 percent to
$26.1 million from $21.2 million in the third quarter of 2009, led
by a 31 percent increase in U.S. volume.
Gross Margin
The GAAP gross margin for the third quarter was 69 percent of
revenue, compared with 70 percent in the third quarter of 2009, and
the non-GAAP gross margin was 70 percent of revenue, compared with
72 percent in the same quarter last year. Gross margin reflects
changes in product mix and investments made to improve the
company’s quality operations, including costs associated with
Genzyme’s third-party consultant, Quantic.
In the fourth quarter, non-GAAP gross margin is expected to be
74 percent of revenue, reflecting increased capacity utilization
associated with the resupply of Cerezyme and Fabrazyme, and
favorable product mix.
Operating Expenses
Genzyme’s GAAP SG&A was $337.9 million, or approximately 34
percent of revenue, compared with $323.5 million, or approximately
35 percent of revenue in the third quarter of 2009. Non-GAAP
SG&A was $312.7 million, or approximately 31 percent of
revenue, compared with $301.2 million, or approximately 33 percent
of revenue, in the same period last year.
The company’s GAAP R&D was $207.1 million compared with
$215.9 million in last year’s third quarter; non-GAAP R&D was
$193.3 million compared with $202.2 million in the third quarter of
2009.
During the third quarter, Genzyme began reducing spending in
advance of the implementation of the Value Improvement Program,
which is beginning this quarter and intended to significantly
reduce operating costs and improve margins over the next 15 months,
with the full impact seen by 2012. Fourth-quarter savings resulting
from this program are expected to be $0.05 per share, which is
already accounted for in the fourth-quarter non-GAAP EPS guidance
of $0.90 – $0.95.
Late-Stage R&D Programs
Genzyme’s late-stage pipeline features three novel treatments
that are expected to help drive the company’s long-term growth:
- Genzyme last week presented five-year
data from the phase 2 trial of alemtuzumab in multiple sclerosis at
the Congress of the European Committee for Treatment and Research
in Multiple Sclerosis. Data from a sub-group analysis showed that
clinical outcomes persist at 60 months. Nearly 90 percent of
alemtuzumab-treated patients were free of sustained accumulation of
disability and maintained improved mean disability scores and a low
risk of relapse over the 60-month follow-up period, with no changes
in the safety profile. Two phase 3 studies are ongoing and data are
expected beginning in mid-2011. The company expects to file for
U.S. and E.U. approval in early 2012, and has been granted fast
track status by the FDA for this submission.
- Genzyme and Isis Pharmaceuticals Inc.
reported in August that phase 3 studies of mipomersen in severe
hypercholesterolemia and high-risk patients met their primary
endpoints with 36 and 37 percent LDL-C reductions. These two
studies, along with two additional phase 3 trials that have already
been completed, will contribute to the initial U.S. and E.U.
regulatory filings for the product, which will seek approval for
the treatment of patients with the genetic disease homozygous
familial hypercholesterolemia (FH). These two filings may also
include patients with severe heterozygous FH, and are anticipated
in the first half of 2011.
- Enrollment is underway in three global,
multi-center, phase 3 trials of eliglustat tartrate, Genzyme’s
investigational oral therapy for patients with Gaucher disease type
1. There are currently a total of 65 active sites for these trials,
with additional sites preparing to begin enrollment. Two-year
follow-up data from the phase 2 clinical trial of the treatment
were recently published in the journal Blood, and indicate
continued improvements across all endpoints. Thirty-month data from
the trial will be presented at the American Society of Human
Genetics annual meeting next month. This therapy has the potential
to transform the treatment experience for patients by providing an
oral capsule option instead of bi-weekly infusions.
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 approximately
10,000 employees in locations spanning the globe and 2009 revenues
of $4.5 billion. In 2010, Genzyme was named to the Fortune 500.
With many established products and services helping patients in
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. 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.
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.
This press release contains forwarding-looking statements
regarding Genzyme’s financial outlook and business plans including,
without limitation: its financial expectations for the fourth
quarter of 2010, including expected revenues for Cerezyme,
Fabrazyme, and Myozyme/Lumizyme, expected non-GAAP EPS, and
expected non-GAAP gross margin; its expectations regarding Cerezyme
and Fabrazyme supply and patient dosing of Cerezyme; its
expectation that its new Framingham manufacturing facility will be
approved in late 2011 and that its expanded fill/finish operations
in Waterford, Ireland will be approved in the second half of 2011;
its expectation of the timing of the results from its two phase 3
studies of alemtuzumab in MS patients and its regulatory filing
plans and timetables for the product; its assessment that the
company is on track to meet its deadlines to transition all Allston
fill/finish operations for products sold in the U.S. to a third
party manufacturer; its plans to begin implementation of a plan to
increase shareholder value and its expected fourth-quarter savings
and the timing of margin improvements resulting from this program;
its expectation regarding the sale of Genzyme Genetics; its
expectations regarding mipomersen, including the anticipated
regulatory filing strategy and timing; its expectations regarding
the continued launch of Renvela in Europe; its assessment that the
planned divestitures of its Diagnostics and Pharmaceuticals
businesses are on-track; its anticipated timing for resumption of
promotional activities for Thyrogen; and its assessment that
eliglustat tartrate has the potential to transform the treatment
experience for Gaucher patients. These statements are subject to
risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties include, among others:
that production and shipment of Fabrazyme and Cerezyme does not
continue as planned due to any reason, including contamination,
equipment malfunctions, cell growth at lower than expected levels,
fill-finish inefficiencies, power outages, human error or
regulatory issues; that Genzyme is unable to meet its financial
guidance for any reason, including due to lower than expected
revenues attributable to further manufacturing issues or an
inability to transition Lumizyme patients to commercial product as
quickly as anticipated, or higher than expected operating expenses;
that Genzyme cannot obtain on expected timetables or maintain
regulatory approvals for its products and manufacturing facilities,
including its Allston manufacturing facility, its new Framingham
facility, and its expanded fill/finish operations in Waterford;
that Genzyme is unable to successfully transition its fill/finish
operations out of its Allston facility on planned timelines; that
Genzyme is not able to successfully complete clinical development
and obtain regulatory approvals of its product candidates within
anticipated timeframes and for anticipated indications, including
alemtuzumab-MS, mipomersen and eliglustat tartrate for any reason,
including trial results that are not as favorable as expected and
safety profiles that reduce the potential target population; that
Genzyme is unable to complete the sale of Genzyme Genetics or
complete its other planned business divestitures on the anticipated
timeframes; that Genzyme will not be able to implement its plan to
increase shareholder in a manner consistent with expectations,
including an inability to reduce operating expenses to the extent
expected; 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
Management’s Discussion and Analysis of Financial Condition and
Results of Operations in Genzyme's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2010. Genzyme cautions investors not
to place substantial reliance on the forward-looking statements
contained in this press release. These statements speak only as of
October 20, 2010 and Genzyme undertakes no obligation to update or
revise them.
Important Information
Genzyme has filed with the Securities and Exchange Commission a
Solicitation/Recommendation Statement on Schedule 14D-9. Genzyme
shareholders are advised to read the company's
Solicitation/Recommendation Statement on Schedule 14D-9 because it
contains important information. Shareholders may obtain a free copy
of the Solicitation/Recommendation Statement on Schedule 14D-9, as
well as any other documents filed by Genzyme in connection with the
tender offer by Sanofi-Aventis, free of charge at the SEC's
website at http://www.sec.gov. In addition, investors can obtain
free copies of these documents from Genzyme by directing a request
to Genzyme at 500 Kendall Street, Cambridge, MA 02142, Attention:
Shareholder Relations Department, or by calling 617-252-7500 and
asking for the Shareholder Relations Department.
Genzyme®, Cerezyme®, Fabrazyme®, Myozyme®, Synvisc®,
Synvisc-One®, Renvela®, Renagel®, Thyrogen®, Mozobil®, Clolar®, and
Thymoglobulin® are registered trademarks and Lumizyme™ is a
trademark of Genzyme Corporation or its subsidiaries. All rights
reserved.
Conference Call Information
Genzyme will host a conference call today at 11 a.m. Eastern. To
participate in the call, please dial 773-799-3828 and refer to pass
code “Genzyme.” A replay of this call will be available by dialing
203-369-3645. This call will also be Webcast live on the investor
events section of www.genzyme.com. Replays of the call and the
Webcast will be available until midnight on October 27, 2010.
Upcoming Events
Genzyme’s board and management are initiating a program to
communicate with shareholders regarding the company’s value and the
Sanofi-Aventis tender offer. On October 22, Genzyme will hold an
Analyst and Investor meeting in New York to provide a financial
outlook, including 2011 guidance, an update on its progress in
executing its shareholder value plan, and other pertinent
information. The meeting will be Webcast on the investor events
section of www.genzyme.com. Following this event, Genzyme’s
management will begin a series of meetings with shareholders.
Genzyme will host a conference call on February 16, 2011 at
11:00 a.m. Eastern to discuss financial results for the fourth
quarter of 2010. To participate in the call, please dial
773-799-3828 and refer to pass code “Genzyme.” A replay of this
call will be available by dialing 203-369-3598. This call will also
be Webcast live on the investor events section of www.genzyme.com.
Replays of the call and the Webcast will be available until
midnight on February 23, 2011.
GENZYME CORPORATION (GENZ) Consolidated
Statements of Operations Three Months Ended
Nine Months Ended (Unaudited, amounts in thousands,
except per share amounts) September 30,
September 30,
2010
2009 (2)
2010
2009 (2)
Total revenues $ 1,001,800 $ 923,766 $
2,896,855 $ 3,038,998 Operating costs and
expenses: Cost of products and services sold 309,273 279,882
856,474 774,212 Selling, general and administrative 337,883 323,513
1,203,918 904,024 Research and development 207,051 215,925 645,187
608,935 Amortization of intangibles 61,761 68,078 194,327 183,270
Contingent consideration expense (3,134 ) 28,197
69,436 37,287 Total operating
costs and expenses 912,834 915,595
2,969,342 2,507,728 Operating income
(loss) 88,966 8,171 (72,487 )
531,270 Other income (expenses): Equity in
loss of equity method investments (643 ) - (2,210 ) - Gains
(losses) on investments in equity securities, net 4,648 (651 )
(26,750 ) (1,332 ) Gain on acquisition of business - - - 24,159
Other (385 ) 614 (643 ) (2,347 ) Investment income 2,403 4,543
8,787 14,038 Interest expense (3,358 ) -
(3,358 ) - Total other income (expenses)
2,665 4,506 (24,174 )
34,518 Income (loss) from continuing operations before taxes
91,631 12,677 (96,661 ) 565,788 (Provision for) benefit from income
taxes (17,385 ) 965 58,493
(160,305 ) Income (loss) from continuing operations, net of
tax 74,246 13,642 (38,168 ) 405,483 Income (loss) from discontinued
operations, net of tax (5,292 ) 2,353
(11,599 ) (6,428 ) Net income (loss) $ 68,954 $
15,995 $ (49,767 ) $ 399,055
Net income (loss) per share-basic:
Income (loss) from continuing operations, net of tax $ 0.29 $ 0.05
$ (0.15 ) $
1.50
Income (loss) from discontinued
operations, net of tax
$ (0.02 ) $ 0.01 $ (0.04 ) $ (0.02 ) Net income (loss) $
0.27 $ 0.06 $ (0.19 ) $ 1.48 Net income
(loss) per share-diluted: (1) Income (loss) from continuing
operations, net of tax $ 0.28 $ 0.05 $ (0.15 ) $
1.47
Income (loss) from discontinued
operations, net of tax
$ (0.02 ) $ 0.01 $ (0.04 ) $ (0.02 ) Net income (loss) $
0.26 $ 0.06 $ (0.19 ) $
1.45
Weighted average shares outstanding: Basic 255,359
268,957 262,293 269,923 Diluted (1) 263,786 273,741 262,293 275,375
GENZYME CORPORATION (GENZ)
Condensed Consolidated
Balance Sheets September 30, December 31,
(Unaudited, amounts in thousands)
2010
2009 (2)
Cash and all marketable securities $ 1,164,591 $ 1,049,700
Assets held for sale-current 159,725
190,292
Other current assets 2,063,684
1,706,635
Property, plant and equipment, net 2,866,947 2,627,231 Intangibles,
net 3,220,390 3,625,126 Assets held for sale-noncurrent 293,504
274,039 Other noncurrent assets 660,712
587,701
Total assets $ 10,429,553 $
10,060,724
Liabilities associated with assets held for
sale-current $ 63,593 $
55,206
Other current liabilities 1,345,883
1,024,924
Liabilities associated with assets held for sale-noncurrent - 4,598
Other noncurrent liabilities 2,018,840 1,292,344 Stockholders'
equity 7,001,237
7,683,652
Total liabilities and stockholders' equity $ 10,429,553
$
10,060,724
All amounts herein are presented in accordance
with GAAP and are provided for quantitative analysis only and
should be read in conjunction with the text of the Earnings
Release. Please refer to our Form 10-Q's and Form 10-K's for an
in-depth discussion and analysis of our results of operations and
financial position and for detailed information regarding specific
material transactions in a particular period. In addition,
we believe that certain Non-GAAP financial measures, when
considered together with the GAAP figures, can enhance the overall
understanding of the company's past financial performance and its
prospects for the future. Please refer to our GAAP to Non-GAAP
Reconciliations attached to the Earnings Releases for the above
respective periods, which are filed as 8-K's with the Securities
and Exchange Commission at www.sec.gov. The Non-GAAP financial
measures are provided with the intent of providing investors with a
more complete understanding of the trends underlying our operating
results and financial position and are among the primary indicators
management uses for planning and forecasting purposes and measuring
the company's performance. (1) Diluted net loss per share
and diluted weighted average shares outstanding for the nine months
ended September 30, 2010 excludes the effect of all common stock
equivalents because their effect would be anti-dilutive due to our
net loss for the period. (2) 2009 consolidated statements of
operations and consolidated balance sheets have been revised to
reflect discontinued operations (for Genzyme Genetics and Genzyme
Diagnostics) and assets held for sale (for Genzyme Genetics,
Genzyme Diagnostics and Genzyme Pharmaceuticals), respectively, in
accordance with GAAP.
Genzyme Corporation
(GENZ) Analyst Schedule (Amounts in thousands, except
percentage amounts) PRIOR PERIODS REVISED FOR
DISCONTINUED OPERATIONS - UNAUDITED Q3-10 vs.
Q3-09
Q3-09 Q4-09 Q1-10 Q2-10
Q3-10
% B/(W)
FY 2008 FY 2009 YTD 9/30/10 Total
revenues: Personalized Genetic Health Cerezyme $ 93,599
$ 105,368 $ 179,147 $ 138,736 $ 179,781 92 % $ 1,238,977 $ 793,024
$ 497,664 Fabrazyme 115,161 58,026 53,241 39,484 33,882 (71 %)
494,260 429,690 126,607 Myozyme 85,980 91,900 86,059 92,054 106,223
24 % 296,176 324,545 284,336 Aldurazyme 40,331 38,707 39,897 43,651
40,766 1 % 151,664 155,065 124,314
Other Personalized Genetic Health
34,807 54,043 34,160 36,615
43,531 25 % 114,950 147,286 114,306
Total Personalized Genetic Health product
and service revenue
369,878 348,044 392,504 350,540 404,183 9 % 2,296,027 1,849,610
1,147,227 R&D Revenue - - - -
- 110 - -
Total Personalized Genetic
Health 369,878 348,044
392,504 350,540 404,183 9 %
2,296,137 1,849,610
1,147,227 Renal and Endocrinology Renagel and
Renvela (including Sevelamer) 181,702 178,890 164,607 170,066
178,755 (2 %) 677,729 706,589 513,428 Hectorol 36,869
31,877 42,025 41,863 49,285 34 %
128,153 130,757 133,173 Subtotal 218,571
210,767 206,632 211,929 228,040 4 %
805,882 837,346 646,601 Thyrogen 41,691 47,267
45,625 46,300 42,257 1 % 148,448 170,644 134,182 Other Renal and
Endocrinology - - - - - -
30 - Total Renal and Endocrinology product and
service revenue 260,262 258,034 252,257 258,229 270,297 4 % 954,330
1,008,020 780,783 R&D revenue 156 155 166
150 134 (14 %) 90 332 450
Total Renal and Endocrinology 260,418
258,189 252,423 258,379
270,431 4 %
954,420 1,008,352
781,233 Biosurgery Synvisc 87,526
95,419 79,507 107,686 99,998 14 % 263,094 328,533 287,191 Sepra
products 37,831 40,365 37,177 38,935 40,858 8 % 133,663 148,538
116,970 Other Hyaluronic Acid products 8,800 6,698
8,984 4,818 5,908 (33 %) 45,587
34,597 19,710 Total Hyaluronic Acid product and service
revenue 134,157 142,482 125,668 151,439 146,764 9 % 442,344 511,668
423,871 Cell-Based Therapy 10,449 14,080 10,645 11,839 9,510 (9 %)
42,547 45,788 31,994 Other Biosurgery 394 343
494 300 258 (35 %) 3,564 1,866
1,052 Total Biosurgery product and service revenue 145,000 156,905
136,807 163,578 156,532 8 % 488,455 559,322 456,917 R&D revenue
647 414 559 404 200 (69 %)
2,645 2,493 1,163
Total Biosurgery
145,647 157,319 137,366
163,982 156,732 8 %
491,100 561,815 458,080
Hematology and Oncology Mozobil 12,896 19,267 18,966 22,141
23,630 83 % 639 54,650 64,737 Thymoglobulin 53,412 58,265 52,910
58,232 56,891 7 % 183,296 215,964 168,033 Clolar 21,182 22,230
24,688 25,520 26,129 23 % 64,044 81,280 76,337 Other Hematology and
Oncology 56,096 68,978 59,727 70,597
60,645 8 % 47,120 158,659 190,969 Total
Hematology and Oncology product and service revenue 143,586 168,740
156,291 176,490 167,295 17 % 295,099 510,553 500,076 R&D
revenue 7 24 19 7 1 (86 %)
14,439 2,367 27
Total Hematology and
Oncology 143,593 168,764
156,310 176,497 167,296 17 %
309,538 512,920 500,103
Multiple Sclerosis R&D revenue -
110 - - -
21,709 12,467 -
Other Other product and service revenue 3,648
5,137 3,099 3,399 2,848 (22 %) 51,473
29,441 9,346 Total Other product and service revenue
3,648 5,137 3,099 3,399 2,848 (22 %) 51,473 29,441 9,346 R&D
revenue 582 727 189 367 310 (47
%) 3,048 2,683 866
Total Other
4,230 5,864 3,288
3,766 3,158 (25 %)
54,521
32,124 10,212
Total revenues $
923,766 $ 938,290 $ 941,891
$ 953,164 $ 1,001,800 8 %
$
4,127,425 $ 3,977,288 $
2,896,855 All amounts herein are presented in
accordance with GAAP and are provided for quantitative analysis
only and should be read in conjunction with the text of the
Earnings Release and our audited financial statements filed with
the Securities and Exchange Commission. Please refer to our Form
10-Q's and Form 10-K's for an in-depth discussion and analysis of
our results of operations and financial position and for detailed
information regarding specific material transactions in a
particular period.
GENZYME
CORPORATION RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Three Months Ended September 30, 2010 (Amounts in
thousands, except percentage and per share data)
UNAUDITED OTHER DISCRETE
ITEMS (included in GAAP and Non-GAAP results)
Bayer Stock GAAP Acquisition
Compensation Restructuring / Discontinued
Manufacturing Genzyme As
Reported Related
Expense Severance
Operations (3)
NON-GAAP (1) Related (2)
Pharmaceuticals Income Statement Classification:
Total revenues $ 1,001,800 $ - $ - $ - $ - $ 1,001,800 $ - $
(3,082 ) Cost of products and services sold $ (309,273 ) $
8,351 $ 5,023 $ - $ - $ (295,899 ) $ 5,629
$ 3,200 Gross margin 69 % $ 692,527 $ 8,351 $ 5,023
70 % $ 705,901 $ 5,629 $ 118 Selling, general and
administrative $ (337,883 ) $ - $ 22,003 $ 3,207 $ - $ (312,673 ) $
- $ 625 Research and development $ (207,051 ) $ - $ 13,781 $
- $ - $ (193,270 ) $ - $ 686 Amortization of intangibles $
(61,761 ) $ - $ - $ - $ - $ (61,761 ) $ - $ - Contingent
consideration expense $ 3,134 $ (3,134 ) $ - $ - $ - $ - $ - $ -
Equity in loss of equity method investments $ (643 ) $ - $ -
$ - $ - $ (643 ) $ - $ - Other $ 4,263 $ - $ - $ - $ - $
4,263 $ - $ - Investment income $ 2,403 $ - $ - $ - $ - $
2,403 $ - $ - Interest expense $ (3,358 ) $ - $ - $ - $ - $
(3,358 ) $ - $ -
Summary: Income (loss)
from continuing operations before income taxes $ 91,631 $ 5,217 $
40,807 $ 3,207 $ - $ 140,862 $ 5,629 $ 1,429 (Provision for)
benefit from income taxes 18.97 % $ (17,385 ) $ 2,126 $
(13,366 ) $ (744 ) $ - 20.85 % $ (29,369 ) $ (1,860 ) $ (362 )
Income (loss) from continuing operations $ 74,246 $ 7,343 $
27,441 $ 2,463 $ - $ 111,493 $ 3,769 $ 1,067 Income (loss)
from discontinued operations, net of tax $ (5,292 ) $ - $ -
$ - $ 5,292 $ - $ - $ -
Net income (loss)
$ 68,954 $ 7,343 $ 27,441 $ 2,463 $
5,292 $ 111,493 $ 3,769 $ 1,067
Net income (loss) per share-basic: Income (loss) from continuing
operations, net of tax $ 0.29 $ 0.03 $ 0.11 $ 0.01 $ - $ 0.44 $
0.01 $ 0.00
Income (loss) from discontinued
operations, net of tax
$ (0.02 ) $ - $ - $ - $ 0.02 $ - $ -
$ - Net income (loss) $ 0.27 $ 0.03 $
0.11 $ 0.01 $ 0.02 $ 0.44 $ 0.01 $ 0.00
Net income (loss) per share-diluted: Income (loss)
from continuing operations, net of tax $ 0.28 $ 0.03 $ 0.10 $ 0.01
$ - $ 0.42 $ 0.01 $ 0.00
Income (loss) from discontinued
operations, net of tax
$ (0.02 ) $ - $ - $ - $ 0.02 $ - $ -
$ - Net income (loss) $ 0.26 $ 0.03 $
0.10 $ 0.01 $ 0.02 $ 0.42 $ 0.01 $ 0.00
Weighted average shares outstanding: Basic
255,359 255,359 255,359 255,359 255,359 255,359 255,359 255,359
Diluted 263,786
263,786 263,786
263,786
263,786 263,786
263,786 263,786
Notes:
(1) Represents the Non-GAAP results of
operations for Genzyme Corporation for the three months ended
September 30, 2010. We believe that certain Non-GAAP financial
measures, when considered together with the GAAP figures, can
enhance the overall understanding of the company's past financial
performance and its prospects for the future. The Non-GAAP
financial measures are included with the intent of providing
investors with a more complete understanding of the trends
underlying our operating results and financial position and are
among the primary indicators management uses for planning and
forecasting purposes and measuring the company's performance. Such
Non-GAAP financial measures should not be considered in isolation
or used as a substitute for GAAP. Earnings per share are calculated
as net income (loss) divided by weighted average shares
outstanding. Therefore, earnings per share may not add across due
to rounding.
(2) Represents write-offs of inventory that did not meet the
necessary quality specifications. (3) Discontinued
Operations represents the operations of Genzyme Genetics and
Genzyme Diagnostics, net of tax.
GENZYME
CORPORATION RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Three Months Ended September 30, 2009 (Amounts in
thousands, except percentage and per share data) REVISED FOR
DISCONTINUED OPERATIONS - UNAUDITED
OTHER DISCRETE ITEMS (included in GAAP and Non-GAAP
results) Bayer GAAP Acquisition FAS
123R Discontinued Allston Technology
As Reported
Related Expense
Operations (2) NON-GAAP
(1) Remediation Purchase Income
Statement Classification: Total revenues $ 923,766 $ - $
- $ - $ 923,766 $ - $ - Cost of products and services sold $
(279,882 ) $ 17,740 $ 5,015 $ - $ (257,127 ) $
23,735 Gross margin 70 % $ 643,884 $ 17,740 $ 5,015 $
- 72 % $ 666,639 $ 23,735 $ - Selling, general and
administrative $ (323,513 ) $ - $ 22,333 $ - $ (301,180 ) $ - $ -
Research and development $ (215,925 ) $ - $ 13,741 $ - $
(202,184 ) $ - $ 7,000 Amortization of intangibles $ (68,078
) $ - $ - $ - $ (68,078 ) $ - $ - Contingent consideration
expense $ (28,197 ) $ 28,197 $ - $ - $ - $ - $ - Gains
(losses) on investments in equity securities $ (651 ) $ - $ - $ - $
(651 ) $ - $ - Other $ 614 $ - $ - $ - $ 614 $ - $ -
Investment income $ 4,543 $ - $ - $ - $ 4,543 $ - $ -
Summary: Income (loss)
from continuing operations before income taxes $ 12,677 $ 45,937 $
41,089 $ - $ 99,703 $ 23,735 $ 7,000 (Provision for) benefit
from income taxes -7.61 % $ 965 $ (11,667 ) $ (11,151 ) $ -
21.92 % $ (21,853 ) $ (4,186 ) $ (1,576 ) Income
(loss) from continuing operations $ 13,642 $ 34,270 $ 29,938 $ - $
77,850 $ 19,549 $ 5,424 Income (loss) from discontinued
operations, net of tax $ 2,353 $ - $ - $
(2,353 ) $ - $ - $ - Net income (loss)
$ 15,995 $ 34,270 $ 29,938 $ (2,353 ) $ 77,850
$ 19,549 $ 5,424 Net income
(loss) per share-basic: Income (loss) from continuing operations,
net of tax $ 0.05 $ 0.13 $ 0.11 $ - $ 0.29 $ 0.07 $ 0.02
Income (loss) from discontinued
operations, net of tax
$ 0.01 $ - $ - $ (0.01 ) $ - $ -
$ - Net income (loss) $ 0.06 $ 0.13 $ 0.11
$ (0.01 ) $ 0.29 $ 0.07 $ 0.02
Net income (loss) per share-diluted: Income (loss) from continuing
operations, net of tax $ 0.05 $ 0.13 $ 0.11 $ - $ 0.28 $ 0.07 $
0.02
Income (loss) from discontinued
operations, net of tax
$ 0.01 $ - $ - $ (0.01 ) $ - $ -
$ - Net income (loss) $ 0.06 $ 0.13 $ 0.11
$ (0.01 ) $ 0.28 $ 0.07 $ 0.02
Weighted average shares outstanding: Basic 268,957 268,957
268,957 268,957 268,957 268,957 268,957 Diluted
273,741 273,741
273,741
273,741 273,741
273,741 273,741
Notes:
(1) Represents the Non-GAAP results of operations for
Genzyme Corporation for the three months ended September 30, 2009.
We believe that certain Non-GAAP financial measures, when
considered together with the GAAP figures, can enhance the overall
understanding of the company's past financial performance and its
prospects for the future. The Non-GAAP financial measures are
included with the intent of providing investors with a more
complete understanding of the trends underlying our operating
results and financial position and are among the primary indicators
management uses for planning and forecasting purposes and measuring
the company's performance. Such Non-GAAP financial measures should
not be considered in isolation or used as a substitute for GAAP.
Earnings per share are calculated as net income (loss) divided by
weighted average shares outstanding. Therefore, earnings per share
may not add across due to rounding. (2) Discontinued
Operations represents the operations of Genzyme Genetics and
Genzyme Diagnostics, net of tax.
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