The FDA has finalized the terms of the consent decree regarding Genzyme’s Allston manufacturing plant, subject to approval by the U.S. District Court for the District of Massachusetts. Genzyme will pay an up-front disgorgement of past profits of $175 million. The company will continue to ship Cerezyme and Fabrazyme, which are manufactured, filled and finished in Allston, as well as Thyrogen, which is filled and finished at the plant. In the U.S., distribution of Thyrogen will be based on medical necessity until another facility is available. The company is currently shipping Cerezyme at approximately 50% of demand and Fabrazyme at 30%.

The consent decree also requires Genzyme to move fill/finish operations out of the Allston plant for Cerezyme, Fabrazyme and Thyrogen sold within the U.S. by November 28, 2010, and by August 31, 2011 for products sold outside of the U.S. If Genzyme can’t meet these deadlines, the FDA can require the company to disgorge 18.5% of revenue for these products.

Genzyme began using excess capacity at its facility in Waterford, Ireland where it currently fills 80% of Cerezyme supply. Genzyme also recently received regulatory approval to fill and finish Myozyme produced at the 160 L scale in Waterford, and will cease operations for Myozyme in Allston. Genzyme has begun the process of transferring all remaining filling activities from Allston to an existing Genzyme contract manufacturer.

Last year, Genzyme implemented a remediation plan to improve quality and compliance at the Allston facility. This plan was submitted to the FDA in October of 2009. Genzyme expects this remediation plan will require approximately two to three years to complete. If remediation actions are not met, the FDA can require Genzyme to pay $15,000 per day, per affected drug, until the compliance milestones are met. Once the remediation plan is fully completed, FDA will require five years of oversight and annual reports.

“We continue to make significant progress both to improve manufacturing and quality systems in Allston and transfer fill/finish activities to other locations, working as expeditiously as possible through the regulatory pathways globally,” said Genzyme’s chairman and chief executive officer, Henri A. Termeer. “We appreciate the guidance the FDA provided over the past year as we work to restore the agency’s confidence in our ability to operate the Allston plant at the highest standards, and return to reliable product supply for patients.”