Citi Lowers Genzyme (GENZ) Price Target

Citi Investment Research & Analysis analyst Yaron Werber maintained a Buy/High Risk rating for shares of Genzyme Corporation (Nasdaq: GENZ), while lowering the stock's price target to $64 per share, down from the previous price target of $66.

Werber said that Genzyme (GENZ) announced further (but expected) delays in the supply of Cerezyme and Fabrazyme.

The analyst said, "We are beginning to see the light at the end of the long Cerezyme tunnel, but can’t find the tunnel yet for Fabrazyme as we now question whether the new working cell bank (WCB) is viable as yields remain way too low at 30%."

Werber also said that Genzyme's recent stock buybacks and sale of non-core assets were steps in the right direction but that the company still needs to lower its EPS guidance because of manufacturing problems, foreign exchange issues and that its guidance was overly optimistic to begin with.

Regarding Fabrazyme's issues, the Citi Investment Research & Analysis analyst wrote, "We are more concerned about the lack of visibility into the future supply of Fabrazyme as yields from the new working cell bank (WCB) are not satisfactory and remain at 30%. Mgt did not provide any new info today on whether FDA approved this new cell bank and this will be communicated soon as part of its Q2 results presumably. This is leading us to believe that there may yet be more challenges with this line, and not expect a pick up until 2011. We are lowering our sales ests in 2010 from $218M to $186M."

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