Genzyme not short of natural catalysts

In my last post I looked at an ugly biotech; now for a nice one:

Genzyme (GENZ) is a large, US based biotech with a healthy mix of commercial products and new drugs in the pipeline.

The market cap. is $16B, the forward PE is about 20 and the growth rate is 20%.

"Our products across the board have good traction and momentum" says CEO Henri Termeer.

According to the last 10Q, SG&A expenses have been reduced from 29% of revenue to 27%. This has allowed them to increase R&D spending to 18% of revenue. Now that is NICE!

Compare that to the situation with Alizyme who were having to reduce R&D spending to cut costs and were betting everything on their late stage drugs.

R&D spending is as essential to a biotech as exploration is to an oil company so it is great to see GENZ investing in its future.

According to the 10Q, "Genzyme is conducting more late-stage trials now than at any point in its history." So plenty of scope for future revenue growth then.

The only negatives I have found so far is the ongoing stock dilution through the stock compensation program, and that the shares are denominated in dollars! I am not sure being exposed to the USD is a good place to be at the moment.

The present is good for GENZ and the future should be even brighter. On a forward PE of 20 this looks cheap.