Genzyme Corp. (NASDAQ: GENZ) today reported that third-quarter revenue was $1.06 billion, compared with $1.16 billion in the same period a year ago. Results reflect the impact of the temporary interruption in production of Cerezyme® (imiglucerase for injection) and Fabrazyme® (agalsidase beta) associated with the remediation of the company’s Allston manufacturing facility.
GAAP net income was $16.0 million, or $0.06 per diluted share, compared with $119.6 million, or $0.42 per diluted share, in the third quarter of 2008. Non-GAAP net income was $83.9 million, or $0.31 per diluted share, compared with $151.4 million, or $0.53 per diluted share, in the same period last year. Non-GAAP net income excludes purchase accounting and inventory step-up associated with the acquisition of Bayer oncology assets, and stock compensation.
GAAP and non-GAAP net income in this year’s third quarter reflect the $23.7 million pre-tax cost of the temporary Allston shutdown and related remediation costs. Net income also includes the $7.0 million pre-tax impact of a payment to acquire technology from Targeted Genetics. These expenses, along with lost Cerezyme/Fabrazyme revenue and a shift in product mix, reduced the gross margin to approximately 67 percent of revenue during the third quarter.
The company expects its 2009 non-GAAP EPS to be approximately $2.26, compared with previous guidance of $2.35 – $2.90. This reflects the decision to write off Cerezyme work-in-process material, the cost of remediating the Allston plant, and management of customer-level inventories related to the Bayer transaction.