Genzyme General to Buy Drug Maker GelTex

Biotechnology company Genzyme General Corp. said it agreed to buy drug maker GelTex Pharmaceuticals Inc. in a cash-and-stock deal worth about $1 billion. Genzyme officials told analysts in a conference call that GelTex’s kidney disease drug Renagel should reach $500 million in sales in the next five years and $1 billion in revenue by the end of the decade. Investors, however, sent shares of Cambridge, Mass.-based Genzyme down $7.63, or 12%, to close at $57.69 on Nasdaq. Genzyme said the deal will dilute earnings in 2001, without giving specifics, and said it would add to earnings in 2002. Paine Webber analyst Elise Wang estimated the impact would be about 6% in 2001. “They have a long way to go before Renagel adds substantively to Genzyme’s earnings,” said Jonas Alsenas, a portfolio manager for ING Barings. “It’s not a horrible thing, but it’s also not perceived as the answer to Genzyme’s pipeline problem [for new products].” Shares of Waltham, Mass.-based GelTex jumped $5.63, or 15%, to close at $43.25 on Nasdaq.