Genzyme Corp (GENZ)

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A biotechnology company dedicated to making an impact on the lives of people with serious diseases. Its product and service portfolio is focused on rare disorders, renal diseases, orthopaedics, organ transplant, and diagnostic and predictive testing.

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Avatar NetscribeBiotech (78.76) Submitted: 2/27/07 1:55 AM : Start Price: $63.01 GENZ Score: 31.38

Genzyme Corporation is a global biotechnology company focused on developing products for medical needs in six broad medical areas viz. genetic diseases, renal disease, orthopaedics, transplant and immune diseases, oncology, and diagnostics. The key products in its portfolio are Cerezyme, Renage, Fabrazyme and Synvisc. Besides this it has a deep product pipeline for each of its franchise.

In fiscal 2006, company’s clocked 17% rise in its revenues. The company reported net loss for the year primarily due to write-off related to its takeover of Anormed. This acquisition is likely to strengthen Genzyme‘s transplant and oncology businesses.

The company’s strategy of targeting orphan diseases i.e. diseases for which for which there is no known treatment has paid good dividends in terms of marketing exclusivity and pricing power.

The good thing about GENZ is the fact that it is not dependent on a single driver to propel its growth. Its multi-product portfolio serves broad range of ailments. Thus it is somewhat insulated from a sudden meltdown in prices due to single event. However, the company’s lead product, Cerezyme which contributes almost one-third to its revenue seems to be reaching its saturation point which should be of some concern.

Though, the company is unlikely to give any spectacular returns, however at the end of the day it has a business model that offers strong cash flows, steady growth at substantially lower risk. Its valuation as compared to its peers seems to be reasonable. Thus Genzyme will attract long-term portfolio interest as it has the making of a good defensive stock and hence may outperform in medium-term.

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Avatar NetscribeBiotech (78.76) Submitted: 5/29/07 8:46 AM

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Complacency takes root easily when all the products are established and a clear market position has been carved out. Genzyme Corporation although did not fell for it despite being in similar state. Instead of sitting pretty over the steady stream of income from its established drug molecules that the company’s five segments were bringing in, the focus was to move on to the next stage. This involved developing next generation drugs, which will eventually replace the existing drugs.

Genzyme started by implementing this strategy in its renal segment to substitute its hugely successful molecule Renagel with Renvela. There is also the change of form of Renagel from pill to powder form which the company thinks will open up the market as it improves convenience. Coming to its biosurgery segment, the product offering Synvise is already the market leader and with the recent introduction of Synvise ONE, which will reduce the number of injections per dosage to one from three will see a large jump in market penetration. Moving on to transplant segment where Thymoglobulin is the market leader, the company is banking on Mozobil, which in its Phase III trials has shown the potential to grow into a blockbuster. In the therapeutics segment the company has effectively grafted in Myozyme, which is expected to be the major growth contributor in the segment along with Cerezyme.

To add on to this, recent clinical studies has shown promising result for a wide range of diseases from Central nervous system disorder to various gene therapy application. With product pipeline buzzing with a lot of activity and grafting of molecule into product portfolio taking place so seamlessly the company is expected to continue its upward climb in months to come.

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Genzyme Corp (GENZ)

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