Analysts Downgrade Genzyme on Continuing Manufacturing Probelms And Changes in Medicare Payments
Mon, 09/21/2009 - 5:32am
NEW YORK (AP) — An Oppenheimer and Co. analyst downgraded shares of Genzyme Corp. Monday, pointing to the biotechnology company's manufacturing problems and changes in Medicare payments that could hurt sales. Brian Abrahams lowered his rating on the stock to "Perform" from "Outperform," and removed his price target of $63 per share. Abrahams said the shares are at a fair price. The Cambridge, Mass., company's stock finished at $57.55 Friday, and has traded between $47.09 and $82.99 over the last 12 months. Genzyme shares have performed well despite manufacturing problems that have created shortages of two Genzyme drugs, and potentially delayed approvals for two other products, the analyst said. Genzyme had to shut down production at a facility in Allston, Mass., in June due to viral contamination. Abrahams said production is back online, but it is hard to predict the results of an upcoming FDA inspection. The stoppage hurt production of Genzyme's drugs Cerezyme and Fabrazyme. The analyst also reduced his sales estimates for the kidney-disease treatments Renagel and Renvela, saying new Medicare rules could encourage physicians to use generic drugs instead.