Back in March, the company said that one of the reasons it couldn't get approval for the large-scale production of its pompe disorder drug, Myozyme, was that the Food and Drug Administration had issued a warning letter for one of its manufacturing plants.
Today's issue was at the same plant, but the problem will affect drugs already approved for sale. The company discovered a viral infection in one of the bioreactors and will need to shut down production until the end of July. The virus isn't suspected of being dangerous to patients, but it interferes with the growth of the cells used to produce the drugs.
Genzyme has experience in cleaning these things up. The company had two production issues last year that it now believes were caused by the same virus. As you'd expect, Genzyme will now be screening raw materials -- the suspected culprit of the infection -- for the virus.
The shutdown to clean the plant will cause supply constraints for Cerezyme and Fabrazyme, which both treat rare genetic disorders. This could result in a meaningful hit to revenue and earnings, but it's a one-time thing -- hopefully -- that shouldn't affect Genzyme's long-term growth. Sales of Aldurazyme, which it sells with Biomarin Pharmaceuticals
Genzyme's issues underscore the complexity of manufacturing biologic drugs compared to small molecule drugs. Investors worried about the impact follow-on biologics will have should pay attention here. Once Congress signs off on a pathway for approval, it's not going to be a cakewalk for generic-drug makers to come in and make copycats of biologic drugs. Considering their complexity, betting on Novartis
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