8-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): December 23, 2004

GENZYME CORPORATION
(Exact name of registrant as specified in its charter)

Massachusetts
(State or other jurisdiction
of incorporation or organization) 0-14680
(Commission
File Number) 06-1047163
(IRS Employer
Identification Number)

500 Kendall Street, Cambridge, Massachusetts 02142
(Address of Principal Executive Offices)    (Zip Code)

Registrant's telephone number, including area code: (617) 252-7500

Item 8.01 Other Events.

        As we reported on our current report on Form 8-K dated December 20, 2004 and filed with the SEC on December 21, 2004, on December 20, 2004, we completed the acquisition of ILEX Oncology, Inc., a publicly held Delaware corporation, pursuant to the terms of an Agreement and Plan of Merger dated as of February 26, 2004 among us, two of our wholly-owned subsidiaries (GLBC Corp. and GLBC LLC), and ILEX.

        We are filing this report to include the unaudited, pro forma combined financial information which describes the pro forma effect of our transaction with ILEX on our statements of operations for the year ended December 31, 2003 and the nine months ended September 30, 2004, as if the transaction had occurred on January 1, 2003, and our balance sheet as of September 30, 2004, as if the transaction had occurred on this date.

Item 9.01. Financial Statements and Exhibits.

(c)

Exhibits:

99.1 Unaudited, pro forma combined financial information which describes the pro forma effect of our transaction with ILEX on our statements of operations for the year ended December 31, 2003 and the nine months ended September 30, 2004, as if the transaction had occurred on January 1, 2003, and our balance sheet as of September 30, 2004, as if the transaction had occurred on this date. Filed herewith.

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GENZYME CORPORATION
By:	/s/  MICHAEL S. WYZGA Michael S. Wyzga Executive Vice President, Finance, Chief Financial Officer, and Chief Accounting Officer

DATE: December 23, 2004

EXHIBIT INDEX

EXHIBIT NO.

DESCRIPTION

99.1

Unaudited, pro forma combined financial information which describes the pro forma effect of our transaction with ILEX on our statements of operations for the year ended December 31, 2003 and the nine months ended September 30, 2004, as if the transaction had occurred on January 1, 2003, and our balance sheet as of September 30, 2004, as if the transaction had occurred on this date. Filed herewith.

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Item 8.01 Other Events.
Item 9.01. Financial Statements and Exhibits.

SIGNATURE
EXHIBIT INDEX

EX-99.1

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Exhibit 99.1

UNAUDITED, PRO FORMA COMBINED FINANCIAL INFORMATION

        The following unaudited, pro forma combined financial information describes the pro forma effect of our transaction with ILEX Oncology, Inc., or ILEX, on our statements of operations for the year ended December 31, 2003 and the nine months ended September 30, 2004, as if the transaction had occurred on January 1, 2003, and our balance sheet as of September 30, 2004, as if the transaction had occurred on this date. Certain historical financial information of ILEX has been reclassified to conform with the presentation of our historical financial statements.

        This pro forma combined financial information is for informational purposes only. It does not purport to indicate the results that would have actually been obtained had the transaction been completed on the assumed date or for the periods presented, or which may be obtained in the future. To produce the pro forma financial information, we allocated the purchase price using our best estimates. The unaudited, pro forma combined financial statements should be read in conjunction with the historical consolidated financial statements, including notes thereto, of both Genzyme and ILEX. Our historical consolidated financial statements are included in Exhibit 13.1 to our annual report on Form 10-K for the year ended December 31, 2003, filed with the Securities and Exchange Commission, or SEC, on March 15, 2004 and our quarterly report on Form 10-Q for the quarterly period ended September 30, 2004, filed with the SEC on November 9, 2004. The historical consolidated financial statements of ILEX are included in pages F-1 through F-31 of ILEX's annual report on Form 10-K for the year ended December 31, 2003, filed with the SEC on March 12, 2004 and pages 3 through 10 of ILEX's quarterly report on Form 10-Q for the quarterly period ended September 30, 2004, filed with the SEC on November 9, 2004.

        Pursuant to the merger agreement, each share of ILEX common stock outstanding was converted into the right to receive 0.4682 of a share of our common stock, which we refer to as Genzyme Stock. An aggregate of approximately 18,457,800 shares of Genzyme Stock are being issued as consideration. We are paying cash for any fractional shares that result from the conversion of the ILEX common stock to Genzyme Stock. In addition, we have assumed all of the outstanding options to purchase shares of ILEX common stock. These ILEX options have been converted into options to acquire approximately 1,736,702 shares of Genzyme Stock, adjusted to reflect the exchange ratio referred to above.

        We have prepared the unaudited, pro forma combined financial information using the purchase method of accounting for the transaction. We expect to have reorganization and restructuring expenses as well as potential operating efficiencies as a result of the transaction. The unaudited, pro forma combined financial statements and related notes do not reflect these potential expenses and efficiencies.

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GENZYME CORPORATION
UNAUDITED, PRO FORMA COMBINED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2003
(Amounts in thousands)

				Historical Genzyme Corporation			Historical ILEX Oncology, Inc.			Pro Forma Adjustments			Footnote Reference	Pro Forma Genzyme Corporation
Revenues:
	Net product sales			$	1,563,509		$	—		$	—			$	1,563,509
	Product profit and royalty				—			23,315			—				23,315
	Net service sales				130,984			—			—				130,984
	Outlicensing revenue				—			2,773			—				2,773
	Revenues from research and development contracts:
		Related parties			1,836			—			—				1,836
		Other			17,542			8,701			—				26,243
			Total revenues		1,713,871			34,789			—				1,748,660
Operating costs and expenses:
	Cost of products sold				399,961			—			—				399,961
	Cost of services sold				75,683			—			—				75,683
	Selling, general and administrative				519,977			14,713			—				534,690
	Research and development (including research and development related to contracts)				335,256			60,693			—				395,949
	Amortization of intangibles				80,257			4,945			19,113		[A1]		104,315
	Purchase of in-process research and development				158,000			—			—				158,000
	Charge for impaired goodwill				102,792			—			—				102,792
	Charge for impaired assets				10,894			213			—				11,107
	Settlement charge				—			16,500			—				16,500
			Total operating costs and expenses		1,682,820			97,064			19,113				1,798,997
Operating income (loss)					31,051			(62,275	)		(19,113	)			(50,337	)
Other income (expenses):
	Equity in loss of equity method investments				(16,743	)		—			—				(16,743	)
	Minority interest				2,232			—			—				2,232
	Loss on investments in equity securities				(1,201	)		—			—				(1,201	)
	Loss on sale of product line				(27,658	)		—			—				(27,658	)
	Other				959			18			—				977
	Investment income				43,015			4,304			—				47,319
	Interest expense				(26,600	)		(4,137	)		—				(30,737	)
			Total other income (expenses)		(25,996	)		185			—				(25,811	)
Income (loss) before income taxes					5,055			(62,090	)		(19,113	)			(76,148	)
(Provision for) benefit from income taxes					(72,647	)		(24	)		29,907		[A2]		(42,764	)
Net income (loss)				$	(67,592	)	$	(62,114	)	$	10,794			$	(118,912	)

See Notes to Unaudited, Pro Forma Combined Financial Statements.

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GENZYME CORPORATION
UNAUDITED, PRO FORMA COMBINED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2003
(Amounts in thousands, except per share data)

			Historical Genzyme Corporation			Historical ILEX Oncology, Inc.			Pro Forma Adjustments		Footnote Reference	Pro Forma Genzyme Corporation
Net income (loss) per share:
Allocated to Genzyme Stock(1):
	Genzyme General net income (loss)		$	82,143		$	(62,114	)	$	10,794	[A3]	$	30,823
	Tax benefit allocated from Genzyme Biosurgery			8,720			—			—			8,720
	Tax benefit allocated from Genzyme Molecular Oncology			3,420			—			—			3,420
	Net income (loss) allocated to Genzyme Stock		$	94,283		$	(62,114	)	$	10,794		$	42,963
	Net income per share of Genzyme Stock:
		Basic	$	0.43								$	0.18
		Diluted	$	0.42								$	0.18
	Weighted average shares outstanding:
		Basic		219,376									237,834
		Diluted		225,419									244,162
Allocated to Biosurgery Stock (through June 30, 2003)(1):
	Genzyme Biosurgery net loss		$	(166,656	)							$	(166,656	)
	Allocated tax benefit			14,005									14,005
	Net loss allocated to Biosurgery Stock		$	(152,651	)							$	(152,651	)
	Net loss per share of Biosurgery Stock—basic and diluted		$	(3.76	)							$	(3.76	)
	Weighted average shares outstanding			40,630									40,630
Allocated to Molecular Oncology Stock (through June 30, 2003)(1):
	Net loss allocated to Molecular Oncology Stock		$	(9,224	)							$	(9,224	)
	Net loss per share of Molecular Oncology Stock—basic and diluted		$	(0.54	)							$	(0.54	)
	Weighted average shares outstanding			16,958									16,958

(1)

Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating earnings to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our earnings are allocated to Genzyme General. Earnings or losses allocated to Genzyme Biosurgery and Genzyme Molecular Oncology prior to July 1, 2003 remain allocated to those divisions and are not affected by the elimination of our tracking stock structure.

See Notes to Unaudited, Pro Forma Combined Financial Statements.

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GENZYME CORPORATION
UNAUDITED, PRO FORMA COMBINED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2004
(Amounts in thousands, except per share amounts)

			Historical Genzyme Corporation			Historical ILEX Oncology, Inc.			Pro Forma Adjustments			Footnote Reference	Pro Forma Genzyme Corporation
Revenues:
	Net product sales		$	1,451,044		$	—		$	—			$	1,451,044
	Product profit and royalty			—			17,015			—				17,015
	Net service sales			150,885			—			—				150,885
	Outlicensing revenue			—			1,762			—				1,762
	Revenues from research and development contracts			8,139			6,606			—				14,745
		Total revenues		1,610,068			25,383			—				1,635,451
Operating costs and expenses:
	Cost of products sold			323,544			—			—				323,544
	Cost of services sold			101,145			—			—				101,145
	Selling, general and administrative			443,956			16,940			(4,710	)	[A4]		456,186
	Research and development (including research and development related to contracts)			284,374			51,784			—				336,158
	Amortization of intangibles			81,147			3,738			14,306		[A1]		99,191
		Total operating costs and expenses		1,234,166			72,462			9,596				1,316,224
Operating income (loss)				375,902			(47,079	)		(9,596	)			319,227
Other income (expenses):
	Equity in loss of equity method investments			(12,467	)		—			—				(12,467	)
	Minority interest			3,715			—			—				3,715
	Gain (loss) on investments in equity securities			(2,282	)		—			—				(2,282	)
	Other			(733	)		(26	)		—				(759	)
	Investment income			17,845			1,709			—				19,554
	Interest expense			(33,250	)		(1,319	)		—				(34,569	)
		Total other income (expenses)		(27,172	)		364			—				(26,808	)
Income (loss) before income taxes				348,730			(46,715	)		(9,596	)			292,419
(Provision for) benefit from income taxes				(104,861	)		(31	)		20,753		[A2]		(84,139	)
Net income (loss)			$	243,869		$	(46,746	)	$	11,157			$	208,280

See Notes to Unaudited, Pro Forma Combined Financial Statements.

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GENZYME CORPORATION
UNAUDITED, PRO FORMA COMBINED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2004
(Amounts in thousands, except per share amounts)

			Historical Genzyme Corporation		Historical ILEX Oncology, Inc.			Pro Forma Adjustments		Footnote Reference	Pro Forma Genzyme Corporation
Net income (loss) per share allocated to Genzyme Stock(1):
	Net income (loss) allocated to Genzyme Stock		$	243,869	$	(46,746	)	$	11,157	[A3]	$	208,280
	Net income (loss) per share of Genzyme Stock:
		Basic	$	1.08							$	0.85
		Diluted	$	1.05							$	0.83
	Weighted average shares outstanding:
		Basic		226,815								245,273
		Diluted		232,727								251,470

(1)

Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating earnings to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our earnings are allocated to Genzyme General. Earnings or losses allocated to Genzyme Biosurgery and Genzyme Molecular Oncology prior to July 1, 2003 remain allocated to those divisions and are not affected by the elimination of our tracking stock structure.

See Notes to Unaudited, Pro Forma Combined Financial Statements.

5

GENZYME CORPORATION
UNAUDITED, PRO FORMA COMBINED BALANCE SHEETS
As of September 30, 2004
(Amounts in thousands, except par value amounts)

			Historical Genzyme Corporation			Historical ILEX Oncology, Inc.			Pro Forma Adjustments			Footnote Reference	Pro Forma Genzyme Corporation
ASSETS
Current assets:
	Cash and cash equivalents		$	331,232		$	68,926		$	—			$	400,158
	Short-term investments			24,785			59,493			—				84,278
	Restricted short-term investments			—			604			—				604
	Accounts receivable, net			501,990			10,564			—				512,554
	Inventories			266,478			—			—				266,478
	Prepaid expenses and other current assets			88,574			4,554			—				93,128
	Deferred tax assets			134,977			—			39,743		[A5]		174,720
		Total current assets		1,348,036			144,141			39,743				1,531,920
Property, plant and equipment, net				1,231,775			2,450			—				1,234,225
Long-term investments				467,429			1,050			—				468,479
Restricted long-term investments				—			1,691			—				1,691
Notes receivable—related parties				9,588			—			—				9,588
Goodwill, net				801,350			—			392,701		[A5]		1,194,051
Other intangible assets, net				868,008			56,087			232,613		[A5]		1,156,708
Investments in equity securities				116,124			—			—				116,124
Other noncurrent assets				70,404			1,581			(2,459	)	[A6]		69,526
		Total assets	$	4,912,714		$	207,000		$	662,598			$	5,782,312
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	63,533		$	7,768		$	—			$	71,301
	Accrued expenses			330,750			6,024			10,775		[A6]		347,549
	Deferred revenue			12,722			592			—				13,314
	Current portion of long-term debt and capital lease obligations			119,184			19,709			—				138,893
		Total current liabilities		526,189			34,093			10,775				571,057
Long-term debt and capital lease obligations				147,094			—			—				147,094
Convertible notes				690,000			—			—				690,000
Deferred revenue—noncurrent				7,792			833							8,625
Deferred tax liabilities				177,084			—			16,842		[A5]		193,926
Other noncurrent liabilities				51,724			729			—				52,453
		Total liabilities		1,599,883			35,655			27,617				1,663,155
Commitments and contingencies
Stockholders' equity:
	Preferred stock, $0.01 par value			—			—			—				—
	Common stock-Genzyme Stock, $0.01 par value			2,293			—			185		[A5]		2,478
	Additional paid-in capital-Genzyme Stock			3,094,350			—			1,080,741		[A5]		4,175,091
	Notes receivable from stockholders			(13,711	)		—			—				(13,711	)
	Accumulated earnings (deficit)			45,309			—			(274,600	)	[A5]		(229,291	)
	Accumulated other comprehensive income			184,590			—			—				184,590
	ILEX Oncology, Inc. convertible preferred stock, $0.01 par value			—			—			—				—
	ILEX Oncology, Inc. common stock, $0.01 par value			—			392			(392	)	[A7]		—
	ILEX Oncology, Inc. additional paid-in capital			—			562,722			(562,722	)	[A7]		—
	ILEX Oncology, Inc. deferred compensation			—			(166	)		166		[A7]		—
	ILEX Oncology, Inc. accumulated deficit			—			(392,290	)		392,290		[A7]		—
	ILEX Oncology, Inc. accumulated other comprehensive income			—			687			(687	)	[A7]		—
		Total stockholders' equity		3,312,831			171,345			634,981				4,119,157
		Total liabilities and stockholders' equity	$	4,912,714		$	207,000		$	662,598			$	5,782,312

See Notes to Unaudited, Pro Forma Combined Financial Statements.

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NOTES TO UNAUDITED, PRO FORMA COMBINED FINANCIAL STATEMENTS

(1) PRO FORMA INFORMATION

Pro Forma Information

        The following unaudited, pro forma combined financial information describes the pro forma effect of our transaction with ILEX on our statements of operations for the year ended December 31, 2003 and for the nine months ended September 30, 2004, as if the transaction had occurred on January 1, 2003, and our balance sheet as of September 30, 2004, as if the transaction had occurred on this date. Certain historical financial information of ILEX has been reclassified to conform to the presentation of our historical financial statements.

(2) PURCHASE PRICE ALLOCATION

        The estimated aggregate purchase price is comprised of the following (amounts in thousands):

Issuance of 18,457,800 shares of Genzyme Stock	$	1,036,222
Issuance of options to purchase 1,736,702 shares of Genzyme Stock		44,704
Transaction costs		8,270
Total purchase price	$	1,089,196

        Pursuant to the merger agreement with ILEX, each share of ILEX common stock outstanding on December 20, 2004 (the measurement date) was converted into the right to receive 0.4682 of a share of Genzyme Stock. Approximately 18.5 million shares of Genzyme Stock valued at approximately $1.0 billion will be issued in exchange for the outstanding shares of ILEX common stock, based on the three day average trading price commencing December 16, 2004 (two trading days before the measurement date).

        Options to purchase approximately 3,709,922 shares of ILEX common stock have been exchanged for options to purchase approximately 1,736,702 shares of Genzyme Stock based on the exchange ratio referred to above. Using the value of Genzyme Stock to be issued in the transaction and certain other assumptions in the Black-Scholes option valuation model, the Genzyme options issued in exchange for the ILEX options are estimated, for purposes of these unaudited, pro forma financial statements, to be valued at approximately $44.7 million. The estimated value of these options may change as a result of changes in the assumptions used to complete the final Black-Scholes option valuation model for these options.

        For purposes of the unaudited, pro forma combined financial statements, we allocated the aggregate purchase price of approximately $1.1 billion to the acquired tangible and intangible assets

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and assumed liabilities of ILEX based on their estimated respective fair values as of September 30, 2004 (amounts in thousands):

Cash and cash equivalents		$	68,926
Short-term investments			58,819
Restricted short-term investments			604
Accounts receivable			10,564
Deferred tax assets-current			39,743
Other current assets			5,228
Long-term investments			1,050
Restricted long-term investments			1,691
Property, plant and equipment			2,450
Other intangible assets (to be amortized straight-line over 12 years)			288,700
Goodwill			392,701
In-process research and development			274,600
Other assets			1,581
Assumed liabilities:
	Note payable		(19,709	)
	Other assumed liabilities		(20,910	)
Deferred tax liability			(16,842	)
Allocated purchase price		$	1,089,196

        The total purchase price, the estimated fair values of assets acquired and liabilities assumed, the allocation of purchase price and the lives of intangible assets remain subject to change pending completion of the final valuation of the transaction and may vary from the amounts we have presented in these unaudited, pro forma combined financial statements.

        In connection with the transaction, we have acquired in-process research and development, or IPR&D, related to three development projects, CAMPATH (for indications other than B-cell chronic lymphocytic leukemia), clofarabine and ILX-651.

        CAMPATH is a humanized monoclonal antibody that binds to a specific target, CD52, on cell surfaces leading the body's immune system to destroy malignant, or cancerous, cells. CAMPATH was launched in May 2001 in the United States and in August 2001 in Europe under the name MABCAMPATH. The product is approved for use in patients with B-cell chronic lymphocytic leukemia who have been treated with alkylating agents and who have failed fludarabine therapy, and ILEX is now conducting trials in non-Hodgkin's lymphoma and multiple sclerosis as well.

        Clofarabine is a next-generation, purine nucleoside antimetabolite that is currently under investigation in pediatric and adult leukemias and solid tumors. ILEX has submitted the final section of its "rolling" New Drug Application with the FDA for acute pediatric leukemias based on phase II clinical trial data.

        ILX-651 is a next-generation synthetic pentapeptide analog of the natural substance dolastatin-15. This product candidate targets tubulin and has been chemically modified to provide improved pharmacological properties over earlier members of its class. ILEX initiated phase II clinical trials of ILX-651 in late 2003 in recurrent or metastatic melanoma and in locally advanced or metastatic non-small cell lung cancer.

8

        As of September 30, 2004, none of these projects had reached technological feasibility nor had an alternative future use. Accordingly, we allocated to IPR&D, and charged to accumulated deficit in our unaudited, pro forma combined balance sheet as of September 30, 2004, $274.6 million, representing the portion of the purchase price attributable to these projects, of which $115.8 million is attributable to the CAMPATH development project, $118.6 million is attributable to the clofarabine development project and $40.2 million is related to the ILX-651 development project. The portion of the purchase price estimated to be attributable to these programs will be charged to expense in our statement of operations in December 2004. Material non-recurring charges, such as IPR&D, are not reflected in these unaudited, pro forma combined financial statements of operations for the year ended December 31, 2003 and nine months ended September 30, 2004.

        Management assumes responsibility for determining the IPR&D valuation. The fair value assigned to purchased IPR&D was estimated by discounting, to present value, the cash flows expected to result from each project once it has reached technological feasibility. We used a discount rate of 11% and cash flows that have been probability-adjusted to reflect the risks of advancement through the product approval process. In estimating future cash flows, we also considered other tangible and intangible assets required for successful exploitation of the technology resulting from the purchased IPR&D projects and adjusted future cash flows for a charge reflecting the contribution to value of these assets.

(3) PRO FORMA ADJUSTMENTS

        The following adjustments reflect the exchange of ILEX common stock for Genzyme Stock in the transaction as well as the exchange of options to purchase shares of ILEX common stock for fully vested options to purchase shares of Genzyme Stock.

I. Unaudited, Pro Forma Combined Statements of Operations of Genzyme

(A1)

To record the amortization of acquired other intangible assets, all of which will be amortized straight-line over 12 years, for the year ended December 31, 2003 and the nine months ended September 30, 2004 (amounts in thousands):

Other Intangible Assets:		Assigned Value		Annual Amortization		Nine Months Amortization
Developed technology		$	178,900	$	14,908	$	11,181
Core technology			105,500		8,792		6,594
Trademark			2,400		200		150
Technology license			1,900		158		119
	Total	$	288,700	$	24,058	$	18,044

(A2)

To adjust the tax provision for the impact of the historical losses of ILEX and the pro forma adjustments related to the transaction.

(A3)

The pro forma adjustments to net income (loss) reflect the aggregate impact of all pro forma adjustments on our income (loss).

(A4)

To eliminate $4.7 million of non-recurring transaction costs included in the historical statements of operations of ILEX for the nine months ended September 30, 2004. There were no similar

9

transaction costs included in the historical statements of operations of ILEX for the year ended December 31, 2003.

II. Unaudited, Pro Forma Combined Balance Sheets of Genzyme

(A5)

To record the assumption of the net assets of ILEX and the issuance of approximately 18.5 million shares of Genzyme Stock.

The other intangible assets of approximately $288.7 million are comprised of the following (amounts in thousands):

Other Intangible Assets:		Assigned Value
Developed technology		$	178,900
Core technology			105,500
Trademark			2,400
Technology license			1,900
	Total	$	288,700

Material non-recurring charges, such as the acquired IPR&D charge of $274.6 million resulting from the transaction, are not reflected in our unaudited, pro forma combined statements of operations for the year ended December 31, 2003 or nine months ended September 30, 2004. The $274.6 million allocated to IPR&D has been charged to accumulated deficit for purposes of the pro forma balance sheet presentation only and will be charged to expense in our statements of operations in December 2004.

(A6)

To accrue the following expenses which have not been reflected in our historical balances as of September 30, 2004:

•

$8.3 million for the estimated merger costs we expect to incur; and

•

$7.3 million for severance and bonus payments to certain officers of ILEX that we would be contractually obligated to pay.

Our historical other noncurrent assets as of September 30, 2004 include $2.5 million of merger costs incurred prior to that date.

(A7)

To eliminate ILEX's historical stockholders' equity amounts totaling $171.3 million.

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Exhibit 99.1

UNAUDITED, PRO FORMA COMBINED FINANCIAL INFORMATION