Genzyme (GENZ) has been under a lot of pressure over the past few quarters following the temporary shutdown of its Allston manufacturing facility due to contamination problems.
While we are pleased to see that Genzyme is taking steps to emerge from the impact of the temporary shutdown of the Allston plant, we believe that the company may face additional challenges before it is able to go back to a normal production and supply schedule. Moreover, the FDA is looking to enforce a consent decree on the company which would result in Genzyme incurring additional costs.
With the company yet to emerge fully from its manufacturing issues, we are downgrading the stock to Underperform. Although Genzyme could receive some positive news in the form of FDA approval of Lumizyme, we expect investor focus to remain on the emerging pipeline, updates regarding the supply schedule of Cerezyme and Fabrazyme, the FDA’s enforcement action and updated guidance.Zacks Investment Research
