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):
February 17, 2005

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

        Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

/

/    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

/

/    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

/

/    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

/

/    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

        On February 17, 2005, Genzyme Corporation issued a press release relating to its results of operations and financial condition for the quarter and year ended December 31, 2004. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

        The press release includes certain non-GAAP financial measures that involve adjustments to GAAP figures. Genzyme believes that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of Genzyme's past financial performance and its prospects for the future. The non-GAAP financial measures are included with the intent of providing both management and investors with a more complete understanding of underlying operational results and trends. In addition, these non-GAAP financial measures are among the primary indicators Genzyme management uses for planning and forecasting purposes. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP figures.

Item 9.01 Financial Statements and Exhibits.

(c)	Exhibits
99.1	Press Release of Genzyme Corporation dated February 17, 2005.

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
Dated: February 17, 2005	By:	/s/ MICHAEL S. WYZGA Michael S. Wyzga Executive Vice President, Finance; Chief Financial Officer; and Chief Accounting Officer

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release of Genzyme Corporation dated February 17, 2005.

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Item 2.02 Results of Operations and Financial Condition.
Item 9.01 Financial Statements and Exhibits.

SIGNATURE
INDEX TO EXHIBITS

EX-99.1

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Exhibit 99.1

For Immediate Release	Media Contact:	Investor Contact:
February 17, 2005	Bo Piela (617) 768-6579	Sally Curley (617) 768-6140

Genzyme Delivers Excellent Fourth-Quarter and 2004 Performance

Outlook for 2005 Highlights Continued Momentum

        CAMBRIDGE, Mass.—Genzyme Corporation (Nasdaq: GENZ) today reported strong fourth-quarter and year-end financial results and issued guidance for 2005 that underscored its continued momentum. The company confirmed its previous revenue guidance of $2.5-$2.7 billion and its non-GAAP earnings guidance of $2.08-$2.16 per share for the year.

        Fourth-quarter revenue grew 24 percent to $591.1 million, up from $476.1 million in the same quarter a year earlier. Revenue for the year totaled $2.2 billion, 40 percent greater than revenue of $1.6 billion in 2003. This top-line performance was driven by broad-based growth across the corporation and the addition of new products and businesses.

        Acquisition-related costs contributed to a fourth-quarter GAAP net loss of $97.1 million, or $0.42 per diluted share, compared with net income of $57.3 million, or $0.25 per diluted share in the fourth quarter a year earlier. The largest of these costs was a charge of $194.3 million for in-process research and development purchased from ILEX Oncology Inc. For the year, GAAP net income was $146.7 million, or $0.63 per diluted share, compared with $94.3 million, or $0.42 per diluted share in 2003.

        Non-GAAP net income—which excludes special items and amortization—rose 44 percent in the fourth quarter to $124.3 million, or $0.52 per diluted share, compared with $86.5 million, or $0.38 per diluted share, in the fourth quarter of 2003. For the year, non-GAAP net income increased 36 percent to $428.1 million, or $1.82 per diluted share, from $314.4 million, or $1.39 per share in 2003.

        "Our results last year confirmed the positive effect of the diversification strategy we began pursuing years ago, and we expect to see a much fuller effect of this strategy going forward," said Henri A. Termeer, chairman and chief executive officer of Genzyme Corp. "We also anticipate a significant improvement in our gross margin, which confirms our longstanding commitment to invest in manufacturing. Last year we established an entry point in oncology, and we are working now to build our presence in this area."

        Selling, general and administrative expenses totaled $599.4 million for the year, compared with $455.4 million the year before. SG&A spending in 2004 reflects the integration of the oncology testing business acquired from IMPATH Inc., the full-year impact of the tracking-stock consolidation, and investments in expanding the availability of Genzyme's products throughout the world.

        Research and development spending prior to one-time events and FIN 46 was $377.9 million, compared with $294.1 million a year earlier. R&D spending represented approximately 17 percent of revenue, underscoring Genzyme's significant commitment to conduct clinical studies to expand the indications of its marketed products and to advance earlier-stage candidates forward through the development process.

        The company's effective net tax rate was 30 percent for the quarter and 31 percent for the year, before special items and amortization. The GAAP tax rate for the fourth quarter was 60 percent applied to a loss due to the ILEX purchase accounting, and it was 49 percent for the year.

        Figures reported for 2003 present results for Genzyme General in the first and second quarters and for the entire corporation in the third and fourth quarters.

2005 Revenue Guidance

        Genzyme confirmed its earlier revenue guidance of $2.5-$2.7 billion for 2005, up from $2.2 billion in 2004.

        Within the Renal area, revenue for Renagel® (sevelamer hydrochloride) is expected to rise to $420-$430 million, compared with $363.7 million in 2004. Renagel revenue includes product sales, royalties and sales of bulk sevelamer. Renagel is a phosphate binder for patients with end-stage renal disease on hemodialysis. Its growth in the near term will be driven by increasing adoption in the United States and international markets based on broader implementation of National Kidney Foundation clinical guidelines and a growing body of clinical data supporting the product's use. During the year, Genzyme anticipates releasing top-line data from its Dialysis Clinical Outcomes Revisited (D-COR) study, the largest outcomes study ever conducted in the dialysis population. The trial is examining the difference in morbidity and mortality outcomes for patients receiving Renagel and those receiving calcium-based phosphate binders.

        Within the Therapeutics area, sales of Fabrazyme® (agalsidase beta) for Fabry disease are expected to reach $300-$315 million, compared with $209.6 million in 2004. Fabrazyme sales have grown significantly since the product was first introduced in Europe less than four years ago. Genzyme anticipates that Fabrazyme will continue to gain market share in Europe this year and that sales in newer markets such as the United States and Japan will continue to be strong as new patients are identified and begin treatment. Last year, Genzyme successfully completed its Phase 4 study designed to verify the clinical benefit of Fabrazyme, and it plans to file labeling supplements soon to incorporate the study's findings.

        Sales of Cerezyme® (imiglucerase for injection) for Type 1 Gaucher disease will continue to grow but will become a smaller percentage of revenue once again. Sales are expected to reach $870-$890 million, compared with $839.4 million in 2004. Cerezyme is a mature product whose growth is driven largely by the identification of new patients in international markets.

        Sales of Aldurazyme® (laronidase) for patients with MPS I are expected to reach $60-$66 million, compared with $42.6 million in 2004. Aldurazyme sales are not included within Genzyme's revenue because the company is commercializing the product through a joint venture with BioMarin Pharmaceutical Inc.

        Sales of Thyrogen® (thyrotropin alfa for injection) are expected to reach $75-$80 million, compared with $63.5 million in 2004. Thyrogen is indicated for use as a diagnostic tool in the management of patients being tested for the recurrence of well-differentiated thyroid cancer.

        Within the Biosurgery area, sales of Synvisc® (hylan G-F 20) are expected to reach $215-$225 million, compared with $88.3 million in 2004. This increase reflects Genzyme's reacquisition of the sales and marketing rights for Synvisc in the United States and several European countries, a transaction that is expected to have a material impact on the company's top line and gross margin. Synvisc is now available in more than 60 countries and has significant growth potential. Genzyme is working aggressively to seize this opportunity by broadening the use of the current formulation and by accelerating its work to develop new formulations that could bring even further benefits to patients with osteoarthritis. During the first quarter, the company will make a significant investment to support Synvisc in the United States, including integrating and training the sales force acquired from Wyeth Pharmaceuticals.

        Also within the Biosurgery area, the Sepra™ family of anti-adhesion products are expected to contribute $70-$75 million in revenue this year, compared with $61.6 million in 2004.

        Within the Transplant business, sales of Thymoglobulin® (anti-thymocyte globulin, Rabbit) are expected to reach $110-$120 million, compared with $99.7 million in 2004. This product is used in

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conjunction with immunosuppressant drugs in organ transplant procedures. Thymoglobulin is well established in the United States, Canada and Europe, and Genzyme is working to expand the product's availability by bringing it to new markets in Asia, the Pacific and Latin America. At the end of 2004, Genzyme exited the market for generic cyclosporine products, which contributed $33.6 million in sales for the company in 2004.

        Revenue for the Diagnostics/Genetics business is expected to increase to $305-$315 million, compared with $279.1 million in 2004. Within this area, revenue from diagnostic testing services is expected to reach $210-$218 million, compared with $188.2 million in 2004, reflecting the full-year impact of the oncology testing business acquired from IMPATH in May 2004.

        Oncology products are expected to contribute $55-$60 million in revenue. Oncology products include CLOLAR™ (clofarabine) for intravenous infusion, recently launched by Genzyme, and sales of CAMPATH® (alemtuzumab for injection), which is marketed by Schering AG. Each product is indicated for the treatment of a type of leukemia. In 2005, Genzyme will work to establish a commercial presence for its emerging cancer business by building a sales and marketing organization, increasing its investment in research and development, expanding relationships with partners, and continuing to look for opportunities to bring in additional new products and technologies.

        Other revenue—including sales of WelChol® (colesevelum hydrochloride) and pharmaceutical intermediates—is expected to total $60-$65 million, compared with $82.5 million in 2004.

Gross Margin

        Total gross margin is expected to be in the range of 77-78 percent of revenue, compared with 74 percent in 2004. Several factors account for this increase: improved product margins for Synvisc, improved margins for Renagel resulting from the transition to in-house manufacturing, and improved margins for lysosomal storage disorder products resulting from increased utilization of manufacturing facilities.

SG&A Expenses

        Selling, general and administrative expenses are expected to be approximately $750 million this year, a 25 percent increase from 2004. SG&A spending reflects continuing strong support for sales and marketing activities, including those associated with the U.S. launch of CLOLAR and the assumption of U.S. sales and marketing responsibilities for Synvisc.

R&D Spending

        Research and development spending is expected to be approximately $490 million this year, 30 percent greater than last year.

Earnings Per Share

        For 2005, Genzyme anticipates GAAP diluted earnings per share of $1.67-$1.75 per share. Amortization is expected to total approximately $170 million, or $0.41 per share. Non-GAAP earnings—which exclude amortization, one-time items and the impact of contingent convertible debt—are expected to reach $2.08-$2.16 per share for the year and $0.45-$0.48 per diluted share for the first quarter. Genzyme expects to have a weighted average of 250-260 million diluted shares outstanding this year, compared with 234 million last year, excluding the impact of contingent convertible debt.

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Tax Rate

        The company's effective net tax rate for 2005 is expected to be approximately 30 percent on a GAAP basis and 31 percent on a non-GAAP basis, which excludes amortization, one-time items and the impact of contingent convertible debt.

Cash

        Genzyme ended 2004 with approximately $1.1 billion in cash and equivalents. In 2005, it expects to incur capital expenditures of approximately $180-$200 million as it continues to build its global infrastructure.

Product Pipeline

        Genzyme's research and development program is focused on the areas of medicine where it markets commercial products, namely rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune diseases, and diagnostic testing. It also conducts research in cardiovascular disease and other areas of unmet medical need. The company strives to maintain product candidates across the stages of the development spectrum, from pre-clinical research to post-marketing studies. During 2005, Genzyme expects significant activity within its pipeline. In particular, it anticipates moving a number of product candidates forward into Phase 2 or Phase 3 studies toward commercial approval:

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Genzyme plans to seek approval this year in the United States, Japan and other countries of its most advanced product candidate, Myozyme® (alglucosidase alfa) for Pompe disease. The European marketing application for Myozyme was accepted for review at the end of last year, and a decision by the Committee for Human Medicinal Products is expected later this year. Decisions by the European Commission and other authorities are expected in 2006. If approved, Myozyme would become the first treatment available to patients with Pompe disease, a debilitating and often fatal muscle disorder resulting from an inherited enzyme deficiency. Later this year, Genzyme plans to begin enrollment in the first clinical trial of Myozyme ever conducted for patients with the late-onset form of Pompe disease. The trial is intended to broaden clinical experience with the product.



•

Genzyme is seeking a label expansion that would allow Thyrogen to be used in the ablation of remnant thyroid tissue, a therapeutic procedure that patients commonly undergo when being treated for thyroid cancer. The Committee for Human Medicinal Products of the European Medicines Agency has issued a positive opinion on Genzyme's application, and a decision by the European Commission is expected soon. A decision on the U.S. application is expected later this year.



•

Patient enrollment will begin in the Phase 3 clinical trial of tolevamer sodium, a novel non-absorbed polymer therapy that could be the first non-antibiotic treatment for Clostridium difficile-associated diarrhea (CDAD). The trial will enroll approximately 1,000 patients in more than 100 clinical centers in Europe and North America. CDAD is a widespread problem among hospitalized patients, with more than 400,000 cases annually in the United States alone, resulting in prolonged hospitalization and 5,000 deaths.



•

Genzyme has initiated a clinical trial of sevelamer carbonate in patients with end-stage renal disease and expects to begin another for patients with chronic kidney disease this year.



•

Genzyme is committed to expanding the indications for Synvisc beyond the knee. Enrollment is currently more than half completed in the U.S. trial studying the use of Synvisc in the hip, an indication that is already approved in Europe and Canada. Patient enrollment continues, as well, in trials studying Synvisc's use in the ankle and shoulder. Two new product formulations that could enhance patient convenience by reducing the number of injections are being evaluated.

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•

Genzyme continues to work with physicians to explore new uses for Thymoglobulin. It recently completed enrollment in a clinical trial evaluating the product's ability to prevent rejection in living-donor kidney transplants. Interim data will be available this spring. Pilot studies are underway to explore Thymoglobulin as a conditioning agent in bone marrow transplant procedures for patients with severe leukemia and in induction procedures associated with liver transplantation.



•

Genzyme plans to make a significant investment in building its pipeline of candidates to treat various forms of cancer, nearly quadrupling its oncology research and development budget this year. The most advanced candidate in this area is tasidotin-HCL (ILX-651). Genzyme is conducting Phase 2 trials of tasidotin in three solid-tumor indications—prostate cancer, melanoma and non-small-cell lung cancer. Data from these trials are expected in 2005.



•

The company is also actively working to expand the use of marketed cancer products CAMPATH (in collaboration with partner Schering AG) and CLOLAR. Enrollment is complete in a Phase 3 trial for earlier-line use of CAMPATH in B-cell chronic lymphocytic leukemia, and interim data are expected this year. A clinical study of CAMPATH in non-Hodgkin's lymphoma is in progress. CAMPATH may also have potential outside of cancer, and enrollment has been completed in a Phase 2 trial evaluating the product in a randomized, head-to-head comparison study with Rebif® (interferon beta-1a) for the treatment of relapsing-remitting multiple sclerosis. Genzyme also intends to begin studying CLOLAR's efficacy in adult leukemia this year and to continue to investigate the product's potential application in pediatric leukemia and a range of solid-tumor cancers. The company is supporting multiple investigator-sponsored studies exploring the use of both CAMPATH and CLOLAR in a variety of cancer indications.



•

The first patients will be treated shortly in a Phase 2 clinical trial of Genzyme's proprietary HIF-1-alpha gene therapy in peripheral arterial disease.



•

Enrollment is continuing in the Phase 2 clinical trial evaluating Genzyme's small molecule iron chelator. This therapy is designed to help patients with forms of chronic anemia, who are subject to iron overload because of the frequent infusions necessitated by their primary disease. Patients in the trial have thalassemia, which has the greatest requirement for iron clearance of all anemias.

About Genzyme

        One of the world's leading biotechnology companies, Genzyme is dedicated to making a major positive impact on the lives of people with serious diseases. Founded in 1981, Genzyme has grown from a small start-up to a diversified enterprise with annual revenues exceeding $2 billion and nearly 7,000 employees in locations spanning the globe. With many established products and services helping patients in more than 80 countries, Genzyme is a leader in the effort to develop and apply the most advanced technologies in the life sciences. The company's products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune diseases, and diagnostic testing. Genzyme's commitment to innovation continues today with a substantial development program focused on these fields as well as heart disease and other areas of unmet medical need.

        This press release contains forward-looking statements, including statements regarding non-GAAP earnings and revenue estimates and other financial guidance for fiscal year 2005, expected drivers of Genzyme's future growth, the expected financial impact of the purchase of Synvisc sales and marketing rights from Wyeth, plans to seek an expanded label for Fabrazyme, the estimated timing of the decision on Genzyme's US and EU applications to expand Thyrogen's label, the development of Genzyme's oncology business, the expected timing of a response from European regulatory authorities regarding the Myozyme marketing authorization application, submission of Myozyme marketing authorization

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applications in the US, Japan and other countries and the timing thereof, the development of new markets for Genzyme's existing products, anticipated progress of clinical trials, including for Myozyme, tolevamer sodium, Synvisc, Thymoglobulin, ILX-651 and CAMPATH, as well as other statements regarding Genzyme's future performance and strategy. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those forecast in these forward-looking statements. These risks and uncertainties include, among others, Genzyme's ability to successfully complete preclinical and clinical development of our products and services, including Myozyme; Genzyme's ability to expand the use of current products in existing and new indications; Genzyme's ability to maintain and obtain regulatory approvals for products and services; Genzyme's ability to successfully identify and market to new patients; the scope of third-party reimbursement coverage for Genzyme's products and services; Genzyme's ability to successfully expand its sales and marketing teams in existing and new markets; Genzyme's ability to manufacture products and product candidates in a timely and cost effective manner; Genzyme's ability to effectively manage inventory levels; changes in legislation and regulations affecting the sale of Genzyme's products and services; and the risks and uncertainties described in Genzyme's SEC reports filed under the Securities Exchange Act of 1934, including the factors discussed under the caption "Factors Affecting Future Operating Results" in Genzyme's Quarterly Report on Form 10-Q for the period ended September 30, 2004. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of February 17, 2005 and Genzyme undertakes no obligation to update or revise the statements.

        Genzyme®, Renagel®, Fabrazyme®, Cerezyme®, Thyrogen®, Synvisc®, Myozyme®, Thymoglobulin®, CAMPATH® and CLOLAR™ are registered trademarks of Genzyme Corporation or its subsidiaries. Aldurazyme® is a registered trademark of BioMarin/Genzyme LLC. All rights reserved.

Conference Call Information

        There will be a conference call today at 11:00 a.m. Eastern to discuss Genzyme Corporation's fourth quarter 2004 financial results and 2005 financial guidance. If you would like to participate in the call, please dial 719-457-2642. A replay of this call will be available from 2:30 p.m. Eastern today through midnight on February 24 by dialing 719-457-0820. Please refer to reservation number 629502. This call will also be Webcast live on the investor events section of www.genzyme.com.

Upcoming Events

        Genzyme will report its first quarter 2005 financial results on April 21, 2005. If you would like to participate in the 11:00 a.m. Eastern conference call, please dial 719-457-2642. Please check www.genzyme.com one week prior to the reporting date for any changes to this information.

# # #

        Genzyme's press releases and other company information are available at www.genzyme.com and by calling Genzyme's investor information line at 1-800-905-4369 within the United States or 1-703-797-1866 outside the United States.

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GENZYME GENERAL (GENZ)
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share amounts)

			Three Months Ended December 31,						Year Ended December 31,
			2004(1)			2003(1)			2004(1)			2003(1)
Total revenues			$	591,077		$	476,131		$	2,201,145		$	1,574,817
Operating costs and expenses:
	Cost of products and services sold			163,897			129,392			588,586			418,969
	Selling, general and administrative			155,432			147,606			599,388			455,395
	Research and development			107,428			97,588			391,802			295,725
	Amortization of intangibles			28,326			25,844			109,473			64,720
	Purchase of in-process research and development(2)			194,300			—			194,300			158,000
	Charge for impaired assets(3)			4,463			—			4,463			7,996
		Total operating costs and expenses		653,846			400,430			1,888,012			1,400,805
Operating income (loss)				(62,769	)		75,701			313,133			174,012
Other income (expenses):
	Equity in loss of equity method investments			(3,157	)		(2,242	)		(15,624	)		(16,743	)
	Minority interest			2,284			2,232			5,999			2,232
	Gain (loss) on investments in equity securities			1,030			1,236			(1,252	)		(1,201	)
	Gain on sale of product line			—			1,709			—			1,709
	Other			376			(222	)		(357	)		994
	Investment income			6,399			7,551			24,244			42,312
	Interest expense(4)			(4,977	)		(9,393	)		(38,227	)		(22,380	)
		Total other income (expenses)		1,955			871			(25,217	)		6,923
Income (loss) before income taxes				(60,814	)		76,572			287,916			180,935
Provision for income taxes				(36,308	)		(19,270	)		(141,169	)		(86,652	)
Net income (loss)			$	(97,122	)	$	57,302		$	146,747		$	94,283
Net income (loss) per share allocated to Genzyme Stock(1):
	Genzyme General net income (loss)		$	(97,122	)	$	57,302		$	146,747		$	82,143
	Tax benefit allocated from Genzyme Biosurgery			—			—			—			8,720
	Tax benefit allocated from Genzyme Molecular Oncology			—			—			—			3,420
	Net income (loss) allocated to Genzyme Stock		$	(97,122	)	$	57,302		$	146,747		$	94,283
	Net income (loss) per share of Genzyme Stock:
		Basic	$	(0.42	)	$	0.26		$	0.64		$	0.43
		Diluted(5,6,7)	$	(0.42	)	$	0.25		$	0.63		$	0.42
	Weighted average shares outstanding:
		Basic		232,255			224,101			228,175			219,376
		Diluted(5,6,7)		232,255			232,181			244,004			225,976

(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

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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.

From July 1, 2003 through May 27, 2004, we referred to our outstanding series of common stock as Genzyme General Stock. At our annual meeting of shareholders on May 27, 2004, our shareholders approved an amendment to our charter that eliminated the designation of separate series of common stock, resulting in 690,000,000 authorized shares of a single series of common stock, which we refer to as Genzyme Stock.

(2)

Includes charges for the purchase of in-process research and development of $(194,300)K related to our acquisition of ILEX Oncology, Inc. in December 2004 and $(158,000)K related to our acquisition of SangStat Medical Corporation in September 2003.

(3)

Includes impairment charges of $(4,463)K recorded in December 2004 to write down the assets of a manufacturing facility in Oklahoma and $(7,996)K recorded in September 2003 to write down the assets related to our FocalSeal business.

(4)

In June 2004, we completed the redemption of our 3% convertible subordinated debentures for cash, including $575.0 million in principal, accrued interest of approximately $0.8 million and $4.3 million in premium. Interest expense for the year ended December 31, 2004 includes charges of $(4,313)K for the premium paid upon redemption of the debentures and $(5,329)K to write off the unamortized debt fees associated with these debentures.

(5)

Reflects the retroactive application of Emerging Issues Task Force Issue No. 04-8, "The Effect of Contingently Convertible Debt on Diluted Earnings Per Share," or EITF 04-8. As a result of the adoption of EITF 04-8, the 9,686K shares issuable upon conversion of our $690.0 million in principal of 1.25% convertible senior notes, which were issued in December 2003, are now included in diluted weighted average shares for purposes of computing diluted earnings per share, unless the effect would be anti-dilutive. For the three months ended December 31, 2004, the potentially dilutive effect of the assumed conversion of these notes is excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive due to our net loss for the period. For the year ended December 31, 2004, in accordance with EITF 04-8, interest and debt issuance costs related to the notes of approximately $(7,487)K, net of tax, have been added back to net income for the purpose of computing diluted earnings per share. The adoption of EITF 04-8 reduced diluted earnings per share by approximately $0.04 per share for the year ended December 31, 2004. Diluted earnings per share for the three months and year ended December 31, 2003 were not impacted by the adoption of EITF 04-8 because our convertible senior notes were only outstanding for a portion of the month in December 2003.

(6)

Net loss per share on a diluted basis and weighted average shares-diluted for the three months ended December 31, 2004 excludes: (i) the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock and (ii) the potentially dilutive effect of the assumed conversion of our convertible senior notes because the effect of these securities would be anti-dilutive due to our net loss for the period.

(7)

Net income per share on a diluted basis and weighted average shares-diluted for the year ended December 31, 2004 and for the three months and year ended December 31, 2003 include the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock, and the potentially dilutive effect of the assumed conversion of our convertible senior notes.

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GENZYME GENERAL (GENZ)
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)

		December 31, 2004(1)		December 31, 2003(1)
Cash and all marketable securities(2)		$	1,081,749	$	1,227,460
Other current assets			1,093,021		909,490
Property, plant and equipment, net			1,310,256		1,151,133
Intangibles, net			2,427,836		1,517,791
Other assets			225,674		198,654
	Total assets	$	6,138,536	$	5,004,528
Current liabilities		$	616,245	$	392,025
Noncurrent liabilities(2)			1,087,414		1,676,091
Stockholders' equity			4,434,877		2,936,412
	Total liabilities and stockholders' equity	$	6,138,536	$	5,004,528

(1)

Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating assets and liabilities to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our assets and liabilities are allocated to Genzyme General.

(2)

In June 2004, we completed the redemption of our 3% convertible subordinated debentures for cash, including $575.0 million in principal, accrued interest of approximately $0.8 million and $4.3 million in premium. Upon redemption, we also recorded a non-cash charge of $5.3 million to interest expense to write off the unamortized debt fees associated with these debentures.

9

GENZYME CORPORATION
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share amounts)

				Three Months Ended December 31,						Year Ended December 31,
				2004			2003			2004			2003
Total revenues				$	591,077		$	476,131		$	2,201,145		$	1,713,871
Operating costs and expenses:
		Cost of products and services sold			163,897			129,392			588,586			475,644
		Selling, general and administrative			155,432			147,606			599,388			519,977
		Research and development			107,428			97,588			391,802			335,256
		Amortization of intangibles			28,326			25,844			109,473			80,257
		Purchase of in-process research and development(1)			194,300			—			194,300			158,000
		Charge for impairment of goodwill(2)			—			—			—			102,792
		Charge for impaired assets(3)			4,463			—			4,463			10,894
			Total operating costs and expenses		653,846			400,430			1,888,012			1,682,820
Operating income (loss)					(62,769	)		75,701			313,133			31,051
Other income (expenses):
		Equity in loss of equity method investments			(3,157	)		(2,242	)		(15,624	)		(16,743	)
		Minority interest			2,284			2,232			5,999			2,232
		Gain (loss) on investments in equity securities			1,030			1,236			(1,252	)		(1,201	)
		Loss on sale of product line(4)			—			1,709			—			(27,658	)
		Other			376			(222	)		(357	)		959
		Investment income			6,399			7,551			24,244			43,015
		Interest expense(5)			(4,977	)		(9,393	)		(38,227	)		(26,600	)
			Total other income (expenses)		1,955			871			(25,217	)		(25,996	)
Income (loss) before income taxes					(60,814	)		76,572			287,916			5,055
Provision for income taxes					(36,308	)		(19,270	)		(141,169	)		(72,647	)
Net income (loss)				$	(97,122	)	$	57,302		$	146,747		$	(67,592	)
Net income (loss) per share:
	Allocated to Genzyme Stock(6):
		Genzyme General net income (loss)		$	(97,122	)	$	57,302		$	146,747		$	82,143
		Tax benefit allocated from Genzyme Biosurgery			—			—			—			8,720
		Tax benefit allocated from Genzyme Molecular Oncology			—			—			—			3,420
		Net income (loss) allocated to Genzyme Stock		$	(97,122	)	$	57,302		$	146,747		$	94,283
		Net income (loss) per share of Genzyme Stock:
			Basic	$	(0.42	)	$	0.26		$	0.64		$	0.43
			Diluted(7,8,9)	$	(0.42	)	$	0.25		$	0.63		$	0.42
		Weighted average shares outstanding:
			Basic		232,255			224,101			228,175			219,376
			Diluted(7,8,9)		232,255			232,181			244,004			225,976
	Allocated to Biosurgery Stock(6):
		Genzyme Biosurgery net loss			—			—			—		$	(166,656	)
		Allocated tax benefit			—			—			—			14,005
		Net loss allocated to Biosurgery Stock			—			—			—		$	(152,651	)
		Net loss per share of Biosurgery Stock—basic and diluted											$	(3.76	)
		Weighted average shares outstanding			—			—			—			40,630
	Allocated to Molecular Oncology Stock(6):
		Net loss allocated to Molecular Oncology Stock			—			—			—		$	(9,224	)
		Net loss per share of Molecular Oncology Stock—basic and diluted			—			—			—		$	(0.54	)
		Weighted average shares outstanding			—			—			—			16,958

(1)

Includes charges for the purchase of in-process research and development of $(194,300)K related to our acquisition of ILEX Oncology, Inc. in December 2004 and $(158,000)K related to our acquisition of SangStat Medical Corporation in September 2003.

10

(2)

Represents the write off of the goodwill allocated to our orthopaedics reporting unit in June 2003 in accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."

(3)

Includes impairment charges of $(4,463)K recorded in December 2004 to write down assets related to a manufacturing facility in Oklahoma, $(7,996)K in September 2003 to write down the assets related to our FocalSeal business and $(2,898)K in June 2003 to write down the carrying value of our cardiothoracic devices manufacturing facility in Fall River, Massachusetts to fair value.

(4)

Represents the final adjustment to the net loss on the sale of our cardiothoracic devices business to Teleflex Inc. in accordance with the sale agreement. We recorded an estimated net loss of $(29,367)K in June 2003, which we allocated to Genzyme Biosurgery. However, as a result of elimination of our tracking stock capital structure effective July 1, 2003, the final adjustment to the net loss is allocated to Genzyme General.

(5)

In June 2004, we completed the redemption of our 3% convertible subordinated debentures for cash, including $575.0 million in principal, accrued interest of approximately $0.8 million and $4.3 million in premium. Interest expense for the year ended December 31, 2004 includes charges of $(4,313)K for the premium paid upon redemption of the debentures and $(5,329)K to write off the unamortized debt fees associated with these debentures.

(6)

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.

From July 1, 2003 through May 27, 2004, we referred to our outstanding series of common stock as Genzyme General Stock. At our annual meeting of shareholders on May 27, 2004, our shareholders approved an amendment to our charter that eliminated the designation of separate series of common stock, resulting in 690,000,000 authorized shares of a single series of common stock, which we refer to as Genzyme Stock.

(7)

Reflects the retroactive application of Emerging Issues Task Force Issue No. 04-8, "The Effect of Contingently Convertible Debt on Diluted Earnings Per Share," or EITF 04-8. As a result of the adoption of EITF 04-8, the 9,686K shares issuable upon conversion of our $690.0 million in principal of 1.25% convertible senior notes, which were issued in December 2003, are now included in diluted weighted average shares for purposes of computing diluted earnings per share, unless the effect would be anti-dilutive. For the three months ended December 31, 2004, the potentially dilutive effect of the assumed conversion of these notes is excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive due to our net loss for the period. For the year ended December 31, 2004, in accordance with EITF 04-8, interest and debt issuance costs related to the notes of approximately $(7,487)K, net of tax, have been added back to net income for purposes of calculating diluted earnings per share. The adoption of EITF 04-8 reduced diluted earnings per share by approximately $0.04 million per share for the year ended December 31, 2004. Diluted earnings per share for the three months and year ended December 31, 2003 were not impacted by the adoption of EITF 04-8 because our convertible senior notes were only outstanding for a portion of the month in December 2003.

(8)

Net loss per share on a diluted basis and weighted average shares-diluted for the three months ended December 31, 2004 excludes: (i) the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock and (ii) the dilutive effect of the assumed conversion of our convertible senior notes because the effect of these securities would be anti-dilutive due to our net loss for the period.

(9)

Net income per share on a diluted basis and weighted average shares-diluted for the year ended December 31, 2004 and for the three months and year ended December 31, 2003 include the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock, and the potentially dilutive effect of the assumed conversion of our convertible senior notes.

11

GENZYME CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)

		December 31, 2004		December 31, 2003
Cash and all marketable securities(1)		$	1,081,749	$	1,227,460
Other current assets			1,093,021		909,490
Property, plant and equipment, net			1,310,256		1,151,133
Intangibles, net			2,427,836		1,517,791
Other assets			225,674		198,654
	Total assets	$	6,138,536	$	5,004,528
Current liabilities		$	616,245	$	392,025
Noncurrent liabilities(1)			1,087,414		1,676,091
Stockholders' equity			4,434,877		2,936,412
	Total liabilities and stockholders' equity	$	6,138,536	$	5,004,528

(1)

In June 2004, we completed the redemption of our 3% convertible subordinated debentures for cash, including $575.0 million in principal, accrued interest of approximately $0.8 million and $4.3 million in premium. Upon redemption, we also recorded a non-cash charge of $5.3 million to interest expense to write off the unamortized debt fees associated with these debentures.

12

Genzyme General (GENZ)
Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)

				Q4-03(1)		Q1-04(1)		Q2-04(1)		Q3-04(1)		Q4-04(1)		Q4-04 vs. Q4-03 % B/(W)		FY 2002		FY 2003(1)		YTD 12/31/04(1)
Total revenues:
	Renal
		Renagel phosphate binder (including Sevelamer)		$	81,465	$	83,523	$	87,617	$	93,308	$	99,272	22	%	$	156,864	$	281,701	$	363,720
		Other Renal			—		—		—		—		—	—			—		—
			Total Renal product and service revenue	$	81,465	$	83,523	$	87,617	$	93,308	$	99,272	22	%	$	156,864	$	281,701	$	363,720
		Renal R&D revenue			—		—		—		—		—				—		—		—
			Total Renal	$	81,465	$	83,523	$	87,617	$	93,308	$	99,272	22	%	$	156,864	$	281,701	$	363,720
	Therapeutics
		Cerezyme enzyme			192,683		202,970		209,371		208,378		218,647	13	%		619,184		733,817		839,366
		Fabrazyme enzyme			31,889		38,103		49,620		57,996		63,918	100	%		26,101		80,617		209,637
		Thyrogen hormone			12,529		13,997		16,298		15,428		17,731	42	%		28,270		43,438		63,454
		Other Therapeutics			448		39		1,193		575		655	46	%		871		1,802		2,462
			Total Therapeutics product and service revenue		237,549		255,109		276,482		282,377		300,951	27	%		674,426		859,674		1,114,919
		Therapeutics R&D revenue			—		—		—		—		—	—			834		1		—
		Total Therapeutics			237,549		255,109		276,482		282,377		300,951	27	%		675,260		859,675		1,114,919
	Transplant
		Thymoglobulin/Lymphoglobuline			25,055		25,012		25,260		28,342		30,314	21	%		—		29,953		108,928
		Other Transplant			11,946		11,222		11,235		12,669		6,999	(41	%)		—		14,367		42,125
			Total Transplant product and service revenue		37,001		36,234		36,495		41,011		37,313	1	%		—		44,320		151,053
		Transplant R&D revenue			—		—		—		261		49				—		—		310
			Total Transplant		37,001		36,234		36,495		41,272		37,362	1	%		—		44,320		151,363
	Biosurgery
		Synvisc viscosupplementation product and services			25,825		22,363		27,520		24,630		13,783	(47	%)		—		55,579		88,296
		Sepra products			14,008		14,212		15,579		15,085		16,771	20	%		—		25,959		61,647
		Other Biosurgery			13,003		10,807		14,178		16,814		13,533	4	%		12,828		32,414		55,332
			Total Biosurgery product and service revenue		52,836		47,382		57,277		56,529		44,087	(17	%)		12,828		113,952		205,275
		Biosurgery R&D revenue			406		321		2,302		227		1,391	243	%		—		5,127		4,241
			Total Biosurgery		53,242		47,703		59,579		56,756		45,478	(15	%)		12,828		119,079		209,516
	Diagnostics/Genetics
		Diagnostic Products			21,722		23,370		22,917		21,667		23,001	6	%		83,065		88,588		90,955
		Genetic Testing			26,736		28,744		48,809		55,915		54,698	105	%		89,745		102,147		188,166
			Total Diagnostics/Genetics product and service revenue		48,458		52,114		71,726		77,582		77,699	60	%		172,810		190,735		279,121
		Diagnostic/Genetics R&D revenue			—		—		—		—		—				—		—		—
			Total Diagnostics/Genetics		48,458		52,114		71,726		77,582		77,699	60	%		172,810		190,735		279,121
	Other
		Other product and service revenue			16,242		14,784		16,444		15,935		27,332	68	%		57,084		71,710		74,495
		Other R&D revenue			2,174		1,784		1,245		1,999		2,983	37	%		5,339		7,597		8,011
			Total Other		18,416		16,568		17,689		17,934		30,315	65	%		62,423		79,307		82,506
Total revenues				$	476,131	$	491,251	$	549,588	$	569,229	$	591,077	24	%	$	1,080,185	$	1,574,817	$	2,201,145

13

			Q4-03(1)			Q1-04(1)			Q2-04(1)			Q3-04(1)			Q4-04(1)			Q4-04 vs. Q4-03 % B/(W)		FY 2002			FY 2003(1)			YTD 12/31/04(1)
Revenues:
	Total product and service revenue		$	473,551		$	489,146		$	546,041		$	566,742		$	586,654		24	%	$	1,074,012		$	1,562,092		$	2,188,583
	Total R&D revenue			2,580			2,105			3,547			2,487			4,423		71	%		6,173			12,725			12,562
		Total revenues		476,131			491,251			549,588			569,229			591,077		24	%		1,080,185			1,574,817			2,201,145
Total product and service gross profit				344,159			362,184			403,173			411,883			422,757		23	%		808,194			1,143,123			1,599,997
SG&A expense				147,606			143,220			152,850			147,886			155,432		(5	%)		323,683			455,395			599,388
R&D expense				97,588			92,816			99,370			92,188			107,428		(10	%)		230,043			295,725			391,802
Amortization of intangibles				25,844			26,245			27,245			27,657			28,326		(10	%)		38,998			64,720			109,473
Purchase of in-process research and development(2)				—			—			—			—			194,300					—			158,000			194,300
Charge for impaired assets(3)				—			—			—			—			4,463					13,986			7,996			4,463
Operating income (loss)				75,701			102,008			127,255			146,639			(62,769	)	(183	%)		207,657			174,012			313,133
Other income (expenses):
	Equity in loss of equity method investments			(2,242	)		(3,831	)		(4,274	)		(4,362	)		(3,157	)	(41	%)		(16,858	)		(16,743	)		(15,624	)
	Minority interest			2,232			1,162			964			1,589			2,284		2	%		—			2,232			5,999
	Gain (loss) on investments in equity securities			1,236			353			71			(2,706	)		1,030		(17	%)		(14,497	)		(1,201	)		(1,252	)
	Gain on sale of product line(4)			1,709			—			—			—			—		(100	%)		—			1,709			—
	Other			(222	)		(324	)		(390	)		(19	)		(376	)	269	%		(152	)		994			(357	)
	Investment income			7,551			7,676			5,603			4,566			6,399		(15	%)		48,944			42,312			24,244
	Interest expense(5)			(9,393	)		(10,326	)		(17,495	)		(5,429	)		(4,977	)	47	%		(17,847	)		(22,380	)		(38,227	)
Income (loss) before income taxes				76,572			96,718			111,734			140,278			(60,814	)	(179	%)		207,247			180,935			287,916
Provision for income taxes				(19,270	)		(28,824	)		(33,558	)		(42,479	)		(36,308	)	(88	%)		(56,516	)		(98,792	)		(141,169	)
Division net income (loss) before allocated tax benefits				57,302			67,894			78,176			97,799			(97,122	)	(269	%)		150,731			82,143			146,747
Allocated tax benefits				—			—			—			—			—					27,795			12,140			—
Net income (loss) allocated to Genzyme Stock(1)			$	57,302		$	67,894		$	78,176		$	97,799		$	(97,122	)	(269	%)	$	178,526		$	94,283		$	146,747
Net income (loss) per share of Genzyme Stock-diluted(1,6,7)			$	0.25		$	0.29		$	0.33		$	0.41		$	(0.42	)	(268	%)	$	0.81		$	0.42		$	0.63
Weighted average shares outstanding-diluted(6,7)				232,181			241,603			241,230			244,406			232,255		0	%		219,388			225,976			244,004

14

			Q4-03(1)			Q1-04(1)			Q2-04(1)			Q3-04(1)			Q4-04(1)			FY 2002			FY 2003(1)			YTD 12/31/04(1)
Total product and service revenue			$	473,551		$	489,146		$	546,041		$	566,742		$	586,654		$	1,074,012		$	1,562,092		$	2,188,583
As a % of total product and service revenue:
	Renagel (including Sevelamer)			17	%		17	%		16	%		16	%		17	%		15	%		18	%		17	%
	Cerezyme enzyme			41	%		41	%		38	%		37	%		37	%		58	%		47	%		38	%
	Fabrazyme enzyme			7	%		8	%		9	%		10	%		11	%		2	%		5	%		9	%
	Thyrogen hormone			3	%		3	%		3	%		3	%		3	%		3	%		3	%		3	%
	Thymoglobulin/Lymphoglobuline			5	%		5	%		5	%		5	%		5	%		0	%		2	%		5	%
	Synvisc viscosupplementation product and services			5	%		5	%		5	%		4	%		3	%		0	%		3	%		4	%
	Sepra products			3	%		3	%		3	%		3	%		3	%		0	%		2	%		3	%
	Diagnostics/Genetics			10	%		11	%		13	%		14	%		13	%		16	%		12	%		13	%
	Other			9	%		7	%		8	%		8	%		8	%		6	%		8	%		8	%
Total product and service gross margin				73	%		74	%		74	%		73	%		72	%		75	%		73	%		73	%
Total revenues			$	476,131		$	491,251		$	549,588		$	569,229		$	591,077		$	1,080,185		$	1,574,817		$	2,201,145
SG&A expense as % of total revenue				31	%		29	%		28	%		26	%		26	%		30	%		29	%		27	%
R&D expense as % of total revenue				20	%		19	%		18	%		16	%		18	%		21	%		19	%		18	%
Operating income (loss) as % of total revenue				16	%		21	%		23	%		26	%		(11	%)		19	%		11	%		14	%
Provision for income taxes as % of profit (loss) before tax				25	%		30	%		30	%		30	%		(60	%)		14	%		48	%		49	%
Balance sheet trends:				12/31/03(8	)		03/31/04(8	)		06/30/04(8	)		09/30/04(8	)		12/31/04(8	)		12/31/02			12/31/03(8	)		12/31/04(8	)
	Cash and all marketable securities		$	1,227,460		$	1,235,859		$	657,047		$	823,446		$	1,081,749		$	1,149,145		$	1,227,460		$	1,081,749
	Other current assets			909,490			907,286			944,828			992,019			1,093,021			633,501			909,490			1,093,021
	Property, plant and equipment, net			1,151,133			1,156,083			1,202,580			1,231,775			1,310,256			749,840			1,151,133			1,310,256
	Intangibles, net			1,517,791			1,537,411			1,698,415			1,669,358			2,427,836			933,360			1,517,791			2,427,836
	Other assets			198,654			208,805			201,885			196,116			225,674			89,955			198,654			225,674
		Total assets	$	5,004,528		$	5,045,444		$	4,704,755		$	4,912,714		$	6,138,536		$	3,555,801		$	5,004,528		$	6,138,536
	Current liabilities		$	392,025		$	922,995		$	497,503		$	526,189		$	616,245		$	274,872		$	392,025		$	616,245
	Noncurrent liabilities			1,676,091			1,082,140			1,083,563			1,073,694			1,087,414			695,045			1,676,091			1,087,414
	Stockholders' equity			2,936,412			3,030,309			3,123,689			3,312,831			4,434,877			2,585,884			2,936,412			4,434,877
		Total liabilities and stockholders' equity	$	5,004,528		$	5,045,444		$	4,704,755		$	4,912,714		$	6,138,536		$	3,555,801		$	5,004,528		$	6,138,536

15

Notes:

(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.

From July 1, 2003 through May 27, 2004, we referred to our outstanding series of common stock as Genzyme General Stock. At our annual meeting of shareholders on May 27, 2004, our shareholders approved an amendment to our charter that eliminated the designation of separate series of common stock, resulting in 690,000,000 authorized shares of a single series of common stock, which we refer to as Genzyme Stock.

(2)

Includes charges for the purchase of in-process research and development of $(194,300)K related to our acquisition of ILEX Oncology, Inc. in December 2004 and $(158,000)K related to our acquisition of SangStat Medical Corporation in September 2003.

(3)

Includes impairment charges of (i) $(4,463)K recorded in December 2004 to write down the assets of a manufacturing facility in Oklahoma, (ii) $(7,996)K recorded in September 2003 to write down the assets of our FocalSeal business and (iii) $(13,986)K recorded in December 2002 to write off engineering costs related to a proposed manufacturing facility in Framingham, Massachusetts.

(4)

Represents the final adjustment to the net loss on the sale of our cardiothoracic devices business to Teleflex Inc. in accordance with the sale agreement. We recorded an estimated net loss of $(29,367)K in June 2003, which we allocated to Genzyme Biosurgery. However, as a result of the elimination of our tracking stock capital structure effective July 1, 2003, the final adjustment to the net loss is allocated to Genzyme General.

(5)

In June 2004, we completed the redemption of our 3% convertible subordinated debentures for cash, including $575.0 million in principal, accrued interest of approximately $0.8 million and $4.3 million in premium. Interest expense for the year ended December 31, 2004 includes charges of $(4,313)K for the premium paid upon redemption and $(5,329)K to write off the unamortized debt fees associated with these debentures.

(6)

Reflects the retroactive application of the adoption of Emerging Issues Task Force Issue No. 04-8, "The Effect of Contingently Convertible Debt on Diluted Earnings Per Share," or EITF 04-8. As a result of the adoption of EITF 04-8, the 9,686K shares issuable upon conversion of our $690.0 million in principal 1.25% convertible senior notes, which were issued in December 2003, are now included in diluted weighted average shares for purposes of computing diluted earnings per share, unless the effect would be anti-dilutive. For the three months ended December 31, 2004, the potentially dilutive effect of the assumed conversion of these notes is excluded from the calculation of diluted earnings per share because the net effect would be anti-dilutive due to our net loss for the period. For the year ended December 31, 2004, in accordance with EITF 04-8, interest and debt issuance costs related to the notes of approximately $(7,487)K, net of tax, have been added back to net income for the purpose of calculating diluted earnings per share. The adoption of EITF 04-8 reduced diluted earnings per share by approximately $0.04 per share for the year ended December 31, 2004. Diluted earnings per share for the three months and year ended December 31, 2003 were not impacted by the adoption of EITF 04-8 because our convertible senior notes were only outstanding for a portion of the month in December 2003.

(7)

For all periods except Q4-04, includes the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock, and the dilutive effect of the assumed conversion of our 1.25% convertible senior notes.

In Q4-04, excludes the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock, and the potentially dilutive effect of the assumed conversion of our 1.25% convertible senior notes because the effect would be anti-dilutive due to our net loss for the period.

(8)

Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating assets and liabilities to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our assets and liabilities are allocated to Genzyme General.

16

GENZYME GENERAL
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Year Ended December 31, 2004
(Amounts in thousands, except per share data)

		Before Gains/ (Charges), Amortization FIN 46 & EITF 04-8			Dilution Due to Contingently Convertible Debt (EITF 04-8)
																	Exit Costs
								SangStat Inventory StepUp			Convert Premium			Convert Fees			Oklahoma City			Generic Cyclosporine			Amortization			IPR&D			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues		$	2,201,145																										$	2,201,145					$	2,201,145
Cost of products and services sold		$	(576,582	)				$	(3,937	)										$	(8,067	)							$	(588,586	)				$	(588,586	)
Selling, general and administrative		$	(599,163	)																									$	(599,163	)	$	(225	)	$	(599,388	)
Research and development		$	(377,944	)													$	(2,079	)										$	(380,023	)	$	(11,779	)	$	(391,802	)
Amortization of intangibles		$	—																				$	(109,473	)				$	(109,473	)				$	(109,473	)
Purchase of in-process research and development		$	—																							$	(194,300	)	$	(194,300	)				$	(194,300	)
Charge for impaired assets		$	—														$	(4,463	)										$	(4,463	)				$	(4,463	)
Equity in loss of equity method investments		$	(21,621	)																									$	(21,621	)	$	5,997		$	(15,624	)
Minority interest		$	—																										$	—		$	5,999		$	5,999
Gain (loss) on investments in equity securities		$	(1,252	)																									$	(1,252	)				$	(1,252	)
Other		$	(357	)																									$	(357	)				$	(357	)
Investment income		$	24,236																										$	24,236		$	8		$	24,244
Interest Expense		$	(28,585	)							$	(4,313	)	$	(5,329	)													$	(38,227	)				$	(38,227	)
Summary:
Income (loss) before income taxes		$	619,877		$	—		$	(3,937	)	$	(4,313	)	$	(5,329	)	$	(6,542	)	$	(8,067	)	$	(109,473	)	$	(194,300	)	$	287,916		$	—		$	287,916
Provision for income taxes		$	(191,828	)		—			1,449			1,587			1,961			2,407			2,969			40,286			—			(141,169	)		—		$	(141,169	)
Net income allocated to Genzyme Stock		$	428,049		$	—		$	(2,488	)	$	(2,726	)	$	(3,368	)	$	(4,135	)	$	(5,098	)	$	(69,187	)	$	(194,300	)	$	146,747		$	—		$	146,747
Net income per share of Genzyme Stock:
	Basic	$	1.87		$	—		$	(0.011	)	$	(0.012	)	$	(0.015	)	$	(0.018	)	$	(0.022	)	$	(0.303	)	$	(0.850	)	$	0.64		$	—		$	0.64
	Diluted (1)	$	1.82		$	(0.039	)	$	(0.010	)	$	(0.011	)	$	(0.014	)	$	(0.017	)	$	(0.021	)	$	(0.284	)	$	(0.796	)	$	0.63		$	—		$	0.63
Weighted average shares outstanding:
	Basic		228,175			228,175			228,175			228,175			228,175			228,175			228,175			228,175			228,175			228,175			228,175			228,175
	Diluted(1)		234,318			244,004			244,004			244,004			244,004			244,004			244,004			244,004			244,004			244,004			244,004			244,004

(1)    GAAP As-Reported diluted earnings per share and diluted weighted average shares outstanding reflect the adoption of EITF 04-8.

17

GENZYME GENERAL
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
Quarter Ended December 31, 2004
(Amounts in thousands, except per share data)

					Dilution Due to Contingently Convertible Debt (EITF 04-8)
		Before Gains/(Charges), Amortization, FIN 46 & EITF 04-8						Exit Costs
								Oklahoma City			Generic Cyclosporine			Amortization			IPR&D			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues		$	591,077																	$	591,077					$	591,077
Cost of products and services sold		$	(155,830	)								(8,067	)							$	(163,897	)				$	(163,897	)
Selling, general and administrative		$	(155,432	)													$	(155,432	)							$	(155,432	)
Research and development		$	(100,775	)				$	(2,079	)										$	(102,854	)	$	(4,574	)	$	(107,428	)
Amortization of intangibles		$	—												(28,326	)				$	(28,326	)				$	(28,326	)
Purchase of in-process research and development		$	—															(194,300	)	$	(194,300	)				$	(194,300	)
Charge for impaired assets		$	—					$	(4,463	)										$	(4,463	)				$	(4,463	)
Equity in loss of equity method investments		$	(5,440	)																$	(5,440	)	$	2,283		$	(3,157	)
Minority interest		$	—																	$	—		$	2,284		$	2,284
Gain (loss) on investments in equity securities		$	1,030																	$	1,030					$	1,030
Other		$	376																	$	376					$	376
Investment income		$	6,392																	$	6,392		$	7		$	6,399
Interest Expense		$	(4,977	)		—														$	(4,977	)				$	(4,977	)
Summary:
Income (loss) before income taxes		$	176,421		$	—		$	(6,542	)	$	(8,067	)	$	(28,326	)	$	(194,300	)	$	(60,814	)	$	—		$	(60,814	)
Provision for income taxes		$	(52,108	)		—			2,407			2,969			10,424			—			(36,308	)		—			(36,308	)
Net income (loss) allocated to Genzyme Stock		$	124,313		$	—		$	(4,135	)	$	(5,098	)	$	(17,902	)	$	(194,300	)	$	(97,122	)	$	—		$	(97,122	)
Net income (loss) per share of Genzyme Stock:
	Basic	$	0.54		$	—		$	(0.018	)	$	(0.022	)	$	(0.077	)	$	(0.836	)	$	(0.42	)	$	—		$	(0.42	)
	Diluted (1)	$	0.52		$	(0.013	)	$	(0.017	)	$	(0.020	)	$	(0.072	)	$	(0.816	)	$	(0.42	)	$	—		$	(0.42	)
Weighted average shares outstanding:
	Basic		232,255			232,255			232,255			232,255			232,255			232,255			232,255			232,255			232,255
	Diluted(1)		239,092			248,778			248,778			248,778			248,778			248,778			232,255			232,255			232,255

(1)    GAAP As-Reported diluted net loss per share for the three months ended December 31, 2004 excludes the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock, and the potentially dilutive effect of our 1.25% convertible notes because the effect would be anti-dilutive to our net loss for the period.

18

GENZYME GENERAL
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
Quarter Ended September 30, 2004
(Amounts in thousands, except per share data)

		Before Gains/(Charges), Amortization, FIN 46 & EITF 04-8			Dilution Due to Contingently Convertible Debt (EITF 04-8)			SangStat Acquisition-Related Costs			Amortization			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues		$	569,229											$	569,229					$	569,229
Cost of products and services sold		$	(153,808	)				$	(1,051	)				$	(154,859	)				$	(154,859	)
Selling, general and administrative		$	(147,754	)										$	(147,754	)	$	(132	)	$	(147,886	)
Research and development		$	(89,143	)										$	(89,143	)	$	(3,045	)	$	(92,188	)
Amortization of intangibles		$	—								$	(27,657	)	$	(27,657	)				$	(27,657	)
Purchase of in-process research and development		$	—											$	—					$	—
Charge for impaired assets		$	—											$	—					$	—
Equity in loss of equity method investments		$	(5,950	)										$	(5,950	)	$	1,588		$	(4,362	)
Minority interest		$	—											$	—		$	1,589		$	1,589
Gain (loss) on investments in equity securities		$	(2,706	)										$	(2,706	)				$	(2,706	)
Other		$	(19	)										$	(19	)				$	(19	)
Investment income		$	4,566											$	4,566					$	4,566
Interest expense		$	(5,429	)	$	—								$	(5,429	)				$	(5,429	)
Summary:
Income (loss) before income taxes		$	168,986		$	—		$	(1,051	)	$	(27,657	)	$	140,278		$	—		$	140,278
Provision for income taxes		$	(53,044	)		—			387			10,178			(42,479	)		—		$	(42,479	)
Net income allocated to Genzyme Stock		$	115,942		$	—		$	(664	)	$	(17,479	)	$	97,799		$	—		$	97,799
Net income per share of Genzyme Stock:
	Basic	$	0.51		$	—		$	(0.003	)	$	(0.076	)	$	0.43		$	—		$	0.43
	Diluted (1)	$	0.49		$	(0.011	)	$	(0.003	)	$	(0.072	)	$	0.41		$	—		$	0.41
Weighted average shares outstanding:
	Basic		228,156			228,156			228,156			228,156			228,156			228,156			228,156
	Diluted(1)		234,720			244,406			244,406			244,406			244,406			244,406			244,406

(1)    GAAP As-Reported diluted earnings per share and diluted weighted average shares outstanding have been revised to reflect the adoption of EITF 04-8.

19

GENZYME GENERAL
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
Quarter Ended June 30, 2004
(Amounts in thousands, except per share data)

		Before Gains/ (Charges), Amortization FIN 46 & EITF 04-8			Dilution Due to Contingently Convertible Debt (EITF 04-8)			SangStat Acquisition-Related Costs			Convert Premium			Convert Fees			Amortization			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues		$	549,588																	$	549,588					$	549,588
Cost of products and services sold		$	(141,817	)				$	(1,051	)										$	(142,868	)				$	(142,868	)
Selling, general and administrative		$	(152,779	)																$	(152,779	)	$	(71	)	$	(152,850	)
Research and development		$	(97,512	)																$	(97,512	)	$	(1,858	)	$	(99,370	)
Amortization of intangibles		$	—														$	(27,245	)	$	(27,245	)				$	(27,245	)
Purchase of in-process research and development		$	—																	$	—					$	—
Charge for impaired assets		$	—																	$	—					$	—
Equity in loss of equity method investments		$	(5,238	)																$	(5,238	)	$	964		$	(4,274	)
Minority interest		$	—																	$	—		$	964		$	964
Gain (loss) on investments in equity securities		$	71																	$	71					$	71
Other		$	(390	)																$	(390	)				$	(390	)
Investment income		$	5,602																	$	5,602		$	1		$	5,603
Interest expense		$	(7,853	)							$	(4,313	)	$	(5,329	)				$	(17,495	)				$	(17,495	)
Summary:
Income (loss) before income taxes		$	149,672		$	—		$	(1,051	)	$	(4,313	)	$	(5,329	)	$	(27,245	)	$	111,734		$	—		$	111,734
Provision for income taxes		$	(47,519	)		—			387			1,587			1,961			10,026			(33,558	)		—		$	(33,558	)
Net income allocated to Genzyme Stock		$	102,153		$	—		$	(664	)	$	(2,726	)	$	(3,368	)	$	(17,219	)	$	78,176		$	—		$	78,176
Net income per share of Genzyme Stock:
	Basic	$	0.45		$	—		$	(0.003	)	$	(0.012	)	$	(0.015	)	$	(0.076	)	$	0.35		$	—		$	0.35
	Diluted(1)	$	0.44		$	(0.010	)	$	(0.003	)	$	(0.011	)	$	(0.014	)	$	(0.071	)	$	0.33		$	—		$	0.33
Weighted average shares outstanding:
	Basic		226,578			226,578			226,578			226,578			226,578			226,578			226,578			226,578			226,578
	Diluted(1)		231,544			241,230			241,230			241,230			241,230			241,230			241,230			241,230			241,230

(1)    GAAP As-Reported diluted earnings per share and diluted weighted average shares outstanding have been revised to reflect the adoption of EITF 04-8.

20

GENZYME GENERAL
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
Quarter Ended March 31, 2004
(Amounts in thousands, except per share data)

		Before Gains/(Charges), Amortization, FIN 46 & EITF 04-8			Dilution Due to Contingently Convertible Debt (EITF 04-8)			SangStat Acquisition-Related Costs			Amortization			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues		$	491,251											$	491,251					$	491,251
Cost of products and services sold		$	(125,127	)				$	(1,835	)				$	(126,962	)				$	(126,962	)
Selling, general and administrative		$	(143,198	)										$	(143,198	)	$	(22	)	$	(143,220	)
Research and development		$	(90,514	)										$	(90,514	)	$	(2,302	)	$	(92,816	)
Amortization of intangibles		$	—								$	(26,245	)	$	(26,245	)				$	(26,245	)
Purchase of in-process research and development		$	—											$	—					$	—
Charge for impaired assets		$	—											$	—					$	—
Equity in loss of equity method investments		$	(4,993	)										$	(4,993	)	$	1,162		$	(3,831	)
Minority interest		$	—											$	—		$	1,162		$	1,162
Gain (loss) on investments in equity securities		$	353											$	353					$	353
Other		$	(324	)										$	(324	)				$	(324	)
Investment income		$	7,676											$	7,676					$	7,676
Interest expense		$	(10,326	)										$	(10,326	)				$	(10,326	)
Summary:
Income (loss) before income taxes		$	124,798		$	—		$	(1,835	)	$	(26,245	)	$	96,718		$	—		$	96,718
Provision for income taxes		$	(39,157	)		—			675			9,658			(28,824	)		—			(28,824	)
Net income allocated to Genzyme Stock		$	85,641		$	—		$	(1,160	)	$	(16,587	)	$	67,894		$	—		$	67,894
Net income per share of Genzyme Stock:
	Basic	$	0.38		$	—		$	(0.005	)	$	(0.073	)	$	0.30		$	—		$	0.30
	Diluted (1)	$	0.37		$	(0.006	)	$	(0.005	)	$	(0.069	)	$	0.29		$	—		$	0.29
Weighted average shares outstanding:
	Basic		225,711			225,711			225,711			225,711			225,711			225,711			225,711
	Diluted (1)		231,917			241,603			241,603			241,603			241,603			241,603			241,603

(1)    GAAP As-Reported diluted earnings per share and diluted weighted average shares outstanding have been revised to reflect the adoption of EITF 04-8.

21

GENZYME 2005 GUIDANCE

DESCRIPTION		2005 GUIDANCE Ranges
Cerezyme		$	870		$	890
Fabrazyme			300			315
Thyrogen			75			80
Other Therapeutics			6			6
Renal			420			430
Thymoglobulin			110			120
Other Transplant products			15			15
	Total Transplant		125			135
Synvisc			215			225
Sepra			70			75
Other Biosurgery			50			60
	Total Biosurgery		335			360
Diagnostic Products			95			97
Genetic Testing			210			218
	Total Diag/Genetics		305			315
Oncology			55			60
Other			60			65
	TOTAL REVENUE	$	2,500		$	2,700
	GROSS MARGIN		77	%		78	%
	SG&A		approx.			(750	)
	R&D		approx.			(490	)
	AMORTIZATION		approx.			(170	)
	NET INTEREST		approx.			10
	NET OTHER		(15	)		(18	)
	TAX RATE—GAAP		approx.			30	%
	*TAX RATE—NON-GAAP		approx.			31	%
	GENZ GAAP EPS	$	1.67		$	1.75
	AMORTIZATION	$	0.41		$	0.41
	**GENZ NON-GAAP EPS	$	2.08		$	2.16
	WTD AVERAGE SHARES O/S		250			260
	CAPITAL EXPENDITURES	$	180		$	200

This financial guidance, which is provided as part of a press release dated February 17, 2005, is subject to all of the qualifications and limitations described therein. Actual results may differ from these forward-looking statements due to the numerous factors described in the press release.

*

Non-GAAP tax rate excludes the impact of amortization, one-time events and EITF 04-08.

**

Non-GAAP EPS excludes the impact of amortization, one-time events and EITF 04-08.

22

QuickLinks

Exhibit 99.1