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Genzyme Corp.'s (GENZ) long domination of treating Gaucher disease, a genetic disorder, may come under fire as competitors attempt to capitalize on the short supply of its top-selling Cerezyme.

The shortage, caused by the contamination of the sole manufacturing facility of the drug, comes as two competitors - Shire PLC (SHPGY) and Protalix Biotherapeutics Inc. (PLX) - hope to enter the market by mid-2010. The Food and Drug Administration has allowed those drugs to be used in patients, which may give them a market foothold as the shortage causes frustration in a community with few options.

"There isn't any road map," said Noralane Lindor, a medical genetics specialist at the Mayo Clinic. "We don't know the outcome of taking people off of the enzyme."

Gaucher disease is an extremely rare condition caused by an enzyme deficiency that leads to fat cells building up in certain organs and bones. Its severe form can kill children in a few years, while the most common version emerges in childhood and early adulthood, causing disability and complications.

Cerezyme, a synthetic version of the deficient enzyme, is the standard treatment and is taken by 5,500 patients worldwide. It had 2008 sales of $1.24 billion.

But a temporary shutdown in June of its sole production facility in Massachusetts will cause a shortage through year-end and has led the company to predict full-year sales at the low end of $750 million to $1 billion.

Although Genzyme has been providing Gaucher's enzyme replacement therapy for 18 years, two competitive products are in development: Shire's velaglucerase alfa is expected to be submitted for FDA approval by the end of September, while Protalix will do the same for its prGCD by year-end.

Both will get a fast track FDA review, which usually takes six months, but the drugs can be used now under the FDA's protocol.

Actelion Ltd. (ATLN.VX) makes an oral therapy, Zavesca, that inhibits formation of the fat cells that cause problems in Gaucher patients. It is approved for use in adults with a mild to moderate form of the disease who can't take enzyme replacement therapy

Geoff McDonough, senior vice president at Genzyme, said that it will take some time to determine the market impact of the shortage, but that the company is focused on patients and isn't thinking in "competitive terms."

"Of course, patients who switch therapy today are not guaranteed to return," McDonough said.

Collins Stewart recently conducted a survey that suggests physicians will likely manage patients with lower dosage and drug holidays, with some giving velaglucerase a try, on the assumption that there are no further supply disruptions.

If the shortage stretches into mid-2010, physicians will use either alternative, but are looking for more data on prGCD, according to the survey.

Over the long term, the alternative therapies are expected to gain traction because the disease isn't well controlled in all patients on Cerezyme. The new therapies may be cheaper for patients.

Price is a huge issue for Cerezyme, which costs between $200,000 and $250,000 per year.

Protalix boasts of having a cheaper method of production and plans to use that to penetrate the market if it is approved. Shire declined to provide information on pricing.

Although Cerezyme's long presence makes it familiar to the few specialists who treat Gaucher disease, the shortage may provide an opportunity for Shire and Protalix to build physician relationships prior to marketing approval.

Aside from having more treatment options, some physicians may have a soured impression of Genzyme after the shortage is over.

"I am furious," Dr. Lindor said, noting that the current situation is "terrifying" for patients. "We all expected more from Genzyme," she said, criticizing Genzyme's high profits and pricing, and apparent lack of a contingency plan.

The company doesn't disclose the profitability of individual products, but reported a gross margin on product sales of 74% for the three months ended June 30.

McDonough stressed that the shortage highlights the production difficulties for biotech drugs, which are made from biologic processes, and that the company is building a redundant facility that should be ready in mid-2011.

"In retrospect, it would have been better to have started that project two years earlier," he said. "We would indeed have been in a better position today had we done so."

-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; thomas.gryta@dowjones.com