Genzyme Top Seller Faces Competition Amid Supply Issues
August 31 2009 - 1:39PM
Dow Jones News
Genzyme Corp.'s (GENZ) long domination of treating Gaucher
disease, a genetic disorder, may come under fire as competitors
attempt to capitalize on the short supply of its top-selling
Cerezyme.
The shortage, caused by the contamination of the sole
manufacturing facility of the drug, comes as two competitors -
Shire PLC (SHPGY) and Protalix Biotherapeutics Inc. (PLX) - hope to
enter the market by mid-2010. The Food and Drug Administration has
allowed those drugs to be used in patients, which may give them a
market foothold as the shortage causes frustration in a community
with few options.
"There isn't any road map," said Noralane Lindor, a medical
genetics specialist at the Mayo Clinic. "We don't know the outcome
of taking people off of the enzyme."
Gaucher disease is an extremely rare condition caused by an
enzyme deficiency that leads to fat cells building up in certain
organs and bones. Its severe form can kill children in a few years,
while the most common version emerges in childhood and early
adulthood, causing disability and complications.
Cerezyme, a synthetic version of the deficient enzyme, is the
standard treatment and is taken by 5,500 patients worldwide. It had
2008 sales of $1.24 billion.
But a temporary shutdown in June of its sole production facility
in Massachusetts will cause a shortage through year-end and has led
the company to predict full-year sales at the low end of $750
million to $1 billion.
Although Genzyme has been providing Gaucher's enzyme replacement
therapy for 18 years, two competitive products are in development:
Shire's velaglucerase alfa is expected to be submitted for FDA
approval by the end of September, while Protalix will do the same
for its prGCD by year-end.
Both will get a fast track FDA review, which usually takes six
months, but the drugs can be used now under the FDA's protocol.
Actelion Ltd. (ATLN.VX) makes an oral therapy, Zavesca, that
inhibits formation of the fat cells that cause problems in Gaucher
patients. It is approved for use in adults with a mild to moderate
form of the disease who can't take enzyme replacement therapy
Geoff McDonough, senior vice president at Genzyme, said that it
will take some time to determine the market impact of the shortage,
but that the company is focused on patients and isn't thinking in
"competitive terms."
"Of course, patients who switch therapy today are not guaranteed
to return," McDonough said.
Collins Stewart recently conducted a survey that suggests
physicians will likely manage patients with lower dosage and drug
holidays, with some giving velaglucerase a try, on the assumption
that there are no further supply disruptions.
If the shortage stretches into mid-2010, physicians will use
either alternative, but are looking for more data on prGCD,
according to the survey.
Over the long term, the alternative therapies are expected to
gain traction because the disease isn't well controlled in all
patients on Cerezyme. The new therapies may be cheaper for
patients.
Price is a huge issue for Cerezyme, which costs between $200,000
and $250,000 per year.
Protalix boasts of having a cheaper method of production and
plans to use that to penetrate the market if it is approved. Shire
declined to provide information on pricing.
Although Cerezyme's long presence makes it familiar to the few
specialists who treat Gaucher disease, the shortage may provide an
opportunity for Shire and Protalix to build physician relationships
prior to marketing approval.
Aside from having more treatment options, some physicians may
have a soured impression of Genzyme after the shortage is over.
"I am furious," Dr. Lindor said, noting that the current
situation is "terrifying" for patients. "We all expected more from
Genzyme," she said, criticizing Genzyme's high profits and pricing,
and apparent lack of a contingency plan.
The company doesn't disclose the profitability of individual
products, but reported a gross margin on product sales of 74% for
the three months ended June 30.
McDonough stressed that the shortage highlights the production
difficulties for biotech drugs, which are made from biologic
processes, and that the company is building a redundant facility
that should be ready in mid-2011.
"In retrospect, it would have been better to have started that
project two years earlier," he said. "We would indeed have been in
a better position today had we done so."
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com