The disconnect between how a company sees its quarterly results and the market's reaction to these results is something that is always amusing to follow. Biopharmaceutical company Genzyme (NASDAQ:GENZ) today announced "strong third-quarter financial results," but investors promptly dropped its shares nearly 5% in morning trading.

Non-GAAP earnings grew 22% year over year to come in at $195.9 million for the quarter, which equates to $0.73 a share excluding certain items. More Foolish investors will probably include stock-based compensation in the EPS number, an adjustment that reduces earnings to $0.62 a share. Revenues were up 14% to $809 million over this quarter last year and non-GAAP selling, general, and administrative expenses declined to 27% of revenues compared to 29% a year ago, which shows Genzyme is exhibiting scale with its sales growth and good control over its spending.

Last quarter, I predicted that there might be an acquisition in Genzyme's future with all the cash sitting on the company's balance sheet (now nearly $1.7 billion), and now Genzyme has started a full-on bidding war with Millennium Pharmaceuticals (NASDAQ:MLNM) for AnorMED (NASDAQ:ANOR). Just yesterday, AnorMED announced that Genzyme has put in the highest offer, valuing AnorMED at $580 million. Normally I prefer biotechs that can grow their pipelines in-house, but Genzyme has a good history of successful acquisitions, so I'll defer to its judgment on the prospects for AnorMED.

Speaking of its pipeline, Genzyme has several drugs in late-stage clinical development. Earlier in the quarter, phase 2 results from a trial testing Campath as a treatment for multiple sclerosis were released, and the company plans to start a phase 3 trial for the drug in the first half of 2007. It will be a long time before Campath might ever gain approval for MS, and I don't particularly like its chances for approval in this indication (other Fool analysts are more sanguine), but any drug to treat MS has huge blockbuster potential.

The one downside to the quarter is that sales growth for Genzyme's lead drug, Cerezyme, are still not picking up. Cerezyme sales only grew 6% to $252 million for the quarter. But on the bright side, sales of most of the company's other high-selling drugs, like Fabrazyme and Renagel, are still increasing briskly (18% and 26%, respectively).

With earnings growing at a 22% clip but shares trading at nearly 40 times trailing earnings, Genzyme's third-quarter results can't exactly be described as strong compared to what the market is expecting from the company. With such a proven management team, though, I'm sure things like the AnorMED acquisition will secure years of future revenue growth and better quarters to come for Genzyme.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.