Genzyme expects to pay $175m consent decree

Globe Staff

Genzyme Corp., the Cambridge biotechnology company that was forced to temporarily close its Allston plant last year, said it is setting aside $175 million on the expectation that it will have to pay penalties and fines to the Food and Drug Administration.

The announcement was included in a company press release issued today regarding Genzyme's first quarter results.

Last month, Genzyme disclosed that the FDA had notified the company of agency plans to take "enforcement action" against Genzyme because of problems at its Allston facility. (To read a Globe story about that disclosure, please click here.)

In today's release, Genzyme said it has received a draft consent decree from the FDA.

"The draft provides for an up-front disgorgement of past profits of $175 million," Genzyme said. "Because this is a likely outcome, Genzyme booked this expense in the first quarter."

Commenting on its latest financial performance, the reported a first-quarter GAAP net loss of $114.9 million, or $0.43 per diluted share, compared with net income of $195.5 million, or $0.70 per diluted share, in the same quarter a year ago.

First-quarter revenue was $1.07 billion, compared with $1.15 billion in the same period last year, Genzyme said in a press release.

"As we work to resume sustainable growth, we are focusing on transforming our manufacturing operations, maximizing the potential of our diverse product portfolio, and advancing key pipeline programs, while tightly managing expenses across the corporation," Henri A. Termeer, Genzyme's chairman and chief executive, said in a statement. To read some recent Globe coverage of Genzyme, please click here.