I bet Genzyme (NASDAQ:GENZ) investors wish it were still February. Last week, the company was living large with two approvals. This week? Genzyme announced that it got two letters as well, but they weren't the jump-up-and-down kind.
The company got a complete response letter from the Food and Drug Administration turning down the company's application to make its pompe disorder drug, Myozyme, at a larger scale. Worse yet, it also got a warning letter from the FDA due to problems with its manufacturing plant and won't be able to gain approval for the drug until it clears up the warning label.
The drugmaker has been trying for months to get an approval to manufacture the drug in larger bioreactors. The FDA wasn't convinced that the drug produced at the larger scale was the same as the drug produced at the scale that was originally approved. While the FDA was playing hard ball, it also realized that pompe is a rare genetic disorder with few treatment options, so in November it said the company could get an accelerated approval of the drug and would just need to verify that the drug worked in a new clinical trial.
Clinical trials to prove equivalency are becoming a common request from the FDA. Amylin Pharmaceuticals (NASDAQ:AMLN) and Eli Lilly (NYSE:LLY) have had related problems with once-weekly Byetta, and yesterday the FDA said that Lilly and Bristol-Myers Squibb (NYSE:BMY) would have to run another trial to prove manufacturing equivalency for their cancer drug, Erbitux.
Three months later, Genzyme still hasn't reached an agreement with the FDA about the trial nor has the company gotten the FDA to sign off on its Risk Evaluation and Mitigation Strategy (REMS) that seeks to make sure only the right patients get the drug. (Tysabri, sold by Biogen Idec (NASDAQ:BIIB) and Elan (NYSE:ELN), goes this route, for instance.) The only thing Genzyme and the agency seem to have agreed upon is a name for the drug produced at the larger manufacturing site: Lumizyme. Perhaps Delayzyme would have been more appropriate.
Genzyme does think it will be able to submit the information that the FDA needs within 30 days and expects to respond to the FDA about the warning letter by the end of this week. But the delays are going to cost the company to the tune of $0.12 per share this year if it can get this wrapped up in six months.
It's not the end of the world, but it's not the accelerated growth we were expecting from Genzyme.
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