Genzyme reports second quarter results

Genzyme Corporation has increased revenue by 22% in the second quarter of 2005; from $549.6m in the same quarter last year to $668.1m.

GAAP net income was $123.6m, compared with $78.2m in 2004, while non-GAAP net income, which excludes amortisation and the dilutive effect of contingent convertible debt, rose 46% to $149m, compared with $102.2m.

The company's gross margin in the second quarter was 78% of revenue, up from 74% in the second quarter last year. It generated approximately $274m in gross cash during the second quarter. This was driven by improved margins for Synvisc (hylan G-F 20) stemming from the acquisition of US sales and marketing rights; improved margins for both Renagel (sevelamer hydrochloride) and for enzyme replacement products resulting from increased utilization of manufacturing facilities; and the exit from the generic cyclosporine business.

Within the therapeutics area, sales of Fabrazyme (agalsidase beta) enzyme replacement therapy for Fabry disease rose 50% to $74.4m. US sales were $28.1m, while sales outside the US amounted to $46.3m, with $28.9m coming from Europe.

Within biosurgery, revenue from Synvisc more than doubled to $58.8m from $27.5m, reflecting the company's early 2005 acquisition of sales and marketing rights for the product in the US and several additional European countries. Synvisc is a viscosupplementation product for the treatment of pain due to osteoarthritis of the knee.

Sales of the Sepra family of anti-adhesion products reached $17.1m, while total revenue for the diagnostics/genetics business rose 7% to $76.5 million. Selling, general and administrative expenses totalled $196.4m, and spending on r&d hit $121.7m, compared with $99.4m in the same quarter in 2004.