0000912057-01-533339.txt : 20011009
0000912057-01-533339.hdr.sgml : 20011009
ACCESSION NUMBER: 0000912057-01-533339
CONFORMED SUBMISSION TYPE: S-3/A
PUBLIC DOCUMENT COUNT: 9
FILED AS OF DATE: 20010925
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: GENZYME CORP
CENTRAL INDEX KEY: 0000732485
STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
IRS NUMBER: 061047163
STATE OF INCORPORATION: MA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-3/A
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-68548
FILM NUMBER: 1743923
BUSINESS ADDRESS:
STREET 1: ONE KENDALL SQ
CITY: CAMBRIDGE
STATE: MA
ZIP: 02139
BUSINESS PHONE: 6172527500
MAIL ADDRESS:
STREET 1: ONE KENDALL SQUARE
CITY: CAMBRIDGE
STATE: MA
ZIP: 02139
S-3/A
1
a2059482zs-3a.txt
S-3A
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 24, 2001
REGISTRATION NO. 333-68548
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
GENZYME CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 06-1047163
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
ONE KENDALL SQUARE, CAMBRIDGE, MASSACHUSETTS 02139 (617) 252-7500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------------
PETER WIRTH, ESQ.
Executive Vice President and Chief Legal Officer
Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
(617) 252-7500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
WITH COPIES TO:
PAUL M. KINSELLA, ESQ.
Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
(617) 573-0100
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO AGGREGATE OFFERING AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER UNIT PRICE REGISTRATION FEE
Genzyme General Division Common Stock,
$0.01 par value(1)........................ 2,633,400 shares(2) $41.53(3) $109,365,102 $5,908(4)
(1) Includes associated purchase rights which currently are evidenced by
certificates for shares of Genzyme General Division common stock ("Genzyme
General Stock") and automatically trade with such shares.
(2) The registration statement shall also cover such additional number of shares
of Genzyme General Stock as are required for issuance upon a stock split,
stock dividend or similar transaction.
(3) Estimated solely for the purpose of determining the registration fee and
computed pursuant to Rule 457(c), based upon the average of the high
($42.57) and low ($40.49) prices for Genzyme General Stock, as reported by
The Nasdaq National Market on September 21, 2001.
(4) On August 28, 2001, the Registrant registered 2,064,438 shares of Genzyme
General Stock pursuant to this Registration Statement and paid a
registration fee of $28,841 with respect to such shares, based upon a
proposed maximum aggregate offering price per share of $55.88. This
Pre-Effective Amendment No. 1 registers an additional 568,962 shares of
Genzyme General Stock. The registration fee for these additional shares is
$5,908, based upon a proposed maximum aggregate offering price per share of
$41.53.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 2001
[LOGO]
2,633,400 SHARES
GENZYME GENERAL DIVISION COMMON STOCK
This prospectus relates to resales of up to 2,633,400 shares of Genzyme
General Division common stock that we are issuing in a private placement in
connection with our acquisition of Novazyme Pharmaceuticals, Inc. We are issuing
these shares (1) to Novazyme stockholders in exchange for their shares of
Novazyme capital stock, (2) upon the exercise of warrants to purchase shares of
Novazyme common stock that we are assuming in the acquisition and (3) upon the
exercise of rights to purchase shares of Novazyme Series B Preferred Stock that
we are assuming in the acquisition. These shares may be offered and sold from
time to time by the selling securityholders listed in this prospectus or a
prospectus supplement. We will not receive any of the proceeds from the sale of
these shares.
Genzyme General Division common stock is one of Genzyme Corporation's three
tracking stocks. It is quoted on the Nasdaq National Market under the trading
symbol "GENZ," and on September 21, 2001 its closing price was $40.74 per share.
------------------------
INVESTING IN SHARES OF GENZYME GENERAL DIVISION COMMON STOCK INVOLVES A HIGH
DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE "RISK FACTORS"
BEGINNING ON PAGE 4.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS SEPTEMBER , 2001.
GENZYME CORPORATION - ONE KENDALL SQUARE, CAMBRIDGE, MASSACHUSETTS 02139 -
(617) 252-7500
TABLE OF CONTENTS
PAGE
--------
Note Regarding Forward-Looking Statements................... 2
Genzyme Corporation......................................... 3
Risk Factors................................................ 4
Use of Proceeds............................................. 17
Selling Securityholders..................................... 17
Plan of Distribution........................................ 18
Legal Matters............................................... 20
Experts..................................................... 20
Where You Can Find More Information......................... 20
NOTE REGARDING TRADEMARKS
Genzyme-Registered Trademark-, Cerezyme-Registered Trademark-,
Ceredase-Registered Trademark- and Thyrogen-Registered Trademark- are registered
trademarks of Genzyme Corporation.
Fabrazyme-TM- and Sepra-TM- are trademarks of Genzyme Corporation.
Genzyme-Registered Trademark- is a registered servicemark of Genzyme
Corporation.
Renagel-Registered Trademark- is a registered trademark of GelTex
Pharmaceuticals, Inc.
Synvisc-Registered Trademark- is a registered trademark of Genzyme Biosurgery
Corporation.
AVONEX-Registered Trademark- is a registered trademark of Biogen, Inc.
Replagal-TM- is a trademark of Transkaryotic Therapies, Inc.
NOTE REGARDING REFERENCES TO GENZYME DIVISIONS AND SERIES OF STOCK.
Throughout this prospectus, the words "we," "us," "our" and "Genzyme" refer
to Genzyme Corporation and all of its operating divisions taken as a whole, and
"our board of directors" refers to the board of directors of Genzyme
Corporation. In addition, we refer to our three operating divisions as follows:
- Genzyme General Division = "Genzyme General";
- Genzyme Biosurgery Division = "Genzyme Biosurgery"; and
- Genzyme Molecular Oncology Division = "Genzyme Molecular Oncology."
We currently have three designated series of common stock. Each of these
series is intended to reflect the value and track the performance of one of our
divisions. We refer to each series of common stock as follows:
- Genzyme General Division Common Stock = "Genzyme General Stock";
- Genzyme Biosurgery Division Common Stock = "Biosurgery Stock"; and
- Genzyme Molecular Oncology Division Common Stock = "Molecular Oncology
Stock."
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements about our financial
condition, results of operations, business strategies, operating efficiencies,
competitive positions, growth opportunities for existing products, future
success of development-stage products, plans and objectives of management and
other matters. These forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially from those
suggested by the forward-looking statements. Forward-looking statements,
therefore, should be considered in light of all of the information included or
referred to in this prospectus, including the information set forth under the
heading "RISK FACTORS" beginning on page 4.
Words such as "estimate," "project," "plan," "intend," "expect," "believe,"
"anticipate," "should," "may," "will" and similar expressions are intended to
identify forward-looking statements. These forward-looking statements are found
at various places throughout this prospectus and the documents incorporated by
reference.
We caution you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus or the date of
the incorporated document, as applicable.
2
GENZYME CORPORATION
We are a biotechnology and human healthcare company that develops innovative
products and provides services for major unmet medical needs. We were founded as
a Delaware corporation in June 1981 and became a Massachusetts corporation in
1991. We currently have three operating divisions. Each of our divisions has a
related series of common stock that is intended to reflect its value and track
its financial performance. Our three operating divisions are:
- Genzyme General, which develops and markets therapeutic products, with an
expanding focus on products that treat patients suffering from lysosomal
storage disorders and other specialty therapeutics; diagnostic products,
with a focus on IN VITRO diagnostics; and other products and services,
such as genetic testing services and lipids and peptides for drug
delivery.
- Genzyme Biosurgery, which develops, manufactures and sells instruments,
devices, biomaterials and biotherapeutic products to improve or replace
surgery, with an emphasis on the orthopaedic and cardiothoracic markets.
- Genzyme Molecular Oncology, which utilizes its functional genomics and
antigen discovery technology platforms to develop novel cancer products
focused on cancer vaccines and angiogenesis inhibitors, and to generate
partnering revenue by developing cancer products, with a focus on
therapeutic vaccines and angiogenesis inhibitors.
We allocate all of our products, services, programs, assets and liabilities
among our divisions for purposes of financial statement presentation; however,
Genzyme, the corporation, continues to own all of the assets and is responsible
for all of the liabilities allocated to each of the divisions.
3
RISK FACTORS
IF YOU PURCHASE OUR SECURITIES YOU WILL TAKE ON FINANCIAL RISK. IN DECIDING
WHETHER TO INVEST, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN
ADDITION TO THE OTHER INFORMATION INCLUDED AND INCORPORATED BY REFERENCE IN THIS
PROSPECTUS. IT IS ESPECIALLY IMPORTANT TO KEEP THESE RISK FACTORS IN MIND WHEN
YOU READ FORWARD-LOOKING STATEMENTS.
RISKS RELATED TO GENZYME
THE FOLLOWING RISK FACTORS RELATE TO GENZYME GENERALLY AND AFFECT ALL OF OUR
DIVISIONS, INCLUDING GENZYME GENERAL. HOLDERS OF GENZYME GENERAL STOCK ARE
STOCKHOLDERS OF GENZYME AND ARE, THEREFORE, SUBJECT TO ALL OF THE RISKS AND
UNCERTAINTIES OF GENZYME, NOT JUST THOSE OF GENZYME GENERAL. LIABILITIES OR
CONTINGENCIES OF OUR DIVISIONS OTHER THAN GENZYME GENERAL THAT AFFECT OUR
RESOURCES OR FINANCIAL CONDITION COULD AFFECT THE FINANCIAL CONDITION OR RESULTS
OF OPERATIONS OF GENZYME GENERAL. THEREFORE, YOU SHOULD CONSIDER CAREFULLY THESE
RISK FACTORS BEFORE INVESTING IN OUR SECURITIES.
A REDUCTION IN REVENUE FROM SALES OF PRODUCTS THAT TREAT GAUCHER DISEASE WOULD
HAVE AN ADVERSE EFFECT ON OUR BUSINESS.
We generate a majority of our product revenues from sales of
enzyme-replacement products for patients with Gaucher disease. We entered this
market in 1991 with Ceredase-Registered Trademark- enzyme. Because production of
Ceredase-Registered Trademark- enzyme was subject to supply constraints, we
developed Cerezyme-Registered Trademark- enzyme, a recombinant form of the
enzyme. Recombinant technology uses specially engineered cells to produce
enzymes, or other substances, by inserting into the cells of one organism the
genetic material of a different species. In the case of
Cerezyme-Registered Trademark- enzyme, scientists engineer Chinese hamster ovary
cells to produce human alpha glucocerebrosidase. We stopped producing
Ceredase-Registered Trademark- enzyme, except for small quantities, during 1998,
after substantially all the patients who previously used
Ceredase-Registered Trademark- enzyme converted to
Cerezyme-Registered Trademark- enzyme. Sales of Ceredase-Registered Trademark-
enzyme and Cerezyme-Registered Trademark- enzyme totaled $536.9 million for the
year ended December 31, 2000, representing approximately 59% of our total
revenues for that year and $280.9 million for the six months ended June 30,
2001, representing approximately 49% of our total revenues for that period.
Because our business is highly dependent on Cerezyme-Registered Trademark-
enzyme, a decline in the growth rate of Cerezyme-Registered Trademark- enzyme
sales could have an adverse effect on our operations and may cause the value of
our securities to decline substantially. We will lose revenues from
Cerezyme-Registered Trademark- enzyme if alternative treatments for Gaucher
disease gain commercial acceptance. Some companies have developed competitive
products, and other companies may do so in the future. In addition, the patient
population with Gaucher disease is limited. Because a significant percentage of
that population already uses Cerezyme-Registered Trademark- enzyme,
opportunities for future sales growth are limited. Further, changes in the
methods for treating patients with Gaucher disease, including treatment
protocols that combine Cerezyme-Registered Trademark- enzyme with other
therapeutic products or reduce the amount of Cerezyme-Registered Trademark-
enzyme prescribed, could result in a decline in Cerezyme-Registered Trademark-
enzyme sales. Cerezyme-Registered Trademark- enzyme's orphan drug status, which
provided us with exclusive marketing rights for Cerezyme-Registered Trademark-
enzyme in the United States, expired in May 2001. We have patents protecting our
method of manufacturing Cerezyme-Registered Trademark- enzyme until 2010 and the
composition of Cerezyme-Registered Trademark- enzyme as made by that process
until 2013. The expiration of market exclusivity and orphan drug status in
May 2001 will likely subject Cerezyme-Registered Trademark- enzyme to increased
competition which may decrease the amount of revenue we receive from this
product or the growth of that revenue.
OUR FUTURE EARNINGS GROWTH WILL DEPEND ON OUR ABILITY TO INCREASE SALES OF
RENAGEL-REGISTERED TRADEMARK- PHOSPHATE BINDER.
In November 1998, we launched, through a joint venture with GelTex
Pharmaceuticals, Inc. (or GelTex), Renagel-Registered Trademark- phosphate
binder, a non-absorbed phosphate binder approved for use by patients
4
with end-stage renal disease undergoing a form of treatment known as
hemodialysis. We acquired GelTex in December 2000. We are currently conducting
additional clinical trials in order to determine the efficacy and safety of
Renagel-Registered Trademark- phosphate binder when administered to pre-dialysis
patients. The commercial success of Renagel-Registered Trademark- phosphate
binder is subject to substantial uncertainty and will depend on a number of
factors, including:
- the results of additional clinical trials for additional indications and
expanded labeling;
- our ability to increase market acceptance and sales of
Renagel-Registered Trademark- phosphate binder;
- market acceptance of a tablet formulation of Renagel-Registered Trademark-
phosphate binder, which was launched in September 2000 in the United
States;
- optimal dosing and patient compliance with respect to
Renagel-Registered Trademark- phosphate binder;
- the availability of competing treatments serving the dialysis market;
- the content and timing of our submissions to and decisions by regulatory
authorities;
- our ability to successfully expand manufacturing systems;
- our ability to manufacture Renagel-Registered Trademark- phosphate binder
at a reasonable price;
- the availability of reimbursement from third-party payers, and the extent
of coverage; and
- the accuracy of available information about dialysis patient populations
and the accuracy of our expectations about growth in this population.
GOVERNMENT REGULATION IMPOSES SIGNIFICANT COSTS AND RESTRICTIONS ON THE
DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCTS AND SERVICES.
Our success will depend on our ability to satisfy regulatory requirements.
We may not receive the required regulatory approvals on a timely basis or at
all. Government agencies heavily regulate the production and sale of healthcare
products and the provision of healthcare services. In particular, the Food and
Drug Administration, commonly referred to as the FDA, and comparable agencies in
foreign countries, must approve human therapeutic and diagnostic products before
they are marketed. This approval process can involve lengthy and detailed
laboratory and clinical testing, sampling activities and other costly and
time-consuming procedures. This regulation may delay the time at which a company
like Genzyme can first sell a product or may limit how a consumer may use a
product or service or may adversely impact third-party reimbursement. A
company's failure to comply with applicable regulatory approval requirements may
lead regulatory authorities to take action against the company, including:
- issuing warning letters;
- issuing fines and other civil penalties;
- suspending regulatory approvals;
- refusing approval of pending applications or supplements to approved
applications;
- suspending product sales in the United States and/or exports from the
United States;
- recalling products; and
- seizing products.
Furthermore, therapies that have received regulatory approval for commercial
sale may continue to face regulatory difficulties. The FDA and comparable
foreign regulatory agencies, for example, may require post-marketing clinical
trials or patient outcome studies. In addition, regulatory agencies subject
5
a marketed therapy, its manufacturer and the manufacturer's facilities to
continual review and periodic inspections. The discovery of previously unknown
problems with a therapy, the therapy's manufacturer or the facility used to
produce the therapy could prompt a regulatory authority to impose restrictions
on the therapy, manufacturer or facility, including withdrawal of the therapy
from the market.
LEGISLATIVE CHANGES MAY ADVERSELY IMPACT OUR BUSINESS.
The FDA has designated some of our products as orphan drugs under the Orphan
Drug Act. The Orphan Drug Act provides incentives to manufacturers to develop
and market drugs for rare diseases, generally by entitling the first developer
that receives FDA marketing approval for an orphan drug to a seven-year
exclusive marketing period in the United States for that product. In recent
years Congress has considered legislation to change the Orphan Drug Act to
shorten the period of automatic market exclusivity and to grant marketing rights
to simultaneous developers of the drug. If the Orphan Drug Act is amended in
this manner, any drugs for which we have been granted exclusive marketing rights
under the Orphan Drug Act will face increased competition which may decrease the
amount of revenue we receive from these products. In addition, the U.S.
government has shown significant interest in pursuing healthcare reform. Any
government-adopted reform measures could adversely affect:
- the pricing of therapeutic products and medical devices in the United
States or internationally; and
- the amount of reimbursement available from governmental agencies or other
third-party payers.
If the U.S. government significantly reduces the amount we may charge for our
products, or the amount of reimbursement available for purchases of our products
declines, our future revenues may decline and we may need to revise our research
and development programs.
THE DEVELOPMENT OF OUR PRODUCTS INVOLVES A LENGTHY AND COMPLEX PROCESS, AND WE
MAY BE UNABLE TO COMMERCIALIZE ANY OF THE PRODUCTS WE ARE CURRENTLY DEVELOPING.
Before we can commercialize our development-stage products, we will need to:
- conduct substantial research and development;
- undertake preclinical and clinical testing; and
- pursue regulatory approvals.
This process involves a high degree of risk and takes several years. Our product
development efforts may fail for many reasons, including:
- failure of the product in preclinical studies;
- clinical trial data that is insufficient to support the safety or
effectiveness of the product; or
- our failure to obtain the required regulatory approvals.
For these reasons, and others, we may not successfully commercialize any of the
products we are currently developing.
ANY MARKETABLE PRODUCTS THAT WE DEVELOP MAY NOT BE COMMERCIALLY SUCCESSFUL.
Even if we obtain regulatory approvals for any of our development-stage
products, those products may not be accepted by the market or approved for
reimbursement by third-party payers. A number of factors may affect the rate and
level of market acceptance of these products, including:
- regulation by the FDA and other government authorities;
- market acceptance by doctors and hospital administrators;
6
- the effectiveness of our sales force;
- the effectiveness of our production and marketing capabilities;
- the success of competitive products; and
- the availability and extent of reimbursement from third-party payers.
If our products fail to achieve market acceptance, our profitability and
financial condition will suffer.
WE WILL REQUIRE SIGNIFICANT ADDITIONAL FINANCING WHICH MAY NOT BE AVAILABLE ON
FAVORABLE TERMS, IF AT ALL.
At June 30, 2001, we had approximately $994.2 million in cash, cash
equivalents and short- and long-term investments, excluding investments in
equity securities. We intend to use substantial portions of our available cash
for:
- product development and marketing;
- expanding facilities and staff;
- working capital; and
- strategic business initiatives.
We may further reduce available cash reserves to pay principal and interest
on the following debt:
- $575.0 million in principal under our 3% convertible subordinated
debentures due May 15, 2021, the entire amount of which is allocated to
Genzyme General. These debentures may be converted into shares of Genzyme
General Stock. Holders of debentures may require us to repurchase all or
part of their debentures for cash on May 15, 2006, 2011 or 2016, at a
price equal to 100% of the principal amount of the debentures plus accrued
interest through the date prior to the date of purchase.
- $218.0 million in principal under our revolving credit facility with a
syndicate of commercial banks, all of which is allocated to Genzyme
Biosurgery.
- $10.0 million in principal under our 6.9% convertible subordinated note in
favor of UBS Warburg LLC, the entire amount of which is allocated to
Genzyme Biosurgery. This note matures in May 2003 and is convertible into
shares of Biosurgery Stock.
If we use cash to pay or redeem all or a portion of this debt, including the
principal and interest due on it, our cash reserves will be diminished. To
satisfy these and other commitments, we may have to obtain additional financing.
We may be unable to obtain any additional financing, extend any existing
financing arrangement, or obtain either on terms that we consider favorable.
WE MAY FAIL TO PROTECT ADEQUATELY OUR PROPRIETARY TECHNOLOGY, WHICH WOULD ALLOW
COMPETITORS TO TAKE ADVANTAGE OF OUR RESEARCH AND DEVELOPMENT EFFORTS.
Our long-term success largely depends on our ability to market
technologically competitive products. If we fail to adequately protect our
proprietary technology we may not be able to prevent third parties from using
our proprietary rights. Our currently pending or future patent applications may
not result in issued patents. In the United States, patent applications are
confidential until patents issue, and because third parties may have filed
patent applications for technology covered by our pending patent applications
without us being aware of those applications, our patent applications may not
have priority over any patent applications of others. In addition, our issued
patents may not contain claims sufficiently broad to protect us against third
parties with similar technologies or products or provide us with any competitive
advantage. If a third party initiates litigation regarding our patents, our
7
collaborators' patents, or those patents for which we have license rights, and
is successful, a court could revoke our patents or limit the scope of coverage
for those patents.
The U.S. Patent and Trademark Office, commonly referred to as the USPTO, and
the courts have not consistently treated the breadth of claims allowed in
biotechnology patents. If the USPTO or the courts begin to allow broader claims,
the incidence and cost of patent interference proceedings and the risk of
infringement litigation will likely increase. On the other hand, if the USPTO or
the courts begin to allow narrower claims, the value of our proprietary rights
may be limited. Any changes in, or unexpected interpretations of, the patent
laws may adversely affect our ability to enforce our patent position.
We also rely upon trade secrets, proprietary know-how and continuing
technological innovation to remain competitive. We protect this information with
reasonable security measures, including the use of confidentiality agreements
with our employees, consultants and corporate collaborators. It is possible that
these individuals will breach these agreements and that any remedies for a
breach will be insufficient to allow us to recover our costs. Furthermore, our
trade secrets, know-how and other technology may otherwise become known or be
independently discovered by our competitors.
WE MAY BE REQUIRED TO LICENSE TECHNOLOGY FROM COMPETITORS IN ORDER TO DEVELOP
AND COMMERCIALIZE SOME OF OUR PRODUCTS AND SERVICES, AND IT IS UNCERTAIN WHETHER
THESE LICENSES WILL BE AVAILABLE.
Third-party patent rights may cover some of the products that we or our
strategic partners are developing or testing. As a result, we or our strategic
collaborators may be required to obtain licenses from the holders of these
patents in order to use, manufacture or sell these products and services, and
payments under these licenses may reduce our revenue from these products.
Furthermore, we may not be able to obtain these licenses on acceptable terms or
at all. If we fail to obtain a required license or are unable to alter the
design of our technology to fall outside of a patent, we may be unable to
effectively market some of our technology and services, which could limit our
profitability.
WE MAY INCUR SUBSTANTIAL COSTS AS A RESULT OF LITIGATION OR OTHER PROCEEDINGS
RELATING TO PATENT AND OTHER INTELLECTUAL PROPERTY RIGHTS.
A third party may sue us or one of our strategic collaborators for
infringing the third-party's patent rights. Likewise, we or one of our strategic
collaborators may need to resort to litigation to enforce our patent rights or
to determine the scope and validity of third-party proprietary rights. For
example, we filed a lawsuit on July 25, 2000 seeking injunctive relief and
damages against Transkaryotic Therapies, Inc. in the U.S. District Court in
Wilmington, Delaware for patent infringement resulting from Transkaryotic
Therapies' manufacture and use of Replagal-TM-, its replacement therapy for
Fabry disease. The suit alleges infringement of U.S. Patent No. 5,356,804, which
we exclusively licensed from Mount Sinai School of Medicine. The patent is
directed to methods of making alpha-galactosidase in mammalian cells, as well as
the genetically-engineered cells themselves. On September 19, 2000,
Transkaryotic Therapies filed a lawsuit against us and Mount Sinai School of
Medicine in the U.S. District Court in Boston, Massachusetts seeking declaratory
judgments that the manufacture, use and sale of Replagal-TM- does not infringe
the patent licensed by us from Mount Sinai and that the Mount Sinai patent is
invalid. While the declaratory judgment action filed by Transkaryotic Therapies
has been dismissed without prejudice, Genzyme will continue the parallel case
pending in the U.S. District Court in Delaware.
8
The cost to us of any litigation or other proceeding relating to
intellectual property rights, even if resolved in our favor, could be
substantial, and the litigation would divert our management's efforts. Some of
our competitors may be able to sustain the costs of complex patent litigation
more effectively than we can because they have substantially greater resources.
If we do not prevail in this type of litigation, we or our strategic
collaborators may be required to:
- pay monetary damages;
- stop commercial activities relating to the affected products or services;
- obtain a license in order to continue manufacturing or marketing the
affected products or services; or
- compete in the market with a substantially similar product.
Uncertainties resulting from the initiation and continuation of any
litigation could limit our ability to continue some of our operations. In
addition, a court may require that we pay expenses or damages and litigation
could disrupt our commercial activities.
WE MAY BE LIABLE FOR PRODUCT LIABILITY CLAIMS NOT COVERED BY INSURANCE.
Individuals who use our products or services, including those we acquire in
business combinations, may bring product liability claims against us or our
subsidiaries. While we have taken, and continue to take, what we believe are
appropriate precautions, we may be unable to avoid significant liability
exposure. We have only limited amounts of product liability insurance, which may
not provide sufficient coverage against any product liability claims. We may be
unable to obtain additional insurance in the future, or we may be unable to do
so on acceptable terms. Any additional insurance we do obtain may not provide
adequate coverage against any asserted claims. In addition, regardless of merit
or eventual outcome, product liability claims may result in:
- diversion of management's time and attention;
- expenditure of large amounts of cash on legal fees, expenses and payment
of damages;
- decreased demand for our products and services; and
- injury to our reputation.
IN CONNECTION WITH OUR ACQUISITION OF BIOMATRIX, WE ASSUMED LITIGATION FACED BY
BIOMATRIX.
On July 21 and August 7, 15, and 30, 2000, class action complaints
requesting unspecified damages were filed in the U.S. District Court in New
Jersey against Biomatrix and two of its officers and directors, Endre A. Balazs
and Rory B. Riggs. These lawsuits subsequently were consolidated into a single
class action lawsuit. In this lawsuit, the plaintiffs seek to certify a class of
all persons or entities who purchased or otherwise acquired Biomatrix common
stock during the period between July 20, 1999 and April 12, 2000. The plaintiffs
allege, among other things, that the defendants failed to accurately disclose
information related to Biomatrix's Synvisc-Registered Trademark-
viscosupplementation product during the period between July 20, 1999 and
April 12, 2000, and assert causes of action under the Securities Exchange Act of
1934, as amended, and Rule 10b-5 promulgated under that statute. We acquired
Biomatrix in December 2000. We intend to vigorously defend against those
actions. We may be required to pay substantial damages or settlement costs to
the extent that those damages or settlement costs are not covered by insurance.
Regardless of their outcome, these actions may cause a diversion of our
management time and attention.
9
OUR COMPETITORS IN THE BIOTECHNOLOGY AND PHARMACEUTICAL INDUSTRIES MAY HAVE
SUPERIOR PRODUCTS, MANUFACTURING CAPABILITIES OR MARKETING POSITION.
The human healthcare products and services industry is extremely
competitive. Our competitors include major pharmaceutical companies and other
biotechnology companies. Some of these competitors may have more extensive
research and development, marketing and production capabilities. Some
competitors also may have greater financial resources than we have.
Our future success will depend on our ability to develop and market
effectively our products against those of our competitors. For instance, we are
seeking orphan drug designation for some of our products that are still in
development or are currently being reviewed by the FDA for marketing approval,
including Fabrazyme-TM- enzyme for the treatment of Fabry disease. We are aware
of other companies developing products for the treatment of Fabry disease.
Transkaryotic Therapies, Inc., for example, submitted its application for
marketing approval for its product to the FDA approximately one week before we
submitted our application for Fabrazyme-TM- enzyme. If Transkaryotic Therapies
or any other company receives FDA approval for a Fabry disease therapy with
orphan drug designation before we receive FDA approval for Fabrazyme-TM- enzyme,
the Orphan Drug Act may preclude us from selling Fabrazyme-TM- enzyme in the
United States for up to seven years. Both Genzyme and Transkaryotic Therapies
received European Medicines Evaluation Agency, or EMEA, approval for their Fabry
disease therapies and were granted the European equivalent of orphan drug
designation in the European Union for up to ten years. If our products receive
marketing approval but cannot compete effectively in the marketplace, our
profitability and financial position will suffer.
IF WE ARE UNABLE TO KEEP UP WITH RAPID TECHNOLOGICAL CHANGES, OUR PRODUCTS OR
SERVICES MAY BECOME OBSOLETE.
The field of biotechnology is characterized by significant and rapid
technological change. Although we attempt to expand our technological
capabilities in order to remain competitive, research and discoveries by others
may make our products or services obsolete. For example, some of our competitors
may develop a product to treat Gaucher disease that is more effective or less
expensive than Cerezyme-Registered Trademark- enzyme. If we cannot compete
effectively in the marketplace, our profitability and financial position will
suffer.
IF WE FAIL TO OBTAIN ADEQUATE LEVELS OF REIMBURSEMENT FOR OUR PRODUCTS FROM
THIRD-PARTY PAYERS, THE COMMERCIAL POTENTIAL OF OUR PRODUCTS WILL BE
SIGNIFICANTLY LIMITED.
A substantial portion of our revenue comes from payments by third-party
payers, including government health administration authorities and private
health insurers. As a result of the trend toward managed healthcare in the
United States, as well as legislative proposals to reduce payments under
government insurance programs, third-party payers are increasingly attempting to
contain healthcare costs by:
- challenging the prices charged for healthcare products and services;
- limiting both coverage and the amount of reimbursement for new therapeutic
products;
- denying or limiting coverage for products that are approved by the FDA,
but are considered experimental or investigational by third-party payers;
and
- refusing in some cases to provide coverage when an approved product is
used for disease indications in a way that has not received FDA marketing
approval.
Government and other third-party payers may not provide adequate insurance
coverage or reimbursement for our products and services, which could impair our
financial results. In addition, third-party payers may not reimburse patients
for newly approved healthcare products, which could decrease demand for our
products. Furthermore, Congress occasionally has discussed implementing
10
broad-based measures to contain healthcare costs. It is possible that Congress
will enact legislation specifically designed to contain healthcare costs. If
third-party reimbursement is inadequate to allow us to recover our costs or if
Congress passes legislation to contain healthcare costs, our profitability and
financial condition will suffer.
CHANGES IN THE ECONOMIC, POLITICAL, LEGAL AND BUSINESS ENVIRONMENTS IN THE
FOREIGN COUNTRIES IN WHICH WE DO BUSINESS COULD CAUSE OUR INTERNATIONAL SALES
AND OPERATIONS, WHICH ACCOUNT FOR A SIGNIFICANT PERCENTAGE OF OUR CONSOLIDATED
NET SALES, TO BE LIMITED OR DISRUPTED.
Our international operations accounted for 39% of our consolidated revenues
for the year ended December 31, 2000 and 36% of our consolidated revenues for
the six months ended June 30, 2001. We expect that international sales will
continue to account for a significant percentage of our revenues for the
foreseeable future. In addition, we have direct investments in a number of
subsidiaries outside of the United States, primarily in Europe and Japan. Our
international sales and operations could be limited or disrupted, and the value
of our direct investments may be diminished, by any of the following:
- fluctuations in currency exchange rates;
- the imposition of governmental controls;
- less favorable intellectual property or other applicable laws;
- the inability to obtain any necessary foreign regulatory approvals of
products in a timely manner;
- import and export license requirements;
- political instability;
- trade restrictions;
- changes in tariffs;
- difficulties in staffing and managing international operations; and
- longer payment cycles.
A significant portion of our business is conducted in currencies other than
our reporting currency, the U.S. dollar. We recognize foreign currency gains or
losses arising from our operations in the period in which we incur those gains
or losses. As a result, currency fluctuations among the U.S. dollar and the
currencies in which we do business have caused foreign currency transaction
gains and losses in the past and will likely do so in the future. Because of the
number of currencies involved, the variability of currency exposures and the
potential volatility of currency exchange rates, we may suffer significant
foreign currency transaction losses in the future due to the effect of exchange
rate fluctuations on our future operating results.
SEVERAL ANTI-TAKEOVER PROVISIONS MAY DEPRIVE OUR STOCKHOLDERS OF THE OPPORTUNITY
TO RECEIVE A PREMIUM FOR THEIR SHARES UPON A CHANGE IN CONTROL.
Provisions of Massachusetts law and our charter, by-laws and shareholder
rights plan could delay or prevent a change in control of Genzyme or a change in
our management. Our tracking stock structure may also deprive our stockholders
of the opportunity to receive a premium for their shares upon a change in
control because, in order to obtain control of a particular division, an
acquiror would have to obtain control of the entire corporation.
11
In addition, our board of directors may, in its sole discretion:
- exchange shares of Biosurgery Stock or Molecular Oncology Stock, for
Genzyme General Stock at a 30% premium over the market value of the
exchanged shares; and
- issue shares of undesignated preferred stock from time to time in one or
more series.
Either of these board actions could increase the cost of an acquisition of
Genzyme and thus discourage a takeover attempt.
RISKS RELATED TO GENZYME TRACKING STOCKS
WE HAVE THREE SERIES OF TRACKING STOCK DESIGNED TO REFLECT THE VALUE AND
TRACK THE PERFORMANCE OF OUR THREE OPERATING DIVISIONS AS FOLLOWS:
- GENZYME GENERAL STOCK DESIGNED TO TRACK THE PERFORMANCE OF GENZYME
GENERAL;
- BIOSURGERY STOCK DESIGNED TO TRACK THE PERFORMANCE OF GENZYME BIOSURGERY;
AND
- MOLECULAR ONCOLOGY STOCK DESIGNED TO TRACK THE PERFORMANCE OF GENZYME
MOLECULAR ONCOLOGY.
THE FOLLOWING ARE RISKS RELATED TO OWNING SHARES OF OUR TRACKING STOCK. YOU
SHOULD CAREFULLY CONSIDER THESE RISK FACTORS BEFORE DECIDING WHETHER TO INVEST
IN OUR STOCK.
HOLDERS OF OUR TRACKING STOCK ARE STOCKHOLDERS OF A SINGLE COMPANY AND
UNFAVORABLE FINANCIAL TRENDS AFFECTING ONE DIVISION COULD NEGATIVELY AFFECT THE
OTHER DIVISIONS.
Our divisions are not separate legal entities. Holders of Genzyme General
Stock, together with holders of our other series of tracking stock, are
stockholders of a single company and face all of the risks of an investment in
Genzyme.
For purposes of financial presentation, we allocate programs, products,
assets and liabilities among our three divisions. Genzyme Corporation and its
subsidiaries, however, own all of the assets and are responsible for all of the
liabilities of each division. A holder of Genzyme General Stock, for example,
does not have any specific rights to the assets allocated to Genzyme General in
our financial statements. Furthermore, if we are unable to satisfy one
division's liabilities out of the assets we allocate to that division, we may be
required to satisfy those liabilities with assets we have allocated to another
division. We encourage you to review our consolidated financial statements and
the financial statements of Genzyme General included in the reports that we file
with the SEC.
OUR BOARD OF DIRECTORS MAY TAKE ACTIONS THAT HAVE AN UNEQUAL AND ADVERSE EFFECT
ON THE HOLDERS OF ONE OR MORE SERIES OF OUR TRACKING STOCK.
At times, the interests of the holders of the different series of our
tracking stock may diverge or appear to diverge from each other. We are not
aware of any legal precedent interpreting the fiduciary duties of the directors
of a Massachusetts corporation in that situation. Recent cases in Delaware have
established that a Delaware court will afford considerable deference to business
decisions that are made in good faith by a disinterested and adequately informed
board of directors even when those decisions involve disparate treatment of
different series of tracking stock. These Delaware cases rely upon the premise
that the board of directors owes its fiduciary duties to the corporation and all
of its stockholders and does not owe separate duties to each class or series of
stockholders. If a Massachusetts court were to follow the reasoning in these
Delaware cases, a Genzyme stockholder may not be able to successfully challenge
an action by the board of directors that has a disadvantageous effect on a
particular series of our tracking stock.
12
MEMBERS OF OUR BOARD OF DIRECTORS MAY FAVOR ONE SERIES OF TRACKING STOCK OVER
ANOTHER IF THEY OWN A DISPROPORTIONATE AMOUNT OF THAT SERIES.
A member of our board of directors may own a disproportionate amount of
tracking stock in a particular series, or the value of his or her holdings of a
particular series of stock may be different from the value of his or her
holdings in another series. This disparate stock ownership may cause the board
member to favor one series of stock over another. Nevertheless, we believe that
a member of our board of directors could properly perform his or her fiduciary
responsibilities to all of our stockholders even if his or her interests in
shares of different series are disproportionate or of unequal values. Our board
of directors may create committees to review matters that raise
conflict-of-interest issues. If a committee is formed, it would report to the
full board of directors.
HOLDERS OF OUR TRACKING STOCK HAVE LIMITED DECISION-MAKING POWER BECAUSE THEY
HAVE LIMITED SEPARATE VOTING RIGHTS.
Holders of all series of our tracking stock vote together as a single class
on all matters requiring common stockholder approval, including the election of
directors. Holders of one series of tracking stock do not have the right to vote
on matters separately from the other series except in limited circumstances.
These circumstances are dictated by Massachusetts law, our charter and our
management and accounting policies. Therefore, stockholders of one series of
tracking stock generally could not make a proposal that would require approval
only of the holders of that series. Instead, they would have to obtain approval
from all common stockholders.
As of June 30, 2001, the relative voting power of our tracking stocks was as
follows:
APPROXIMATE PERCENTAGE
SERIES OF TOTAL VOTING POWER
------ ----------------------
Genzyme General Stock................................... 93%
Biosurgery Stock........................................ 5%
Molecular Oncology Stock................................ 2%
THE VOTES PER SHARE OF OUR TRACKING STOCKS ARE ADJUSTED EVERY TWO YEARS.
Under our charter, Genzyme General Stock is entitled to one vote per share,
which is never adjusted. However, the votes per share of our other tracking
stocks are adjusted every two years. Specifically, on January 1, 2003 and every
second anniversary thereafter, the vote per share to which each tracking stock
is entitled will be recalculated based on its fair market value divided by the
fair market value of a share of Genzyme General Stock, with "fair market value"
meaning the average closing price over the 20 consecutive trading days beginning
the 30th trading day preceding the January 1st adjustment date. At the time of
an adjustment, the per share voting power of any tracking stock relative to the
other series of tracking stock could decrease materially. Additionally, during
the intervening period between adjustments, the per share voting power of each
tracking stock will remain the same even though its market price will fluctuate
relative to--and could become materially greater than--the market prices of the
other tracking stocks. Currently, Biosurgery Stock is entitled to 0.28 vote per
share and Molecular Oncology Stock is entitled to 0.28 vote per share.
THE LIQUIDATION RIGHTS FOR OUR TRACKING STOCKS ARE NOT ADJUSTED TO REFLECT
CHANGES IN THEIR FAIR MARKET VALUES.
If we were to dissolve, liquidate or wind up our affairs, other than as part
of a merger, business combination or sale of substantially all of our assets,
our stockholders would receive any remaining assets according to the percentage
of total liquidation units that they hold. The number of liquidation units per
share for each series of our tracking stock outstanding is as follows:
- each share of Genzyme General Stock has 100 liquidation units;
13
- each share of Biosurgery Stock has 100 liquidation units; and
- each share of Molecular Oncology Stock has 50 liquidation units.
Although we adjust liquidation units to prevent dilution in the event of
some subdivisions, combinations or distributions of common stock, we do not
adjust them to reflect changes in the relative market value or performance of
the divisions. Therefore, at the time of a dissolution, liquidation or winding
up, the relative liquidation units attributable to each series of tracking stock
may not correspond to the value of the underlying assets allocated to that
division.
OUR BOARD OF DIRECTORS MAY CHANGE OUR MANAGEMENT AND ACCOUNTING POLICIES TO THE
DETRIMENT OF ONE SERIES OF TRACKING STOCK WITHOUT STOCKHOLDER APPROVAL.
Our board of directors has adopted management and accounting policies that
are used to govern our business and to prepare our financial statements. These
policies cover the allocation of corporate expenses, assets and liabilities and
other accounting matters, and the reallocation of assets between divisions and
other matters. Our board of directors generally may modify or rescind these
policies or adopt new ones without stockholder approval. Any revised policies
could have different effects on each series of our tracking stock and could be
detrimental to one series as compared to another. The discretion of our board of
directors to make changes is limited only by the policies themselves and the
board's fiduciary duty to all of our stockholders. We encourage you to review
the full text of our management and accounting policies, a copy of which is
attached as Exhibit 3 to our Registration Statement on Form 8-A that we filed
with the SEC on December 19, 2000.
WE MAY ELIMINATE TRACKING STOCK IF A CORPORATE OR SHAREHOLDER LEVEL TAX IS
IMPOSED ON THE ISSUANCE OR RECEIPT OF TRACKING STOCK.
In 1999, the Clinton Administration proposed tax legislation that would have
imposed a corporate level tax on issuances of tracking stock. In 2000, the
Clinton Administration proposed legislation that would tax stockholders upon the
receipt of tracking stock from the issuing corporation as a distribution or in a
tracking stock exchange. Congress has not enacted either of these proposals into
law. If similar proposals are enacted into law or effected through Treasury
Department regulations, we could be taxed on an amount up to the gain realized
in future financings in which we sell tracking stock, including Genzyme General
Stock. Also, any use of our tracking stock to acquire other companies could
result in a tax on us, the stockholders of the target company, or both. We also
may be taxed if we distribute to stockholders "designated" shares of tracking
stock, which are shares designated by the tracked division as issuable at the
option of our board for Genzyme General's benefit. In addition, stockholders
could be taxed if they receive a distribution of designated shares of tracking
stock or if they receive shares of tracking stock in exchange for other Genzyme
stock. These or similarly adverse tax consequences could cause us to eliminate
tracking stock from our capital structure. We cannot predict, however, whether
Congress will enact legislation, or whether the Treasury Department will issue
regulations effecting these or similar proposals.
WE CANNOT ASSURE THAT TRACKING STOCK WILL "TRACK" THE PERFORMANCE OF THE
CORRESPONDING DIVISION.
Although we have attempted to design our tracking stocks to "track" the
performance of their corresponding divisions, we cannot assure that the market
prices of these stocks will indeed reflect that performance. The market may
assign values to a tracking stock that are based on factors other than a
corresponding division's reported financial performance. For instance, we cannot
be certain what, if any, valuation the market might place on the mandatory and
optional exchange features or the differing voting rights and liquidation units
of the tracking stocks. In addition, as discussed above under the subheading
"--Holders of our tracking stock are stockholders of a single company and
unfavorable
14
financial trends affecting one division could negatively affect the other
divisions," financial developments in one division, particularly if significant
and/or adverse, may affect other divisions
THE NON-COMPETE POLICY AMONG OUR DIVISIONS MAY NOT COVER ALL OF THE ACTIVITIES
OF A PARTICULAR DIVISION.
Our board of directors has adopted a policy regarding competition among our
divisions. This non-compete policy requires that we develop certain products and
services within a given division, as opposed to another division, or through
joint ventures involving a given division, because the product or service is
within the field of activity of that division. This non-compete policy, however,
does not cover the entire field of activity of each division. We cannot
guarantee that all products and services we develop in a given field of activity
will be allocated to a division primarily engaged in that field of activity.
RISKS RELATING TO GENZYME GENERAL
GENZYME GENERAL STOCK IS INTENDED TO TRACK THE VALUE AND REFLECT THE
PERFORMANCE OF GENZYME GENERAL. ACCORDINGLY, YOU SHOULD CAREFULLY CONSIDER THE
FOLLOWING FACTORS AFFECTING THE BUSINESS OF GENZYME GENERAL.
GENZYME GENERAL IS SUBSTANTIALLY DEPENDENT UPON SALES OF
CEREZYME-REGISTERED TRADEMARK- ENZYME.
Genzyme General derives a majority of its revenue from sales of
Cerezyme-Registered Trademark- enzyme, our enzyme-replacement therapy for the
treatment of Gaucher disease. Accordingly, the risks described above under
"--Risks Related to Genzyme--A reduction in revenue from sales of products that
treat Gaucher disease would have an adverse effect on our business" may also
adversely affect the business of Genzyme General.
FUTURE GROWTH IN GENZYME GENERAL'S EARNINGS WILL DEPEND ON OUR ABILITY TO
INCREASE SALES OF RENAGEL-REGISTERED TRADEMARK- PHOSPHATE BINDER.
We encourage you to read the material under "--Risks Related to Genzyme--Our
future earnings growth will depend on our ability to increase sales of
Renagel-Registered Trademark- phosphate binder." That material describes the
factors on which the commercial success of Renagel-Registered Trademark-
phosphate binder depends.
WE MAY NOT SUCCESSFULLY COMMERCIALIZE GENZYME GENERAL'S PRODUCT CANDIDATES.
Genzyme General is developing or collaborating on the development of
treatments for Fabry disease, mucopolysaccharidosis I (MPS-I) disease, and Pompe
disease, among others. Our ability to secure regulatory approvals for marketing
these product candidates is highly uncertain, as is our ability to successfully
commercialize those that receive regulatory approvals. Because the commercial
success of these product candidates will substantially determine future revenue
and profit at Genzyme General, we encourage you to review the factors described
under "--Risks Relating to Genzyme" above for details regarding risks that
characterize commercialization of our biotechnology product candidates.
GENZYME GENERAL MAY NOT BE ABLE TO SUCCESSFULLY COMMERCIALIZE
THYROGEN-REGISTERED TRADEMARK- HORMONE.
In January 1999, Genzyme General launched U.S. sales of
Thyrogen-Registered Trademark- recombinant thyroid stimulating hormone used to
diagnose thyroid cancer. The commercial success of
Thyrogen-Registered Trademark- hormone will depend on a number of factors,
including:
- regulation by the FDA;
- our ability to obtain regulatory approvals in foreign countries;
- the development and commercial success of competitive products; and
15
- the availability of reimbursement from third-party payers.
Genzyme General cannot be sure that market penetration of
Thyrogen-Registered Trademark- hormone will increase.
IF GENZYME GENERAL'S STRATEGIC ALLIANCES TO DEVELOP AND COMMERCIALIZE ITS
PRODUCTS ARE UNSUCCESSFUL, GENZYME GENERAL'S EARNINGS GROWTH WILL BE LIMITED.
Several of Genzyme General's strategic initiatives involve alliances with
other biotechnology companies. These include:
- an agreement with Biogen, Inc. for the marketing in Japan of
AVONEX-Registered Trademark- (Interferon-beta 1a), Biogen's treatment for
relapsing forms of multiple sclerosis, following regulatory approval; and
- a joint venture with BioMarin Pharmaceutical Inc. for the development and
commercialization of alpha-L-iduronidase for the treatment of the
lysosomal storage disorder known as MPS-I.
Genzyme General plans to enter into additional alliances in the future. The
success of many of these arrangements is largely dependent on technology and
other intellectual property contributed by Genzyme General's strategic partners
to the alliances or the resources, efforts and skills of Genzyme General's
partners. Genzyme General's strategic partners may:
- terminate their agreements and Genzyme General's access to the underlying
intellectual property;
- fail to devote significant financial or other resources to the alliances
and thereby significantly hinder or delay development, manufacturing or
commercialization activities;
- fail to successfully develop or commercialize any products; and
- fail to maintain the financial resources necessary to continue financing
their portion of the development, manufacturing or commercialization costs
or their own operations.
If any of these alliances are terminated and Genzyme General loses access to
the underlying intellectual property, or if Genzyme General and its partners are
unable to successfully develop or commercialize products, Genzyme General's
future earnings will be adversely affected. For example, in August 2001, Genzyme
General terminated its strategic alliance with Pharming Group N.V. for the
development and commercialization of human alpha-glucosidase produced using a
Chinese hamster ovary cell line for the treatment of Pompe disease as a result
of Pharming's filing for receivership. Although Genzyme General retained access
to the intellectual property licensed from Synpac (North Carolina), Inc. that
was previously sublicensed to the joint venture, it lost access to the
intellectual property licensed from Pharming in connection with this joint
venture.
16
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of Genzyme
General Stock offered by this prospectus.
SELLING SECURITYHOLDERS
This prospectus relates to resales by the selling securityholders listed
below or in a supplement to this prospectus of up to 2,633,400 shares of Genzyme
General Stock that we are issuing in a private placement in connection with our
acquisition of Novazyme Pharmaceuticals, Inc. We are issuing these shares (1) to
Novazyme stockholders in exchange for their shares of Novazyme capital stock,
(2) upon the exercise of warrants to purchase shares of Novazyme common stock
that we are assuming in the acquisition and (3) upon the exercise of rights to
purchase shares of Novazyme Series B Preferred Stock that we are assuming in the
acquisition.
The table below sets forth information about the beneficial ownership of
shares of Genzyme General Stock by each selling securityholder who has timely
provided us with a completed and executed notice and questionnaire stating its
intent to use this prospectus to sell or otherwise dispose of shares of Genzyme
General Stock. Our registration of shares of Genzyme General Stock does not mean
that the selling securityholders identified below will sell all or any of these
shares.
We have prepared this table using information furnished to us by the selling
securityholders. Except as otherwise indicated below, to our knowledge, no
selling securityholder nor any of its affiliates has held any position or office
with, been employed by or otherwise has had any material relationship with us or
our affiliates during the three years prior to the date of this prospectus.
NUMBER OF SHARES OF NUMBER OF SHARES OF
GENZYME GENERAL STOCK GENZYME GENERAL STOCK
OFFERED PURSUANT TO BENEFICIALLY OWNED
NAME (1) THIS PROSPECTUS AFTER THE OFFERING (2)
----------------------------------------------------- --------------------- ----------------------
1999 Double Eagle, L.P. and any of its limited
partners who receive shares of Genzyme General
Stock in a distribution by the limited
partnership........................................ 20,687 0
CANSK, L.L.C. and any of its members who receive
shares of Genzyme General Stock in a distribution
by the limited liability company................... 544,068 0
CHTP / NOVA Associates, LLC and any of its members
who receive shares of Genzyme General Stock in a
distribution by the limited liability company...... 239,324 0
CHTP / NOVA Associates II, LLC and any of its members
who receive shares of Genzyme General Stock in a
distribution by the limited liability company...... 66,116 0
Faircloud Investments, L.L.C. and any of its members
who receive shares of Genzyme General Stock in a
distribution by the limited liability company...... 8,489 0
HealthCare Ventures VI, L.P. and any of its limited
partners who receive shares of Genzyme General
Stock in a distribution by the limited
partnership........................................ 447,950 0
Morgan Stanley Dean Witter Equity Funding, Inc....... 53,148 0
Originators Investment Plan, L.P..................... 2,798 0
Perseus-Soros BioPharmaceutical Fund, L.P. and any of
its limited partners who receive shares of Genzyme
General Stock in a distribution by the limited
partnership........................................ 498,647 0
17
NUMBER OF SHARES OF NUMBER OF SHARES OF
GENZYME GENERAL STOCK GENZYME GENERAL STOCK
OFFERED PURSUANT TO BENEFICIALLY OWNED
NAME (1) THIS PROSPECTUS AFTER THE OFFERING (2)
----------------------------------------------------- --------------------- ----------------------
Tulsa Angel Investment Group, LLC and any of its
members who receive shares of Genzyme General Stock
in a distribution by the limited liability
company............................................ 13,420 0
William M. Canfield (3).............................. 57,150 0
John F. Crowley (3).................................. 115,041 0
William J. Fallon, Ph.D. (3)......................... 22,860 0
Pedro Huertas (4).................................... 28,575 0
Anthony A. McKinney (3).............................. 19,508 0
Ernest J. Parsons.................................... 5,957 400
Remaining former stockholders of Novazyme who receive
shares of Genzyme General Stock in exchange for
their shares of Novazyme capital stock in
connection with Genzyme's acquisition of
Novazyme........................................... 393,804 0
Former holders of warrants and other rights to
purchase shares of Novazyme capital stock who
receive shares of Genzyme General Stock upon
exercise of their warrants or purchase rights
following Genzyme's acquisition of Novazyme........ 95,858 0
------------------------
(1) Individuals and entities who receive shares of Genzyme General Stock covered
by this prospectus from a selling securityholder as a gift or in connection
with a pledge may sell up to 500 of those shares using this prospectus.
(2) Assumes that the selling securityholder has sold all the shares of Genzyme
General Stock listed next to its name and represents additional shares of
Genzyme General Stock beneficially owned before the offering. There can be
no assurance that the selling stockholder will sell all or any part of the
shares offered under this prospectus.
(3) The selling securityholder has entered into a letter agreement with us
providing for his employment with us or with a wholly-owned subsidiary of
ours.
(4) The selling securityholder was a Director of Medical Affairs at Genzyme
Corporation and a Director of Strategic Development at Genzyme Biosurgery
until December 2000.
PLAN OF DISTRIBUTION
We are registering the shares of Genzyme General Stock that we are issuing
in connection with our acquisition of Novazyme Pharmaceuticals, Inc. for resale
by the selling securityholders listed in this prospectus or in a supplement to
this prospectus. These shares of Genzyme General Stock may be sold from time to
time to purchasers:
- directly by the selling securityholders; or
- through broker-dealers or agents who may receive compensation in the form
of discounts, concessions or commissions from the selling securityholders
or the purchasers of the shares of Genzyme General Stock.
The selling securityholders and any such broker-dealers or agents who
participate in the distribution of the shares of Genzyme General Stock may be
deemed to be "underwriters" (as this term is defined in the Securities Act). As
a result, any profits on the sale of the shares of Genzyme General Stock by
selling securityholders and any discounts, commissions or concessions received
by any such broker-dealers or agents might be deemed to be underwriting
discounts and commissions under
18
the Securities Act. If the selling securityholders were deemed to be
underwriters, the selling securityholders may be subject to statutory
liabilities as underwriters under the Securities Act.
If the shares of Genzyme General Stock are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent's commissions.
The shares of Genzyme General Stock may be sold in one or more transactions
at:
- fixed prices;
- prevailing market prices at the time of sale;
- varying prices determined at the time of sale; or
- negotiated prices.
These sales may be effected in transactions:
- on any national securities exchange or quotation service on which the
shares of Genzyme General Stock may be listed or quoted at the time of the
sale, including the Nasdaq National Market;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
- through the writing of options.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the shares of Genzyme General Stock or
otherwise, the selling securityholders may enter into hedging transactions with
broker-dealers. These broker-dealers may in turn engage in short sales of the
shares of Genzyme General Stock in the course of hedging their positions. The
selling securityholders may also sell the shares of Genzyme General Stock short
and deliver shares of Genzyme General Stock to close out short positions, or
loan or pledge the shares of Genzyme General Stock to broker-dealers that in
turn may sell the shares of Genzyme General Stock.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the shares of Genzyme General Stock
by the selling securityholders. We cannot assure you that any such selling
securityholder will not transfer, devise or gift the shares of Genzyme General
Stock by other means not described in this prospectus. To the extent required,
we will amend or supplement this prospectus to disclose material arrangements
regarding the plan of distribution.
There can be no assurance that any selling securityholder will sell any or
all of the shares of Genzyme General Stock pursuant to this prospectus. In
addition, any shares of Genzyme General Stock covered by this prospectus that
qualify for sale pursuant to Rule 144 of the Securities Act may be sold under
Rule 144 rather than pursuant to this prospectus. The selling securityholders
and any other person participating in such distribution will be subject to the
Exchange Act. The Exchange Act rules include, without limitation, Regulation M,
which may limit the timing of purchases and sales of any of the shares of
Genzyme General Stock by the selling securityholders and any such other person.
In addition, Regulation M of the Exchange Act may restrict the ability of any
person engaged in the distribution of Genzyme General Stock being distributed
for a period of up to five business days prior to the commencement of such
distribution. This may affect the marketability of the shares of Genzyme General
Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Genzyme General Stock.
We have agreed to indemnify the selling securityholders against some
liabilities, including some liabilities under the Securities Act. We have agreed
to pay substantially all of the expenses incidental to the registration,
offering and sale of the shares of Genzyme General Stock to the public other
than commissions, fees and discounts of underwriters, broker-dealers and agents.
19
LEGAL MATTERS
The validity of the shares offered by this prospectus will be passed upon
for us by our counsel, Palmer & Dodge LLP, Boston, Massachusetts.
EXPERTS
The financial statements of Genzyme Corporation, Genzyme General, Genzyme
Biosurgery and Genzyme Molecular Oncology incorporated in this prospectus by
reference to Genzyme's annual report on Form 10-K for the year ended
December 31, 2000 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The consolidated financial statements of GelTex Pharmaceuticals, Inc.
appearing in GelTex's annual report on Form 10-K for the year ended
December 31, 1999, as amended, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference which, as to the years 1999 and 1998, are based
in part on the reports of PricewaterhouseCoopers LLP, independent accountants.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such reports given on the authority of such firms as experts in
accounting and auditing.
The financial statements of RenaGel LLC as of December 31, 1999 and 1998 and
for each of the two years in the period ended December 31, 1999 incorporated in
this prospectus by reference to GelTex's annual report on Form 10-K for the year
ended December 31, 1999 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The consolidated financial statements of Biomatrix, Inc. incorporated in
this prospectus by reference to its annual report on Form 10-K for the year
ended December 31, 1999, as amended, have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The financial statements of Wyntek Diagnostics, Inc. as of December 31, 2000
and 1999 and for each of the two years in the period ended December 31, 2000
incorporated in this prospectus by reference to Genzyme's current report on
Form 8-K filed with the SEC on May 18, 2001 have been so incorporated in
reliance on the report of McKay, Carne, Buniva & Lazarus LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The financial statements of Focal, Inc. appearing in Focal's annual report
on Form 10-K for the year ended December 31, 2000, as amended, incorporated by
reference in this prospectus have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
The balance sheets of Novazyme Pharmaceuticals, Inc. as of December 31, 1999
and 2000 and the related statements of operations, shareholders' equity
(deficit) and cash flows for the year ended December 31, 2000 and the periods
from inception (April 16, 1999) to December 31, 1999 and 2000 included in
Genzyme's current report on Form 8-K filed with the SEC on September 7, 2001 and
incorporated herein by reference have been audtied by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said report.
20
WHERE YOU CAN FIND MORE INFORMATION
You may read and copy any reports, statements or other information that we
file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Room. These SEC filings are also available to the public from
commercial document retrieval services and at the Internet world wide web site
maintained by the SEC at "http://www.sec.gov." Reports, proxy statements and
other information concerning us may also be inspected at the offices of The
Nasdaq Stock Market, which is located at 1735 K Street, N.W., Washington, D.C.
20006.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to other documents filed separately with the SEC. The information
incorporated by reference is considered part of this prospectus, except for any
information superseded by information contained directly in this prospectus or
in later-filed documents incorporated by reference in this prospectus.
The following documents that we filed with the SEC are incorporated herein
by reference:
1. Annual Report on Form 10-K for the year ended December 31, 2000,
filed on April 2, 2001;
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001
(filed on May 15, 2001) and June 30, 2001 (filed on August 14, 2001);
3. Current Reports on Form 8-K filed on December 15, 2000 (as amended on
Form 8-K/A filed on February 27, 2001 and May 3, 2001), January 2,
2001 (as amended on Form 8-K/ A filed on March 2, 2001 and May 3,
2001), March 9, 2001, April 26, 2001, May 11, 2001, May 22, 2001,
June 6, 2001, June 6, 2001, July 12, 2001, August 22, 2001,
August 28, 2001 and September 20, 2001;
4. Current Report on Form 8-K filed on May 18, 2001 which contains the
audited financial statements of Wyntek Diagnostics, Inc. as of
December 31, 2000 and 1999 and for each of the two years in the
period ended December 31, 2000, including the independent
accountants' report dated January 31, 2001, and the unaudited
financial statements of Wyntek Diagnostics, Inc. as of and for the
three months ended March 31, 2001 and 2000.
5. Current Report on Form 8-K filed on September 7, 2001 which contains
the audited financial statements of Novazyme as of December 31, 2000
and 1999 and for the year ended December 31, 2000 and the periods
from inception (April 16, 1999) to December 31, 1999 and 2000,
including the report of independent public accountants dated
February 26, 2001, and the unaudited financial statements of Novazyme
as of June 30, 2001 and December 31, 2000 and for the six months
ended June 30, 2001 and 2000 and the period from inception
(April 16, 1999) to June 30, 2001.
6. Proxy Statement on Schedule 14A filed on April 24, 2001;
7. The description of Genzyme General Stock contained in our
Registration Statement on Form 8-A filed on December 19, 2000, as
amended on June 6, 2001, including any further amendment or report
filed hereafter for the purpose of updating such description; and
8. The description of Genzyme General Stock purchase rights contained in
our Registration Statement on Form 8-A filed on December 19, 2000, as
amended on June 6, 2001, including any further amendment or report
filed hereafter for the purpose of updating such description.
21
We also incorporate by reference additional documents that we may file with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act between the
date of this prospectus and the date that we terminate this offering. These
include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.
We also incorporate by reference the material set forth below that GelTex
Pharmaceuticals, Inc., Biomatrix, Inc. and Focal, Inc. have previously filed
with the SEC.
GELTEX FILINGS (FILE NO. 0-26872)
1. Audited financial statements and related notes, including the report
of independent auditors, of GelTex set forth on pages F-1 to F-20 of
GelTex' Annual Report on Form 10-K for the year ended December 31,
1999 (filed on March 30, 2000), as amended on November 7, 2000.
2. Audited financial statements and related notes, including the report
of independent accountants, of RenaGel LLC set forth in Exhibit 99.1
to GelTex' Annual Report on Form 10-K for the year ended
December 31, 1999 (filed on March 30, 2000), as amended on
November 7, 2000.
3. Unaudited financial statements and related notes of GelTex set forth
on pages 3 to 9 of GelTex' Quarterly Report on Form 10-Q for the
quarter ended September 30, 2000 (filed on November 14, 2000).
BIOMATRIX FILINGS (FILE NO. 0-19373)
1. Audited financial statements and related notes, including the report
of independent accountants, of Biomatrix set forth on pages F-1 to
F-21 of Biomatrix' Annual Report on Form 10-K for the year ended
December 31, 1999 (filed on March 30, 2000), as amended on April 26,
2000 and October 26, 2000.
2. Unaudited financial statements and related notes of Biomatrix set
forth on pages 3 to 14 of Biomatrix' Quarterly Report on Form 10-Q
for the quarter ended September 30, 2000 (filed on November 14,
2000).
FOCAL FILINGS (FILE NO. 0-23247)
1. Audited financial statements and related notes, including the report
of independent auditors, of Focal set forth on pages 35 to 51 of
Focal's Annual Report on Form 10-K for the year ended December 31,
2000 (filed on April 2, 2001), as amended on April 30, 2001.
2. Unaudited financial statements and related notes of Focal set forth
on pages 3 to 9 of Focal's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2001 (filed on May 9, 2001).
Documents incorporated by reference are available from us without charge,
excluding all exhibits, except that if we have specifically incorporated by
reference an exhibit in this prospectus, the exhibit will also be provided
without charge. You may obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from us at the
following address and telephone number.
Genzyme Corporation
Shareholder Relations
One Kendall Square
22
Cambridge, Massachusetts 02139
(617) 252-7526
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
information that is different from what is contained in this prospectus. This
prospectus is dated September , 2001. You should not assume that the
information contained in this prospectus is accurate as of any date other than
that date. Neither the delivery of this prospectus nor the sale of securities
creates any implication to the contrary.
23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be borne by Genzyme in connection with the registration of
shares of Genzyme General Stock are estimated as follows:
SEC Registration Fee........................................ $ 34,749
Printing and engraving expenses............................. $ 10,000
Accounting fees and expenses................................ $ 15,000
Legal fees and expenses..................................... $ 20,000
Miscellaneous expenses...................................... $ 251
----------
Total................................................... $ 80,000
==========
All of the above figures, except the SEC registration fee, are estimates.
The selling securityholders listed in the prospectus or any related prospectus
supplement will not bear any of the expenses listed above.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 67 of Chapter 156B of the Massachusetts Business Corporation Law
grants Genzyme the power to indemnify any director, officer, employee or agent
to whatever extent permitted by Genzyme's Restated Articles of Organization,
By-Laws or a vote adopted by the holders of a majority of the shares entitled to
vote thereon, unless the proposed indemnitee has been adjudicated in any
proceeding not to have acted in good faith in the reasonable belief that his or
her actions were in the best interests of Genzyme or, to the extent that the
matter for which indemnification is sought relates to service with respect to an
employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan. Such indemnification may include
payment by Genzyme of expenses incurred in defending a civil or criminal action
or proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he or she shall be adjudicated to be not entitled to indemnification under
the statute.
Article VI of Genzyme's By-Laws provides that Genzyme shall, to the extent
legally permissible, indemnify each person who may serve or who has served at
any time as a director or officer of the corporation or of any of its
subsidiaries, or who at the request of the corporation may serve or at any time
has served as a director, officer or trustee of, or in a similar capacity with,
another organization or an employee benefit plan, against all expenses and
liabilities (including counsel fees, judgments, fines, excise taxes, penalties
and amounts payable in settlements) reasonably incurred by or imposed upon such
person in connection with any threatened, pending or completed action, suit or
other proceeding, whether civil, criminal, administrative or investigative, in
which he or she may become involved by reason of his or her serving or having
served in such capacity (other than a proceeding voluntarily initiated by such
person unless he or she is successful on the merits, the proceeding was
authorized by the corporation or the proceeding seeks a declaratory judgment
regarding his or her own conduct); PROVIDED that no indemnification shall be
provided for any such person with respect to any matter as to which he or she
shall have been finally adjudicated in any proceeding not to have acted in good
faith in the reasonable belief that his or her action was in the best interests
of Genzyme or, to the extent such matter relates to service with respect to any
employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan; and PROVIDED, FURTHER, that as to
any matter disposed of by a compromise payment by such person, pursuant to a
consent decree or otherwise, the payment and indemnification thereof have been
approved by Genzyme, which approval shall not unreasonably be withheld, or by a
court of competent jurisdiction. Such indemnification shall include
II-1
payment by Genzyme of expenses incurred in defending a civil or criminal action
or proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he or she shall be adjudicated to be not entitled to indemnification under
Article VI, which undertaking may be accepted without regard to the financial
ability of such person to make repayment.
The indemnification provided for in Article VI is a contract right inuring
to the benefit of the directors, officers and others entitled to
indemnification. In addition, the indemnification is expressly not exclusive of
any other rights to which such director, officer or other person may be entitled
by contract or otherwise under law, and inures to the benefit of the heirs,
executors and administrators of such a person.
Genzyme also has in place agreements with certain officers and directors
which affirm Genzyme's obligation to indemnify them to the fullest extent
permitted by law and contain various procedural and other provisions which
expand the protection afforded by Genzyme's By-Laws.
Section 13(b)(1 1/2) of Chapter 156B of the Massachusetts Business
Corporation Law provides that a corporation may, in its articles of
organization, eliminate a director's personal liability to the corporation and
its stockholders for monetary damages for breaches of fiduciary duty, except in
circumstances involving (i) a breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(iii) unauthorized distributions and loans to insiders, and (iv) transactions
from which the director derived an improper personal benefit. Article VI.C.5. of
Genzyme's Restated Articles of Organization provides that no director shall be
personally liable to Genzyme or its stockholders for monetary damages for any
breach of fiduciary duty as a director, except to the extent that such
exculpation is not permitted under the Massachusetts Business Corporation Law as
in effect when such liability is determined.
ITEM 16. EXHIBITS
See the Exhibit Index immediately following the signature page.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
II-2
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in
this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions referred to in Item 15 hereof, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cambridge, Commonwealth
of Massachusetts, as of September 24, 2001.
GENZYME CORPORATION
By: /s/ MICHAEL S. WYZGA
-----------------------------------------
Michael S. Wyzga
SENIOR VICE PRESIDENT, FINANCE;
CHIEF FINANCIAL OFFICER; AND
CHIEF ACCOUNTING OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the registration statement has been signed
below by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
*
------------------------------------------- Principal Executive September 24, 2001
Henri A. Termeer Officer and Director
/s/ MICHAEL S. WYZGA
------------------------------------------- Principal Financial and September 24, 2001
Michael S. Wyzga Accounting Officer
*
------------------------------------------- Director September 24, 2001
Constantine E. Anagnostopoulos
*
------------------------------------------- Director September 24, 2001
Douglas A. Berthiaume
*
------------------------------------------- Director September 24, 2001
Henry E. Blair
*
------------------------------------------- Director September 24, 2001
Robert J. Carpenter
*
------------------------------------------- Director September 24, 2001
Charles L. Cooney
II-4
SIGNATURE TITLE DATE
--------- ----- ----
*
------------------------------------------- Director September 24, 2001
Victor J. Dzau
*
------------------------------------------- Director September 24, 2001
Connie Mack III
*By: /s/ MICHAEL S. WYZGA
--------------------------------------
Michael S. Wyzga
ATTORNEY-IN-FACT
II-5
EXHIBIT INDEX
NO. DESCRIPTION
--------------------- -----------
4.1 Restated Articles of Organization of Genzyme, as amended.
Filed as Exhibit 3 to Genzyme's Current Report on Form 8-K
filed with the SEC on June 6, 2001, and incorporated herein
by reference.
4.2 By-laws of Genzyme, as amended. Filed as Exhibit 3.2 to
Genzyme's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999, and incorporated herein by
reference.
4.3 Second Amended and Restated Renewed Rights Agreement dated
as of December 18, 2000 between Genzyme and American Stock
Transfer and Trust Company. Filed as Exhibit 4 to Genzyme's
Registration Statement on Form 8-A filed on December 19,
2000, as amended on June 6, 2001, and incorporated herein by
reference.
4.4 Biomatrix, Inc. 6.9% Convertible Subordinated Note due May
14, 2003. Filed as Exhibit 4.1 to Genzyme's Current Report
on Form 8-K filed on January 2, 2001 and incorporated herein
by reference.
4.5 Warrant Agreement between Genzyme and Comdisco, Inc. Filed
as Exhibit 10.22 to a General Form for Registration on Form
10 of PharmaGenics, Inc. (File No.0-20138), and incorporated
herein by reference.
4.6 Indenture, dated as of May 8, 2001, by and between Genzyme
and State Street Bank and Trust Company as trustee,
including the form of debenture. Filed as Exhibit 4.1 to
Genzyme's Current Report on Form 8-K filed on May 11, 2001,
and incorporated herein by reference.
4.7 Registration Rights Agreement, dated as of May 3, 2001, by
and among Genzyme, Credit Suisse First Boston Corporation,
Goldman Sachs & Co. and Salomon Smith Barney Inc. Filed as
Exhibit 4.2 to Genzyme's Current Report on Form 8-K filed on
May 11, 2001, and incorporated herein by reference.
5 Opinion of Palmer & Dodge LLP. Filed herewith.
23.1 Consent of PricewaterhouseCoopers LLP, independent
accountants to Genzyme. Filed herewith.
23.2 Consent of Ernst & Young LLP, independent auditors to Focal,
Inc. Filed herewith.
23.3 Consent of Ernst & Young LLP, independent auditors to GelTex
Pharmaceuticals, Inc. Filed herewith.
23.4 Consent of PricewaterhouseCoopers LLP, independent
accountants to Biomatrix, Inc. Filed herewith.
23.5 Consent of PricewaterhouseCoopers LLP, independent
accountants to RenaGel LLC. Filed herewith.
23.6 Consent of McKay, Carne, Buniva & Lazarus LLP, independent
accountants to Wyntek Diagnostics, Inc. Filed herewith.
23.7 Consent of Arthur Andersen LLP, independent accountants to
Novazyme Pharmaceuticals, Inc. Filed herewith.
23.8 Consent of Palmer & Dodge LLP (contained in Exhibit 5
hereto).
24 Power of Attorney (included on signature page to the initial
filing of this registration statement).
EX-5
3
a2059482zex-5.txt
EX-5
EXHIBIT 5
PALMER & DODGE LLP
One Beacon Street, Boston, MA 02108-3190
TELEPHONE: (617) 573-0100 FACSIMILE: (617) 227-4420
September 24, 2001
Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
We are rendering this opinion in connection with the Registration Statement
on Form S-3 (No. 333-68548) (the "Registration Statement") filed by Genzyme
Corporation (the "Company"), a Massachusetts corporation, with the Securities
and Exchange Commission under the Securities Act of 1933, as amended. The
Registration Statement relates to the resale of up to 2,633,400 shares (the
"Shares") of Genzyme General Division common stock, $0.01 par value per share,
that will be issued to stockholders of Novazyme Pharmaceuticals, Inc.
("Novazyme") in connection with the Company's acquisition of Novazyme pursuant
to an Agreement and Plan of Merger, dated as of August 6, 2001, among the
Company, Rodeo Merger Corp. and Novazyme (the "Merger Agreement"). We understand
that the Shares are to be offered and sold in the manner described in the
Registration Statement.
We have acted as your counsel in connection with the preparation of the
Registration Statement and are familiar with the proceedings taken by the
Company in connection with the authorization and issuance of the Shares. We have
examined such documents as we consider necessary to enable us to render this
opinion.
Based upon the foregoing, we are of the opinion that upon issuance in
accordance with the terms of the Merger Agreement, the Shares will be duly
authorized, validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the Massachusetts Business Corporation
Law and the federal laws of the United States.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the prospectus filed as part thereof.
Very truly yours,
/s/ PALMER & DODGE LLP
PALMER & DODGE LLP
EX-23.1
4
a2057944zex-23_1.txt
EXHIBIT 23-1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 23, 2001 relating to the
consolidated financial statements and financial statement schedule of Genzyme
Corporation; of our report dated February 23, 2001, except for Note T, as to
which the date is March 16, 2001, relating to the combined financial statements
of Genzyme General; of our report dated February 23, 2001, except for Note S, as
to which the date is March 16, 2001, relating to the combined financial
statements of Genzyme Biosurgery; and of our report dated February 23, 2001
relating to the combined financial statements of Genzyme Molecular Oncology,
which appear in Genzyme Corporation's Annual Report on Form 10-K for the year
ended December 31, 2000. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 20, 2001
EX-23.2
5
a2057944zex-23_2.txt
EXHIBIT 23-2
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-68548) and related Prospectus of
Genzyme Corporation for the registration of Genzyme General Division common
stock and to the incorporation by reference therein of our report dated
January 31, 2001, with respect to the financial statements of Focal, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31,
2000 filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
September 20, 2001
EX-23.3
6
a2057944zex-23_3.txt
EXHIBIT 23-3
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Pre-Effective Amendment No. 1 to the Registration Statement (Form S-3 No.
333-68548) and related Prospectus of Genzyme Corporation for the registration
of Genzyme General Division common stock and to the incorporation by
reference therein of our report dated February 22, 2000, with respect to the
consolidated financial statements of GelTex Pharmaceuticals, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1999, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
September 20, 2001
EX-23.4
7
a2057944zex-23_4.txt
EXHIBIT 23-4
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 28, 2000, except for Note 18,
as to which the date is March 7, 2000 and Note 19 which is October 23, 2000,
relating to the consolidated financial statements of Biomatrix, Inc., which
appears in Biomatrix, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1999, as amended. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
New York, New York
September 20, 2001
EX-23.5
8
a2057944zex-23_5.txt
EXHIBIT 23-5
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 22, 2000, relating to the
financial statements of RenaGel LLC, which appears in GelTex Pharmaceuticals,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 20, 2001
EX-23.6
9
a2057944zex-23_6.txt
EXHIBIT 23-6
EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Prospectus which forms a part of the Registration Statement on Form S-3 of
Genzyme Corporation and to the incorporation by reference therein of our report
dated January 31, 2001, with respect to the financial statements of Wyntek
Diagnostics, Inc. for the years ended December 31, 2000 and 1999.
/s/ McKay, Carne, Buniva & Lazarus LLP
San Diego, California
September 20, 2001
EX-23.7
10
a2059482zex-23_7.txt
EX-23.7
EXHIBIT 23.7
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 26,
2001, on the financial statements of Novazyme Pharmaceuticals, Inc. for the
year ended December 31, 2000 and for the period from inception (April 16,
1999) to December 31, 1999 and 2000, included in the Form 8-K of Genzyme
Corporation dated September 7, 2001, and to all references to our firm with
respect to Novazyme Pharmaceuticals, Inc. in this registration statement.
/s/ Arthur Andersen LLP
Oklahoma City, Oklahoma,
September 20, 2001