Genzyme's Lumizyme faces delay after FDA rejection

NEW YORK (Reuters) - U.S. regulators have declined to approve Genzyme Corp's new Lumizyme treatment for Pompe disease, a setback the drugmaker said could delay its approval for six months and crimp 2009 earnings.

Genzyme, whose shares fell more than 5 percent in after-hours activity, currently sells Myozyme to treat the rare and often-fatal inherited disorder. But because Myozyme is made in relatively small 160-liter batches in the United States, the drug is only commercially available to children and infants.

The biotechnology company had asked the U.S. Food and Drug Administration for permission to make Myozyme in 2000-liter batches, in order to ease supply restraints and make the product available to adult patients. It is approved by more than 40 countries from such larger batches.

But the FDA determined that the drug coming out of the 2000-liter batches was chemically slightly different than Myozyme, and that it needed to be approved as a separate medicine under a separate name.

Genzyme on Monday said several remaining issues need to be addressed before the FDA can approve its marketing application for Lumizyme.

"Assuming a six-month delay, Genzyme anticipates the impact on 2009 non-GAAP earnings will be approximately 12 cents per share," Genzyme said in a release.

Earnings would be hurt because of delayed sales of Lumizyme and the cost of supplying the drug free of charge for compassionate use for about 170 patients.

Genzyme said it and the FDA must agree on the design of a so-called post marketing trial. It would be conducted after Lumizyme is approved to get a better idea of its effectiveness.

In addition, Genzyme said it and the FDA still need to agree on steps that would ensure that the drug reaches the right patients and is administered properly.