Genzyme struggles to recover from virus

By Robert Weisman
Globe Staff / September 21, 2009

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CAMBRIDGE - Genzyme Corp.’s chief executive, Henri A. Termeer, was at his summer home in Maine on June 13 when he got a phone call confirming what he already feared: A virus had infected a bioreactor at his company’s Allston Landing plant, forcing a halt to the production of two expensive drugs that treat rare genetic disorders.

Termeer knew it would be a rough summer. He walked to the beach to absorb the news.

“The great fear you have at that moment is that you know, but very few people around you know, and patients don’t know,’’ Termeer recalled recently in the clipped accent of his native Holland.

Within days, everyone knew. Genzyme had told patients, doctors, investors, regulators, Allston community leaders, and the company’s 11,000 employees. The plant would have to be decontaminated from top to bottom, and the source of the virus hunted down.

It could take months to resume deliveries of the drugs, Cerezyme and Fabrazyme, which are made using living cells. Quickly, company officials devised a plan to ration doses for the 8,000 patients worldwide who depend on the enzyme-replacement treatments.

But three months later, Genzyme, Massachusetts’ largest biotechnology company, with a market value of $15.5 billion, is still struggling to put the problem behind it.

Termeer, in an interview at Genzyme’s headquarters near Kendall Square, said he is embroiled in the toughest challenge of his quarter-century at the helm of the company, and he has thrown himself into the kind of crisis management that could make or break its reputation. Dealing with the effects of the viral contamination consumes nearly all of his time, he said, even “at home or at night.’’

Genzyme has not found the source of the virus, which did not infect drugs already shipped and by itself is not harmful to humans. Scientists suspect it may have entered the bioreactor through a nutrient that helps grow the Chinese hamster ovary cells used to make Cerezyme, its top-grossing drug, with sales of $1.2 billion last year.

The company in late July completed the cleanup and restarted production at the Allston plant, a hulking building overlooking the Charles River. But because cell culture harvesting takes 100 days - the contamination was detected when cells began to die on the 99th day - Genzyme has said it won’t be able to rebuild its inventory and resume shipments of Cerezyme and Fabrazyme until the end of the year.

In the meantime, the fallout has taken many forms.

The rationing program continues for Cerezyme, which treats Gaucher disease, and Fabrazyme, a treatment for Fabry disease. Both diseases are enzyme deficiencies. Gaucher causes fatty substances to accumulate in the spleen, liver, and other organs. Fabry prevents the body from breaking down oils, waxes, and fatty acids that build up in eyes and kidneys. The drugs allow people with the diseases to live normally.

Genzyme’s rationing program gives priority to the most vulnerable patients. And it said it has provided more drugs to a relatively small number who have complained of symptoms, such as bone pain and fatigue, since rationing began.

The company’s share price tumbled from above $60 at the start of June to $48.19 in early July, though it has since recovered much of that ground. To make sure patients don’t have to go without enzyme replacements, regulators allowed two competitors, British drug maker Shire LLC and Israel’s Protalix BioTherapeutics, to expand use of rival treatments in clinical trials before getting those drugs approved for commercial use.

Inspectors from the Food and Drug Administration are planning to revisit the Allston plant, possibly later this month, to confer with a new manager the company brought in, Sandra E. Poole, and review Genzyme’s new testing and manufacturing processes.

“This is the real test,’’ said Harvard Business School professor Bill George, the former chief executive of medical technology giant Medtronic Inc. who has advised Termeer on how to work through the crisis. “You can have 20 good years and you can blow it in 20 seconds if you don’t make the right decisions.’’ So far, George said, Termeer and his management team have made good decisions.

Not everyone agrees. Some industry watchers and patients fault the company for not having enough drug inventory on hand to keep patients from missing doses of the enzyme treatments. The suspension of shipments also gave competitors an opening in the lucrative market for Cerezyme which, like Fabrazyme, costs about $200,000 a year per patient, most of it covered by insurers in the United States or governments elsewhere.

“Obviously, in hindsight, they would do some things differently,’’ said Joshua Schimmer, managing director and biotechnology analyst at the health care investment bank Leerink Swann in New York. “They should have protected their core franchise. Investors are hoping Genzyme will reassess some of the ways it makes its decisions so this kind of thing doesn’t happen in the future.’’

It also took Genzyme weeks after it had discovered the contamination, and alerted the FDA, to determine it was a virus and close the plant. Termeer said company scientists initially thought a viral contamination was unlikely. But they ultimately identified it as one, Vesivirus 2117, the same strain that infected two previous production runs in Allston and Belgium, where Genzyme also has a plant. It took the company another two months to decide, as a precaution, to scrap most of the material from batches that were in production, but not yet finished when the virus was detected.

The problem was aggravated by a 2006 move to increase Allston production of another enzyme-replacement drug, Myozyme, while Genzyme, which has about 5,000 employees in Massachusetts, was building a Framingham plant to boost production capacity for Cerezyme and Fabrazyme. Adding the Myozyme production in Allston contributed to the inventory shortage by taking up space that could have been devoted to making the other two drugs. In the previous cases when viral contamination occurred, Genzyme had enough drugs on hand for patients.

Given that history, “they should have had a better disaster recovery plan in place or they should have been stockpiling enzyme in case something like this happened,’’ said New Jersey property manager Kevin L. Kline, who has been taking Cerezyme for two decades.

Kline is one of about 5,700 people worldwide affected by Gaucher disease. He takes Cerezyme injections to prevent bruising, enlarged organs, and lung and kidney ailments. When his case manager told him of the shortage as he was preparing to move to a new home in a nearby town, Kline recalled, “I knew I’d be taking an enzyme vacation.’’

Because it takes so long for Gaucher disease symptoms to become obvious, Kline said he has not experienced swelling of organs or shortness of breath. He remains loyal to Genzyme and Cerezyme, which he credits with having greatly improved his quality of life. But, he said, “If I had to go a year without [Cerezyme], I’d have to start thinking about other options, like the Shire or the Protalix treatment.’’

Genzyme executives have sought to defuse the strong and sometimes angry reaction from patients, doctors, and investors by hosting meetings, making website postings, and setting up call-in lines to update the progress being made in Allston.

“One of the things we knew would be coming was the understandable emotions,’’ said Geoff McDonough, a senior vice president who helped lead the rationing effort. “It came up many times as people came to grips with the situation.’’

The emotional response is not lost on Termeer, who said the struggles of patients is a deeply personal issue for him. He spent much of his career involved in the development and marketing of Cerezyme - a drug that’s been key to Genzyme’s strategy of focusing on rare diseases - and he knows that many adults and children would have led far different lives without it.

“We’ve been treating these patients globally,’’ he said. “And I know this world. I know the physicians, I know the families, I know many of the early families that went on treatment. And they would tell me when they got married. And they would send me pictures of the children.’’

For now, Termeer is focused on moving as quickly as possible toward resuming Cerezyme shipments from the Allston plant - by Thanksgiving, he hopes. “The most important moment for this healing is the moment we start to deliver product out of that plant,’’ he said.

Robert Weisman can be reached at

Graphic Genzyme Corp.