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GENZYME’s CEREDASE "REASONABLE CHARGE" TALKS WITH FDA

Executive Summary

GENZYME's CEREDASE "REASONABLE CHARGE" TALKS WITH FDA have concluded, paving the way for establishment of a reimbursement level for treatment of patients with Type I Gaucher's Disease. Genzyme had been saying the cost per patient for the product would range from $30,000 to $50,000 per year. The range reportedly has been broadened, to between $20,000-$60,000 per year for patients in early, significant phases of Gaucher's, varying on a range of dosing factors, including patient weight, severity and phase of the disease. Ceredase (glucocerobrosidase) received Treatment IND approval in late November, opening up the potential for extended clinical use during the final stages of testing. However, only about 30 patients with severe cases of Gaucher's Disease are currently receiving the drug on a compassionate need basis. Initially, Genzyme estimated that 200 patients with Type I Gaucher's would receive the drug under the Treatment IND. The slow expansion of distribution is due not only to the fact that Genzyme and FDA have had difficulties approving a price for the Treatment IND but also, in part, to the limited supply of the placenta-derived product. To accommodate the supply demands, the company has built a new plant in France and is working on a recombinant form of the enzyme replacement therapy that will be easier to produce. Genzyme President and CEO Henri Termeer predicted in May that recombinant Ceredase would be on the market by 1992 ("The Pink Sheet" May 14, T&G-3). At a presentation to an Alex. Brown health care conference this spring, Termeer predicted that Genzyme would have the ability to treat "2,000, possibly 3,000 patients" in the U.S. by the end of 1990. The expanded patient population would be good news for Genzyme, which has waited for the influx of revenue represented by Ceredase during the long negotiation process. The company has predicted that yearly sales for the product could reach $50-$100 mil. Genzyme's 1989 revenues were $34.3 mil. (up 33%), but the firm suffered a net loss of $13 mil., stemming, in part, from the acquisition of Integrated Genetics and the repurchase of some earlier funding partnerships. First quarter revenues were $10.1 mil., accompanied by a $23.2 mil. loss.
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