Q1 looks good to me. What do you think? Haven't seen you posting lately. Hope all is well and that you are just busy with work and all the little Vs. Lisa
Thursday April 22, 9:13 am Eastern Time
Company Press Release
SOURCE: Genzyme General
Genzyme General Reports First Quarter EPS Increased 23 Percent to $.38
CAMBRIDGE, Mass., April 22 /PRNewswire/ -- Genzyme General (Nasdaq: GENZ - news) announced today that diluted earnings per share for the first quarter of 1999 were $.38, an increase of 23 percent compared to $.31 per share in the same period a year ago. Net income for the quarter was $32.5 million, an increase of 30 percent from the $24.9 million reported for the first quarter last year.
Total revenues in the quarter reached $178.1 million, an increase of 16 percent over the $154.1 million reported in the first quarter of 1998.
Gross profits for the quarter increased 27 percent to $125.0 million, compared to $98.6 million for the same period a year ago. The gross margin for the quarter was 70 percent, an increase of 6 percentage points over the same quarter last year. Profits before taxes increased 35 percent to $43.0 million, up from $31.8 million in the first quarter last year.
''We are especially pleased with the strong patient growth for Cerezyme that we continued to see this quarter, and with the excellent launches of Renagel and Thyrogen,'' said Henri A. Termeer, chairman and chief executive officer of Genzyme Corp. ''We are also pleased that gross profits and earnings per share grew faster than total revenues, while at the same time we increased our spending on research and development and joint ventures. This demonstrates our ability to deliver strong earnings growth while investing the benefits from improved margins in the future growth of the company.''
Therapeutics
Therapeutics revenues for the quarter were $118.9 million, up 24 percent from $95.6 million in the first quarter of 1998.
Therapeutics revenues were led by worldwide sales of Cerezyme® and Ceredase® enzymes for the treatment of Gaucher disease, which were $113.8 million in the quarter, up 22 percent from $93.5 million in the first quarter of last year.
Genzyme continues to see strong growth in the number of patients worldwide receiving enzyme replacement therapy for the treatment of Gaucher disease. The number of patients starting therapy has increased at a consistent rate for the past eight quarters, with patient growth coming from both existing and new markets. In addition, the conversion of patients from Ceredase to Cerezyme is nearly complete, with Cerezyme accounting for 95 percent of revenues at the end of the quarter.
Revenues from international sales of Cerezyme and Ceredase were moderately affected this quarter by economic conditions in Brazil and by the strong dollar in Europe. In Brazil, the government began reducing its product inventory this quarter as it shifts from a semi-annual to a monthly purchasing schedule while keeping patients on treatment. The revenue impact of this shift was approximately $3.0 million. The strength of the dollar in Europe had approximately a $1.8 million affect on revenue.
Excluding Brazil, Cerezyme and Ceredase units sold were up by 5 percent in the first quarter of 1999 compared to units sold in the fourth quarter of 1998. This unit growth rate is consistent with historic quarterly growth trends.
Therapeutics revenues for the first quarter of 1999 also include sales of Thyrogen® and lipids and peptides for drug delivery. Thyrogen, a diagnostic tool for thyroid cancer screening, is co-marketed in the United States with Knoll Pharmaceutical Co. Thyrogen was launched in January, and sales thus far are in line with Genzyme's expectations.
Renagel® Capsules, a product for the control of serum phosphorous in patients with end-stage renal disease, is being commercialized through a joint venture with GelTex Pharmaceuticals Inc. A 42-person sales force began marketing Renagel in November, and prescriptions have increased steadily.
For patients with end-stage renal disease, elevated phosphorous levels can cause serious complications, including bone disease and tissue calcification. Genzyme is focused on making Renagel more widely available and further enhancing patient care. During the second half of this year, the joint venture expects to obtain regulatory approval in Europe and Canada. Next month, the joint venture will sponsor a symposium at the National Kidney Foundation Clinical Nephrology Meetings. The symposium will feature presentations by Keith Norris, M.D, and Nathan Levin, M.D, who will discuss the implications of poorly controlled hyperphosphatemia.
Revenues from the sale of Renagel are recorded by the joint venture. For the quarter, total net recognized Renagel sales were $3.5 million. Total prescriptions for the quarter, as reported in weekly IMS data, were 14,034. New prescriptions were 10,121 and the refill rate has increased steadily. The total net loss for the Renagel joint venture was $4.5 million in the quarter. Genzyme's share of the loss was $2.3 million.
Genzyme continues to make significant progress with all of its therapeutic development programs for lysosomal storage disorders. Genzyme and BioMarin Pharmaceutical remain on schedule to submit a Biologics License Application in mid-1999 for alpha-L-iduronidase, an enzyme intended to treat patients with MPS-I, after completing a pivotal clinical trial in October 1998.
MPS-I encompasses three syndromes -- Hurler, Hurler-Scheie, and Scheie syndromes -- that represent a spectrum of severity. In its most severe form - - Hurler syndrome -- children typically die by the age of ten. MPS-I is caused by an enzyme deficiency that results in a build-up of carbohydrate materials in the body. This build-up of stored material leads to cell, tissue and organ dysfunction.
In addition, Genzyme recently began treating patients in a phase III clinical trial of alpha-galactosidase for Fabry disease. Genzyme expects the trial to be completed by the end of this year. Fabry disease causes symptoms including severe pain, numbness, kidney failure, and cardiac disease. Like MPS-I, Fabry disease is caused by an enzyme deficiency that results in the body's inability to break down certain lipids.
Genzyme and Pharming Group N.V. are conducting a phase II clinical trial of alpha-glucosidase in patients with Pompe disease, which began during the quarter in Europe. Genzyme is in discussions with the U.S. Food and Drug Administration to expand this trial in the United States. Pompe disease is a fatal lysosomal storage disorder. The enzyme deficiency that causes the disease leads to severe muscle weakness and respiratory failure. In the infantile form of Pompe disease, patients often die before the age of two. Patients with the juvenile form of the disease usually die before the third decade of life.
During the quarter, Genzyme was granted orphan drug status in Japan for AVONEX®, Biogen's treatment for relapsing forms of multiple sclerosis. Under an agreement with Biogen, Genzyme will commercialize and exclusively distribute AVONEX in Japan, following regulatory approval. Genzyme is responsible for managing a clinical development program for AVONEX and expects to initiate clinical trials during the second half of this year.
Also during the quarter, Genzyme Corporation's board of directors approved a proposal to transfer its 50 percent interest in the NeuroCell(TM) joint venture from Genzyme Tissue Repair (Nasdaq: GZTR - news) to Genzyme General. The transfer is subject to Genzyme Tissue Repair shareholder approval. Genzyme Tissue Repair and Diacrin Inc. formed the joint venture in 1996 to develop cell therapies for the treatment of Parkinson's and Huntington's diseases.
Genzyme General believes that NeuroCell-PD for Parkinson's disease has shown early promise and is an excellent fit with its specialty therapeutics product pipeline. Genzyme and Diacrin are conducting randomized, controlled phase II clinical trials of NeuroCell-PD in patients with Parkinson's disease. The trials are expected to conclude by the end of this year.
Surgical Products
During the first quarter of 1999, surgical products revenues increased 18 percent to $30.1 million, compared to $25.6 million in the first quarter of 1998.
Sales of Sepra products increased 58 percent this quarter compared with the first quarter of last year, as Genzyme continues to see positive results from its aggressive marketing program for Seprafilm® Bioresorbable Membrane. Genzyme continues to build awareness about the extent and seriousness of post- operative adhesions through publications and conference presentations.
A study published recently in Diseases of the Colon and Rectum concluded that the incidence of small-bowel obstruction, adhesiolysis for obstruction and additional abdominal surgery after an initial colorectal surgery, are much higher than previously reported. In addition, The Lancet is expected to publish soon the first paper documenting results from a study that examines the 10-year outcomes of more than 50,000 patients who underwent open abdominal and pelvic surgery. Genzyme will also sponsor a symposium on small bowel obstruction at a meeting of the American Society of Colon and Rectal Surgeons in May.
For the quarter, overall sales of surgical instruments and devices increased seven percent compared with the same period a year ago. In particular, Genzyme continues to see very strong sales growth in its line of cardiovascular instruments and devices, which reached record levels in the quarter. At the annual meeting of the American Association for Thoracic Surgery (AATS) this week, Genzyme is introducing several new and second- generation products to its line for minimally-invasive cardiac surgery, including its OPCAB Elite(TM), SaphLift(TM), and MiniSaphLite(TM) products.
Genzyme also announced this week that pre-clinical data presented at the AATS meeting demonstrate the early promise of a cell therapy for cardiovascular disease that would employ a patient's own transplanted heart cells to improve cardiac function. The data showed that cell therapy improved cardiac function after a myocardial infarction in a porcine model. The data were presented by a member of a research group at Toronto General Hospital led by Richard Weisel, M.D. The group began collaborating with Genzyme in January to develop cell-based therapies for cardiovascular disease.
Genzyme remains on track to begin a cardiovascular gene therapy clinical trial in the second half of this year for patients with coronary artery disease. The trial will involve GeneGraft(TM), a product designed to promote the growth of blood vessels in heart tissue that has been deprived of oxygen. GeneGraft is based on the naturally occurring hypoxia-inducible factor (HIF- 1), which has been shown to turn on the expression of many proteins associated with angiogenesis.
Genzyme General recently announced that Genzyme Corp. intends to create a separate division with its own series of common stock for Genzyme's surgical products business and distribute the shares to its shareholders as a dividend. Genzyme expects the transaction to be completed by the end of the second quarter. Creating the surgical products division will allow Genzyme General to sharpen its focus on therapeutics and allow Genzyme surgical products to focus more resources and attention on building its ''biosurgery'' business. Biosurgery is the convergence of mechanical and biological approaches to surgery and interventional procedures. Genzyme is pioneering this field and intends to leverage both its franchise in medical devices and its diverse biotechnology platforms.
Diagnostics
Total diagnostic product and service revenues were $28.6 million in the quarter, compared to $30.5 million during the same period last year. The decrease in diagnostics revenues for the quarter reflects the sale of Genzyme's research products business to TECHNE Corp. in July 1998. The research products business had revenues of approximately $4.0 million per quarter at the time it was sold. Diagnostic product revenues now include royalties on sales from TECHNE's biotechnology group.
Excluding revenues from research products in the first quarter of 1998, diagnostic product sales increased 17 percent this quarter to $14.7 million compared to the same period last year. Sales of Genzyme's LDL and HDL cholesterol test kits were up 33 percent for the quarter, compared with the first quarter last year.
Revenues from diagnostic services were $13.9 million for the quarter, up slightly from a year ago. Genzyme recently introduced an advanced Down syndrome screening test to its comprehensive prenatal genetic services program. The test, known as Afp4®, is expected to increase Down syndrome detection by approximately 8 to 10 percent over Genzyme's existing AFP3 program, for a total expected detection rate of approximately 78 to 80 percent.
Genzyme General develops and markets therapeutic and surgical products and diagnostic products and services. A division of the biotechnology company Genzyme Corp., Genzyme General has its own common stock intended to reflect its value and track its economic performance.
This press release contains forward looking statements, including statements regarding the anticipated timing of submission of a BLA to the U.S. Food and Drug Administration, the anticipated initiation and completion of clinical trials, the proposed transfer of Genzyme's interest in the NeuroCell joint venture from Genzyme Tissue Repair to Genzyme General, the early potential of NeuroCell-PD, the possible efficacy of Seprafilm for the reduction of small bowel obstructions, the potential efficacy of cell transplantation as a therapy for cardiovascular disease in humans, and the expected detection rate for Genzyme's Down syndrome screening tests. Actual results may differ materially depending on many factors, including the enrollment rate for clinical trials, the results of pre-clinical and clinical development efforts, the ability to demonstrate safety and efficacy of products, the ability to manufacture sufficient quantities of products for clinical trials, the timing and content of submission to and decisions made by the FDA and other regulatory authorities, the continued funding of collaborations by Genzyme and its partners, the ability to obtain the requisite stockholder approval for the proposed transfer of the joint venture interest, the accuracy of the Down syndrome screening tests and the accuracy of the published data the expected detection rates are based upon.
Genzyme General's first quarter earnings conference call will be broadcast live on the internet at 10 a.m. EDT today at nasdaq-amex.com. Type GENZ into a stock symbol box and click on ''InfoQuotes.'' Then click on the conference call box. You need RealPlayer, a computer equipped with speakers, and a sound card. You can download RealPlayer at the conference call site. If you miss the live call, the broadcast will be archived through midnight EDT April 29.
Investors may also listen to a playback of a conference call discussing Genzyme General's earnings by calling 1-800-633-8284 in the United States and 1-619-812-6440 outside the United States from noon EDT today through 5:00 p.m. EDT April 29. Please refer to reservation number 11970904.
Genzyme's releases are available on the World Wide Web at genzyme.com. They are also available from Genzyme's fax-on-demand service at 1-800-436-1443 within the United States or 1-201-521-1080 outside the United States.
GENZYME GENERAL
Combined Statements of Operations
(Amounts in thousands, except per share amounts)
Three Months Ended
March 31,
1999 1998
Total revenue $178,119 $154,123
Operating costs and expenses:
Cost of products and services sold 52,566 54,477
Selling, general and administrative 51,012 45,111
Research and development 26,667 18,418
Amortization of intangibles 3,503 3,199
Total operating costs and expenses 133,748 121,205
Operating income 44,371 32,918
Other income and (expenses):
Equity in net loss of unconsolidated
affiliates (7,710) (2,905)
Gain on affiliate issuance of stock 606 -
Minority interest 866 864
Gain on sale of investment 1,963 -
Investment income 7,930 2,920
Interest expense (5,050) (1,990)
Total other income (expenses) (1,395) (1,111)
Income before income taxes 42,976 31,807
Net provision for income taxes (10,495) (6,869)
Net income attributable to
GGD Stock $32,481 $24,938
Per Genzyme General common share:
Net income per Genzyme General
common share - basic $0.40 $0.32
Weighted average shares outstanding 81,958 78,760
Net income per Genzyme General common
and common equivalent share - diluted $0.38 $0.31
Adjusted weighted average
shares outstanding 85,632 81,200
Condensed, Combined Balance Sheets
March 31, December 31,
(In thousands) 1999 1998
Cash and marketable securities $610,321 $556,097
Other current assets 344,736 335,171
Property, plant and
equipment, net 374,294 378,992
Goodwill and intangible
assets, net 259,934 263,748
Other assets 103,916 112,299
Total assets $1,693,201 $1,646,307
Current liabilities $207,934 $196,893
Noncurrent liabilities 282,955 282,347
Division equity 1,202,313 1,167,067
Total liabilities and
division equity $1,693,201 $1,646,307
SOURCE: Genzyme General |
