Genzyme Corporation (NASDAQ:GENZ) is scheduled to report their results after the market closes on April20, 2010. Q1 2010 is expected to be be flat with the depressed 4Q earnings which were $0.31. Given the ongoing challenges for Cerezyme and Fabrazyme as well as a reiteration occurring so late in the quarter, most analysts' have lowered 1Q EPS to an average $0.31 (entirely by cutting Cerezyme and Fabrazyme expectations). 1Q and 2010 (as well as 2011+) consensus estimates should come down and see ongoing business risks, but near-term stock momentum is expected to be driven by news flow around the potential for changes from the ongoing proxy battle. Genzyme expect total revenue to increase to approximately $5.2 billion to $5.5 billion in 2010, with the upper range of the revenue representing increased yield in Fabrazyme, accelerated approval of Lumizyme and maintenance of the Cerezyme market share and the bottom end of our range, excluding among other items, the decrease in the budgeted euro rate.
Genzyme Corporation is a global biotechnology company dedicated to making a major positive impact on the lives of people with serious diseases. The company''s broad product portfolio is focused on rare genetic disorders, renal disease, and osteoarthritis, and includes an industry-leading array of diagnostic products and services. Genzyme''s commitment to innovation continues today with research into novel approaches to cancer, heart disease, and other areas of unmet medical need.
2009 was a year of significant challenges for Genzyme. The full year revenue decreased by approximately $90 million on a year-to-year basis and the volume reductions associated with the supply interruptions reduced the top line by over $430 million year-to-year, with unfavourable currency impact further reducing the top line by an additional $115 million.Q4 non-GAAP net income was $83 million or $0.31 per diluted share, and for the full year, non-GAAP net income was $621 million or $2.27 per diluted share. Within the Cardiometabolic & Renal segment, including Thyrogen, the company saw an increase by about 6% on a year-on-year basis, including the transition of Renvela. Thyrogen's revenue increased by 15% and ended the year with $171 million as Thyrogen is quickly becoming the standard of care for thyroid cancer testing. The Synvisc franchise increased by about 25%, and that was due to the strong Synvisc-One sales. Since its introduction in the United States Synvisc-One is of a very strong start, and that is expected continue into 2010. The Heme/Onc oncology segment ended 2009 with a revenue of about $300 million. Capital expenditures for the year were $662 million. Stock repurchase for 2009 was 7.9 million shares for approximately $414 million, leaving the company with about 7 million shares remaining under our board authorized repurchase.
Analysts' estimates for Q1 2010 range from a low of $0.23 to a high of $0.48, compared to a consensus estimate of $0.34, with number of estimates being 23 and the co-efficient variance 16.74. Genzyme faces pressure to both the top and bottom line near and long term. It seems unlikely that this company will be able to grow back to $5/share, the Street's expectation. Cash flow yields remain well below peers over next 4-5 years because of its need to re-invest in manufacturing. Though Cerezyme issues are resolved, the drug lost a number of patients during the supply shortage and will likely continue to lose share to novel competitor agents going forward. All the aforementioned points are likely to negatively affect earnings in Q1 2010 and the year as a whole.
The stock closed at $ 52.37 on April 9, 2010. Most analysts' recommend a strong hold with a price target of $59.
