The plant is sanitized and back up and running, but the damage is done. Sales of Cerezyme and Fabrazyme, which both treat rare genetic disorders, have both been affected, since inventories couldn't keep up with demand. Even the fourth quarter will take a hit, since Genzyme doesn't expect to resume shipping Cerezyme until late next month, and Fabrazyme in late December.
Not surprisingly, the company slashed full-year adjusted guidance from $2.35-$2.90 per share to around $2.26. By comparison, adjusted earnings per share for 2008 were $4.00.
The question now is whether Genzyme is a bad-news buy or not. Shares are down 22.5% this year, substantially worse than Pfizer
I think investors have probably overreacted slightly, but management will still have to deliver -- for instance, by getting approval for the long-awaited larger manufacturing scale of its Myozyme drug -- before investors come back in droves.