-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QIs2yggzld+bPVNQrykoc8JbVKBFapYbMpOCZeplXQFHBewaueI2qhef1uY3owQ6 ibQrBqyd+6JX0CJvf8Fhcw== 0001047469-08-006265.txt : 20080509 0001047469-08-006265.hdr.sgml : 20080509 20080509105525 ACCESSION NUMBER: 0001047469-08-006265 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20080331 FILED AS OF DATE: 20080509 DATE AS OF CHANGE: 20080509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENZYME CORP CENTRAL INDEX KEY: 0000732485 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 061047163 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14680 FILM NUMBER: 08816596 BUSINESS ADDRESS: STREET 1: ONE KENDALL SQ CITY: CAMBRIDGE STATE: MA ZIP: 02139 BUSINESS PHONE: 6172527500 MAIL ADDRESS: STREET 1: ONE KENDALL SQUARE CITY: CAMBRIDGE STATE: MA ZIP: 02139 10-Q 1 a2185010z10-q.htm 10-Q
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2008
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 0-14680

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

Massachusetts (State or other jurisdiction of incorporation or organization)		06-1047163 (I.R.S. Employer Identification No.)
500 Kendall Street Cambridge, Massachusetts (Address of principal executive offices)		02142 (Zip Code)
(617) 252-7500 (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o
(Do not check if a smaller reporting company)

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o No ý

Number of shares of Genzyme Stock outstanding as of April 30, 2008: 267,313,161

NOTE REGARDING REFERENCES TO OUR COMMON STOCK

Throughout this Form 10-Q, the words "we," "us," "our" and "Genzyme" refer to Genzyme Corporation as a whole, and "our board of directors" refers to the board of directors of Genzyme Corporation. We have one outstanding series of common stock, which we refer to as "Genzyme Stock."

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements, including statements regarding:

•: our plans to seek marketing approvals for our products in additional jurisdictions, including Renvela, Myozyme, Aldurazyme, and Synvisc-One;
•: our plans and our anticipated timing for pursuing additional indications and uses for our products and services, including Renvela, Synvisc-One, Campath and Clolar and for regulatory action on our U.S. submission for Synvisc-One;
•: our expectations for Renvela, including our ability to use it to expand the market for our phosphate binder to patients with chronic kidney disease, or CKD, not yet on dialysis;
•: our expectations for Thymoglobulin, including our estimates of product to be recalled in 2008, our ability to maintain adequate supply levels and our ability to accelerate sales of the product as supply levels increase;
•: our expectations regarding United States Food and Drug Administration, commonly referred to as the FDA, approval of a separate biologics license application, or BLA, for Myozyme manufactured at the 2000 liter, or 2000L, scale and the timing of FDA action; our expectations for Myozyme revenue and costs in 2008; our expectations regarding Myozyme sales growth; and our estimate of the timing for providing U.S. patients with commercial 2000L Myozyme;
•: our expectations for sales of Renagel/Renvela and Hectorol and the anticipated drivers for the future growth of these products;
•: our ability to develop, obtain marketing approval for and commercialize mipomersen and the timing thereof;
•: our assessment of competitors and potential competitors and the anticipated impact of potentially competitive products and services on our revenues;
•: Cerezyme's future contribution to our revenues and our expectations regarding its current growth trends;
•: our intention to pursue our rights with respect to insurance coverage for our settlement of a class action lawsuit under a director and officer liability insurance program;
•: our assessment of the financial impact of legal proceedings and claims on our financial position and results of operations;
•: the sufficiency of our cash, cash equivalents, short- and long-term investments and cash flows from operations;
•: our U.S. and foreign income tax audits, including our provision for potential liabilities and our assessment of the timing and impact of settlement of the Internal Revenue Service, commonly referred to as the IRS, 2004 to 2005 tax audit;
•: our estimates of the cost to complete and estimated commercialization dates for our in-process research and development, or IPR&D, programs;

•: our estimates of the pre-tax gain we will record on our investment in the common stock of Sirtris Pharmaceuticals, Inc., or Sirtris, upon completion of the proposed acquisition of Sirtris by GlaxoSmithKline, or GSK, and the anticipated timing for the completion of the acquisition;
•: our assessment of the deductibility of goodwill;
•: our sales and marketing plans; and
•: our expectations regarding the amortization of intangible assets related to our expected future contingent payments due to Synpac (North Carolina), Inc. and Wyeth.

These statements are subject to risks and uncertainties, and our actual results may differ materially from those that are described in this report. These risks and uncertainties include:

•: our ability to successfully complete preclinical and clinical development of our products and services;
•: our ability to secure regulatory approvals for our products, services and manufacturing facilities, and to do so in the anticipated timeframes, including our ability to obtain and maintain regulatory approvals for Myozyme produced at the 2000L scale in the United States and the 4000 liter, or 4000L, scale in Europe and the timing of these anticipated approvals;
•: the content and timing of submissions to and decisions made by the FDA, the European Agency for the Evaluation of Medicinal Products, or the EMEA, and other regulatory agencies related to our products and services and the facilities and processes used to manufacture our products (including our ability to accurately anticipate the receipt of FDA approval of larger-scale manufacturing of Myozyme);
•: our ability to accurately forecast the impact of regulatory delays on revenues and costs;
•: our ability to manufacture sufficient amounts of our products for development and commercialization activities and to do so in a timely and cost-effective manner, including our ability to manufacture Thymoglobulin that meets our product specifications and in quantities sufficient to meet projected market demand and our ability to manufacture Myozyme;
•: our ability to satisfy the post-marketing commitments made as a condition of the marketing approvals of Fabrazyme, Aldurazyme, Myozyme and Clolar;
•: our reliance on third parties to provide us with materials and services in connection with the manufacture of our products;
•: the accuracy of our estimates of the size and characteristics of the markets to be addressed by our products and services, including growth projections;
•: market acceptance of our products and services in expanded areas of use and new markets;
•: our ability to identify new patients for our products and services;
•: our ability to successfully complete a transaction with Isis Pharmaceuticals, Inc., or Isis, on the timeframes and terms disclosed;
•: our ability to increase market penetration of our products and services both outside and within the United States;
•: the accuracy of our information regarding the products and resources of our competitors and potential competitors;
•: the availability of reimbursement for our products and services from third party payors, the extent of such coverage and the accuracy of our estimates of the payor mix for our products;

•: our ability to effectively manage wholesaler inventories of our products and the levels of their compliance with our inventory management programs;
•: our use of cash in business combinations or other strategic initiatives;
•: the resolution of our dispute with our insurance carriers regarding our claim for coverage under a director and officer liability insurance program;
•: the initiation of legal proceedings by or against us;
•: our ability to successfully integrate the business we acquired from Bioenvision, Inc., or Bioenvision;
•: the outcome of our IRS and foreign tax audits; and
•: the possible disruption of our operations due to terrorist activities, armed conflict, severe climate change or outbreak of diseases, including as a result of the disruption of operations of regulatory authorities, our subsidiaries, manufacturing facilities, customers, suppliers, distributors, couriers, collaborative partners, licensees or clinical trial sites.

We have included more detailed descriptions of these and other risks and uncertainties under the heading "Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and Results of Operations—Risk Factors," in Part I., Item 2. of this Quarterly Report on Form 10-Q. We encourage you to read those descriptions carefully. We caution investors not to place substantial reliance on the forward-looking statements contained in this report. These statements, like all statements in this report, speak only as of the date of this report (unless another date is indicated), and we undertake no obligation to update or revise the statements in light of future developments.

NOTE REGARDING INCORPORATION BY REFERENCE

The United States Securities and Exchange Commission, commonly referred to as the SEC, allows us to disclose important information to you by referring you to other documents we have filed with them. The information that we refer you to is "incorporated by reference" into this Form 10-Q. Please read that information.

NOTE REGARDING TRADEMARKS

Genzyme®, Cerezyme®, Ceredase®, Fabrazyme®, Thyrogen®, Myozyme®, Renagel®, Renvela®, Campath®, Clolar®, Evoltra®, Thymoglobulin®, Synvisc®, Synvisc-One®, Sepra®, Seprafilm®, Carticel®, Epicel®, MACI®, Lymphoglobuline®, Hylaform®, Cholestagel® and Hectorol® are registered trademarks, and Mozobil™ is a trademark, of Genzyme or its subsidiaries. WelChol® is a registered trademark of Sankyo Pharma, Inc. Aldurazyme® is a registered trademark of BioMarin/Genzyme LLC. All rights reserved.

GENZYME CORPORATION AND SUBSIDIARIES

FORM 10-Q, MARCH 31, 2008

TABLE OF CONTENTS

		PAGE NO.
PART I.	FINANCIAL INFORMATION	6
ITEM 1.	Financial Statements	6
	Unaudited, Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2008 and 2007	6
	Unaudited, Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007	7
	Unaudited, Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007	8
	Notes to Unaudited, Consolidated Financial Statements	9
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	65
ITEM 4.	Controls and Procedures	66
PART II.	OTHER INFORMATION	67
ITEM 1.	Legal Proceedings	67
ITEM 1A.	Risk Factors	67
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
ITEM 6.	Exhibits	67
Signatures		68

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GENZYME CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

(Unaudited, amounts in thousands, except per share amounts)

			Three Months Ended March 31,
			2008			2007
Revenues:
	Net product sales		$	1,006,268		$	798,190
	Net service sales			85,864			75,881
	Research and development revenue			7,929			9,112

		Total revenues		1,100,061			883,183

Operating costs and expenses:
	Cost of products sold			216,739			154,724
	Cost of services sold			55,574			47,739
	Selling, general and administrative			318,386			269,021
	Research and development			262,797			166,120
	Amortization of intangibles			55,658			50,017

		Total operating costs and expenses		909,154			687,621

Operating income				190,907			195,562

Other income (expenses):
	Equity in income of equity method investments			188			5,612
	Minority interest			463			3,912
	Gains on investments in equity securities, net			775			12,788
	Other			(160	)		(525	)
	Investment income			14,870			16,219
	Interest expense			(1,655	)		(4,188	)

		Total other income		14,481			33,818

Income before income taxes				205,388			229,380
Provision for income taxes				(60,117	)		(71,193	)

Net income			$	145,271		$	158,187

Net income per share:
	Basic		$	0.54		$	0.60

	Diluted		$	0.52		$	0.57

Weighted average shares outstanding:
	Basic			267,276			263,476

	Diluted			285,208			279,924

Comprehensive income, net of tax:
Net income			$	145,271		$	158,187

Other comprehensive income:
	Foreign currency translation adjustments			109,654			12,610

	Pension liability adjustments, net of tax			78			198

	Unrealized gains on securities, net of tax:
		Unrealized gains arising during the period, net of tax		3,905			9,878
		Reclassification adjustment for gains included in net income, net of tax		(270	)		(8,161	)

		Unrealized gains on securities, net of tax		3,635			1,717

	Other comprehensive income			113,367			14,525

Comprehensive income			$	258,638		$	172,712

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

GENZYME CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited, amounts in thousands, except par value amounts)

			March 31, 2008			December 31, 2007
ASSETS
Current assets:
	Cash and cash equivalents		$	882,798		$	867,012
	Short-term investments			79,050			80,445
	Accounts receivable, net			1,031,095			904,101
	Inventories			468,824			439,115
	Prepaid expenses and other current assets			160,029			154,183
	Deferred tax assets			158,593			164,341

		Total current assets		2,780,389			2,609,197
Property, plant and equipment, net				2,118,960			1,968,402
Long-term investments				486,135			512,937
Goodwill				1,403,716			1,403,828
Other intangible assets, net				1,982,735			1,555,652
Deferred tax assets				120,707			95,664
Investments in equity securities				168,301			89,181
Other noncurrent assets				22,110			66,880

		Total assets	$	9,083,053		$	8,301,741

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	121,192		$	128,380
	Accrued expenses			616,592			645,645
	Income taxes payable			19,567			18,479
	Deferred revenue and other income			21,569			13,277
	Current portion of long-term debt and capital lease obligations			696,743			696,625

		Total current liabilities		1,475,663			1,502,406
Long-term debt and capital lease obligations				111,144			113,748
Deferred revenue—noncurrent				15,536			16,662
Other noncurrent liabilities				532,719			55,988

		Total liabilities		2,135,062			1,688,804

Commitments and contingencies
Stockholders' equity:
	Preferred stock, $0.01 par value			—			—
	Common stock, $0.01 par value			2,670			2,660
	Additional paid-in capital			5,461,714			5,385,154
	Notes receivable from stockholders			(15,824	)		(15,670	)
	Accumulated earnings			971,986			826,715
	Accumulated other comprehensive income			527,445			414,078

		Total stockholders' equity		6,947,991			6,612,937

		Total liabilities and stockholders' equity	$	9,083,053		$	8,301,741

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

GENZYME CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

					Three Months Ended March 31,
					2008			2007
Cash Flows from Operating Activities:
	Net income				$	145,271		$	158,187
	Reconciliation of net income to cash flows from operating activities:
		Depreciation and amortization				91,039			81,919
		Stock-based compensation				42,346			40,737
		Provision for bad debts				2,862			2,041
		Equity in income of equity method investments				(188	)		(5,612	)
		Minority interest				(463	)		(3,912	)
		Gains on investments in equity securities, net				(775	)		(12,788	)
		Deferred income tax benefit				(24,712	)		(24,328	)
		Tax benefit from employee stock-based compensation				17,599			3,715
		Excess tax benefits from stock-based compensation				(5,790	)		(264	)
		Other				2,233			1,049
		Increase (decrease) in cash from working capital changes (excluding impact of acquired assets and assumed liabilities):
			Accounts receivable			(57,928	)		(37,806	)
			Inventories			(1,239	)		(25,048	)
			Prepaid expenses and other current assets			(6,326	)		(15	)
			Income taxes payable			9,229			29,734
			Accounts payable, accrued expenses and deferred revenue			(53,625	)		(9,803	)

				Cash flows from operating activities		159,533			197,806

Cash Flows from Investing Activities:
	Purchases of investments					(146,862	)		(187,380	)
	Sales and maturities of investments					180,037			219,440
	Purchases of equity securities					(80,699	)		(17,518	)
	Proceeds from sales of investments in equity securities					1,148			16,121
	Purchases of property, plant and equipment					(121,967	)		(82,982	)
	Distributions from equity method investments					6,595			6,000
	Purchases of other intangible assets					(7,046	)		(12,207	)
	Other					3,107			603

				Cash flows from investing activities		(165,687	)		(57,923	)

Cash Flows from Financing Activities:
	Proceeds from issuance of common stock					90,243			27,765
	Repurchases of our common stock					(73,218	)		—
	Excess tax benefits from stock-based compensation					5,790			264
	Payments of debt and capital lease obligations					(2,554	)		(2,117	)
	Increase in bank overdrafts					18,549			29,528
	Minority interest contributions					—			4,136
	Other					959			2,482

				Cash flows from financing activities		39,769			62,058

Effect of exchange rate changes on cash						(17,829	)		(6,346	)

Increase in cash and cash equivalents						15,786			195,595
Cash and cash equivalents at beginning of period						867,012			492,170

Cash and cash equivalents at end of period					$	882,798		$	687,765

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements

1. Description of Business

We are a global biotechnology company dedicated to making a major impact on the lives of people with serious diseases. Our broad product and service portfolio is focused on rare disorders, renal diseases, orthopaedics, organ transplant, diagnostic and predictive testing, and cancer. We are organized into six financial reporting units, which we also consider to be our reporting segments:

•: Renal, which develops, manufactures and distributes products that treat patients suffering from renal diseases, including chronic renal failure. The unit derives substantially all of its revenue from sales of Renagel/Renvela (including sales of bulk sevelamer) and Hectorol;
•: Therapeutics, which develops, manufactures and distributes therapeutic products, with an expanding focus on products to treat patients suffering from genetic diseases and other chronic debilitating diseases, including a family of diseases known as lysosomal storage disorders, or LSDs, and other specialty therapeutics, such as Thyrogen. The unit derives substantially all of its revenue from sales of Cerezyme, Fabrazyme, Myozyme, Aldurazyme and Thyrogen;
•: Transplant, which develops, manufactures and distributes therapeutic products that address pre-transplantation, prevention and treatment of graft rejection in organ transplantation and other hematologic and auto-immune disorders. The unit derives substantially all of its revenue from sales of Thymoglobulin;
•: Biosurgery, which develops, manufactures and distributes biotherapeutics and biomaterial-based products, with an emphasis on products that meet medical needs in the orthopaedics and broader surgical areas. The unit derives substantially all of its revenue from sales of Synvisc, the Sepra line of products, Carticel and Matrix-induced Autologous Chondrocyte Implantation, or MACI;
•: Genetics, which provides testing services for the oncology, prenatal and reproductive markets; and
•: Oncology, which develops, manufactures and distributes products for the treatment of cancer, with a focus on antibody- and small molecule-based therapies. The unit derives substantially all of its revenue from sales and royalties received on sales of Campath and Clolar and from the reimbursement of Campath development expenses.

We report the activities of our diagnostic products, bulk pharmaceuticals and cardiovascular business units under the caption "Other." We report our corporate, general and administrative operations and corporate science activities under the caption "Corporate."

Effective January 1, 2008, as a result of changes in how we review our business, certain general and administrative expenses, which were formerly allocated amongst our reporting segments and Other, are now allocated to Corporate.

As a result of our acquisition of Bioenvision in October 2007, our Oncology business unit, which was formerly reported combined with "Other," now meets the criteria for disclosure as a separate reporting segment. We have revised our 2007 segment disclosures to conform to our 2008 presentation.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

Our unaudited, consolidated financial statements for each period include the statements of operations and comprehensive income, balance sheets and statements of cash flows for our operations taken as a whole. We have eliminated all intercompany items and transactions in consolidation. We prepare our unaudited, consolidated financial statements following the requirements of the SEC for interim reporting. As permitted under these rules, we condense or omit certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States.

These financial statements include all normal and recurring adjustments that we consider necessary for the fair presentation of our financial position and results of operations. Since these are interim financial statements, you should also read our audited, consolidated financial statements and notes included in our 2007 Form 10-K. Revenues, expenses, assets and liabilities can vary from quarter to quarter. Therefore, the results and trends in these interim financial statements may not be indicative of results for future periods.

Our unaudited, consolidated financial statements for each period include the accounts of our wholly owned and majority owned subsidiaries. As a result of our adoption of FASB Interpretation No., or FIN, 46R, "Consolidation of Variable Interest Entities," we also consolidate certain variable interest entities for which we are the primary beneficiary. For consolidated subsidiaries in which we have less than a 100% interest, we record minority interest in our consolidated statements of operations for the ownership interest of the minority owner. We use the equity method of accounting to account for our investments in entities in which we have a substantial ownership interest (20% to 50%) which do not fall in the scope of FIN 46R, or over which we exercise significant influence. Our consolidated net income includes our share of the earnings or losses of these entities.

Recent Accounting Pronouncements

FAS 159, "The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115." Effective January 1, 2008, we adopted FAS 159, "The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115," which permits, but does not require, entities to measure certain financial instruments and other assets and liabilities at fair value on an instrument-by-instrument basis. Unrealized gains and losses on items for which the fair value option has been elected should be recognized in earnings at each subsequent reporting date. In adopting FAS 159, we did not elect to measure any new assets or liabilities at their respective fair values and, therefore, the adoption of FAS 159 did not have an impact on our results of operations and financial position.

EITF Issue No. 07-1, "Accounting for Collaborative Arrangements." In December 2007, the Emerging Issues Task Force, or EITF, of the FASB reached a consensus on Issue No. 07-1, "Accounting for Collaborative Arrangements." The EITF concluded on the definition of a collaborative arrangement and that revenues and costs incurred with third parties in connection with collaborative arrangements would be presented gross or net based on the criteria in EITF 99-19 and other accounting literature. Companies are also required to disclose the nature and purpose of collaborative arrangements along with the accounting policies and the classification and amounts of significant financial-statement amounts related to the arrangements. EITF 07-1 will become effective for us January 1, 2009 and will be applied retrospectively to all periods presented for all collaborative arrangements existing as of the

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

2. Basis of Presentation and Significant Accounting Policies (Continued)

effective date. We are evaluating the impact, if any, this standard will have on our consolidated financial statements.

EITF Issue No. 07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities." In June 2007, the FASB ratified the EITF consensus reached in EITF Issue No. 07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities," which provides guidance for nonrefundable prepayments for goods or services that will be used or rendered for future research and development activities and directs that such payments should be deferred and capitalized. Such amounts should be recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered. EITF 07-3 was effective for us beginning January 1, 2008 and we applied it prospectively to new contracts we entered into on or after that date. The implementation of this standard did not have a material impact on our financial position, results of operations or cash flows.

FAS 141 (revised 2007), "Business Combinations." In December 2007, the FASB issued FAS 141 (revised 2007), "Business Combinations," or FAS 141R, which replaces FAS 141, "Business Combinations." FAS 141R retains the underlying concepts of FAS 141 in that all business combinations are still required to be accounted for at fair value under the acquisition method of accounting but changes a number of significant aspects of applying this method. Acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the acquisition date; IPR&D will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. FAS 141R is effective for us on a prospective basis for all business combinations for which the acquisition date is on or after January 1, 2009. Early adoption is not permitted. We are currently evaluating the effects, if any, that FAS 141R will have on our consolidated financial statements.

FAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51." In December 2007, the FASB issued FAS 160, "Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51," which establishes new accounting and reporting standards that require the ownership interests in subsidiaries not held by the parent to be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separate from the parent's equity. FAS 160 also requires the amount of consolidated net income attributable to the parent and to the non-controlling interest, commonly referred to as the minority interest, to be clearly identified and presented on the face of the consolidated statement of income. Changes in a parent's ownership interest while the parent retains its controlling financial interest must be accounted for consistently, and when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary must be initially measured at fair value. The gain or loss on the deconsolidation of the subsidiary is measured using the fair value of any non-controlling equity investment. FAS 160 also requires entities to provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. FAS 160 is effective for us January 1, 2009 and adoption is prospective only; however, upon adoption, presentation and disclosure requirements described above must be applied retrospectively for all periods presented in our consolidated financial statements. We are currently evaluating the effects, if any, that FAS 160 will have on our consolidated financial statements.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

2. Basis of Presentation and Significant Accounting Policies (Continued)

FAS No. 161, "Disclosures About Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133." In March 2008, the FASB issued FAS 161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133," which amends and expands the disclosure requirements of FAS 133, "Accounting for Derivative Instruments and Hedging Activities." FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. FAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. We are currently evaluating the effects, if any, that FAS 161 will have on our consolidated financial statements.

3. Fair Value Measurements

A significant number of our financial instruments are carried at fair value. These assets and liabilities include:

•: fixed income investments;
•: derivatives; and
•: investments in publicly-traded equity securities.

Fair Value Measurement—Definition and Hierarchy

Effective January 1, 2008, we implemented FAS 157, "Fair Value Measurements," for our financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The adoption of FAS 157 to our financial assets and liabilities did not have a material impact on our financial position and results of operations.

FAS 157 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, FAS 157 permits the use of various valuation approaches, including market, income and cost approaches. FAS 157 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available.

The fair value hierarchy is broken down into three levels based on the reliability of inputs. We have categorized our fixed income, derivatives and equity securities within the hierarchy as follows:

•: Level 1—These valuations are based on a "market approach" using quoted prices in active markets for identical assets. Valuations of these products do not require a significant degree of judgment. Assets utilizing Level 1 inputs include money market funds, U.S. government securities, bank deposits and exchange-traded equity securities;
•: Level 2—These valuations are based primarily on a "market approach" using quoted prices in markets that are not very active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Fixed income assets utilizing Level 2 inputs include U.S. agency securities, including direct issuance bonds and mortgage-backed securities, asset-backed

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

3. Fair Value Measurements (Continued)

securities, corporate bonds and commercial paper. Derivative securities utilizing Level 2 inputs include forward foreign-exchange contracts; and

•: Level 3—These valuations are based on various approaches using inputs that are unobservable and significant to the overall fair value measurement. Certain assets are classified within Level 3 of the fair value hierarchy because they trade infrequently and, therefore, have little or no transparency. We currently have no assets or liabilities that are valued with Level 3 inputs because all our fixed income and equity securities, derivatives and warrants have high or reasonable levels of price transparency.

Valuation Techniques

Fair value is a market-based measure considered from the perspective of a market participant who would buy the asset or assume the liability rather than our own specific measure. All of our fixed income securities are priced by our custodial agent and nationally known pricing vendors, using a variety of daily data sources, largely readily-available market data and broker quotes. To validate these prices, we compare the fair market values of our fixed income investments using market data from observable and corroborated sources. We also perform the fair value calculations for our derivative and equity securities using market data from observable and corroborated sources. In periods of market inactivity, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

3. Fair Value Measurements (Continued)

The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2008 (amounts in thousands):

Description			Total			Level 1		Level 2			Level 3
Fixed income investments(1):	Cash equivalents:	Money market funds	$	552,031		$	552,031	$	—		$	—

	Short-term investments:	U.S. Treasury notes		—			—		—			—
		U.S. agency notes		15,821			—		15,821			—
		Corporate notes—global		53,274			—		53,274			—
		Corporate commercial paper		9,955			—		9,955			—

		Total		79,050			—		79,050			—

	Long-term investments:	U.S. Treasury notes		117,267			117,267		—			—
		U.S. agency notes		156,829			—		156,829			—
		Corporate notes—global		212,039			—		212,039			—

		Total		486,135			117,267		368,868			—

	Total fixed income investments			1,117,216			669,298		447,918			—

Derivatives:	Foreign exchange contracts(2)			(28,894	)		—		(28,894	)		—

Equity holdings:	Publicly-traded equity securities(1)			63,296			63,296		—			—

Total assets and (liabilities) at fair value			$	1,151,618		$	732,594	$	419,024		$	—

(1): Changes in fair value of our fixed income investments and investments in publicly-traded equity securities are recorded in accumulated other comprehensive income (loss), a component of stockholders' equity, in our consolidated balance sheets; and
(2): As of March 31, 2008, the aggregate fair value of our foreign exchange contracts was an unrealized loss of $28.9 million, which we recorded as an increase to accrued expenses in our consolidated balance sheet as of that date. Changes in fair value of our forward foreign exchange contracts are recorded in unrealized foreign exchange gains and losses, a component of selling, general and administrative expenses in our consolidated statements of operations.

In accordance with the provisions of FASB Staff Position, or FSP, No. FAS 157-2, "Effective Date of FASB Statement No. 157," we elected to defer implementation of FAS 157, as it relates to our non-financial assets and non-financial liabilities that are recognized and disclosed at fair value in our consolidated financial statements on a nonrecurring basis, until January 1, 2009. We are evaluating the impact, if any, the adoption of FAS 157, for those assets and liabilities within the scope of FSP No. FAS 157-2, will have on our financial position, results of operations or liquidity. We did not have any non-financial assets or non-financial liabilities that would be recognized or disclosed on a recurring basis as of March 31, 2008.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

3. Fair Value Measurements (Continued)

The carrying amounts reflected in our consolidated balance sheets for cash, accounts receivable, other current assets, accounts payable and accrued expenses approximate fair value due to their short-term maturities.

4. Net Income Per Share

The following table sets forth our computation of basic and diluted net income per share (amounts in thousands, except per share amounts):

			Three Months Ended March 31,
			2008		2007
Net income—basic			$	145,271	$	158,187
Effect of dilutive securities:
	Interest expense and debt fee amortization, net of tax, related to our 1.25% convertible senior notes			1,886		1,886

Net income—diluted			$	147,157	$	160,073

Shares used in computing net income per common share—basic				267,276		263,476
Effect of dilutive securities:
	Shares issuable upon the assumed conversion of our 1.25% convertible senior notes			9,686		9,686
	Stock options(1)			7,791		6,751
	Restricted stock units(2)			443		—
	Warrants and stock purchase rights			12		11

		Dilutive potential common shares		17,932		16,448

Shares used in computing net income per common share—diluted(1,2)				285,208		279,924

Net income per common share:
		Basic	$	0.54	$	0.60

		Diluted	$	0.52	$	0.57

(1): We did not include the securities described in the following table in the computation of diluted earnings per share because these securities were anti-dilutive during the corresponding period (amounts in thousands):

		Three Months Ended March 31,
		2008		2007
Shares issuable upon exercise of outstanding options		1,982		13,483

(2): We began issuing restricted stock units, or RSUs, under our 2004 Equity Incentive Plan in May 2007, in connection with our general grant program.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

5. Mergers and Acquisitions

Bioenvision

Effective October 23, 2007, we completed our acquisition of Bioenvision through the culmination of a two step process consisting of a tender offer completed in July 2007, and a merger approved in October 2007. We paid gross consideration of $349.9 million in cash, including $345.4 million for the outstanding shares of Bioenvision Common and Series A Preferred Stock and options to purchase shares of Bioenvision Common Stock, and approximately $5 million for acquisition costs.

The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed amounted to $85.3 million, which was allocated to goodwill. We expect that substantially all of the amount allocated to goodwill will be deductible for tax purposes.

The allocation of purchase price remains subject to potential adjustments, including adjustments for liabilities associated with certain exit and tax restructuring activities. We recorded immaterial adjustments to the purchase price in the first quarter of 2008.

Purchase of In-Process Research and Development

In connection with certain of our acquisitions we completed between January 1, 2006 and December 31, 2007, we have acquired various IPR&D projects. Substantial additional research and development will be required prior to any of our acquired IPR&D programs and technology platforms reaching technological feasibility. In addition, once research is completed, each product candidate acquired will need to complete a series of clinical trials and receive FDA or other regulatory approvals prior to commercialization. Our current estimates of the time and investment required to develop these products and technologies may change depending on the different applications that we may choose to pursue. We cannot give assurances that these programs will ever reach technological feasibility or develop into products that can be marketed profitably. In addition, we cannot guarantee that we will be able to develop and commercialize products before our competitors develop and commercialize products for the same indications. If products based on our acquired IPR&D programs and technology platforms do not become commercially viable, our results of operations could be materially adversely affected. We did not complete any acquisitions in the three months ended March 31, 2008.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

5. Mergers and Acquisitions (Continued)

The following table sets forth the significant IPR&D projects for companies and certain assets we have acquired between January 1, 2006 and March 31, 2008 (amounts in millions):

Company/Assets Acquired	Purchase Price		IPR&D(1)		Programs Acquired	Discount Rate Used in Estimating Cash Flows(1)		Year of Expected Launch
Bioenvision (2007)	$	349.9	$	125.5	Clofarabine (rights outside North America)(2,3)	17	%	2008-2010

AnorMED Inc. (2006)	$	589.2	$	526.8 26.1	Mozobil (stem cell transplant) AMD070 (HIV)(4)	15 15	% %	2009-2014 —

			$	552.9

(1): Management assumes responsibility for determining the valuation of the acquired IPR&D projects. The fair value assigned to IPR&D for each acquisition is estimated by discounting, to present value, the cash flows expected once the acquired projects have reached technological feasibility. The cash flows are probability-adjusted to reflect the risks of advancement through the product approval process. In estimating the future cash flows, we also considered the 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.
(2): IPR&D charges totaled $125.5 million related to the acquisition of Bioenvision, of which $106.4 million was charged to IPR&D and $19.1 million was charged to equity in income of equity method investments.
(3): Clolar is marketed for the treatment of relapsed and refractory pediatric acute lymphoblastic leukemia, or ALL. The IPR&D projects for Clolar are related to the development of the product for the treatment of other medical issues.
(4): Year of expected launch is not provided for AMD070 at this time because we are assessing our future plans for this program.

Exit Activities

In connection with several of our acquisitions, we initiated integration plans to consolidate and restructure certain functions and operations, including the relocation and termination of certain personnel of these acquired entities and the closure of certain of the acquired entities' leased facilities. These costs have been recognized as liabilities in accordance with EITF Issue No. 95-3, "Recognition of Liabilities in Connection with a Purchase or Business Combination," and are subject to potential

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

5. Mergers and Acquisitions (Continued)

adjustments as certain exit activities are confirmed or refined. The following table summarizes the liabilities established for exit activities related to these acquisitions (amounts in thousands):

		Employee Related Benefits			Closure of Leased Facilities			Other Exit Activities			Total Exit Activities
Balance at December 31, 2006(1)		$	6,105		$	24		$	—		$	6,129
	Acquisition(2)		2,601			—			70			2,671
	Revision of estimates(1)		(931	)		2,593			—			1,662
	Payments		(5,602	)		(453	)		—			(6,055	)

Balance at December 31, 2007			2,173			2,164			70			4,407
	Payments		(1,416	)		(155	)		(70	)		(1,641	)

Balance at March 31, 2008		$	757		$	2,009		$	—		$	2,766

(1): We expect to pay employee benefits related to our acquisition of AnorMED through 2008 and payments related to the closing of the leased facility through 2012.
(2): We expect to pay employee-related benefits related to our acquisition of Bioenvision through June 2008.

Pro Forma Financial Summary

The following pro forma financial summary is presented as if the acquisition of Bioenvision had been completed as of January 1, 2007. These pro forma combined results are not necessarily indicative of the actual results that would have occurred had the acquisition been consummated on that date, or of the future operations of the combined entities. Material nonrecurring charges related to the acquisition of Bioenvision, such as IPR&D charges of $125.5 million, are included in the following pro forma financial summary as of January 1, 2007 (amounts in thousands, except per share amounts):

		Three Months Ended March 31, 2007
Total revenues		$	885,305

Net income		$	40,773

Net income per share:
	Basic	$	0.15

	Diluted	$	0.15

Weighted average shares outstanding:
	Basic		263,476

	Diluted		279,924

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

6. Inventories

		March 31, 2008		December 31, 2007
		(Amounts in thousands)
Raw materials		$	113,887	$	120,409
Work-in-process			148,436		130,812
Finished goods			206,501		187,894

	Total	$	468,824	$	439,115

During the three months ended March 31, 2008, we recalled one lot of Thymoglobulin that failed to meet our specifications for product appearance. In April, we recalled an additional three lots for the same reason. The value of the unused portion of these four lots was not significant.

7. Goodwill and Other Intangible Assets

Goodwill

The following tables contains the change in our goodwill during the three months ended March 31, 2008 (amounts in thousands):

	As of December 31, 2007		Adjustments			As of March 31, 2008
Renal	$	303,951	$	—		$	303,951
Therapeutics		355,494		—			355,494
Transplant		163,061		—			163,061
Biosurgery		7,585		—			7,585
Oncology		530,909		477			531,386
Other		42,828		(589	)		42,239

Goodwill	$	1,403,828	$	(112	)	$	1,403,716

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

7. Goodwill and Other Intangible Assets (Continued)

Other Intangible Assets

The following table contains information about our other intangible assets for the periods presented (amounts in thousands):

		As of March 31, 2008							As of December 31, 2007
		Gross Other Intangible Assets		Accumulated Amortization			Net Other Intangible Assets		Gross Other Intangible Assets		Accumulated Amortization			Net Other Intangible Assets
Technology(1)		$	2,162,032	$	(586,396	)	$	1,575,636	$	1,680,190	$	(545,817	)	$	1,134,373
Patents			194,560		(108,750	)		85,810		194,560		(104,413	)		90,147
Trademarks			60,618		(38,142	)		22,476		60,634		(36,787	)		23,847
License fees			91,229		(31,394	)		59,835		90,237		(28,833	)		61,404
Distribution rights(2)			314,213		(136,630	)		177,583		307,260		(125,678	)		181,582
Customer lists(3)			88,483		(27,461	)		61,022		97,031		(33,209	)		63,822
Other			2,052		(1,679	)		373		2,050		(1,573	)		477

	Total	$	2,913,187	$	(930,452	)	$	1,982,735	$	2,431,962	$	(876,310	)	$	1,555,652

(1): Effective January 1, 2008, reflects the consolidation of the results of BioMarin/Genzyme LLC at fair value in accordance with FIN 46R, including $480.5 million for the fair value of the manufacturing and commercialization rights to Aldurazyme, net of $6.0 million of related accumulated amortization. This intangible asset is being amortized on a straight-lined basis over a period of 20 years.
(2): Includes an additional $6.9 million of intangible assets resulting from additional payments made or accrued in the first quarter of 2008 in connection with our reacquisition of the Synvisc sales and marketing rights from Wyeth.
(3): Reflects the write off, during the first quarter of 2008, of $8.3 million of fully amortized customer lists assigned to our Genetics reporting unit.

All of our other intangible assets are amortized over their estimated useful lives. Total amortization expense for our other intangible assets was:

•: $55.7 million for the three months ended March 31, 2008; and
•: $50.0 million for the three months ended March 31, 2007.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

7. Goodwill and Other Intangible Assets (Continued)

The estimated future amortization expense for other intangible assets for the remainder of fiscal year 2008, the four succeeding fiscal years and thereafter is as follows (amounts in thousands):

Year Ended December 31,	Estimated Amortization Expense(1,2)
2008 (remaining nine months)	$	169,320
2009		228,795
2010		241,970
2011		259,691
2012		200,681
Thereafter		567,345

(1): Includes estimated future amortization expense for the Synvisc distribution rights based on the forecasted respective future sales of Synvisc and the resulting future contingent payments we will be required to make to Wyeth, and for the Myozyme patent and technology rights pursuant to a license agreement with Synpac based on forecasted future sales of Myozyme and the milestone payments we will be required to make to Synpac related to future anticipated regulatory approvals. These contingent payments will be recorded as intangible assets when the payments are accrued. Estimated future amortization expense also includes estimated future amortization expense for other arrangements involving contingent payments.
(2): Estimated future amortization expense related to the $480.5 million of technology recorded effective January 1, 2008, related to our consolidation of the results of BioMarin/Genzyme LLC, is entirely offset by the corresponding amortization of a noncurrent liability related to the consolidation of BioMarin/Genzyme LLC.

8. Investments in Equity Securities

We recorded the following net gains on investments in equity securities during the periods presented (amounts in thousands):

		Three Months Ended March 31,
		2008		2007
Therapeutic Human Polyclonals, Inc. (THP)		$	—	$	10,848
Other			775		1,940

	Gains on investments in equity securities, net	$	775	$	12,788

In March 2007, we recorded a $10.8 million gain in connection with the sale of the entire investment in the capital stock of THP, held by our wholly-owned subsidiary, SangStat Medical, LLC, which had a zero cost basis, for net cash proceeds of $10.8 million.

Unrealized Gains (Losses)

At March 31, 2008, our stockholders' equity includes $27.6 million of unrealized gains and $1.2 million of unrealized losses related to our strategic investments in equity securities.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

8. Investments in Equity Securities (Continued)

Strategic Alliance with Isis

On January 7, 2008, we entered into a strategic alliance with Isis, whereby we obtained an exclusive license to develop and commercialize mipomersen, a lipid-lowering drug targeting apolipoprotein B-100, for the treatment of familial hypercholesterolemia, or FH, an inherited disorder that causes exceptionally high levels of LDL-cholesterol. In February 2008, we paid Isis $150.0 million to purchase five million shares of Isis common stock for $30 per share, of which $80.1 million was recorded as an increase to investment in equity securities in our consolidated balance sheets based on the $16.02 closing price per share of Isis common stock on February 4, 2008, the date we acquired the shares, and $69.9 million was charged to research and development expense in our consolidated statements of operations for the premium we paid to purchase the stock. We are working with Isis to finalize the contracts under which we will develop and commercialize mipomersen.

9. Joint Venture with BioMarin

We and BioMarin Pharmaceutical Inc., or BioMarin, formed BioMarin/Genzyme LLC to develop and commercialize Aldurazyme, a recombinant form of the human enzyme alpha-L-iduronidase, used to treat an LSD known as mucopolysaccharidosis I, or MPS I. Prior to January 1, 2008, we recorded our portion of the results of BioMarin/Genzyme LLC in equity in income (loss) of equity method investments in our consolidated statements of operations. Our portion of BioMarin/Genzyme LLC's results for the three months ended March 31, 2007, was net income of $6.1 million.

Effective January 1, 2008, we restructured our relationship with BioMarin/Genzyme LLC regarding the manufacturing and commercialization of Aldurazyme by entering into several new agreements. BioMarin/Genzyme LLC will no longer engage in commercial activities related to Aldurazyme and will solely:

•: hold the intellectual property relating to Aldurazyme and other future collaboration products; and
•: engage in research and development activities that are mutually selected and funded by BioMarin and us, the costs of which we will share equally.

Under the restructured relationship, BioMarin/Genzyme LLC has licensed all intellectual property related to Aldurazyme and other collaboration products on a royalty-free basis to BioMarin and us. BioMarin holds the manufacturing rights and we hold the global marketing rights. We are required to pay BioMarin a tiered royalty payment ranging from 39.5% to 50% of worldwide net product sales of Aldurazyme.

As a result of the restructuring of our relationship with BioMarin/Genzyme LLC, effective January 1, 2008, in accordance with the provisions of FIN 46R, we began consolidating the results of BioMarin/Genzyme LLC. Upon consolidation of BioMarin/Genzyme LLC, we recorded the assets and liabilities of the joint venture in our consolidated balance sheets at fair value. The value of the intellectual property of the joint venture of approximately $480.5 million was recorded as an intangible asset and will be amortized over a useful life of 20 years. As this intellectual property has been out-licensed from the joint venture to BioMarin and us for no consideration, a noncurrent liability was recorded for an amount equal to the negative value of these licenses. The noncurrent liability is being amortized over a period of 20 years. We recorded BioMarin's portion of the joint venture's losses, the

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

9. Joint Venture with BioMarin (Continued)

amount of which was not significant for the three months ended March 31, 2008, as minority interest in our consolidated statements of operations.

Condensed financial information for BioMarin/Genzyme LLC is summarized below for the three months ended March 31, 2007 (amounts in thousands):

	Three Months Ended March 31, 2007
Revenue	$	26,822
Gross margin		20,523
Operating expenses		(8,474	)
Net income		12,220

10. Revolving Credit Facility

As of March 31, 2008, no amounts were outstanding under our five-year $350.0 million senior unsecured revolving credit facility, which we refer to as our 2006 revolving credit facility. The terms of our 2006 revolving credit facility include various covenants, including financial covenants, that require us to meet minimum interest coverage ratios and maximum leverage ratios. As of March 31, 2008, we were in compliance with these covenants.

11. Stockholders' Equity

Stock Repurchase

During the three months ended March 31, 2008, we repurchased and retired an additional 1,000,000 shares of our common stock at an average price of $73.20 per share for a total of $73.2 million in cash, including fees. Since June 2007, when we first began making repurchases, we have repurchased a cumulative total of 4,500,000 shares of our common stock at an average price of $67.71 per share for a total of $304.8 million in cash, including fees. As a result, we recorded the repurchases in our consolidated balance sheets as of March 31, 2008 and December 31, 2007, as a reduction to our common stock account for the par value of the repurchased shares and as a reduction to our additional paid-in capital account.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

11. Stockholders' Equity (Continued)

Stock-Based Compensation Expense, Net of Estimated Forfeitures

We allocated pre-tax stock-based compensation expense, net of estimated forfeitures, based on the functional cost center of each employee as follows (amounts in thousands, except per share amounts):

			Three Months Ended March 31,
			2008			2007
Pre-tax stock-based compensation expense, net of estimated forfeitures charged to:
	Cost of products and services sold(1)		$	(6,514	)	$	(5,896	)
	Selling, general and administrative expense			(22,889	)		(22,499	)
	Research and development expense			(12,585	)		(12,312	)

		Total		(41,988	)		(40,707	)
Less: tax benefit from stock options				12,537			12,432

	Total stock-based compensation expense, net of tax		$	(29,451	)	$	(28,275	)

Effect per common share:
	Basic		$	(0.12	)	$	(0.11	)

	Diluted		$	(0.10	)	$	(0.10	)

(1): We also capitalized stock-based compensation expense to inventory of $3.1 million for the three months ended March 31, 2008 and $2.9 million for the three months ended March 31, 2007, all of which is attributable to participating employees that support our manufacturing operations. We amortize stock-based compensation expense capitalized to inventory based on inventory turns.

At March 31, 2008, there was $219.7 million of pre-tax stock-based compensation expense, net of estimated forfeitures, related to unvested awards not yet recognized which is expected to be recognized over a weighted average period of 1.9 years.

Notes Receivable from Stockholders

In connection with our acquisition of Biomatrix, we assumed notes receivable from five former employees, directors and consultants of Biomatrix, which we refer to as the Makers of the notes. The notes are full-recourse promissory notes that accrue interest at rates ranging from 5.30% to 7.18% and mature at various dates from May 2007 through September 2009, at which point the outstanding principal and accrued interest for each note will become payable. As of March 31, 2008, there is a total of $15.8 million outstanding for these notes, including $10.2 million of principal and $5.6 million of accrued interest. Of these amounts, a total of $8.0 million of principal and $4.6 million of accrued interest is attributable to one Maker. We record the amount of principal and interest outstanding under the notes in stockholders' equity because the notes were originally received in exchange for the issuance of Biomatrix common stock, which was subsequently converted into Genzyme Stock.

On April 29, 2008, we received $1.0 million of cash from one of the Makers as payment in full upon maturity of that Maker's note, including accrued interest. A total of $2.8 million in principal and accrued interest has come due under the notes but has not yet been repaid, of which $1.9 million was

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

11. Stockholders' Equity (Continued)

due as of March 31, 2008 and an additional $0.8 million became due as of April 30, 2008. We are pursuing collection of these past due amounts and the notes will continue to accrue interest until the outstanding principal and accrued interest have been repaid. A total of $0.7 million of the principal and accrued interest that was due but not repaid as of April 30, 2008 is attributable to the Maker that owes a total of $8.0 million in principal under the notes. In June 2008, an additional $6.7 million in principal will become due from this Maker plus accrued interest.

12. Commitments and Contingencies

Legal Proceedings

We periodically become subject to legal proceedings and claims arising in connection with our business.

Through June 30, 2003, we had three outstanding series of common stock, which we referred to as tracking stocks; Genzyme General Stock (which we now refer to as Genzyme Stock), Biosurgery Stock and Molecular Oncology Stock. On August 6, 2007, we reached an agreement in principle to settle lawsuits related to our 2003 repurchase of Biosurgery Stock for $64.0 million. The court entered an order approving the settlement on December 30, 2007. As a result, we recorded a liability for the settlement payment of $64.0 million as a charge to selling, general and administrative expenses, or SG&A, in our consolidated statements of operations in June 2007, which we subsequently paid in August 2007. We have submitted claims to our insurers for reimbursement of portions of the expenses incurred in connection with these cases; the insurer has purported to deny coverage and therefore, we have not recorded a receivable for any potential recovery from our insurer. We intend to vigorously pursue our rights with respect to insurance coverage and to the extent we are successful, we will record the recovery in our consolidated statements of operations.

We periodically become subject to legal proceedings and claims arising in connection with our business. Although we cannot predict the outcome of these additional proceedings and claims, we do not believe the ultimate resolution of any of these existing matters would have a material adverse affect on our financial position or results of operations.

13. Provision for Income Taxes

	Three Months Ended March 31,
	2008			2007
	(Amounts in thousands)
Provision for income taxes	$	60,117		$	71,193
Effective tax rate		29	%		31	%

Our effective tax rate for all periods presented varies from the U.S. statutory tax rate as a result of:

•: our provision for state income taxes;
•: the tax benefits from manufacturing activities;
•: benefits related to tax credits;

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

13. Provision for Income Taxes (Continued)

•: income and expenses taxed at rates other than the U.S. statutory tax rate; and
•: non-deductible stock-based compensation expenses totaling $8.1 million for the three months ended March 31, 2008 and $6.9 million for the three months ended March 31, 2007.

We are currently under IRS audit for tax years 2004 to 2005 and various states for 1999 to 2005. We believe that we have provided sufficiently for all audit exposures. We expect to settle the 2004 to 2005 IRS audit within the next twelve months and do not expect that the settlement will have a material impact on our financial position or results of operations. Settlement of these audits or the expiration of the statute of limitations on the assessment of income taxes for any tax year may result in a reduction of future tax provisions. Any such benefit would be recorded upon the effective settlement of the audit or expiration of the applicable statute of limitations.

14. Segment Information

In accordance with FAS 131, "Disclosures about Segments of an Enterprise and Related Information," we present segment information in a manner consistent with the method we use to report this information to our management. Applying FAS 131, we have six reporting segments as described above in Note 1., "Description of Business," to these consolidated financial statements. Effective January 1, 2008, as a result of changes in how we review our business, certain general and administrative expenses, which were formerly allocated amongst our reporting segments and Other, are now allocated to Corporate. We have revised our 2007 segment presentation to conform to our 2008 presentation.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

14. Segment Information (Continued)

We have provided information concerning the operations of these reportable segments in the following tables (amounts in thousands):

			Three Months Ended March 31,
			2008			2007
Revenues:
	Renal		$	197,770		$	165,677
	Therapeutics(1)			568,693			429,517
	Transplant			45,930			41,277
	Biosurgery			111,662			98,393
	Genetics			74,329			66,158
	Oncology			29,048			22,449
	Other			72,246			59,409
	Corporate			383			303

		Total	$	1,100,061		$	883,183

Income (loss) before income taxes:
	Renal		$	93,275		$	65,004
	Therapeutics(1)			365,210			297,973
	Transplant			(7,914	)		(3,197	)
	Biosurgery			18,787			12,866
	Genetics			4,108			3,804
	Oncology(2)			(24,985	)		(6,886	)
	Other(2,3)			(64,979	)		1,639
	Corporate(4)			(178,114	)		(141,823	)

		Total	$	205,388		$	229,380

(1): Effective January 1, 2008, as a result of our restructured relationship with BioMarin/Genzyme LLC, instead of sharing all costs and profits of Aldurazyme equally, we began to record all sales of and SG&A related to Aldurazyme.
(2): The results of operations of acquired companies and assets and the amortization expense related to acquired intangible assets are included in segment results beginning on the date of acquisition.
(3): Includes a charge of $69.9 million recorded to research and development expense in our consolidated statements of operations for the premium paid to purchase five million shares of Isis in February 2008.
(4): Loss before income taxes for Corporate includes our corporate, general and administrative and corporate science activities, all of our stock-based compensation expense, as well as net gains on investments in equity securities, interest income, interest expense and other income and expense items that we do not specifically allocate to a particular reporting segment.

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

14. Segment Information (Continued)

Segment Assets

We provide information concerning the assets of our reportable segments in the following table (amounts in thousands):

			March 31, 2008		December 31, 2007
Segment Assets(1):
	Renal		$	1,476,506	$	1,468,428
	Therapeutics(2)			1,821,712		1,230,128
	Transplant			420,802		415,903
	Biosurgery			447,503		458,412
	Genetics			157,489		148,787
	Oncology			944,830		940,097
	Other			235,055		246,496
	Corporate(3)			3,579,156		3,393,490

		Total	$	9,083,053	$	8,301,741

(1): Assets for our six reporting segments and Other include primarily accounts receivable, inventory and certain fixed and intangible assets, including goodwill.
(2): Includes the consolidation of the results of BioMarin/Genzyme LLC at fair value, including $480.5 million of additional technology recorded in the first quarter of 2008 for the fair value of BioMarin/Genzyme LLC's manufacturing and commercialization rights to Aldurazyme, net of $6.0 million of related accumulated amortization.
(3): Includes the assets related to our corporate, general and administrative operations, and corporate science activities that we do not allocate to a particular segment. Segment assets for Corporate consist of the following (amounts in thousands):

		March 31, 2008		December 31, 2007
Cash, cash equivalents, short- and long-term investments in debt securities		$	1,447,983	$	1,460,394
Deferred tax assets, net			279,300		260,005
Property, plant & equipment, net			1,361,381		1,240,992
Investments in equity securities			168,301		89,181
Other			322,191		342,918

	Total	$	3,579,156	$	3,393,490

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF GENZYME CORPORATION AND SUBSIDIARIES' FINANCIAL CONDITION AND RESULTS OF OPERATIONS

When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business. In particular, we encourage you to review the risks and uncertainties described under the heading "Risk Factors" below. These risks and uncertainties could cause actual results to differ materially from those forecasted in forward-looking statements or implied by past results and trends. Forward-looking statements are statements that attempt to project or anticipate future developments in our business; we encourage you to review the examples of forward-looking statements under "Note Regarding Forward-Looking Statements" at the beginning of this report. These statements, like all statements in this report, speak only as of the date of this report (unless another date is indicated), and we undertake no obligation to update or revise the statements in light of future developments.

INTRODUCTION

•: Renal, which develops, manufactures and distributes products that treat patients suffering from renal diseases, including chronic renal failure. The unit derives substantially all of its revenue from sales of Renagel/Renvela (including sales of bulk sevelamer) and Hectorol;
•: Therapeutics, which develops, manufactures and distributes therapeutic products, with an expanding focus on products to treat patients suffering from genetic diseases and other chronic debilitating diseases, including a family of diseases known as LSDs, and other specialty therapeutics, such as Thyrogen. The unit derives substantially all of its revenue from sales of Cerezyme, Fabrazyme, Myozyme, Aldurazyme and Thyrogen;
•: Transplant, which develops, manufactures and distributes therapeutic products that address pre-transplantation, prevention and treatment of graft rejection in organ transplantation and other hematologic and auto-immune disorders. The unit derives substantially all of its revenue from sales of Thymoglobulin;
•: Biosurgery, which develops, manufactures and distributes biotherapeutics and biomaterial-based products, with an emphasis on products that meet medical needs in the orthopaedics and broader surgical areas. The unit derives substantially all of its revenue from sales of Synvisc, the Sepra line of products, Carticel and MACI;
•: Genetics, which provides testing services for the oncology, prenatal and reproductive markets; and
•: Oncology, which develops, manufactures and distributes products for the treatment of cancer, with a focus on antibody- and small molecule-based therapies. The unit derives substantially all of its revenue from sales and royalties received on sales of Campath and Clolar and from the reimbursement of Campath development expenses.

Effective January 1, 2008, as a result of a change in how we review our business, certain general and administrative expenses which were formerly allocated amongst our reporting segments and Other, are now allocated to Corporate.

MERGERS AND ACQUISITIONS

The following acquisitions were accounted for as business combinations and, accordingly, we have included their results of operations in our consolidated statements of operations from the date of acquisition.

Diagnostic Assets of Diagnostic Chemicals Limited

On December 3, 2007, we acquired certain diagnostic assets from Diagnostic Chemicals Limited, or DCL, a privately-held diagnostics and biopharmaceutical company based in Charlottetown, Prince Edward Island, Canada, including DCL's line of over 50 formulated clinical chemistry reagents and its diagnostics operations in Prince Edward Island, Canada and Connecticut. We paid consideration of $53.8 million in cash.

Bioenvision

Bioenvision was focused on the acquisition, development and marketing of compounds and technologies for the treatment of cancer, autoimmune disease and infection. The acquisition of Bioenvision provides us with the exclusive, worldwide rights to clofarabine. We currently market clofarabine in the United States and Canada under the brand name Clolar for relapsed and refractory pediatric ALL patients. In Europe, we co-developed clofarabine with Bioenvision and Bioenvision had been marketing the product under the brand name Evoltra, also for the treatment of relapsed and refractory pediatric ALL patients. We are developing clofarabine for diseases with significantly larger patient populations, including use as a first-line therapy for the treatment of adult AML. Clofarabine has been granted orphan drug status for the treatment of ALL and AML in both the United States and European Union.

STRATEGIC TRANSACTION

Strategic Alliance with Isis

On January 7, 2008, we entered into a strategic alliance with Isis, whereby we obtained an exclusive license to develop and commercialize mipomersen, a lipid-lowering drug targeting apolipoprotein B-100, for the treatment of FH, an inherited disorder that causes exceptionally high levels of LDL-cholesterol. In February 2008, we paid Isis $150.0 million to purchase five million shares of Isis common stock for $30 per share, consisting of $69.9 million for the premium we paid to purchase the stock, which was charged to research and development expenses in our consolidated statements of operations, and $80.1 million for the fair value of the stock, which was recorded as an increase to investment in equity securities in our consolidated balance sheet. We are working with Isis to finalize the contracts under which we will develop and commercialize mipomersen.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

Our critical accounting policies and significant judgments and estimates are set forth under the heading "Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates" in Exhibit 13 to our 2007 Form 10-K. Additional information regarding significant judgments and estimates related to sales reserves are included below. There have been no significant changes to our critical accounting policies or significant judgments and estimates since December 31, 2007. Additional information regarding our provisions and estimates for our product sales allowances, sales allowance reserves and accruals, and distributor fees are included below.

Revenue Recognition

Product Sales Allowances

Sales of many biotechnology products in the United States are subject to increased pricing pressure from managed care groups, institutions, government agencies, and other groups seeking discounts. We and other biotechnology companies in the U.S. market are also required to provide statutorily defined rebates and discounts to various U.S. government agencies in order to participate in the Medicaid program and other government-funded programs. In most international markets, we operate in an environment where governments may and have mandated cost-containment programs, placed restrictions on physician prescription levels and patient reimbursements, emphasized greater use of generic drugs and enacted across-the-board price cuts as methods to control costs. The sensitivity of our estimates can vary by program, type of customer and geographic location. Estimates associated with Medicaid and other government allowances may become subject to adjustment in a subsequent period.

We record product sales net of the following significant categories of product sales allowances:

•: Contractual adjustments—We offer chargebacks and contractual discounts and rebates, which we collectively refer to as contractual adjustments, to certain private institutions and various government agencies in both the United States and international markets. We record chargebacks and contractual discounts as allowances against accounts receivable in our consolidated balance sheets. We account for rebates by establishing an accrual for the amounts payable by us to these agencies and institutions, which is included in accrued liabilities in our consolidated balance sheets. We estimate the allowances and accruals for our contractual adjustments based on historical experience and current contract prices, using both internal data as well as information obtained from external sources, such as independent market research agencies and data from wholesalers. We continually monitor the adequacy of these estimates and adjust the allowances and accruals periodically throughout each quarter to reflect our actual experience. In evaluating these allowances and accruals, we consider several factors, including significant changes in the sales performance of our products subject to contractual adjustments, inventory in the distribution channel, changes in U.S. and foreign healthcare legislation impacting rebate or allowance rates, changes in contractual discount rates and the estimated lag time between a sale and payment of the corresponding rebate;
•: Discounts—In some countries, we offer cash discounts for certain products as an incentive for prompt payment, which are generally a stated percentage off the sales price. We account for cash discounts by reducing accounts receivable by the full amounts of the discounts. We consider payment performance and adjust the accrual to reflect actual experience; and
•: Sales returns—We record allowances for product returns at the time product sales are recorded. The product returns reserve is estimated based on the returns policies for our individual products and our experience of returns for each of our products. If the price of a product changes or if the history of product returns changes, the reserve is adjusted accordingly. We

determine our estimates of the sales return accrual for new products primarily based on the historical sales returns experience of similar products, or those within the same or similar therapeutic category.

Our provisions for product sales allowances reduced gross product sales as follows (amounts in thousands):

			Three Months Ended March 31,
			Three Months Ended March 31,						Increase/ Decrease % Change
			2008			2007			Increase/ Decrease % Change
Product sales allowances:
	Contractual adjustments		$	101,919		$	84,795		20	%
	Discounts			5,505			4,414		25	%
	Sales returns			6,751			1,717		>100	%

		Total product sales allowances	$	114,175		$	90,926		26	%

Total gross product sales			$	1,120,442		$	889,116		26	%

Product sales allowances as a percent of total gross product sales				10	%		10	%

Total product sales allowances increased $23.2 million, or 26%, for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to an increase in overall gross product sales, and to a lesser extent, changes in rebate rates or product mix. The increase in sales returns allowances for the three months ended March 31, 2008, as compared to the same period of 2007, is primarily due to increased estimates for the volume of product returns for our Transplant, Biosurgery and Renal segments.

Total estimated product sales allowance reserves and accruals in our consolidated balance sheets increased 4% to approximately $162 million as of March 31, 2008, as compared to approximately $155 million as of December 31, 2007, primarily due to increased product sales. Our actual results have not differed materially from amounts recorded. The annual variation has been less than 0.5% of total product sales for each of the last three years.

Distributor Fees

EITF Issue No. 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

•: the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and
•: the vendor can reasonably estimate the fair value of the benefit received.

We record fees paid to our distributors for services as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the

distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

			Three Months Ended March 31,
			2008		2007
Distributor fees:
	Included in contractual adjustments and recorded as a reduction to product sales		$	4,408	$	3,092
	Charged to SG&A			2,951		2,976

		Total distributor fees	$	7,359	$	6,068

RESULTS OF OPERATIONS

The following discussion summarizes the key factors our management believes are necessary for an understanding of our consolidated financial statements.

REVENUES

The components of our total revenues are described in the following table:

		Three Months Ended March 31,
		Three Months Ended March 31,				Increase/ (Decrease) % Change
		2008		2007		Increase/ (Decrease) % Change
		(Amounts in thousands)
Product revenue		$	1,006,268	$	798,190	26	%
Service revenue			85,864		75,881	13	%

	Total product and service revenue		1,092,132		874,071	25	%
Research and development revenue			7,929		9,112	(13	)%

	Total revenues	$	1,100,061	$	883,183	25	%

Product Revenue

We derive product revenue from sales of:

•

Renal products, including Renagel/Renvela, Hectorol and bulk sevelamer;

•

Therapeutics products, including Cerezyme, Fabrazyme, Myozyme, Aldurazyme, and Thyrogen;

•

Transplant products, primarily Thymoglobulin;

•

Biosurgery products, including orthopaedic products, such as Synvisc, and the Sepra line of products, such as Seprafilm;

•

Oncology products, including Campath and Clolar; and

•

Other products, including:

•: diagnostic products, including infectious disease and cholesterol testing products; and
•: bulk pharmaceuticals, including WelChol.

The following table sets forth our product revenue on a reporting segment basis:

			Three Months Ended March 31,
			Three Months Ended March 31,				Increase/ (Decrease) % Change
			2008		2007		Increase/ (Decrease) % Change
			(Amounts in thousands)
Renal:
	Renagel/Renvela (including sales of bulk sevelamer)		$	168,694	$	137,384	23	%
	Hectorol			29,076		28,293	3	%

		Total Renal		197,770		165,677	19	%

Therapeutics:
	Cerezyme			304,303		263,791	15	%
	Fabrazyme			116,475		100,664	16	%
	Myozyme			67,324		37,919	78	%
	Aldurazyme			36,839		—	N/A
	Thyrogen			33,785		26,338	28	%
	Other Therapeutics			9,772		167	>100	%

		Total Therapeutics		568,498		428,879	33	%

Transplant:
	Thymoglobulin/Lymphoglobuline			43,673		39,442	11	%
	Other Transplant			2,257		1,655	36	%

		Total Transplant		45,930		41,097	12	%

Biosurgery:
	Synvisc/Synvisc-One			56,142		53,596	5	%
	Sepra products			30,604		23,115	32	%
	Other Biosurgery			13,581		10,572	28	%

		Total Biosurgery		100,327		87,283	15	%

Oncology				22,281		16,697	33	%

Other product revenue				71,462		58,557	22	%

		Total product revenue	$	1,006,268	$	798,190	26	%

Renal

Sales of Renagel/Renvela, including sales of bulk sevelamer, increased 23% to $168.7 million for the three months ended March 31, 2008, as compared to the same period of 2007. Renagel price increases in the United States in December 2006 and April 2007 accounted for $6.6 million of the additional revenue, while increased end-user demand worldwide accounted for $19.6 million of additional revenue. The strengthening of foreign currencies, primarily the Euro against the U.S. dollar, for the three months ended March 31, 2008, as compared to the same period of 2007, positively impacted Renagel revenue by $8.6 million. Sales of Renagel/Renvela, including sales of bulk sevelamer, were 15% of our total revenue for the three months ended March 31, 2008, as compared to 16% for the same period of 2007.

On October 22, 2007, the FDA granted marketing approval for Renvela, a second-generation buffered form of Renagel for the control of serum phosphorus in patients with CKD on dialysis. In March 2008, we launched the product for dialysis patients in the United States. Sales of Renvela in the United States were $4.6 million for the three months ended March 31, 2008. We are currently pursuing regulatory approvals in Europe, South America and in other markets internationally.

In October 2007, an FDA advisory committee voted to recommend that the agency extend the indications for phosphate binders to include pre-dialysis patients with hyperphosphatemia. We are engaged in discussions with the FDA regarding the expansion of the product's labeling to include CKD patients with hyperphosphatemia who have not progressed to dialysis. In addition, we expect to file for approval of a powder form of Renvela that may make it easier for patients to comply with their prescribed treatment program. While Renagel will remain available for a period of time, our long-term goal is to transition patients to Renvela.

Sales of Hectorol increased 3% to $29.1 million for the three months ended March 31, 2008 as compared to $28.3 million for the same period of 2007, primarily due to higher end-user demand.

We expect sales of Renagel/Renvela and Hectorol to continue to increase, driven primarily by growing patient access to these products, including through the Medicare Part D program in the United States, and the continued adoption of the products by nephrologists worldwide. Adoption rates for Renagel/Renvela are expected to trend favorably as a result of the recent introduction of Renvela in the U.S. market, anticipation of a label expansion to include hyperphosphatemic patients who are not on dialysis, and the introduction of a powder formulation expected in the first half of 2009. Adoption rates for Hectorol are expected to trend favorably as a result of growth of the CKD market and the anticipated launch of a 1 mg capsule form of Hectorol in the first half of 2009. In addition, we expect adoption rates to increase for both Renagel/Renvela and Hectorol as the result of our recent expansion and redeployment of our Renal sales force.

Renagel/Renvela and Hectorol compete with several other products and our future sales may be impacted negatively by these products. In addition, a generic manufacturer has filed an Abbreviated New Drug Application (ANDA) seeking to market a generic version of Hectorol prior to the expiration dates of our patents covering the product. If this or any other generic manufacturer were to receive approval to sell a generic version of Hectorol, our revenues from this product would be adversely affected. In addition, our ability to continue to increase sales of Renagel/Renvela and Hectorol will depend on many other factors, including our ability to optimize dosing and improve patient compliance with Renagel/Renvela dosing, the availability of reimbursement from third-party payors and the extent of coverage, including under the Medicare Part D program. Also, the accuracy of our estimates of fluctuations in the payor mix and our ability to effectively manage wholesaler inventories and the levels of compliance with the inventory management programs we implemented for Renagel and Hectorol with our wholesalers could impact the revenue from our Renal reporting segment that we record from period to period.

Therapeutics

Therapeutics product revenue increased 33% to $568.5 million for the three months ended March 31, 2008, as compared to the same period of 2007, due to continued growth in sales of Cerezyme, Fabrazyme and Myozyme and the inclusion of Aldurazyme sales in our results beginning in 2008. As a result of our restructured relationship with BioMarin and BioMarin/Genzyme LLC regarding the manufacturing, marketing and sale of Aldurazyme, effective January 1, 2008, we began to record all sales of Aldurazyme.

The 15% growth in sales of Cerezyme to $304.3 million for the three months ended March 31, 2008, as compared to the same period of 2007, is attributable to our continued identification of new Gaucher disease patients, particularly in international markets. Through October 2007, our price for Cerezyme remained consistent from period to period. Effective November 1, 2007, we implemented a 3% price increase in the United States for Cerezyme. Although we expect Cerezyme to continue to be a substantial contributor to revenues in the future, it is a mature product, and as a result, we do not expect that the current new patient growth trend will continue. The strengthening of foreign currencies, primarily the Euro against the U.S. dollar, positively impacted Cerezyme revenue by $17.2 million for the three months ended March 31, 2008, as compared to the same period of 2007.

The 16% increase in sales of Fabrazyme to $116.5 million for the three months ended March 31, 2008, as compared to the same period of 2007, is primarily attributable to increased patient identification worldwide as Fabrazyme is introduced into new markets. We implemented a 3% price increase in the United States for Fabrazyme in November 2007 which did not have a significant impact on Fabrazyme revenue for the three months ended March 31, 2008. The strengthening of foreign currencies, primarily the Euro against the U.S. dollar, positively impacted Fabrazyme revenue by $7.6 million for the three months ended March 31, 2008, as compared to the same period of 2007.

Sales of Myozyme were $67.3 million for the three months ended March 31, 2008, as compared to $37.9 million for the same period of 2007. We launched Myozyme in the United States in May 2006, in Europe a month later and in Canada in September 2006. We are introducing Myozyme on a country-by-country basis in the European Union, as pricing and reimbursement approvals are obtained. Myozyme has received orphan drug designation in the United States, which provides seven years of market exclusivity, and in the European Union, which provides ten years of market exclusivity. In April 2007, Myozyme was approved for commercial sale in Japan and subsequently, in June 2007, we launched the product upon receipt of reimbursement approval. We expect to file for approval in several additional countries in 2008. The strengthening of foreign currencies, primarily the Euro against the U.S. dollar, positively impacted Myozyme revenue by $3.5 million for the three months ended March 31, 2008.

We currently manufacture Myozyme in the United States at the 160 liter, or 160L, scale at our manufacturing facility in Framingham, Massachusetts and at the 2000 liter, or 2000L, scale at our manufacturing facility in Allston, Massachusetts, and have begun Myozyme fill-finish at our 2000L facility in Waterford, Ireland. We have U.S. approval to sell Myozyme manufactured at the 160L scale and production at the 2000L scale has been approved for sale in more than 40 countries outside the United States.

In October 2007, we submitted an application to the FDA seeking approval of production at the 2000L scale to meet the expected demand for Myozyme in the U.S. market going forward. In April 2008, the FDA concluded that Myozyme produced at the 160L scale and at the 2000L scale should be classified as two different products because of differences in the carbohydrate structures of the molecules. As a result, the FDA will require us to submit a separate BLA to gain U.S. approval for Myozyme produced at the 2000L scale. The FDA proposed that we initiate a rolling BLA review process by submitting results from our Late Onset Treatment Study, or LOTS study, for Myozyme because the Myozyme used in that study was produced at the 2000L scale. We had already been in the

process of preparing the results of that study for submission to the FDA to fulfill a post-marketing commitment. The LOTS study, which met its co-primary efficacy endpoints, was undertaken to evaluate the safety and efficacy of Myozyme in juvenile and adult patients with Pompe disease. We expect the FDA to give the BLA priority review and to act on the application by the end of 2008. We anticipate that this process will culminate in the availability of two commercial versions of Myozyme in the United States: one produced at the 160L scale and the other produced at the 2000L scale. This decision by the FDA will negatively impact our anticipated 2008 Myozyme revenue by approximately $45 million and because we will continue to provide Myozyme to some patients through a clinical access program, we anticipate that costs related to Myozyme will be approximately $8-$10 million more than originally expected in 2008. We expect sales of Myozyme to continue to grow and expect to begin providing U.S. patients with commercial 2000L Myozyme during the first quarter of 2009. In the meantime, we are continuing our efforts to optimize supply for the U.S. market.

Effective January 1, 2008, we, BioMarin and BioMarin/Genzyme LLC restructured our relationship regarding the manufacturing, marketing and sale of Aldurazyme and entered into several new agreements. BioMarin will continue to manufacture Aldurazyme. We will continue to purchase Aldurazyme exclusively from BioMarin and globally market and sell the product. Effective January 1, 2008, instead of sharing all costs and profits of Aldurazyme equally, we began to record all sales of Aldurazyme and began paying BioMarin a tiered payment ranging from approximately 39.5% to 50% of worldwide net product sales of Aldurazyme. Aldurazyme product revenue was $36.8 million for the three months ended March 31, 2008. Prior to January 1, 2008, on behalf of BioMarin/Genzyme LLC, we were commercializing Aldurazyme in the United States, Canada, the European Union, Latin America and the Asia-Pacific regions and continuing to launch Aldurazyme on a country-by-country basis as pricing and reimbursement approvals were obtained. BioMarin/Genzyme LLC's Aldurazyme product revenue was $26.8 million for the three months ended March 31, 2007. The $10.0 million increase in sales of Aldurazyme is attributable to increased patient identification worldwide as Aldurazyme is introduced into new markets. We have applications for marketing approval for Aldurazyme currently pending in several countries in Latin America, Central and Eastern Europe and the Asia-Pacific regions.

Sales of Thyrogen increased 28% to $33.8 million for the three months ended March 31, 2008, as compared to the same period of 2007. A Thyrogen price increase of approximately 10% in the United States in April 2007 accounted for $1.4 million of the additional revenue while worldwide volume growth positively impacted sales by $4.3 million. The strengthening of foreign currencies, primarily the Euro against the U.S. dollar, positively impacted Thyrogen revenue by $1.9 million for the three months ended March 31, 2008, as compared to the same period of 2007. In December 2007 we received FDA approval for the use of Thyrogen in thyroid cancer remnant ablation procedures.

Transplant

Transplant product revenue increased 12% to $45.9 million for the three months ended March 31, 2008, as compared to the same period of 2007. This was primarily due to a $4.1 million increase in Thymoglobulin revenue as a result of an 11% increase in the worldwide average sales price of Thymoglobulin. In addition, there was a $2.6 million increase in sales of Thymoglobulin due to an increase in volume. This was a result of increased utilization of Thymoglobulin in transplant procedures worldwide.

In the second quarter of 2007, we began experiencing certain manufacturing challenges with respect to the production of Thymoglobulin at our manufacturing facility in Lyon, France, which resulted in product stability issues. We have worked closely with the FDA in addressing these challenges, and have implemented process changes at our Lyon facility to resolve these production issues. In addition, the FDA has accepted our responses to their warning letter, which was issued in 2007, regarding the production processes at our Lyon facility. We continue to monitor Thymoglobulin

lots produced in 2007 and, if necessary, will recall any lots that are expected to trend outside of our specifications for saleable product prior to the originally established expiration period. In the three months ended March 31, 2008, we recalled one lot of Thymoglobulin that no longer met our specifications for product appearance. In April 2008 we recalled an additional three lots for the same reason. The value of the unused portion of these four lots was not significant. We expect to recall additional lots this year, although most of the product will likely be consumed prior to a recall being necessary. We will continue to closely monitor our Thymoglobulin inventory levels and intend to manage production in order to maintain adequate supply levels throughout the remainder of 2008. We expect Thymoglobulin sales to accelerate in the second half of 2008 as supply levels increase to meet the full demand of the product.

Biosurgery

Biosurgery product revenue increased 15% to $100.3 million for the three months ended March 31, 2008, as compared to the same period of 2007. Seprafilm revenue increased $6.7 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to greater penetration of the product into the United States, Japanese and European markets.

The combined revenues of Synvisc and Synvisc-One increased by $2.5 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to an expanded sales and marketing investment.

We received approval to market Synvisc-One, a single injection regimen, in the European Union in December 2007. In November 2007, we received a letter from the FDA requesting additional analysis and data regarding our marketing application for Synvisc-One in the United States and we currently expect regulatory action on our marketing application by the end of 2008. We also plan on pursuing marketing approvals for Synvisc-One in Canada, Asia and Latin America.

Other Biosurgery product revenue increased 28% to $13.6 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to $2.4 million of revenue related to a dermal filler we are developing with Mentor Corporation, or Mentor.

Oncology

Oncology product revenue increased 33% to $22.3 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to the addition of sales of Clolar outside of North America, which rights we acquired in connection with our acquisition of Bioenvision in October 2007.

In September 2007, the FDA approved expanded labeling for Campath to include first-line treatment of patients with B-cell chronic lymphocytic leukemia, or B-CLL, significantly increasing the number of patients eligible to receive the product. In December 2007 we received European approval for an expanded indication as well.

We are developing the intravenous formulation of Clolar for significantly larger indications, including first-line and relapsed or refractory AML in adults. We are also developing an oral formulation of Clolar and have initiated clinical trials for the treatment of myelodysplastic syndrome, or MDS. Clolar has been granted orphan drug status for the treatment of ALL and AML in both the United States and European Union.

Other Product Revenue

Other product revenue increased 22% to $71.5 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to:

•: a 31% increase in sales of diagnostic products to $40.4 million, due to the acquisition of DCL in December 2007 and an increase in demand for the rapid tests used to diagnose a strain of influenza; and
•: a 37% increase in sales of liquid crystals to $13.3 million combined with a 5% increase in sales of WelChol to $15.7 million, due to bulk sales and royalties earned as a result of increased demand from our U.S. marketing partner, Sankyo Pharma, Inc., or Sankyo.

Service Revenue

We derive service revenue primarily from the following sources:

•: sales of MACI, our proprietary cell therapy product for cartilage repair, in Europe and Australia, Carticel for the treatment of cartilage damage, and Epicel for the treatment of severe burns, all of which are included in our Biosurgery reporting segment; and
•: reproductive/genetics and pathology/oncology diagnostic testing services, which are included in our Genetics reporting segment.

The following table sets forth our service revenue on a segment basis:

		Three Months Ended March 31,
		Three Months Ended March 31,				Increase/ (Decrease) % Change
		2008		2007		Increase/ (Decrease) % Change
		(Amounts in thousands)
Therapeutics		$	176	$	—	N/A
Biosurgery			10,732		9,362	15	%
Genetics			74,329		66,158	12	%
Oncology			410		282	45	%
Other			217		79	>100	%

	Total service revenue	$	85,864	$	75,881	13	%

Service revenue attributable to our Biosurgery reporting segment increased 15% to $10.7 million for the three months ended March 31, 2008, as compared to the same period of 2007. The increase is primarily due to higher demand for Epicel and MACI.

Service revenue attributable to our Genetics reporting segment increased 12% to $74.3 million for the three months ended March 31, 2008, as compared to the same period of 2007. The increase was primarily attributable to continued growth in revenue from our genetic testing and prenatal screening services.

The strengthening of foreign currencies for the three months ended March 31, 2008, as compared to the same period of 2007, did not have a significant impact on service revenue.

International Product and Service Revenue

A substantial portion of our revenue is generated outside of the United States. The following table provides information regarding the change in international product and service revenue as a percentage of total product and service revenue during the periods presented:

	Three Months Ended March 31,
	Three Months Ended March 31,						Increase/ (Decrease) % Change
	2008			2007			Increase/ (Decrease) % Change
	(Amounts in thousands)
International product and service revenue	$	564,127		$	411,019		37	%
% of total product and service revenue		52	%		47	%

The 37% increase to $564.1 million in international product and service revenue for the three months ended March 31, 2008, as compared to the same period of 2007, is primarily due to an $89.5 million increase in the combined international sales of Renagel, Cerezyme, Fabrazyme and Myozyme primarily due to an increase in the number of patients using these products in the European Union, South America and the Asia-Pacific rim. In addition, we began to record Aldurazyme revenue effective January 1, 2008. Revenue generated outside the United States for Aldurazyme was $29.8 million for the three months ended March 31, 2008, which had been recorded as joint venture revenue in 2007.

International product and service revenue as a percentage of total product and service revenue increased due primarily to the addition of revenue generated outside the United States for Aldurazyme and clofarabine. As of January 1, 2008, we began to record revenue for Aldurazyme as a result of the restructured relationship with BioMarin/Genzyme LLC. We began recording clofarabine revenue outside the United States as a result of our acquisition of Bioenvision in October 2007 which provided us with the exclusive, worldwide rights to clofarabine.

The strengthening of foreign currencies, primarily the Euro against the U.S. dollar, positively impacted total product and service revenue by $46.6 million for the three months ended March 31, 2008, as compared to the same period of 2007.

Research and Development Revenue

The following table sets forth our research and development revenue on a segment basis:

		Three Months Ended March 31,
		Three Months Ended March 31,				Increase/ (Decrease) % Change
		2008		2007		Increase/ (Decrease) % Change
		(Amounts in thousands)
Therapeutics		$	19	$	638	(97	)%
Transplant			—		180	(100	)%
Biosurgery			603		1,748	(66	)%
Oncology			6,357		5,470	16	%
Other			567		773	(27	)%
Corporate			383		303	26	%

	Total research and development revenue	$	7,929	$	9,112	(13	)%

Total research and development revenue decreased $1.2 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to decreases in revenue recognized by our Therapeutics and Biosurgery reporting segments partially offset by an increase in revenue from our Oncology reporting segment.

MARGINS

The components of our total margins are described in the following table:

	Three Months Ended March 31,
	Three Months Ended March 31,						Increase/ (Decrease) % Change
	2008			2007			Increase/ (Decrease) % Change
	(Amounts in thousands)
Product margin	$	789,529		$	643,466		23	%
% of total product revenue		78	%		81	%
Service margin	$	30,290		$	28,142		8	%
% of total service revenue		35	%		37	%
Total product and service gross margin	$	819,819		$	671,608		22	%
% of total product and service revenue		75	%		77	%

Product Margin

Our overall product margin increased $146.1 million, or 23%, for the three months ended March 31, 2008, as compared to the same period of 2007. This is primarily due to:

•: improved margins for Hectorol and Renagel due to price increases, increased unit volume and increased efficiency at our global manufacturing facilities;
•: increased margins for Cerezyme, Fabrazyme, Thyrogen and Myozyme due to increased sales volume;
•: an increase in product margin for Seprafilm due to increased sales;
•: an increase in product margin for Hylaform due to a milestone payment received in March 2008; and
•: an increase in product margin for our oncology business due to higher demand for Campath worldwide, and an increase in worldwide sales of Clolar due to our acquisition of Bioenvision in October 2007.

These increases in product margin were partially offset by the $9.5 million unfavorable effect of exchange due to the weakening of the U.S. dollar against many currencies, particularly the Euro.

Total product margin as a percentage of total product revenue for the three months ended March 31, 2008, as compared to the same period of 2007, decreased due to higher unit costs for Cerezyme and Fabrazyme, increased sales of Myozyme and the addition of Aldurazyme to the results, both of which have lower than average margins.

The amortization of product related intangible assets is included in amortization expense and, as a result, is excluded from cost of products sold and the determination of product margins.

Service Margin

Our overall service margin increased $2.1 million, or 8%, for the three months ended March 31, 2008, as compared to the same period of 2007. The increase was primarily attributable to an increase in revenues from our genetic testing and prenatal screening services.

Total service margin as a percent of total service revenue decreased by 2% for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to an increase in Carticel and MACI unit costs.

OPERATING EXPENSES

Selling, General and Administrative Expenses

Effective January 1, 2008, as a result of changes in how we review our business, certain general and administrative expenses which were formerly allocated amongst our reporting segments and Other, are now allocated to Corporate. We have revised our 2007 segment disclosures to conform to our 2008 presentation.

The following table provides information regarding the change in SG&A during the periods presented:

	Three Months Ended March 31,
	Three Months Ended March 31,						Increase/ (Decrease) % Change
	2008			2007			Increase/ (Decrease) % Change
	(Amounts in thousands)
Selling, general and administrative expenses	$	318,386		$	269,021		18	%
% of total revenue		29	%		30	%

SG&A increased $49.4 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to spending increases of:

•: $2.7 million for Renal, primarily due to sales force expansion for Renvela;
•: $12.4 million for Therapeutics, primarily due to costs incurred related to Aldurazyme which were recorded by BioMarin/Genzyme LLC in the same period of 2007, combined with continued promotional activities for Cerezyme, Fabrazyme and Myozyme;
•: $1.6 million for Transplant, primarily due to our investment in international programs and personnel;
•: $5.3 million for Biosurgery, primarily due to sales force expansion combined with additional marketing activities;
•: $2.2 million for Genetics, primarily due to personnel additions and increased spending for advertising and trade shows;
•: $4.6 million for Oncology, primarily due to the inclusion of Bioenvision activities after the acquisition and increased domestic marketing expenses for Clolar;
•: $3.8 million for Other, primarily due to the continued Cholestagel commercial infrastructure build out combined with the acquisition of diagnostic assets from DCL in December 2007; and
•: $16.9 million for Corporate, primarily due to the strengthening of foreign currencies, primarily the Euro against the U.S. dollar.

Research and Development Expenses

The following table provides information regarding the change in research and development expenses during the periods presented:

	Three Months Ended March 31,
	Three Months Ended March 31,						Increase/ (Decrease) % Change
	2008			2007			Increase/ (Decrease) % Change
	(Amounts in thousands)
Research and development expenses	$	262,797		$	166,120		58	%
% of total revenue		24	%		19	%

Research and development expenses increased $96.7 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to:

•: an increase of $18.1 million in spending on certain Therapeutics research and development programs and the addition of Aldurazyme expenses due to the restructuring of our relationship with BioMarin/Genzyme LLC;
•: an increase of $4.8 million in spending on Transplant research and development programs, primarily on Mozobil due to new drug application filing activity and new initiatives;
•: an increase of $15.8 million in spending on Oncology research and development programs, primarily on the development of alemtuzumab for the treatment of multiple sclerosis and the addition of Bioenvision expenses for the development of Clolar for adult AML;
•: an increase of $70.3 million in spending on Other research and development programs, primarily due to a charge of $69.9 million for the premium we paid on shares of Isis common stock that we purchased in February 2008; and
•: an increase of $5.2 million due to the weakening of the U.S. dollar against many currencies, particularly the Euro.

These increases were partially offset by decreases of:

•: $9.4 million in spending on certain Therapeutics research and development programs, including a $7.8 million decrease in spending due to the termination in February 2007 of our joint venture with Dyax for the development of DX-88 for the treatment of HAE; and
•: $3.9 million in spending on our Renal programs due to the termination of our late stage clinical trial for Tolevamer.

Amortization of Intangibles

The following table provides information regarding the change in amortization of intangibles expense during the periods presented:

	Three Months Ended March 31,
	Three Months Ended March 31,						Increase/ (Decrease) % Change
	2008			2007			Increase/ (Decrease) % Change
	(Amounts in thousands)
Amortization of intangibles	$	55,658		$	50,017		11	%
% of total revenue		5	%		6	%

Amortization of intangibles expense increased $5.6 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to the acquisition of technology in connection with our acquisition of Bioenvision in October 2007 and the acquisition of customer lists and trademarks in connection with our acquisition of the diagnostic assets of DCL in December 2007.

As discussed in Note 7., "Goodwill and Other Intangible Assets," to our financial statements included in this report, we calculate amortization expense for the Synvisc sales and marketing rights we reacquired from Wyeth and the Myozyme patent and technology rights pursuant to a licensing agreement with Synpac by taking into account forecasted future sales of the products, and the resulting estimated future contingent payments we will be required to make. As a result, we expect amortization of intangibles expense to fluctuate over the next five years based on these future contingent payments.

Purchase of In-Process Research and Development

The following table sets forth IPR&D projects for companies and certain assets we have acquired between January 1, 2006 and March 31, 2008 (amounts in millions):

Company/Assets Acquired	Purchase Price		IPR&D(1)		Programs Acquired	Discount Rate Used in Estimating Cash Flows(1)		Year of Expected Launch	Estimated Cost to Complete
Bioenvision (2007)	$	349.9	$	125.5	Clofarabine (rights outside North America)(2,3)	17	%	2008-2010	$	41

AnorMED (2006)	$	589.2	$	526.8	Mozobil (stem cell transplant)	15	%	2009-2014	$	125
				26.1	AMD070 (HIV)(4)	15	%	—	$	—

			$	552.9

(1): Management assumes responsibility for determining the valuation of the acquired IPR&D projects. The fair value assigned to IPR&D for each acquisition is estimated by discounting, to present value, the cash flows expected once the acquired projects have reached technological feasibility. The cash flows are probability-adjusted to reflect the risks of advancement through the product approval process. In estimating the future cash flows, we also considered the 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.
(2): IPR&D charges totaled $125.5 million related to the acquisition of Bioenvision, of which $106.4 million was charged to IPR&D and $19.1 million was charged to equity in income (loss) of equity method investments.
(3): Clolar is marketed for the treatment of relapsed and refractory pediatric ALL. The IPR&D projects for Clolar are related to the development of these products for the treatment of other medical issues.
(4): Year of expected launch and estimated cost to complete data is not provided for AMD070 at this time because we are assessing our future plans for this program.

OTHER INCOME AND EXPENSES

		Three Months Ended March 31,
		Three Months Ended March 31,						Increase/ (Decrease) % Change
		2008			2007			Increase/ (Decrease) % Change
		(Amounts in thousands)
Equity in income of equity method investments		$	188		$	5,612		(97	)%
Minority interest			463			3,912		(88	)%
Gains on investments in equity securities, net			775			12,788		(94	)%
Other			(160	)		(525	)	(70	)%
Investment income			14,870			16,219		(8	)%
Interest expense			(1,655	)		(4,188	)	(60	)%

	Total other income	$	14,481		$	33,818		(57	)%

Equity in Income of Equity Method Investments

Under this caption, we record our portion of the results of our joint venture with Medtronic, Inc., or Medtronic, and our investment in Peptimmune, Inc., or Peptimmune, and for the three months ended March 31, 2007, our portion of the results of BioMarin/Genzyme LLC.

Equity in income of equity method investments decreased 97% to $0.2 million for the three months ended March 31, 2008, as compared to $5.6 million for the same period of 2007, primarily due to the restructuring of the relationship with BioMarin/Genzyme LLC. Beginning January 1, 2008, as a result of our restructured relationship with BioMarin, we no longer account for BioMarin/Genzyme LLC using the equity method of accounting.

Minority Interest

As a result of the restructuring of our relationship with BioMarin/Genzyme LLC, effective January 1, 2008, in accordance with the provisions of FIN 46R, we began consolidating the results of BioMarin/Genzyme LLC. We recorded BioMarin's portion of this joint venture's income for the three months ended March 31, 2008 as minority interest in our consolidated statement of operations for that period, the amount of which was not significant.

As a result of our application of FIN 46R, we consolidated the results of Excigen Inc., or Excigen, and, prior to February 20, 2007, Dyax-Genzyme LLC. On February 20, 2007, we agreed with Dyax to terminate our participation and interest in Dyax-Genzyme LLC. We recorded Dyax's portion of this joint venture's losses as minority interest in our consolidated statements of operations through February 20, 2007. The results of Excigen were not significant for both the three months ended March 31, 2008 and 2007.

Gains on Investments in Equity Securities, Net

We recorded the following net realized gains on investments in equity securities during the periods presented (amounts in thousands):

		Three Months Ended March 31,
		2008		2007
THP		$	—	$	10,848
Other			775		1,940

	Gains on investments in equity securities, net	$	775	$	12,788

In March 2007, we recorded a $10.8 million gain in connection with the sale of the entire investment in the capital stock of THP held by our wholly-owned subsidiary, SangStat Medical, LLC, which had a zero cost basis, for net cash proceeds of $10.8 million.

At March 31, 2008, our stockholders' equity includes $27.6 million of unrealized gains and $1.2 million of unrealized losses related to our strategic investments in equity securities.

Acquisition of Sirtris by GSK

As of March 31, 2008, we owned 660,204 shares of the common stock of Sirtris that had a total cost basis of $4.5 million. In April 2008, Sirtris announced its entry into a definitive agreement with GSK, under which GSK will acquire Sirtris for approximately $720 million through a cash tender offer of $22.50 per share. Sirtris and GSK anticipate that the tender offer will commence in early May and close in the second quarter of 2008. We plan to record a pre-tax gain of approximately $10 million, based on the current tender offer price, in gains on investments in equity securities, net, in our consolidated statements of operations in the period in which our shares of Sirtris common stock are successfully tendered and accepted for payment.

Investment Income

Our investment income decreased 8% to $14.9 million for the three months ended March 31, 2008, as compared to $16.2 million for the same period of 2007, primarily due to a decrease in our average portfolio yield, partially offset by higher domestic average cash balances.

Interest Expense

Our interest expense decreased 60% to $1.7 million for the three months ended March 31, 2008, as compared to $4.2 million for the same period of 2007, primarily due to a $1.4 million decrease in interest expense related to asset retirement obligations and a $1.1 million increase in capitalized interest.

Provision for Income Taxes

	Three Months Ended March 31,
	Three Months Ended March 31,						Increase/ (Decrease) % Change
	2008			2007			Increase/ (Decrease) % Change
	(Amounts in thousands)
Provision for income taxes	$	60,117		$	71,193		(16	)%
Effective tax rate		29	%		31	%

Our effective tax rate for all periods presented varies from the U.S. statutory tax rate as a result of:

•: our provision for state income taxes;
•: the tax benefits from manufacturing activities;
•: benefits related to tax credits;
•: income and expenses taxed at rates other than the U.S. statutory tax rate; and
•: non-deductible stock-based compensation expenses of $8.1 million for the three months ended March 31, 2008 and $6.9 million for the three months ended March 31, 2007.

material impact on our financial position or results of operations. Settlement of these audits or the expiration of the statute of limitations on the assessment of income taxes for any tax year may result in a reduction of future tax provisions. Any such benefit would be recorded upon the effective settlement of the audit or expiration of the applicable statute of limitations.

LIQUIDITY AND CAPITAL RESOURCES

We continue to generate cash from operations. We had cash, cash equivalents and short- and long-term investments of $1.4 billion at March 31, 2008 and $1.5 billion at December 31, 2007.

The following is a summary of our statements of cash flows for the three months ended March 31, 2008 and 2007.

Cash Flows from Operating Activities

Cash flows from operating activities are as follows (amounts in thousands):

		Three Months Ended March 31,
		2008			2007
Cash flows from operating activities:
Net income		$	145,271		$	158,187
Non-cash charges			124,151			82,557
Decrease in cash from working capital changes (excluding impact of acquired assets and assumed liabilities)			(109,889	)		(42,938	)

	Cash flows from operating activities	$	159,533		$	197,806

Cash provided by operating activities decreased $38.3 million for the three months ended March 31, 2008, as compared to the same period of 2007, primarily driven by a $12.9 million decrease in net income, which was impacted by a $69.9 million charge to research and development expense for the premium paid to purchase five million shares of Isis stock, a $67.0 million increase in cash used for working capital, offset, in part, by an increase of $41.6 million in non-cash charges, net. The increase in non-cash charges, net, for the three months ended March 31, 2008, as compared to the same period of 2007, is primarily attributable to:

•: a $9.1 million increase in depreciation and amortization;
•: a $13.6 million decrease in gains on investments in equity securities; and
•: a $13.9 million increase in the tax benefit from employee stock-based compensation.

Cash Flows from Investing Activities

Cash flows from investing activities are as follows (amounts in thousands):

		Three Months Ended March 31,
		2008			2007
Cash flows from investing activities:
Net sales of investments, excluding investments in equity securities		$	33,175		$	32,060
Net purchases of investments in equity securities			(79,551	)		(1,397	)
Purchases of property, plant and equipment			(121,967	)		(82,982	)
Distributions from equity method investments			6,595			6,000
Purchases of other intangible assets			(7,046	)		(12,207	)
Other investing activities			3,107			603

	Cash flows from investing activities	$	(165,687	)	$	(57,923	)

For the three months ended March 31, 2008, net purchases of investments in equity securities and capital expenditures accounted for significant cash outlays for investing activities. During the three months ended March 31, 2008, we used:

•: $80.1 million to purchase five million shares of Isis common stock in February 2008; and
•: $122.0 million in cash to fund the purchase of property, plant and equipment, primarily related to the ongoing expansion of our manufacturing capacity in the Republic of Ireland, the United Kingdom, Belgium and France, the construction of a new research and development facility in Framingham, Massachusetts, planned improvements at our facility in Allston, Massachusetts and capitalized costs of an internally developed enterprise software system for our Genetics business.

These decreases in cash were partially offset by $6.6 million of cash distributions from our joint venture with BioMarin.

Cash Flows from Financing Activities

Cash flows from financing activities are as follows (amounts in thousands):

		Three Months Ended March 31,
		2008			2007
Cash flows from financing activities:
Proceeds from issuance of our common stock		$	90,243		$	27,765
Repurchases of our common stock			(73,218	)		—
Excess tax benefits from stock-based compensation			5,790			264
Payments of debt and capital lease obligations			(2,554	)		(2,117	)
Increase in bank overdrafts			18,549			29,528
Minority interest contributions			—			4,136
Other financing activities			959			2,482

	Cash flows from financing activities	$	39,769		$	62,058

In May 2007, our board of directors authorized a stock repurchase program to repurchase up to an aggregate maximum amount of $1.5 billion or 20,000,000 shares of our outstanding common stock over three years, beginning in June 2007. The repurchases are being made from time to time and can be effectuated through open market purchases, privately negotiated transactions, transactions structured

through investment banking institutions, or by other means, subject to management's discretion and as permitted by securities laws and other legal requirements. During the three months ended March 31, 2008, we repurchased an additional 1,000,000 shares of our common stock at an average price of $73.20 per share for a total of $73.2 million in cash, including fees. As of March 31, 2008, we have repurchased a cumulative total of 4,500,000 shares of our common stock at an average price of $67.71 per share for a total of $304.8 million in cash, including fees.

Revolving Credit Facility

In July 2006, we entered into a five-year $350.0 million senior unsecured revolving credit facility, which we refer to as our 2006 revolving credit facility. The proceeds of loans under our 2006 revolving credit facility can be used to finance working capital needs and for general corporate purposes. Our 2006 revolving credit facility may be increased at any time by up to an additional $350.0 million in the aggregate, as long as no default or event of default has occurred or is continuing and certain other customary conditions are satisfied. Borrowings under our 2006 revolving credit facility will bear interest at various rates depending on the nature of the loan.

As of March 31, 2008, no amounts were outstanding under our 2006 revolving credit facility. The terms of our 2006 revolving credit facility include various covenants, including financial covenants that require us to meet minimum interest coverage ratios and maximum leverage ratios. As of March 31, 2008, we were in compliance with these covenants.

Contractual Obligations

The disclosure of payments we have committed to make under our contractual obligations is set forth under the heading "Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and Results of Operations—Liquidity and Capital Resources" in Exhibit 13 to our 2007 Form 10-K. As of March 31, 2008, there have been no material changes to our contractual obligations since December 31, 2007.

Financial Position

We believe that our available cash, investments and cash flows from operations will be sufficient to fund our planned operations and capital requirements for the foreseeable future. Although we currently have substantial cash resources and positive cash flow, we have used or intend to use substantial portions of our available cash and may make additional borrowings for:

•: product development and marketing;
•: payments related to the cash consideration due to the dissenting Bioenvision shareholders, the amount of which will be determined by the Delaware Court of Chancery;
•: business combinations and strategic business initiatives;
•: the remaining $1.2 billion approved for our ongoing stock repurchase program over approximately the next 2 years;
•: expanding existing and constructing new manufacturing facilities;
•: upgrading our information technology systems;
•: contingent payments under license and other agreements, including payments related to our license of mipomersen from Isis;
•: expanding staff; and
•: working capital and satisfaction of our obligations under capital and operating leases.

Our cash reserves may be further reduced to pay principal and interest on the $690.0 million in principal under our 1.25% convertible senior notes due December 1, 2023. The notes are initially convertible into Genzyme Stock at a conversion price of approximately $71.24 per share. Holders of the notes may require us to repurchase all or any part of the notes for cash, common stock, or a combination, at our option, on December 1, 2008, 2013 or 2018, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest through the date prior to the date of repurchase. Additionally, upon a change of control, each holder may require us to repurchase, at 100% of the principal amount of the notes plus accrued interest, all or a portion of the holder's notes for cash. On or after December 1, 2008, we may redeem for cash at 100% of the principal amount of the notes plus accrued interest, all or part of the notes that have not been previously converted or repurchased.

In addition, we have several outstanding legal proceedings. Involvement in investigations and litigation can be expensive and a court may ultimately require that we pay expenses and damages. As a result of legal proceedings, we also may be required to pay fees to a holder of proprietary rights in order to continue certain operations.

To satisfy these and other commitments, we may have to obtain additional financing. We cannot guarantee that we will be able to obtain any additional financing, extend any existing financing arrangement, or obtain either on favorable terms.

Off-Balance Sheet Arrangements

We do not use special purpose entities or other off-balance sheet financing arrangements. We enter into guarantees in the ordinary course of business related to the guarantee of our own performance and the performance of our subsidiaries. In addition, we have joint ventures and certain other arrangements that are focused on research, development, and the commercialization of products. Entities falling within the scope of FIN 46R are included in our consolidated statements of operations if we qualify as the primary beneficiary. Entities not subject to consolidation under FIN 46R are accounted for under the equity method of accounting if our ownership percent exceeds 20% or if we exercise significant influence over the entity. We account for our portion of the results of these entities in the line item "Equity in income of equity method investments" in our consolidated statements of operations. We also acquire companies in which we agree to pay contingent consideration based on attaining certain thresholds.

Recent Accounting Pronouncements

FAS 159, "The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115." Effective January 1, 2008, we adopted FAS 159, "The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115," which permits, but does not require, us to measure certain financial instruments and other assets and liabilities at fair value on an instrument-by-instrument basis. Unrealized gains and losses on items for which the fair value option has been elected are recognized in earnings at each subsequent reporting date. In adopting FAS 159, we did not elect to measure any new assets or liabilities at their respective fair values and, therefore, the adoption of FAS 159 did not have an impact on our results of operations or financial position.

EITF Issue No. 07-1, "Accounting for Collaborative Arrangements." In December 2007, the EITF of the FASB reached a consensus on Issue No. 07-1, "Accounting for Collaborative Arrangements." The EITF concluded on the definition of a collaborative arrangement and that revenues and costs incurred with third parties in connection with collaborative arrangements would be presented gross or net based on the criteria in EITF 99-19 and other accounting literature. Companies are also required to disclose the nature and purpose of collaborative arrangements along with the accounting policies and the classification and amounts of significant financial-statement amounts related to the arrangements. EITF 07-1 will become effective for us beginning January 1, 2009 and will be applied retrospectively to all periods presented for all collaborative arrangements existing as of the effective date. We are evaluating the impact, if any, this standard will have on our consolidated financial statements.

FAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51." In December 2007, the FASB issued FAS 160, "Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51," which establishes new accounting and reporting standards that require the ownership interests in subsidiaries not held by the parent company to be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separate from the parent's equity. FAS 160 also requires the amount of consolidated net income attributable to the parent and to the non-controlling interest, commonly referred to as the minority interest, to be clearly identified and presented on the face of the consolidated statement of income. Changes in a parent's ownership interest while the parent retains its controlling financial interest must be accounted for consistently, and when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary must be initially measured at fair value. The gain or loss on the deconsolidation of the subsidiary is measured using the fair value of any non-controlling equity investment. FAS 160 also requires entities to provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. FAS 160 is effective for us beginning January 1, 2009 and adoption is

prospective only; however, upon adoption, presentation and disclosure requirements described above must be applied retrospectively for all periods presented in our consolidated financial statements. We are currently evaluating the effects, if any, that FAS 160 will have on our consolidated financial statements.

RISK FACTORS

Our future operating results could differ materially from the results described in this report due to the risks and uncertainties related to our business, including those discussed below.

If we fail to increase sales of several existing products and services, we will not meet our financial goals.

Over the next few years, our success will depend substantially on our ability to increase revenue from our existing products and services. These products and services include Renagel, Renvela, Synvisc, Synvisc-One, Fabrazyme, Myozyme, Hectorol, Thymoglobulin, Thyrogen, Clolar, Campath, Aldurazyme and diagnostic testing services. Our ability to increase sales will depend on a number of factors, including:

•: acceptance by the medical community of each product or service;
•: the availability of competing treatments that are deemed safer, more efficacious, more convenient to use, or more cost effective;
•: our ability, and the ability of our collaborators, to efficiently manufacture sufficient quantities of each product to meet demand and to do so in a cost efficient manner;
•: regulation by the U.S. Food and Drug Administration, commonly referred to as the FDA, and the European Agency for the Evaluation of Medicinal Products, or EMEA, and other regulatory authorities of these products and the facilities and processes used to manufacture these products;
•: the scope of the labeling approved by regulatory authorities for each product and competitive products;
•: the effectiveness of our sales force;
•: the availability and extent of coverage, pricing and level of reimbursement from governmental agencies and third party payors; and
•: the size of the patient population for each product or service and our ability to identify new patients.

Part of our growth strategy involves conducting additional clinical trials to support approval of expanded uses of some of our products, including Clolar and alemtuzumab, pursuing marketing approval for our products in new jurisdictions and developing next generation products such as Renvela

and Synvisc-One. The success of this component of our growth strategy will depend on the outcome of these additional clinical trials, the content and timing of our submissions to regulatory authorities and whether and when those authorities determine to grant approvals.

Because the healthcare industry is extremely competitive and regulatory requirements are rigorous, we spend substantial funds marketing our products and attempting to expand approved uses for them. These expenditures depress near-term profitability, with no assurance that the expenditures will generate future profits that justify the expenditures.

Our future success will depend on our ability to effectively develop and market our products and services against those of our competitors.

The human healthcare products and services industry is extremely competitive. Other organizations, including pharmaceutical, biotechnology, device and diagnostic testing companies, have developed and are developing products and services to compete with our products, services, and product candidates. If healthcare providers, patients or payors prefer these competitive products or services or these competitive products or services have superior safety, efficacy, pricing or reimbursement characteristics, we will have difficulty maintaining or increasing the sales of our products and services.

Renagel competes with two other products approved in the United States for the control of elevated phosphorus levels in patients with chronic kidney failure on hemodialysis. Fresenius Medical Care markets PhosLo®, a calcium-based phosphate binder. Shire Pharmaceuticals Group plc, or Shire, markets Fosrenol®, a non-calcium based phosphate binder. Amgen, Inc. recently acquired Ilypsa and its product candidate, ILY101, a polymeric phosphate binder that completed a phase 2 trial in CKD patients on dialysis. Renagel also competes with over-the-counter calcium carbonate products such as TUMS® and metal-based options such as aluminum and magnesium.

UCB S.A. has developed Zavesca®, a small molecule drug for the treatment of Gaucher disease, the disease addressed by Cerezyme. Zavesca, sold by Actelion Ltd., has been approved in the United States, European Union and Israel as an oral therapy for use in patients with mild to moderate Type 1 Gaucher disease for whom enzyme replacement therapy is unsuitable. In addition, Shire reported top-line data from a phase 1/2 clinical trial for its gene-activated glucocerebrosidase program, also to treat Gaucher disease, and initiated phase 3 studies in July 2007. Protalix Biotherapeutics Ltd. initiated a phase 3 trial for plant-derived enzyme replacement therapy to treat Gaucher disease in the third quarter of 2007. Amicus Therapeutics, Inc., or Amicus, is conducting phase 2 trials for oral chaperone medication to treat Gaucher disease. We are also aware of other development efforts aimed at treating Gaucher disease.

Outside the United States, Shire is marketing Replagal™, a competitive enzyme replacement therapy for Fabry disease which is the disease addressed by Fabrazyme. In addition, while Fabrazyme has received orphan drug designation, which provides us with seven years of market exclusivity for the product in the United States, other companies may seek to overcome our market exclusivity and, if successful, compete with Fabrazyme in the United States. Amicus has initiated phase 2 trials for an oral chaperone medication to treat Fabry disease. We are aware of other development efforts aimed at treating Fabry disease.

Current competition for Synvisc and Synvisc-One includes Supartz®, a product manufactured by Seikagaku Corporation that is sold in the United States by Smith & Nephew Orthopaedics and in Japan by Kaken Pharmaceutical Co. under the name Artz®; Hyalgan®, produced by Fidia Farmaceutici S.p.A. and marketed in the United States by Sanofi-Aventis; Orthovisc®, produced by Anika Therapeutics, Inc., and marketed in the United States by Johnson & Johnson's Mitek division and marketed outside the United States through distributors; Euflexxa™, a product manufactured and sold by Ferring Pharmaceuticals and marketed in the United States and Europe; and Durolane®,

manufactured by Q-Med AB and distributed outside the United States by Smith & Nephew Orthopedics. Durolane and Euflexxa are produced by bacterial fermentation, which may provide these products a competitive advantage over avian-sourced Synvisc and Synvisc-One. We are aware of various viscosupplementation products on the market or in development, but are unaware of any products that have physical properties of viscosity, elasticity or molecular weight comparable to those of Synvisc and Synvisc-One. Furthermore, several companies market products that are not viscosupplementation products but which are designed to relieve the pain associated with osteoarthritis. Synvisc and Synvisc-One will have difficulty competing with any of these products to the extent the competitive products are considered more efficacious, less burdensome to administer or more cost-effective.

Myozyme has marketing exclusivity in the United States until 2013 and in the European Union until 2016 due to its orphan drug status. Amicus Therapeutics has completed two phase 1 clinical studies for a small molecule treatment for Pompe disease and has announced their plans to initiate a phase 2 clinical trial in early 2008.

Several companies market products that, like Thymoglobulin, are used for the prevention and treatment of acute rejection in renal transplant. These products include Novartis' Simulect® and Pfizer Inc.'s ATGAM®. Competition in the acute transplant rejection market is driven largely by product efficacy due to the potential decreased long-term survival of transplanted organs as the result of an acute organ rejection episode.

The examples above are illustrative and not exhaustive. Almost all of our products and services face competition. Furthermore, the field of biotechnology is characterized by significant and rapid technological change. Discoveries by others may make our products or services obsolete. For example, competitors may develop approaches to treating LSDs that are more effective, convenient or less expensive than our products and product candidates. Because a significant portion of our revenue is derived from products that address this class of diseases and a substantial portion of our expenditures is devoted to developing new therapies for this class of diseases, such a development would have a material negative impact on our results of operations.

If we fail to obtain and maintain adequate levels of reimbursement for our products from third party payors, the commercial potential of our products will be significantly limited.

A substantial portion of our domestic and international revenue comes from payments by third party payors, including government health administration authorities and private health insurers. Governments and other third party payors may not provide adequate insurance coverage or reimbursement for our products and services, which could impair our financial results.

Third party payors are increasingly scrutinizing pharmaceutical budgets and healthcare expenses and are attempting to contain healthcare costs by:

•: challenging the prices charged for healthcare products and services;
•: limiting both the coverage and the amount of reimbursement for new therapeutic products;
•: reducing existing reimbursement rates for commercialized products and services;
•: limiting coverage for the treatment of a particular patient to a maximum dollar amount or specified period of time;
•: denying or limiting coverage for products that are approved by the FDA or other governmental regulatory bodies but are considered experimental or investigational by third party payors; and
•: refusing in some cases to provide coverage when an approved product is used for disease indications in a way that has not received FDA or other applicable marketing approval.

Attempts by third party payors to reduce costs in any of these ways could decrease demand for our products. In addition, in certain countries, including countries in the European Union and Canada, the coverage of prescription drugs, the pricing, and the level of reimbursement are subject to governmental control. Therefore, we may be unable to negotiate coverage, pricing and/or reimbursement on terms that are favorable to us. Government health administration authorities may also rely on analyses of the cost-effectiveness of certain therapeutic products in determining whether to provide reimbursement for such products. Our ability to obtain satisfactory pricing and reimbursement may depend in part on whether our products, the cost of some of which is high in comparison to other therapeutic products, are viewed as cost-effective.

Furthermore, governmental regulatory bodies, such as the Centers for Medicare and Medicaid Services (CMS), may from time-to-time make unilateral changes to reimbursement rates for our products and services. These changes could reduce our revenues by causing healthcare providers to be less willing to use our products and services. Although we actively seek to assure that any initiatives that are undertaken by regulatory agencies involving reimbursement for our products and services do not have an adverse impact on us, we may not always be successful in these efforts.

The development of new biotechnology products involves a lengthy and complex process, and we may be unable to commercialize any of the products we are currently developing.

We have numerous products under development and devote considerable resources to research and development, including clinical trials.

Before we can commercialize our development-stage product candidates, we will need to:

•: conduct substantial research and development;
•: undertake preclinical and clinical testing;
•: develop and scale-up manufacturing processes; and
•: pursue marketing approvals and, in some jurisdictions, pricing and reimbursement approvals.

This process involves a high degree of risk and takes many years. Our product development efforts with respect to a product candidate may fail for many reasons, including:

•: failure of the product candidate in preclinical studies;
•: difficulty enrolling patients in clinical trials, particularly for disease indications with small patient populations;
•: patients exhibiting adverse reactions to the product candidate or indications of other safety concerns;
•: insufficient clinical trial data to support the effectiveness of the product candidate;
•: our inability to manufacture sufficient quantities of the product candidate for development or commercialization activities in a timely and cost-efficient manner;
•: our failure to obtain the required regulatory approvals for the product candidate, the facilities or the process used to manufacture the product candidate; or
•: changes in the regulatory environment, including pricing and reimbursement, that make development of a new product or indication no longer desirable.

Few research and development projects result in commercial products, and success in preclinical studies or early clinical trials often is not replicated in later studies. For example, in our phase 3 trial known as the Polymer Alternative for CDAD treatment (PACT) study, tolevamer did not meet its primary endpoint. In our pivotal study of hylastan for treatment of patients with osteoarthritis of the

knee, hylastan did not meet its primary endpoint. We may decide to abandon development of a product or service candidate at any time or we may be required to expend considerable resources repeating clinical trials or conducting additional trials, either of which would increase costs of development and delay any revenue from those product candidates.

Our efforts to expand the approved indications for our products and to gain marketing approval in new jurisdictions and to develop next generation products also may fail. These expansion efforts are subject to many of the risks associated with completely new products and accordingly, we may fail to recoup the investments we make pursuing these strategies.

Our financial results are dependent on sales of Cerezyme.

Sales of Cerezyme, our enzyme-replacement product for patients with Gaucher disease, totaled $304.3 million for the three months ended March 31, 2008, representing approximately 28% of our total revenue. Because our business is dependent on Cerezyme, negative trends in revenue from this product could have an adverse effect on our results of operations and cause the value of our securities to decline. We will lose revenue if alternative treatments gain commercial acceptance, if our marketing activities are restricted, or if coverage, pricing or reimbursement is limited. In addition, the patient population with Gaucher disease is not large. Because a significant percentage of that population already uses Cerezyme, opportunities for future sales growth are constrained. Furthermore, changes in the methods for treating patients with Gaucher disease, including treatment protocols that combine Cerezyme with other therapeutic products or reduce the amount of Cerezyme prescribed, could limit growth, or result in a decline, in Cerezyme sales.

We may encounter substantial difficulties managing our growth.

Several risks are inherent to our plans to grow our business. Achieving our goals will require substantial investments in research and development, sales and marketing, and facilities. For example, we have spent considerable resources building and seeking regulatory approvals for our manufacturing plants. We cannot assure you that these facilities will prove sufficient to meet demand for our products or that we will not have excess capacity at these facilities. In addition, building our facilities is expensive, and our ability to recover these costs will depend on increased revenue from the products produced at the facilities.

We produce relatively small amounts of material for research and development activities and pre-clinical trials. Even if a product candidate receives all necessary approvals for commercialization, we may not be able to successfully scale-up production of the product material at a reasonable cost or at all and we may not receive manufacturing approvals in sufficient time to meet product demand. For example, the FDA has concluded that Myozyme produced in our 2000 liter bioreactors is a different product than Myozyme produced in our 160 liter bioreactors and is therefore requiring us to submit a separate BLA for the 2000 liter Myozyme. This delay in receipt of FDA approval has had an adverse effect on our revenues and earnings and will continue to have an adverse effect until we receive regulatory approval.

If we are able to grow sales of our products, we may have difficulty managing inventory levels. Marketing new therapies is a complicated process, and gauging future demand is difficult. With Renagel, for example, we have encountered problems in the past managing inventory levels at wholesalers. Comparable problems may arise with any of our products, particularly during market introduction.

Growth in our business may also contribute to fluctuations in our operating results, which may cause the price of our securities to decline. Our revenue may fluctuate due to many factors, including changes in:

•: wholesaler buying patterns;
•: reimbursement rates;
•: physician prescribing habits;
•: the availability or pricing of competitive products; and
•: currency exchange rates.

We may also experience fluctuations in our quarterly results due to price changes and sales incentives. For example, purchasers of our products, particularly wholesalers, may increase purchase orders in anticipation of a price increase and reduce order levels following the price increase. We occasionally offer sales incentives and promotional discounts on some of our products and services that could have a similar impact. In addition, some of our products, including Synvisc, are subject to seasonal fluctuation in demand.

Our operating results and financial position may be impacted when we attempt to grow through business combination transactions.

We may encounter problems assimilating operations acquired in business combination transactions. These transactions often entail the assumption of unknown liabilities, the loss of key employees, and the diversion of management attention. Furthermore, in any business combination, including our acquisition of Bioenvision, there is a substantial risk that we will fail to realize the benefits we anticipated when we decided to undertake the transaction. We have in the past taken significant charges for impaired goodwill and for impaired assets acquired in business combination transactions. We may be required to take similar charges in the future.

Manufacturing problems may cause product launch delays, inventory shortages, recalls and unanticipated costs.

In order to generate revenue from our approved products, we must be able to produce sufficient quantities of the products. Many of our products are difficult to manufacture. Our products that are biologics, for example, require product characterization steps that are more onerous than those required for most chemical pharmaceuticals. Accordingly, we employ multiple steps to attempt to control the manufacturing processes. Minor deviations in these manufacturing processes could result in unacceptable changes in the products that result in lot failures, product recalls, product liability claims and insufficient inventory. For example, we have experienced manufacturing issues with Thymoglobulin that resulted in write offs or recalls of lots produced in 2007 that went out of specification prior to expiry.

Certain of the raw materials required in the commercial manufacturing and the formulation of our products are derived from biological sources, including mammalian sources and human plasma. Such raw materials may be subject to contamination or recall. Also, some countries in which we market our products may restrict the use of certain biologically derived substances in the manufacture of drugs. A material shortage, contamination, recall, or restriction of the use of certain biologically derived substances in the manufacture of our products could adversely impact or disrupt our commercial manufacturing of our products or could result in a mandated withdrawal of our products from the market. This too, in turn, could adversely affect our ability to satisfy demand for our products, which could materially and adversely affect our operating results.

In addition, we may only be able to produce some of our products at a very limited number of facilities and, in some cases, we rely on third parties to formulate and manufacture our products. For example, we manufacture all of our Cerezyme and a portion of our Fabrazyme and Myozyme products

at our facility in Allston, Massachusetts. A number of factors could cause production interruptions at our facilities or the facilities of our third party providers, including equipment malfunctions, labor problems, natural disasters, power outages, terrorist activities, or disruptions in the operations of our suppliers.

Manufacturing is also subject to extensive government regulation. Regulatory authorities must approve the facilities in which human healthcare products are produced and those facilities are subject to ongoing inspections. In addition, changes in manufacturing processes may require additional regulatory approvals. Obtaining and maintaining these regulatory approvals could cause us to incur significant additional costs and lose revenue. Furthermore, any third party we use to manufacture, fill-finish or package our products to be sold must also be licensed by the applicable regulatory authorities. As a result, alternative third party providers may not be readily available on a timely basis.

Guidelines and recommendations published by various organizations can reduce the use of our products.

Professional societies, practice management groups, private health/science foundations, and organizations involved in various diseases may publish guidelines or recommendations to the healthcare and patient communities from time to time. Recommendations of government agencies or these other groups/organizations may relate to such matters as usage, dosage, route of administration, cost-effectiveness, and use of related therapies. Organizations like these have in the past made recommendations about our products and products of our competitors. Recommendations or guidelines that are followed by patients and healthcare providers could result in decreased use of our products. The perception by the investment community or shareholders that recommendations or guidelines will result in decreased use of our products could adversely affect prevailing market price for our common stock. In addition, our success also depends on our ability to educate patients and healthcare providers about our products and their uses. If these education efforts are not effective, then we may not be able to increase the sales of our existing products or successfully introduce new products to the market.

We rely on third parties to provide us with materials and services in connection with the manufacture of our products.

Some materials necessary for commercial production of our products, including specialty chemicals and components necessary for manufacture, fill-finish and packaging, are provided by unaffiliated third party suppliers. In some cases, such materials are specifically cited in our marketing application with regulatory authorities so that they must be obtained from that specific source unless and until the applicable authority approves another supplier. In addition, there may only be one available source for a particular chemical or component. For example, we acquire polyalylamine (PAA), used in the manufacture of Renagel, Renvela, Cholestagel and WelChol, from Cambrex Charles City, Inc., the only source for this material currently qualified in our FDA drug applications for these products. Our suppliers also may be subject to FDA regulations or the regulations of other governmental agencies outside the United States regarding manufacturing practices. We may be unable to manufacture our products in a timely manner or at all if these third party suppliers were to cease or interrupt production or otherwise fail to supply these materials or products to us for any reason, including due to regulatory requirements or actions, adverse financial developments at or affecting the supplier, or labor shortages or disputes.

We also source some of our manufacturing, fill-finish, packaging and distribution operations to third party contractors. The manufacture of products, fill-finish, packaging and distribution of our products requires successful coordination among these third party providers and Genzyme. Our inability to coordinate these efforts, the inability of the third party contractor to secure sufficient source materials, the lack of capacity available at a third party contractor or any other problems with the operations of these third party contractors could require us to delay shipment of saleable products,

recall products previously shipped or could impair our ability to supply products at all. This could increase our costs, cause us to lose revenue or market share and damage our reputation.

Government regulation imposes significant costs and restrictions on the development and commercialization of our products and services.

Our success will depend on our ability to satisfy regulatory requirements. We may not receive required regulatory approvals on a timely basis or at all. Government agencies heavily regulate the production and sale of healthcare products and the provision of healthcare services. In particular, the FDA and comparable regulatory agencies in foreign jurisdictions must approve human therapeutic and diagnostic products before they are marketed, as well as the facilities in which they are made. This approval process can involve lengthy and detailed laboratory and clinical testing, sampling activities and other costly and time-consuming procedures. Several biotechnology companies have failed to obtain regulatory approvals because regulatory agencies were not satisfied with the structure or conduct of clinical trials. Similar problems could delay or prevent us from obtaining approvals. Furthermore, regulatory authorities, including the FDA, may not agree with our interpretations of our clinical trial data, which could delay, limit or prevent regulatory approvals.

Therapies that have received regulatory approval for commercial sale may continue to face regulatory difficulties. If we fail to comply with applicable regulatory requirements, regulatory authorities could take actions against us, including:

•: issuing warning letters;
•: issuing fines and other civil penalties;
•: suspending regulatory approvals;
•: refusing to approve pending applications or supplements to approved applications;
•: suspending product sales, imports and/or exports;
•: requiring us to communicate with physicians and other customers about concerns related to potential safety, efficacy, and other issues involving Genzyme products;
•: mandating product recalls; and
•: seizing products.

Furthermore, the FDA and comparable foreign regulatory agencies may require post-marketing clinical trials or patient outcome studies. We have agreed with the FDA, for example, to a number of post-marketing commitments as a condition to U.S. marketing approval for Fabrazyme, Aldurazyme and Myozyme and Clolar. In addition, regulatory agencies subject a marketed therapy, its manufacturer and the manufacturer's facilities to continual review and periodic inspections. The discovery of previously unknown problems with a therapy or the facility or process used to produce the therapy could prompt a regulatory authority to impose restrictions on us, or could cause us to voluntarily adopt such restrictions, including withdrawal of one or more of our products or services from the market. For example, we received a warning letter from the FDA in September 2007 that addresses certain of our manufacturing procedures in our Thymoglobulin production facility in Lyon, France. The FDA has accepted our response to the warning letter and we continue to work to optimize our processes at this plant.

We may incur substantial costs as a result of litigation or other proceedings.

A third party may sue us or one of our strategic collaborators for infringing the third party's patent or other intellectual property rights. Likewise, we or one of our strategic collaborators may sue to enforce intellectual property rights or to determine the scope and validity of third party proprietary rights. If we do not prevail in this type of litigation, we or our strategic collaborators may be required to:

•: pay monetary damages;

•: stop commercial activities relating to the affected products or services;
•: obtain a license in order to continue manufacturing or marketing the affected products or services; or
•: compete in the market with a different product.

We are also currently involved in litigation matters and investigations that do not involve intellectual property claims and may be subject to additional actions in the future. For example, the federal government, state governments and private payors are investigating and have begun to file actions against numerous pharmaceutical and biotechnology companies, including Genzyme, alleging that the companies have overstated prices in order to inflate reimbursement rates. Domestic and international enforcement authorities also have instituted actions under healthcare "fraud and abuse" laws, including anti-kickback and false claims statutes. Moreover, individuals who use our products or services, including our diagnostic products and genetic testing services, sometimes bring product and professional liability claims against us or our subsidiaries.

We may also become subject to investigations by government authorities in connection with our business activities. For example, we are currently cooperating with an investigation of Bone Care (a company we acquired in July 2005) by the United States Attorney for the Eastern District of New York which was initiated in October 2004, when Bone Care received a subpoena requiring it to provide a wide range of documents related to numerous aspects of its business.

We believe some of our products are prescribed by physicians for uses not approved by the FDA or comparable regulatory agencies outside the United States. Although physicians may lawfully prescribe our products for off-label uses, any promotion by us of off-label uses would be unlawful. Some of our practices intended to make physicians aware of off-label uses of our products without engaging in off-label promotion could nonetheless be construed as off-label promotion. Although we have policies and procedures in place designed to help assure ongoing compliance with regulatory requirements regarding off-label promotion, some non-compliant actions may nonetheless occur. Regulatory authorities could take enforcement action against us if they believe we are promoting, or have promoted, our products for off-label use.

We have only limited amounts of insurance, which may not provide coverage to offset a negative judgment or a settlement payment. We may be unable to obtain additional insurance in the future, or we may be unable to do so on acceptable terms. Our insurers may dispute our claims for coverage. For example, we have submitted claims to our insurers for reimbursement of portions of the expenses incurred in connection with the litigation and settlement related to the consolidation of our tracking stock and are seeking coverage for the settlement. The insurer has purported to deny coverage. Any additional insurance we do obtain may not provide adequate coverage against any asserted claims.

Regardless of merit or eventual outcome, investigations and litigations can result in:

•: the diversion of management's time and attention;
•: the expenditure of large amounts of cash on legal fees, expenses, and payment of damages;
•: limitations on our ability to continue some of our operations;
•: decreased demand for our products and services; and
•: injury to our reputation.

Our international sales, clinical activities, manufacturing and other operations are subject to the economic, political, legal and business environments of the countries in which we do business, and our failure to operate successfully or adapt to changes in these environments could cause our international sales and operations to be limited or disrupted.

Our international operations accounted for approximately 52% of our consolidated product and service revenues for the three months ended March 31, 2008. We expect that international product and

service sales will continue to account for a significant percentage of our revenues for the foreseeable future. In addition, we have direct investments in a number of subsidiaries outside of the United States. Our international sales and operations could be limited or disrupted, and the value of our direct investments may be diminished, by any of the following:

•: economic problems that disrupt foreign healthcare payment systems;
•: the imposition of governmental controls, including foreign exchange and currency restrictions;
•: less favorable intellectual property or other applicable laws;
•: the inability to obtain any necessary foreign regulatory or pricing approvals of products in a timely manner;
•: the inability to obtain third party reimbursement support for products;
•: product counterfeiting and intellectual property piracy;
•: parallel imports;
•: anti-competitive trade practices;
•: import and export license requirements;
•: political instability;
•: terrorist activities, armed conflict, or a pandemic;
•: restrictions on direct investments by foreign entities and trade restrictions;
•: changes in tax laws and tariffs;
•: difficulties in staffing and managing international operations; and
•: longer payment cycles.

Our operations and marketing practices are also subject to regulation and scrutiny by the governments of the other countries in which we operate. In addition, the United States Foreign Corrupt Practices Act prohibits U.S. companies and their representatives from offering, promising, authorizing or making payments to foreign officials for the purpose of obtaining or retaining business abroad. Failure to comply with domestic or foreign laws could result in various adverse consequences, including possible delay in the approval or refusal to approve a product, recalls, seizures, withdrawal of an approved product from the market, and/or the imposition of civil or criminal sanctions.

Our international sales and operating expenses are subject to fluctuations in currency exchange rates.

A significant portion of our business is conducted in currencies other than our reporting currency, the U.S. dollar. We recognize foreign currency gains or losses arising from our operations in the period in which we incur those gains or losses. As a result, currency fluctuations among the U.S. dollar and the currencies in which we do business have caused foreign currency translation gains and losses in the past and will likely do so in the future. Because of the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates, we may suffer significant foreign currency translation losses in the future due to the effect of exchange rate fluctuations.

We may fail to adequately protect our proprietary technology, which would allow competitors or others to take advantage of our research and development efforts.

Our long-term success largely depends on our ability to market technologically competitive products. If we fail to obtain or maintain adequate intellectual property protection in the United States or abroad, we may not be able to prevent third parties from using our proprietary technologies. Our currently pending or future patent applications may not result in issued patents. Patent applications are confidential for 18 months following their filing, and because third parties may have filed patent applications for technology covered by our pending patent applications without us being aware of those applications, our patent applications may not have priority over patent applications of others. In addition, our issued patents may not contain claims sufficiently broad to protect us against third parties with similar technologies or products, or provide us with any competitive advantage. If a third party initiates litigation regarding our patents, our collaborators' patents, or those patents for which we have license rights, and is successful, a court could declare our patents invalid or unenforceable or limit the scope of coverage of those patents. Governmental patent offices and courts have not consistently treated the breadth of claims allowed in biotechnology patents. If patent offices or the courts begin to allow or interpret claims more broadly, the incidence and cost of patent interference proceedings and the risk of infringement litigation will likely increase. On the other hand, if patent offices or the courts begin to allow or interpret claims more narrowly, the value of our proprietary rights may be reduced. Any changes in, or unexpected interpretations of, the patent laws may adversely affect our ability to enforce our patent position.

We also rely upon trade secrets, proprietary know-how, and continuing technological innovation to remain competitive. We attempt to protect this information with security measures, including the use of confidentiality agreements with employees, consultants, and corporate collaborators. These individuals may breach these agreements and any remedies available to us may be insufficient to compensate for our damages. Furthermore, our trade secrets, know-how and other technology may otherwise become known or be independently discovered by our competitors.

Some of our products may face competition from lower cost generic or follow-on products in the future.

Some of our drug products, for example Renagel, Renvela, Clolar and Hectorol, are approved under the provisions of the United States Food, Drug and Cosmetic Act that render them susceptible to potential competition from generic manufacturers via the Abbreviated New Drug Application (ANDA) procedure. Generic manufacturers pursuing ANDA approval are not required to conduct costly and time-consuming clinical trials to establish the safety and efficacy of their products; rather, they are permitted to rely on the innovators data regarding safety and efficacy. Thus, generic manufacturers can sell their products at prices much lower than those charged by the innovative pharmaceutical companies who have incurred substantial expenses associated with the research and development of the drug product.

The ANDA procedure includes provisions allowing generic manufacturers to challenge the effectiveness of the innovator's patent protection long prior to the generic manufacturer actually commercializing their products—the so-called "Paragraph IV" certification procedure. In recent years, generic manufacturers have used Paragraph IV certifications extensively to challenge patents on a wide array of innovative pharmaceuticals, and we expect this trend to continue and to implicate drug products with even relatively small total revenues.

Other of our products, including Cerezyme, Fabrazyme, Aldurazyme, Myozyme and Campath (so-called "biotech drugs") are not currently considered susceptible to an abbreviated approval procedure, either due to current United States law or FDA practice in approving biologic products. However, the United States Congress is expected to continue to explore, and ultimately enact,

legislation that would establish a procedure for the FDA to accept ANDA-like abbreviated applications for the approval of "follow-on," "biosimilar" or "comparable" biotech drugs. Such legislation has already been adopted in the European Union.

A generic manufacturer has filed an ANDA seeking to market a generic version of Hectorol prior to the expiration dates of our patents covering the product. If this or any other manufacturer were to receive approval to sell a generic or follow-on version of one of our products, that product would become subject to increased competition and our revenues for that product would likely be impacted negatively.

We may be required to license technology from competitors or others in order to develop and commercialize some of our products and services, and it is uncertain whether these licenses would be available.

Third party patents may cover some of the products or services that we or our strategic partners are developing or producing. A patent is entitled to a presumption of validity and accordingly, we face significant hurdles in any challenge to a patent. In addition, even if we are successful in challenging the validity of a patent, the challenge itself may be expensive and require significant management attention.

To the extent valid third party patent rights cover our products or services, we or our strategic collaborators would be required to seek licenses from the holders of these patents in order to manufacture, use or sell these products and services, and payments under them would reduce our profits from these products and services. We may not be able to obtain these licenses on acceptable terms, or at all. If we fail to obtain a required license or are unable to alter the design of our technology to fall outside the scope of a third party patent, we may be unable to market some of our products and services, which would limit our profitability.

Importation of products may lower the prices we receive for our products.

In the United States and abroad, many of our products are subject to competition from lower-priced versions of our products and competing products from other countries where government price controls or other market dynamics result in lower prices for such products. Our products that require a prescription in the United States may be available to consumers in markets such as Canada, Mexico, Taiwan and the Middle East without a prescription, which may cause consumers to further seek out these products in these lower priced markets. The ability of patients and other customers to obtain these lower priced imports has grown significantly as a result of the Internet, an expansion of pharmacies in Canada and elsewhere that target American purchasers, an increase in U.S.-based businesses affiliated with Canadian pharmacies marketing to American purchasers and other factors. Most of these foreign imports are illegal under current United States law. However, the volume of imports continues to rise due to the limited enforcement resources of the FDA and the United States Customs Service, and there is increased political pressure to permit such imports as a mechanism for expanding access to lower priced medicines. The importation of lower-priced versions of our products into the United States and other markets adversely affects our profitability. This impact could become more significant in the future.

Legislative or regulatory changes may adversely impact our business.

The United States government and other governments have shown significant interest in pursuing healthcare reform. Any government-adopted reform measures could adversely impact:

•: the pricing of healthcare products in the United States or internationally; and
•: the amount of reimbursement available from governmental agencies or other third party payors.

New laws, regulations and judicial decisions, or new interpretations of existing laws, regulations and decisions, that relate to healthcare availability, methods of delivery or payment for products and services, or sales, marketing or pricing may cause our revenue to decline, and we may need to revise our research and development programs.

On September 27, 2007, the Food and Drug Administration Amendments Act of 2007 (the "FDAAA") was enacted, giving the FDA enhanced post-market authority, including the authority to require post-marketing studies and clinical trials, labeling changes based on new safety information, and compliance with risk evaluations and mitigation strategies approved by the FDA. The FDA's exercise of its new authority could result in delays or increased costs during the period of product development, clinical trials and regulatory review and approval, increased costs to assure compliance with new post-approval regulatory requirements, and potential restrictions on the sale of approved products.

If our strategic alliances are unsuccessful, our operating results will be negatively impacted.

Several of our strategic initiatives involve alliances with other biotechnology and pharmaceutical companies. The success of these arrangements is largely dependent on technology and other intellectual property contributed by our strategic partners or the resources, efforts, and skills of our partners. Disputes and difficulties in such relationships are common, often due to conflicting priorities or conflicts of interest. Merger and acquisition activity may exacerbate these conflicts. The benefits of these alliances are reduced or eliminated when strategic partners:

•: terminate the agreements or limit our access to the underlying intellectual property;
•: fail to devote financial or other resources to the alliances and thereby hinder or delay development, manufacturing or commercialization activities;
•: fail to successfully develop, manufacture or commercialize any products; or
•: fail to maintain the financial resources necessary to continue financing their portion of the development, manufacturing, or commercialization costs of their own operations.

Furthermore, payments we make under these arrangements may exacerbate fluctuations in our financial results. In addition, under some of our strategic alliances, we make milestone payments well in advance of commercialization of products with no assurance that we will ever recoup these payments. We also may make equity investments in our strategic partners, as we did with RenaMed Biologics, Inc., or RenaMed, in June 2005. Our strategic equity investments are subject to market fluctuations, access to capital and other business events, such as initial public offerings, the completion of clinical trials and regulatory approvals, which can impact the value of these investments. For example, in October 2006, RenaMed suspended clinical trials of its renal assist device which was being developed to treat patients with acute renal failure, causing us to write off our entire investment in RenaMed. If any of our other strategic equity investments decline in value and remain below cost for an extended duration, we may incur additional charges.

We may require significant additional financing, which may not be available to us on favorable terms, if at all.

As of March 31, 2008, we had $1.4 billion in cash, cash equivalents and short- and long-term investments, excluding our investments in equity securities.

We intend to use substantial portions of our available cash for:

•: product development and marketing;
•: payments related to the cash consideration due to the dissenting Bioenvision shareholders, the amount of which will be determined by the Delaware Court of Chancery;

•: business combinations and strategic business initiatives;
•: the remaining $1.2 billion approved for our ongoing stock repurchase program over approximately the next 2 years;
•: upgrading our information technology systems;
•: expanding existing and constructing new manufacturing facilities;
•: contingent payments under license and other agreements, including payments related to our license of mipomersen from Isis;
•: expanding staff; and
•: working capital and satisfaction of our obligations under capital and operating leases.

We may further reduce available cash reserves to pay principal and interest on outstanding debt, including our $690.0 million in principal of 1.25% convertible senior notes.

To satisfy our cash requirements, we may have to obtain additional financing. We may be unable to obtain any additional financing or extend any existing financing arrangements at all or on terms that we or our investors consider favorable.

Our level of indebtedness may harm our financial condition and results of operations.

As of March 31, 2008, we had $696.8 million of outstanding indebtedness, excluding capital leases. We may incur additional indebtedness in the future. Our level of indebtedness will have several important effects on our future operations, including:

•: increasing our vulnerability to adverse changes in general economic and industry conditions; and
•: limiting our ability to obtain additional financing for capital expenditures, acquisitions and general corporate and other purposes.

Our ability to make payments and interest on our indebtedness depends upon our future operating results and financial performance.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

We are exposed to potential loss from exposure to market risks represented principally by changes in foreign exchange rates, interest rates and equity prices. At March 31, 2008, we held derivative contracts in the form of foreign exchange forward contracts. We also held a number of other financial instruments, including investments in marketable securities and we had debt securities outstanding. We do not hold derivatives or other financial instruments for speculative purposes.

Equity Price Risk

We hold investments in a limited number of U.S. and European equity securities. We estimated the potential loss in fair value due to a 10% decrease in the equity prices of each marketable security held at March 31, 2008 to be $6.3 million, as compared to $6.5 million at December 31, 2007. This estimate assumes no change in foreign exchange rates from quarter-end spot rates and excludes any potential risk associated with securities that do not have a readily determinable market value.

Interest Rate Risk

We are exposed to potential loss due to changes in interest rates. Our principal interest rate exposure is to changes in U.S. interest rates. Instruments with interest rate risk include short- and long-term investments in fixed income securities. Other exposures to interest rate risk include the fair value of fixed rate convertible debt and other fixed rate debt. To estimate the potential loss due to changes in interest rates, we performed a sensitivity analysis using the instantaneous adverse change in interest rates of 100 basis points across the yield curve.

We used the following assumptions in preparing the sensitivity analysis for our convertible bonds:

•: convertible notes that are "in-the-money" at March 31, 2008 are considered equity securities and are excluded;
•: convertible notes that are "out-of-the-money" at March 31, 2008 are analyzed by taking into account both fixed income and equity components; and
•: convertible notes will mature on the first available put or call date.

On this basis, we estimate the potential loss in fair value that would result from a hypothetical 1% (100 basis points) increase in interest rates to be $3.5 million as of March 31, 2008, as compared to $3.3 million as of December 31, 2007.

Foreign Exchange Risk

As a result of our worldwide operations, we may face exposure to adverse movements in foreign currency exchange rates, primarily to the Euro, British pound and Japanese yen. Exposures to currency fluctuations that result from sales of our products in foreign markets are partially offset by the impact of currency fluctuations on our international expenses. We use forward foreign exchange contracts to further reduce our exposure to changes in exchange rates. We also hold a limited amount of foreign cash and foreign currency denominated equity securities.

As of March 31, 2008, we estimated the potential loss in fair value of our foreign currency contracts, foreign cash, and foreign equity holdings that would result from a hypothetical 10% adverse change in exchange rates to be $64.1 million, as compared to $36.2 million as of December 31, 2007. The change from the prior period is primarily due to an increase in our net foreign currency contracts.

ITEM 4. CONTROLS AND PROCEDURES

As of March 31, 2008, we evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2008.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We periodically become subject to legal proceedings and claims arising in connection with our business. Although we cannot predict the outcome of these additional proceedings and claims, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our financial position or results of operations.

ITEM 1A. RISK FACTORS

We incorporate by reference our disclosure related to risk factors which is set forth under the heading "Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and Results of Operations—Risk Factors" in Part I., Item 2. of this Quarterly Report on Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about our repurchases of our equity securities during the quarter ended March 31, 2008:

Period		Total Number of Shares Purchased		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2008-January 31, 2008		—			—		—	$	1,268,494,422
February 1, 2008-February 29, 2008		—			—		—		1,268,494,422
March 1, 2008-March 31, 2008		1,000,000		$	73.20		1,000,000		1,195,296,813

	Total	1,000,000	(1)	$	73.20	(2)	1,000,000

(1): In May 2007, our board of directors authorized a stock repurchase program to repurchase up to an aggregate maximum amount of $1.5 billion or 20,000,000 shares of our outstanding common stock over three years. During the first quarter of fiscal 2008, we repurchased 1,000,000 shares of our common stock under our stock repurchase program for $73.2 million of cash, including fees.
(2): Represents the weighted average price paid per share for stock repurchases made during the first quarter of fiscal 2008.

ITEM 6. EXHIBITS

(a): Exhibits

See the Exhibit Index following the signature page to this report on Form 10-Q.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GENZYME CORPORATION
Dated: May 9, 2008	By:	/s/ MICHAEL S. WYZGA
		Michael S. Wyzga Executive Vice President, Finance, Chief Financial Officer, and Chief Accounting Officer

GENZYME CORPORATION AND SUBSIDIARIES

FORM 10-Q, MARCH 31, 2008

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION
*3.1		Restated Articles of Organization of Genzyme, as amended. Filed as Exhibit 3.1 to Genzyme's Form 10-Q for the quarter ended June 30, 2006.
*3.2		By-laws of Genzyme, as amended. Filed as Exhibit 3.1 to Genzyme's Form 8-K filed May 25, 2007.
**10.1		Amended and Restated Collaboration Agreement, effective as of January 1, 2008, among Genzyme, BioMarin Pharmaceutical, Inc. and BioMarin/Genzyme LLC. Filed herewith.
**10.2		Manufacturing, Marketing and Sales Agreement, effective as of January 1, 2008, among Genzyme, BioMarin Pharmaceutical, Inc. and BioMarin/Genzyme LLC. Filed herewith.
10.3		Forms of Restricted Stock Unit Award Agreements for grants to executive officers under Genzyme's 2004 Equity Incentive Plan. Filed herewith.
31.1		Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
31.2		Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
32.1		Certification of the Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
32.2		Certification of the Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

*: Indicates exhibit previously filed with the SEC and incorporated herein by reference. Exhibits filed with Forms 10-K, 10-Q, 8-K, 8-A, 8-B or Schedule 14A of Genzyme Corporation were filed under Commission File No. 0-14680.
**: Confidential treatment has been requested for the redacted portions of Exhibits 10.1 and 10.2.

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GENZYME CORPORATION AND SUBSIDIARIES FORM 10-Q, MARCH 31, 2008 TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GENZYME CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations and Comprehensive Income (Unaudited, amounts in thousands, except per share amounts)
GENZYME CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited, amounts in thousands, except par value amounts)
GENZYME CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited, amounts in thousands)
GENZYME CORPORATION AND SUBSIDIARIES Notes to Unaudited, Consolidated Financial Statements

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF GENZYME CORPORATION AND SUBSIDIARIES' FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RISK FACTORS

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 6. EXHIBITS

SIGNATURES
EXHIBIT INDEX
EX-10.1 2 a2185010zex-10_1.htm EXHIBIT 10.1

Exhibit 10.1

AMENDED AND RESTATED COLLABORATION AGREEMENT

THIS AMENDED AND RESTATED COLLABORATION AGREEMENT effective as of January 1, 2008 (the “Agreement”) is made by and among Genzyme Corporation, a Massachusetts corporation having its principal place of business at 500 Kendall Street, Cambridge, Massachusetts 02142 (“Genzyme”), BioMarin Pharmaceutical, Inc., a Delaware corporation having its principal place of business at 105 Digital Drive, Novato, California 94949 (“BioMarin”) and BioMarin/Genzyme LLC, a Delaware limited liability company having its principal place of business at 500 Kendall Street, Cambridge, Massachusetts 02142 (“BioMarin/Genzyme LLC”). Genzyme, BioMarin and BioMarin/Genzyme LLC are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

A. BioMarin, Genzyme and BioMarin/Genzyme LLC are parties to a Collaboration Agreement dated as of September 4, 1998 (the “Original Collaboration Agreement”) pursuant to which BioMarin and Genzyme through BioMarin/Genzyme LLC develop, manufacture, market and sell Aldurazyme (as defined herein).

B. The Parties no longer desire to develop, manufacture, market and sell Aldurazyme through a joint venture and instead have agreed that: (1) BioMarin will manufacture Aldurazyme and sell finished product to Genzyme; (2) Genzyme will label and commercially distribute, market and sell Aldurazyme globally; (3) each of Genzyme and BioMarin may conduct its own research and development of Aldurazyme and other Collaboration Products (as defined herein) in accordance with the terms of this Agreement and the Manufacturing, Marketing and Sales Agreement (as defined herein); and (4) BioMarin/Genzyme LLC will maintain and provide intellectual property licenses and sublicenses to BioMarin and Genzyme so that they may fulfill their respective obligations under this Agreement, the Manufacturing, Marketing and Sales Agreement and the Fill Agreement (as defined herein).

C. BioMarin and Genzyme are hereby amending and restating the Original Collaboration Agreement so that hereafter BioMarin/Genzyme LLC will no longer engage in commercial activities and will solely (1) hold the intellectual property relating to Aldurazyme and license all such intellectual property on the terms set forth herein to BioMarin and Genzyme on the terms set forth herein and (2) engage in research and development activities that are mutually selected and funded by BioMarin and Genzyme.

NOW THEREFORE, in consideration of the premises and of the covenants herein contained, the Parties mutually agree as follows:

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

ARTICLE I

DEFINITIONS

For purposes of this Agreement, the terms defined in this Article shall have the meanings specified below. Certain other capitalized terms are defined elsewhere in this Agreement.

1.1 “Affiliate” shall mean any corporation or other entity which controls, is controlled by, or is under common control with a Party. A corporation or other entity shall be regarded as in control of another corporation or entity if it owns or directly or indirectly controls more than fifty percent (50%) of the voting stock or other ownership interest of the other corporation or entity, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other entity.

1.2 “Aldurazyme” shall mean alpha-L-iduronidase meeting the Specifications.

1.3 “alpha-L-iduronidase” shall mean recombinant human alpha-L-iduronidase.

1.4 “BioMarin Companies” shall mean BioMarin and BioMarin Genetics, Inc., a Delaware corporation and a wholly-owned subsidiary of BioMarin (“BioMarin Genetics”).

1.5 “BioMarin/Genzyme Patent Rights” shall mean the Patent Rights that claim Joint Inventions (as such term is defined in Section 9.1.1 hereof) that are discovered, made or conceived during and in connection with the Program jointly by employees or consultants of Genzyme and BioMarin to the extent that such Patent Rights relate to or are useful for the research, development, manufacture or commercialization of Collaboration Products for use in the Field.

1.6 “BioMarin/Genzyme Technology” shall mean all Technology discovered, made or conceived during and in connection with the Program jointly by employees or consultants of Genzyme and BioMarin relating to or useful for the research, development, manufacture or commercialization of Collaboration Products for use in the Field.

1.7 “BioMarin Patent Rights” shall mean all Patent Rights Controlled by BioMarin during the Term to the extent that such Patent Rights relate to or are useful for the research, development, manufacture or commercialization of Collaboration Products for use in the Field.

1.8 “BioMarin Technology” shall mean all Technology Controlled by BioMarin during the Term to the extent that such Technology relates to or is useful for the research, development, manufacture or commercialization of Collaboration Products for use in the Field.

1.9 “BLA” shall mean a Biologics License Application or similar application filed with the FDA after completion of human clinical trials to obtain marketing approval for a Collaboration Product, including without limitation the BLA as approved by the FDA on April 30, 2003 that

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

provides for marketing approval for Aldurazyme in the United States, as the same may be updated or amended from time to time.

1.10 “Collaboration Product” shall mean any pharmaceutical compositions of alpha-L-iduronidase (including Aldurazyme unless otherwise indicated herein), including without limitation any and all improvements, derivatives, analogs, combination products, delivery systems and dosage forms related thereto.

1.11 “Commercialization Costs” with respect to a Collaboration Product shall mean the variable costs and fixed costs incurred by BioMarin/Genzyme LLC with respect to work performed by the Parties and their Affiliates and subcontractors in connection with the performance of and in accordance with the commercialization plan for such Collaboration Product, including without limitation, sales and marketing costs related to performing market research, advertising, producing promotional literature, sponsoring seminars and symposia, sales training meetings and seminars, originating sales, providing reimbursement and other patient support services. For purposes of this Section 1.11, “variable costs” shall be deemed to be the cost of labor, raw materials, supplies and other resources directly consumed in the conduct of the Commercialization Plan and manufacture of Collaboration Product for use in commercialization activities, as well as amounts paid to Third Parties under a Third Party Agreement as a result of performance of the Commercialization Plan, to the extent not included in Development Costs or Fully Absorbed Cost of Goods. For purposes of this Section 1.11, “fixed costs” shall be deemed to be the cost of facilities, utilities, insurance, equipment depreciation and other fixed costs directly related to the conduct of and in accordance with the Commercialization Plan and the manufacture of Collaboration Product for use in commercialization activities, allocated based upon the proportion of such costs directly attributable to support or performance of the Commercialization Plan and the manufacture of Collaboration Product for use in commercialization activities or by such other method of cost allocation as may be approved by the Steering Committee. All cost determinations made hereunder shall be made in accordance with GAAP.

1.12 “Commercialization Party” shall have the meaning set forth in Section 7.1 below.

1.13 “Control” shall mean possession of the ability to grant a license or sublicense as provided for herein without violating the terms of an agreement with a Third Party.

1.14 “Development Costs” with respect to a Collaboration Product shall mean the variable costs and fixed costs incurred by BioMarin/Genzyme LLC with respect to work performed by the Parties and their Affiliates and subcontractors in connection with the conduct of and in accordance with the Development Plan for such Collaboration Product, including without limitation (a) direct, out-of-pocket external costs, including clinical grants, clinical laboratory fees, positive controls and the cost of studies conducted and services provided by contract research organizations and individuals, consultants, toxicology contractors, and manufacturers necessary or useful for the purpose of obtaining Regulatory Approvals for such Collaboration Product, (b) amounts paid to Genzyme and BioMarin by BioMarin/Genzyme LLC with respect to research and development and pre-commercialization sales and marketing efforts as set forth in the Development Plan for such

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Collaboration Product, including without limitation the efforts of Genzyme and BioMarin to develop and document process methods and procedures for the manufacture of such Collaboration Product and the Fully Absorbed Cost of Goods for batches of such Collaboration Product manufactured and supplied for use in preclinical and clinical trials and pre-commercialization activities, (c) costs related to data management, statistical designs and studies, document preparation and other expenses associated with the clinical testing program for such Collaboration Product, (d) costs for preparing, submitting, reviewing or developing data or information for the purpose of submission of applications to obtain Regulatory Approvals for such Collaboration Product, (e) license fees and other amounts paid to a Third Party pursuant to any Third Party Agreement other than those fees and other amounts payable with respect to Aldurazyme under the Third Party Agreements in effect as of the Effective Date, and (f) costs relating to the prosecution and maintenance of Patent Rights which claim, or disclose subject matter relevant to, the manufacture or use of such Collaboration Product. For purposes of this Section 1.14, “variable costs” shall be deemed to be the cost of labor, raw materials, supplies and other resources directly consumed in the conduct of and in accordance with the Development Program and the manufacture of the Collaboration Product for use in preclinical and clinical trials and pre-commercialization activities. For purposes of this Section 1.14, “fixed costs” shall be deemed to be the cost of facilities, utilities, insurance, facility and equipment depreciation and other fixed costs directly related to the conduct of the Development Program and the manufacture of the Collaboration Product for use in preclinical and clinical trials and pre-commercialization activities, allocated based upon the proportion of such costs directly attributable to the support or performance of the Development Program and the manufacture of the Collaboration Product for use in preclinical and clinical trials and pre-commercialization activities or by such other method of cost allocation as may be approved by the Steering Committee. All cost determinations made hereunder shall be made in accordance with GAAP.

1.15 “Development Plan” shall mean, with respect to a particular Collaboration Product, the comprehensive three (3) year rolling plan and budget for the development of such Collaboration Product under the Development Program, as more specifically described in Section 5.1.2 hereof.

1.16 “Development Program” shall mean, with respect to a particular Collaboration Product, the preclinical and clinical development of such Collaboration Product including post-marketing studies and the preparation and filing of all applications for Regulatory Approvals for such Collaboration Product, all as determined by the Steering Committee or as otherwise set forth herein.

1.17 “Effective Date” shall mean January 1, 2008.

1.18 “Field” shall mean any and all therapeutic applications of alpha-L-iduronidase for MPS I and other alpha-L-iduronidase deficiencies. Notwithstanding the foregoing, the Field shall not include Gene Therapy for MPS I or other alpha-L-iduronidase deficiencies. For purposes of this Agreement, “Gene Therapy” shall mean treatment or prevention of MPS I or other alpha-L-iduronidase deficiencies by means of ex vivo or in vivo introduction (via viral or nonviral gene transfer systems) of nucleotide sequences (including without limitation, DNA, RNA and complementary and reverse complementary nucleotide sequences thereto, whether coding or noncoding).

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

1.19 “FDA” shall mean the United States Food and Drug Administration, any successor agency, or the regulatory authority of any country other than the United States with responsibilities comparable to those of the United States Food and Drug Administration.

1.20 “Fully Absorbed Cost of Goods” with respect to units of Collaboration Product shall mean (a) the variable costs and fixed costs incurred by a Party associated with the manufacture (inclusive of finishing processes including filling, packaging, labeling and/or other preparation) quality assurance, quality control and other testing, storage and shipping of batches of such units of Collaboration Product or (b) if such units or portions of Collaboration Product are not manufactured by the Parties, the amounts paid to the vendor plus costs associated with acquisition from such vendor. For purposes of this Section 1.20, “variable costs” shall be deemed to be the cost of labor, raw materials, supplies and other resources directly consumed in the manufacture, quality assurance, quality control and other testing, storage and shipping of batches of such Collaboration Product. For purposes of this Section 1.20, “fixed costs” shall be deemed to be the cost of facilities, utilities, insurance, facility and equipment depreciation and other fixed costs directly related to the manufacture, quality assurance, quality control and other testing, storage and shipping of batches of such Collaboration Product, as well as amounts paid to Third Parties under a Third Party Agreement as a result of the manufacture, use or sale of such units of Collaboration Products. Fixed costs shall be allocated to such units of Collaboration Product based upon the proportion of such costs directly attributable to support of the manufacturing, quality assurance, quality control and other testing, storage and shipping processes for such Collaboration Product. If a facility is used to manufacture Collaboration Products and has the capacity to manufacture products for other programs of either Genzyme or BioMarin, fixed costs shall be allocated in proportion to the actual use of such facility for the manufacture of Collaboration Products and the capacity to manufacture products for such other programs. For the avoidance of doubt, no idle capacity of a manufacturing facility shall be included in Fully Absorbed Cost of Goods unless such facility is appropriately sized and dedicated solely to the manufacture of Collaboration Products. Fully Absorbed Cost of Goods shall exclude all costs otherwise reimbursed pursuant to this Agreement. In the event that either BioMarin or Genzyme subcontracts with the other Party to perform any work on its behalf in connection with the manufacturing responsibilities assigned to BioMarin or Genzyme, respectively, pursuant to Section 7.1.1 hereof, BioMarin and Genzyme (i) shall each directly charge BioMarin/Genzyme LLC their respective Fully Absorbed Cost of Goods and (ii) shall not include any part of the other Party’s Fully Absorbed Cost of Goods in the amount so charged to BioMarin/Genzyme LLC. Except as otherwise provided in this Agreement, all cost determinations made hereunder shall be made in accordance with GAAP.

1.21 “GAAP” shall mean the then-current United States generally accepted accounting principles, consistently applied, except when different accounting principles are required under the terms of the Operating Agreement, in which case the accounting principles mandated under the Operating Agreement shall control.

1.22 “Genzyme Patent Rights” shall mean all Patent Rights Controlled by Genzyme during the Term to the extent that such Patent Rights relate to or are useful for the research, development, manufacture or commercialization of Collaboration Products for use in the Field.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

1.23 “Genzyme Technology” shall mean all Technology Controlled by Genzyme during the Term to the extent such Technology relates to or is useful for the research, development manufacture or commercialization of Collaboration Products for use in the Field.

1.24 “Manufacturing Party” shall have the meaning set forth in Section 7.1.1.

1.25 “Manufacturing Know-How” shall mean all information, techniques, inventions, discoveries, improvements, practices, methods, knowledge, skill, experience and other technology, whether or not patentable or copyrightable, and any copyrights based thereon, relating to or necessary or useful for the production, purification, packaging, storage and transportation of Collaboration Products, including without limitation specifications, acceptance criteria, manufacturing batch records, standard operating procedures, engineering plans, installation, operation and process qualification protocols for equipment, validation records, master files submitted to the FDA, process validation reports, environmental monitoring processes, test data including pharmacological, toxicological and clinical test data, cost data and employee training materials.

1.26 “Manufacturing, Marketing and Sales Agreement” shall mean the Manufacturing, Marketing and Sales Agreement of even date herewith by and among the Parties.

1.27 “Member” shall have the meaning set forth in the Operating Agreement.

1.28 “Members Agreement” shall have the meaning set forth in the recitals.

1.29 “MPS-I” shall mean mucopolysaccharidosis I.

1.30 “Operating Agreement” shall mean the Operating Agreement of BioMarin/Genzyme LLC dated as of September 4, 1998 by and among the BioMarin Companies and Genzyme.

1.31 “Original Date of Execution” shall mean September 4, 1998.

1.32 “Patent Rights” shall mean any U.S. and foreign patents and patent applications (including continuations, continuations-in-part, divisionals, reissues, re-examinations, renewals, supplemental protection certificates and extensions).

1.33 “Percentage Interest” shall have the meaning set forth in the Operating Agreement.

1.34 “Program” shall mean the collaboration among BioMarin/Genzyme LLC, BioMarin and Genzyme described in this Agreement.

1.35 “Program Costs” shall mean all Program-related costs, including without limitation Development Costs and Commercialization Costs, in each case as such costs are incurred or accrued by BioMarin/Genzyme LLC on or after the Original Date of Execution. Notwithstanding anything herein to the contrary, it is understood that the Parties shall apply mutually agreed upon cost allocation methods in determining Program Costs hereunder. It is understood and agreed that, with respect to Aldurazyme, “Program Costs” shall be limited to Program Costs incurred (i) on or prior to

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

December 31, 2007 or (ii) solely pursuant to development activities identified in the Development Plan attached hereto as Appendix A and other development activities added pursuant to Section 5.1.4 hereof or agreed to by the Steering Committee on or after the Effective Date, and shall exclude (x) all Commercialization Costs incurred on or after January 1, 2008, (y) all Fully Absorbed Costs incurred on or after January 1, 2008 except with respect to quantities of Collaboration Products required for the activities described in clause (ii) above and (z) all other costs that are allocated between the Parties under the Manufacturing, Marketing and Sales Agreement or the Fill Agreement of even date herewith by and between BioMarin and Genzyme (the “Fill Agreement”). The Parties shall maintain separate records for Program Costs incurred on or prior to December 31, 2007 and for Program Costs incurred on or after the Effective Date.

1.36 “Program Management Team” shall mean the joint team composed of representatives of Genzyme and BioMarin described in Section 8.1.1 hereof.

1.37 “Regulatory Approvals” shall mean all approvals from regulatory authorities in any country in the Territory required lawfully to manufacture and market Collaboration Products in any such country, including without limitation approval of any BLA, any establishment license application filed with the FDA to obtain approval of the facilities and equipment to be used to manufacture a Collaboration Product, and any product pricing approvals where applicable.

1.38 “Regulatory Scheme” shall mean the United States Public Health Service Act and the regulations, interpretations and guidelines promulgated thereunder by the FDA or the regulatory scheme applicable to the Collaboration Products in any country other than the United States, as such statutes, regulations, interpretations and guidelines or regulatory schemes may be amended from time to time.

1.39 “Related Agreements” shall mean the Manufacturing, Marketing and Sales Agreement, the Members Agreement, the Fill/Finish Manufacturing Agreement and the Operating Agreement.

1.40 “Specifications” with respect to a particular Collaboration Product (other than Aldurazyme) shall mean the written specifications for such Collaboration Product determined by the Program Management Team and approved by the Steering Committee; provided that such specifications shall at all times comply with the relevant Regulatory Scheme in the country of sale and in the country of use. Such Specifications may be amended from time to time by the Program Management Team provided that such amendments are approved by the Steering Committee or the written agreement of the Parties, as the case may be. Copies of the then-current Specifications shall be maintained by both BioMarin and Genzyme and shall become a part of this Agreement as if incorporated herein. The term “Specifications” with respect to Aldurazyme shall have the meaning set forth in the Manufacturing, Marketing and Sales Agreement.

1.41 “Steering Committee” shall mean the governing body of BioMarin/Genzyme LLC composed of representatives of BioMarin and Genzyme appointed as described in Section 8.2.1 hereof.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

1.42 “Technology” shall mean inventions, trade secrets, copyrights, know-how, data and other intellectual property of any kind (including without limitation any proprietary biological or other materials, compounds or reagents, but not including Patent Rights).

1.43 “Term” shall mean the period commencing on September 4, 1998 and ending with the effective date of any termination of this Agreement pursuant to Article 13 hereof.

1.44 “Territory” shall mean the world.

1.45 “Third Party” shall mean any entity other than BioMarin/Genzyme LLC, BioMarin or Genzyme and their respective Affiliates.

1.46 “Third Party Agreements” shall mean collectively those Third Party agreements listed on Schedule 1.47 hereto or such other Third Party agreements pursuant to which a Party obtains rights applicable to the development, manufacture, sale or use of Collaboration Products hereunder. If after the Effective Date any of BioMarin, Genzyme and/or BioMarin/Genzyme LLC enter into an agreement to license or acquire rights from a Third Party with respect to subject matter to be utilized in connection with Collaboration Products in accordance with Section 3.1.4 below, such agreements shall also be included in the definition of Third Party Agreements for purposes of this Agreement.

ARTICLE II

SCOPE AND STRUCTURE OF THE COLLABORATION

2.1 General. BioMarin/Genzyme LLC will undertake the Development Program, with each of the Parties assuming responsibility for those portions of the Development Program allocated to it under this Agreement in accordance with the Development Plan then in effect. Upon receipt of Regulatory Approval in any country within the Territory, the Manufacturing Party or Parties will manufacture the Collaboration Products and the Commercialization Party will distribute, market and sell the Collaboration Products in such country all on the terms and conditions set forth in the Manufacturing, Marketing and Sales Agreement and such other terms and conditions as the Parties may agree upon. All services provided by or on behalf of BioMarin, Genzyme or their respective Affiliates for BioMarin/Genzyme LLC in connection with the Program shall be provided at cost. For avoidance of doubt, “cost” for services provided by a Third Party on behalf of BioMarin, Genzyme or their respective Affiliates for BioMarin/Genzyme LLC in connection with the Program shall be the amount paid for such services plus costs associated with the acquisition, including quality control, of such services from such Third Party.

2.2 Exclusive Relationship. Except as otherwise expressly provided herein or in any Related Agreement, during the Term, neither BioMarin/Genzyme LLC, Genzyme nor BioMarin, nor any of their respective Affiliates shall independently, or with or through a Third Party, conduct research or development activities regarding, or engage in the manufacture, marketing, sale or distribution of,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Collaboration Products in the Field and in the Territory other than as part of the Program. In addition, during the two-year period following termination of this Agreement, neither (a) the breaching Party and its Affiliates in the case of termination pursuant to Section 12.2.1 of the Manufacturing, Marketing and Sales Agreement, (b) (c) the terminating Party and its Affiliates in the case of termination pursuant to Section 12.2.2 of the Manufacturing, Marketing and Sales Agreement or (d) the non-terminating Party and its Affiliates in the case of termination pursuant to Sections 12.2.3 or 12.2.4 of the Manufacturing, Marketing and Sales Agreement shall independently, or with or through a Third Party, conduct research regarding, or engage in the manufacture, marketing, sale or distribution of, Collaboration Products in the Field and in the Territory; provided, however, that in the event that this Agreement is terminated pursuant to Section 12.2.2 of the Manufacturing, Marketing and Sales Agreement and the non-terminating Party does not exercise its option under Section 12.3.2(a) thereof, then the restrictions set forth in this sentence shall not apply. Notwithstanding the foregoing, except as provided in Section 3.1.5 nothing herein is intended to restrict BioMarin, Genzyme or their respective Affiliates from conducting research or development activities regarding, or engaging in the manufacture, marketing, sale or distribution of Gene Therapy products targeted to MPS I and other alpha-L-iduronidase deficiencies.

ARTICLE III

GRANTS AND RESERVATIONS OF RIGHTS

3.1 Licenses of Rights to BioMarin/Genzyme LLC.

3.1.1 Grants from BioMarin. Except as otherwise expressly provided herein, BioMarin hereby grants to BioMarin/Genzyme LLC a worldwide, exclusive, royalty-free right and license during the term of this Agreement under the BioMarin Patent Rights, BioMarin Technology, BioMarin/Genzyme Patent Rights and the BioMarin/Genzyme Technology and Manufacturing Know-How Controlled by BioMarin to develop, make, have made, use, offer for sale, sell, have sold, import and export Collaboration Products for use in the Field and in the Territory.

3.1.2 Grants from Genzyme. Except as otherwise expressly provided herein, Genzyme hereby grants to BioMarin/Genzyme LLC a worldwide, exclusive, royalty-free right and license during the term of this Agreement under the Genzyme Patent Rights, Genzyme Technology, BioMarin/Genzyme Patent Rights and the BioMarin/Genzyme Technology and Manufacturing Know-How Controlled by Genzyme to develop, make, have made, use, offer for sale, sell, have sold, import and export Collaboration Products for use in the Field and in the Territory.

3.1.3 BioMarin/Genzyme LLC Undertakings; Sublicenses. In consideration of the licenses granted under this Section 3.1, except as provided herein, BioMarin/Genzyme LLC hereby undertakes to pay all royalties, sublicense fees and other costs or expenses payable to Third Parties under a Third Party Agreement associated with the acquisition or exercise of such licenses by or on behalf of BioMarin/Genzyme LLC for use in connection with the Program. The licenses granted or

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

to be granted under Sections 3.1.1 and 3.1.2 above shall include the right to grant and further authorize sublicenses within the scope of such licenses; provided, however, all sublicenses granted by BioMarin/Genzyme LLC (other than those provided in Section 3.2.1 below) shall be subject to prior approval by the Steering Committee. Notwithstanding anything to the contrary herein, pursuant to the Manufacturing, Marketing and Sales Agreement, Genzyme shall be solely responsible for all royalties payable to Third Parties under Third Party Agreements that are payable based on the commercialization of Aldurazyme.

3.1.4 Rights of BioMarin/Genzyme LLC to Patent Rights or Technology Developed Outside the Program. In the event that either BioMarin or Genzyme develops, acquires or otherwise Controls Patent Rights, Technology or Manufacturing Know-How after the Original Date of Execution other than in connection with the Program and such Patent Rights, Technology or Manufacturing Know-How are useful in the Field (“Additional Technology”), the Party Controlling such Additional Technology hereby grants to BioMarin/Genzyme LLC an option exercisable at the discretion of the Steering Committee to obtain an exclusive, irrevocable (during the Term) right and license, with the right to grant sublicenses, to such Additional Technology limited to use in the Field and in the Territory to the extent necessary or appropriate to enable BioMarin/Genzyme LLC to develop, make, have made, use, offer for sale, sell, have sold, import and export Collaboration Products, in each case subject only to BioMarin/Genzyme LLC’s undertaking to pay (a) a commercially reasonable portion of all costs incurred by BioMarin or Genzyme, as the case may be, to acquire or develop such Additional Technology, (b) a commercially reasonable portion of any and all development costs relating to the Additional Technology incurred by BioMarin or Genzyme, as the case may be, since the date such Party acquired or developed such Additional Technology and (c) a pro rata share of all royalties, sublicense fees and other costs or expenses payable to Third Parties under a Third Party Agreement associated with the acquisition or exercise of such license by or on behalf of BioMarin/Genzyme LLC, allocated based upon the proportion of such costs attributable to the acquisition or use of such Additional Technology by BioMarin/Genzyme LLC; provided, however, that if BioMarin or Genzyme, as the case may be, has more limited rights to such Additional Technology that those described above, the license subject to BioMarin/Genzyme LLC’s option hereunder shall be consistent with the rights held by BioMarin or Genzyme, as the case may be, with respect to such Additional Technology. Subject to BioMarin/Genzyme LLC agreeing to pay the appropriate amounts due to a Third Party under an agreement with a Party as a result of the acquisition of Additional Technology and/or exercise of the rights therein by or on behalf of BioMarin/Genzyme LLC, the same shall be a “Third Party Agreement” for purposes of this Agreement.

3.1.5 External Products. If at any time during the Term either Genzyme, BioMarin or their respective Affiliates intends to collaborate with a Third Party regarding the development and/or commercialization of a Gene Therapy product for the treatment or prevention of MPS I or other alpha-L-iduronidase deficiencies (an “External Product”), such Party (the “Proposing Party”) shall provide written notice of its intent to the Steering Committee. The Proposing Party and the Steering Committee shall negotiate in good faith the terms and conditions upon which the Proposing Party and BioMarin/Genzyme LLC would be willing to collaborate for such purposes. If the Proposing Party and the Steering Committee are unable to agree upon such terms and conditions

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

within sixty (60) days after receipt by the Steering Committee of the Proposing Party’s notice, the Proposing Party shall have the right to develop or commercialize such External Product with a Third Party.

3.2 Sublicenses of Rights from BioMarin/Genzyme LLC to BioMarin and Genzyme.

3.2.1 General. BioMarin/Genzyme LLC hereby grants to each of BioMarin and Genzyme a worldwide, non-exclusive, royalty-free right and sublicense during the Term under the Patent Rights, Technology and Manufacturing Know-How licenses granted to BioMarin/Genzyme LLC pursuant to Section 3.1 or under the Third Party Agreements solely to the extent required to permit such Party to perform its duties and obligations and exercise its rights under this Agreement and any Related Agreement. BioMarin/Genzyme LLC also hereby agrees to grant to each of BioMarin and Genzyme a worldwide, non-exclusive, royalty-free right and license during the Term under any Additional Technology as to which BioMarin/Genzyme LLC obtains a license pursuant to Section 3.1.4 above solely to the extent required to permit such Party to perform its duties and obligations and exercise its rights under this Agreement and any Related Agreement. BioMarin/Genzyme LLC also hereby grants a worldwide, non-exclusive, royalty-free right and license during the Term to use any and all present and future trademarks Controlled by BioMarin/Genzyme LLC (i) to Genzyme in connection with the commercialization of Aldurazyme in the Territory to the extent required to permit Genzyme to perform its duties and obligations and exercise its rights under this Agreement and any Related Agreement with respect to Aldurazyme and (ii) the Commercialization Party in connection with the commercialization of any other Collaboration Product to the extent required to permit such Commercialization Party to perform its duties and obligations and exercise its rights under this Agreement and any Related Agreement with respect to such Collaboration Product, in each case such licenses are subject to the quality-related requirements for Collaboration Products set forth in this Agreement and the Related Agreements.

3.2.2 Further Sublicenses. The foregoing licenses granted to Genzyme and BioMarin, respectively, shall include the right to grant and further authorize sublicenses to Third Parties within the scope of such licenses.

3.3 Reservation of Rights.

3.3.1 Reservation by BioMarin. Notwithstanding the license grants set forth in Section 3.1 but subject to the terms and conditions set forth in this Agreement and the Manufacturing, Marketing and Sales Agreement, BioMarin at all times reserves the rights under the BioMarin Patent Rights, the BioMarin Technology, the BioMarin/Genzyme Patent Rights, the BioMarin/Genzyme Technology and the Manufacturing Know-How Controlled by BioMarin (a) to make, have made and use Collaboration Products for research and development purposes only; (b) to develop, make, have made, use, offer for sale, sell, have sold, import and export (i) products outside the Field and (ii) products other than a Collaboration Product; and (c) to grant licenses to Third Parties for the foregoing purposes.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

3.3.2 Reservation by Genzyme. Notwithstanding the license grants set forth in Section 3.1 but subject to the terms and conditions set forth in this Agreement and the Manufacturing, Marketing and Sales Agreement, Genzyme at all times reserves the rights under the Genzyme Patent Rights, the Genzyme Technology, the BioMarin/Genzyme Patent Rights, the BioMarin/Genzyme Technology and Manufacturing Know-How Controlled by Genzyme (a) to make, have made and use Collaboration Products for research and development purposes only; (b) to develop, make, have made, use, offer for sale, sell, have sold, import and export (i) products outside the Field and/or outside the Territory and (ii) products other than a Collaboration Product; and (c) to grant licenses to Third Parties for the foregoing purposes.

3.4 Assignment of Orphan Drug Designation. Except to the extent prohibited by the applicable Regulatory Scheme, BioMarin hereby assigns and BioMarin and Genzyme each hereby agree to assign to BioMarin/Genzyme LLC any “Orphan Drug” (or similar designation outside the United States) for any Collaboration Product which BioMarin has received or which BioMarin or Genzyme may receive during the Term in the Territory.

3.5 Third Party Agreements. Each Party shall exercise their rights under the Third Party Agreements in a manner that is as consistent as possible with the terms of this Agreement and the Related Agreements in consultation with and as reasonably requested by the other Parties. Without the prior written consent of the other Parties (which consent shall not be unreasonably withheld, delayed or conditioned), none of the Parties shall voluntarily (i) amend or modify, or consent to any action that may be taken under, any Third Party Agreement, the effect of which would change any financial terms or conditions thereunder or materially adversely affect the Parties’ rights under this Agreement or any Related Agreement, (ii) take or consent to any action taken with respect to any Patent Rights, Technology or Manufacturing Know-How licensed under the Third Party Agreement, the effect of which would materially adversely affect the Party’s rights under this Agreement or any Related Agreement, or (iii) terminate or engage in any act or omission that constitutes or would constitute, with or without the giving of notice or the passage of time, an event that would permit the licensor under the Third Party Agreements to terminate the Third Party Agreements. Each Party shall immediately notify the other Parties of any such event or of the receipt any notice of breach or termination of any Third Party Agreement. The Party who is a party to a Third Party Agreement shall take all reasonable actions necessary, or permit such actions to be taken in its name by the other Parties, to maintain and enforce the Parties’ rights under such Third Party Agreement in a manner consistent with the terms of this Agreement and the Related Agreement.

ARTICLE IV

PROGRAM FUNDING

4.1 Program Funding Commitments. Genzyme hereby undertakes to make capital contributions to BioMarin/Genzyme LLC in an amount equal to fifty percent (50%) of all Program Costs and BioMarin, on behalf of the BioMarin Companies, hereby undertakes to make capital

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

contributions to BioMarin/Genzyme LLC in an aggregate amount equal to fifty percent (50%) of all Program Costs. In the event that either BioMarin, on behalf of the BioMarin Companies, or Genzyme fails to make a capital contribution pursuant to this Section 4.1 and Section 4.2 below, and the other Party does not elect to terminate the Development Program pursuant to Article 13 hereof, then the Percentage Interests in BioMarin/Genzyme LLC and the future funding responsibility of the Members shall be adjusted as provided in Section 4.1(b) of the Operating Agreement.

4.2 Program Funding Capital Contributions.

4.2.1 Quarterly Capital Contributions. Genzyme and BioMarin, on behalf of the BioMarin Companies, shall each make capital contributions to BioMarin/Genzyme LLC, quarterly in advance, not later than the fifteenth (15th) day prior to the end of the prior calendar quarter, in an aggregate amount equal to the Program Costs budgeted to be incurred by BioMarin/Genzyme LLC in the then-current Development Plan for such calendar quarter, allocated between such Parties in accordance with the funding responsibility assumed by Genzyme and BioMarin, on behalf of the BioMarin Companies, pursuant to Section 4.1 above. Upon receipt of each such capital contribution from Genzyme or BioMarin, as the case may be, BioMarin/Genzyme LLC shall promptly pay each of the Parties an amount equal to that portion of the budgeted Program Costs to which they are respectively entitled in accordance with this Agreement.

4.2.2 Monthly Statements; Quarterly Reconciliation. As soon as practicable, but in any event prior to the tenth (10th) business day after the end of each calendar month, each of BioMarin and Genzyme shall provide BioMarin/Genzyme LLC with a detailed itemization of Program Costs actually incurred by such Party during the previous month. Within thirty (30) days following receipt of the third monthly statement for each calendar quarter of actual Program Costs provided by each of BioMarin and Genzyme, BioMarin, on behalf of the BioMarin Companies, and Genzyme shall each make an additional capital contribution to BioMarin/Genzyme LLC in the amount of any actual Program Costs shown on the three (3) monthly statements for such calendar quarter, taken in the aggregate, and not yet paid for which such Party has assumed funding responsibility pursuant to Section 4.1 above but only to the extent that such amount, together with all prior capital contributions to date during such year, does not exceed [**] of the total Program Costs budgeted year-to-date through the end of the quarter to which such statement relates (except to the extent such excess is approved by the Steering Committee pursuant to Section 5.1.3 hereof). If the aggregate amount stated to be due from BioMarin/Genzyme LLC based on such quarterly reconciliation for actual Program Costs is less than the amount already contributed by the Parties to the capital of BioMarin/Genzyme LLC with respect to budgeted Program Costs for such calendar quarter, such excess shall be credited against the next successive quarterly capital contribution(s) due from Genzyme or BioMarin hereunder.

4.3 Distributions. Distributions to each Member shall be made at such times and in such amounts as determined in accordance with the Operating Agreement.

4.4 Books of Account; Audit. Genzyme shall keep and maintain proper and complete books of account, and shall maintain a bank account, on behalf of BioMarin/Genzyme LLC. In the event

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

that either BioMarin or Genzyme reasonably deems the Program to be material to BioMarin or Genzyme, as the case may be, for financial accounting purposes, then, upon such Party’s request, audited financial statements of BioMarin/Genzyme LLC shall be prepared by an independent accounting firm to be selected by the Steering Committee. Each of BioMarin and Genzyme shall keep and maintain proper and complete records and books of account documenting all Program Costs incurred by such Party. Each of BioMarin/Genzyme LLC, BioMarin and Genzyme shall permit independent accountants retained by BioMarin or Genzyme (the “Auditing Party”) to have access to its records and books for the sole purpose of determining the appropriateness of Program Costs charged by or accrued to the Party being audited hereunder. Such examination shall be conducted during regular business hours and upon reasonable notice, at the Auditing Party’s own expense and no more than once in each calendar year during the Term and once during the three (3) calendar years following the expiration or termination hereof. If such examination reveals that such Program Costs have been misstated, any adjustment shall be promptly refunded or paid, as appropriate. The Auditing Party shall pay the fees and expenses of the accountant engaged to perform the audit, unless such audit reveals an overcharge or accrual of [**] or more for the period examined, in which case the Party who received such overpayment shall pay all reasonable costs and expenses incurred by the Auditing Party in the course of making such determination, including the fees and expenses of the accountant along with interest at the rate set forth in Section 14.4.

4.5 Enforceability of Sections 4.1 and 4.2. The agreements regarding capital contributions set forth in Sections 4.1 and 4.2 hereof are by and between, and for the benefit of, Genzyme and BioMarin only, and are not enforceable by BioMarin/Genzyme LLC or any Third Party.

4.6 General and Administrative Services. Except as provided in this Section 4.6, each of BioMarin and Genzyme shall continue to provide general and administrative services to BioMarin/Genzyme LLC after the Effective Date (in substantially the same manner and to the same extent as such Party has provided such general and administrative services to BioMarin/Genzyme LLC prior to the Effective Date) at no cost to BioMarin/Genzyme LLC. To the extent that there are any Third Party costs (such as legal or accounting costs or insurance premiums), all such costs shall be paid for [**].

ARTICLE V

THE DEVELOPMENT PROGRAM

5.1 Conduct of the Development Program.

5.1.1 General. The Parties agree to use commercially reasonable and diligent efforts to execute and substantially perform and to cooperate with each other in carrying out the Development Plan for each Collaboration Product. Neither BioMarin nor Genzyme shall be required to undertake activities in furtherance of the Development Plan in the absence of funding from BioMarin/Genzyme LLC pursuant to the provisions of this Agreement. As used in this Agreement,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

the phrase “commercially reasonable and diligent efforts” will mean that level of effort which, consistent with the exercise of prudent scientific and business judgment, is applied by the Party in question to its other therapeutic products at a similar stage of development and with similar commercial potential.

5.1.2 Development Plan. The Development Program shall be conducted by the Parties for BioMarin/Genzyme LLC in accordance with the then-current Development Plan which shall describe the proposed overall program of development for each Collaboration Product, including preclinical studies, toxicology, formulation, manufacturing, clinical trials and regulatory plans and other key elements. Pursuant to the Development Plan, development work may be subcontracted to Genzyme and BioMarin or their respective Affiliates, at fully absorbed costs determined by GAAP. The respective charges to BioMarin/Genzyme LLC for Development Costs incurred by a Party shall be invoiced following completion of the work, and shall be payable by BioMarin/Genzyme LLC within a commercially reasonable time thereafter (but in no event later than forty-five (45) days of the date of invoice therefor). The Development Plan shall include (i) a summary of estimated Development Costs expected to be incurred by each Party hereunder in performing activities of the Development Program assigned to such Party pursuant to Section 5.1.4 below and (ii) a summary budget for all development projects proposed for the applicable period and for each Collaboration Product.

5.1.3 Initial and Updated Development Plan. The Parties have agreed to an initial three (3) year development plan and budget for the period beginning on the Effective Date and ending on December 31, 2010, which is attached hereto as Appendix A. The rolling three (3) year Development Plan shall be updated annually by the Program Management Team and submitted to the Steering Committee for review and approval not later than sixty (60) days prior to January 1 of each year during the Development Program. Each such updated Development Plan shall include (a) an overall development plan for each Collaboration Product which sets forth all major development tasks and (b) a detailed description and budget for the activities proposed for the covered period. The Project Management Team shall be primarily responsible for preparing the annual updates to the Development Plan and, in connection with the preparation of such updates, shall consult with Genzyme and BioMarin regarding the identification, timing and execution of and budget for the major tasks and detailed activities required to perform the updated Development Plan. Each such updated Development Plan approved by the Steering Committee shall be signed by an authorized representative of each of BioMarin and Genzyme. The members of the Program Management Team shall actively consult with one another throughout the term of the Development Plan so as to adjust the specific work performed under the Development Plan to conform to evolving developments in technology and the results of the development work performed. Any changes in the scope or direction of the work and any changes to the total amount budgeted in any calendar year for the Development Program must be approved by the Steering Committee, in the absence of which approval the most recently approved Development Plan shall remain in effect.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

5.1.4 Studies Required by Regulatory Authorities.

(a) Existing Markets. In the event that any regulatory authority in any country in which Aldurazyme has received all necessary Regulatory Approvals as of the Effective Date (“Existing Markets”) requires a post-marketing study related to Aldurazyme (other than any registry program existing on the Effective Date or post-marketing studies related to the manufacture of Aldurazyme, each of which shall be governed by the terms and conditions of the Manufacturing, Marketing and Sales Agreement) that is not contemplated by the initial Development Plan described above, then such study shall automatically be added to the Development Program and (i) the Program Management Team shall promptly prepare a plan for the conduct of such required post-marketing study (including without limitation a timeline and reasonably detailed budget) and submit the plan to the Steering Committee for review and approval and (ii) the Steering Committee shall promptly review such plan and, upon approval of such plan by the Steering Committee, the then-current Development Plan shall automatically be updated to include the study and the budget included in the approved plan; provided, however, that in the event that any regulatory authority requires a post-marketing study to be conducted through or as part of the registry program, then, notwithstanding anything to the contrary herein, such study and the incremental costs associated with conducting such study (i.e., such costs above the general cost of maintaining the registry program) shall be added to the Development Plan in accordance with the process set forth in this Section 5.1.4(a).

(b) New Markets. In the event that clinical studies are required to apply for Regulatory Approval for Aldurazyme in any country that is not an Existing Market and/or the regulatory authority in any such country requires a post-marketing study(ies) as a condition to granting or maintaining Regulatory Approval for Aldurazyme, then (i) the Program Management Team shall promptly prepare a plan for the conduct of such study(ies) (including without limitation a timeline and reasonably detailed budget) and submit the plan to the Steering Committee for review and approval and (ii) if the Steering Committee approves the plan, such study(ies) will be added to the Development Program and the then-current Development Plan shall automatically be updated to include such study(ies) and the budget included in the approved plan; provided, however, that in the event that any regulatory authority requires any such post-marketing study to be conducted through or as part of the registry program, then the budget for such study shall reflect the incremental costs associated with conducting such study (i.e., such costs above the general cost of maintaining the registry program).

5.1.5 Other Development Activities. In the event that either BioMarin or Genzyme desires to engage in any research or development activities related to Aldurazyme or other Collaboration Products that are not contemplated by an existing Development Plan or covered by Section 5.1.4 above (including without limitation through investigator sponsored studies), then such Party shall submit a proposal to the Steering Committee for such activities (including a reasonably detailed budget therefore), and the Steering Committee shall decide within ninety (90) days after receipt thereof whether such activities will be added to the Development Program. If the Steering Committee elects to add such activities to the Development Program, then it shall promptly amend the then-current Development Plan to include such activities and the related budget. If the Steering Committee declines or fails to make such election, then the Party who submitted the proposal shall be free to conduct such research or development activities independently at its own expense subject

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

to the terms of the Manufacturing, Marketing and Sales Agreement ; provided, however, that any and all Patent Rights, Technology and Manufacturing Know-How developed as a result of those activities shall be subject to the rights and licenses granted to the Parties pursuant to Article 3 of this Agreement.

5.1.6 Execution and Performance. The Development Program shall allocate among the Parties responsibility for each of the activities described therein. The Parties shall use commercially reasonable and diligent efforts to conduct the activities described in the Development Plan. The Development Plan shall be supervised by the Program Management Team. The Program Management Team will coordinate preclinical and clinical testing of the Collaboration Products in the Territory and work with designated individuals at BioMarin and Genzyme in the preparation of Regulatory Approval filings for the Collaboration Products and filing the same with regulatory agencies designated by the Steering Committee.

5.1.7 Attendance at Regulatory Meetings; Correspondence. Each Party shall provide the others with prior notice of all meetings and teleconferences between representatives of the notifying Party and regulatory authorities regarding any Collaboration Product for use in the Territory. Except as otherwise provided herein, the Party receiving such notice shall have the right to have representatives participate in all such meetings and teleconferences. Each Party shall use reasonable efforts to provide the other Party with a reasonable opportunity to review and comment upon submissions to, and correspondence with, any regulatory agency in the Territory with respect to Collaboration Products prior to the filing or delivery of such submissions or correspondence. Without limiting the foregoing, each Party shall use reasonable efforts to confirm in writing to the other Party all communications with a regulatory authority with respect to a Regulatory Approval (including filings therefor) and to provide to the other Party copies of all documents sent to or received from such regulatory authority regarding such Regulatory Approvals.

5.2 Development Information.

5.2.1 Reports and Information Exchange. As between the Parties hereto, (a) BioMarin/Genzyme LLC shall own all clinical trial data accumulated from all clinical trials of Collaboration Products conducted as part of the Program or otherwise funded or partially funded by BioMarin/Genzyme LLC and (b) subject to the license granted pursuant to Section 3.1 above, BioMarin or Genzyme, as the case may be, shall own all clinical trial data accumulated from all clinical trials of Collaboration Products that are not conducted as part of the Program. Each of BioMarin and Genzyme shall use commercially reasonable and diligent efforts to disclose to BioMarin/Genzyme LLC and to the other Party all material information relating to any Collaboration Product promptly after it is learned or its materiality is appreciated. The Party performing or supervising clinical trials of Collaboration Products in accordance with the Development Plan shall, on behalf and in the name of BioMarin/Genzyme LLC, maintain the database of clinical trial data accumulated from all clinical trials of Collaboration Products and of adverse reaction information for all such Collaboration Products. Each Party shall also keep the Program Management Team informed as to its progress in the Development Plan. All protocols for clinical trials to be conducted, and all product registration plans, for Collaboration Products for applications within the Field in the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Territory shall be submitted to the Program Management Team for review and comment by the Program Management Team prior to filing of such protocols or registrations with any regulatory agency. Within sixty (60) days following the end of each calendar quarter during the Development Program, each of BioMarin and Genzyme shall provide the other Parties with a reasonably detailed written report describing the progress to date of all activities for which such Party was allocated responsibility during such quarter under the Development Plan.

5.2.2 Adverse Reaction Reporting. Each of BioMarin and Genzyme shall notify the other Parties of any Adverse Reaction Information relating to any Collaboration Product within twenty-four (24) hours of the receipt of such information and as necessary for compliance with regulatory requirements. “Adverse Reaction Information” includes without limitation information relating to any experience that (a) suggests a significant hazard, contraindication, side effect or precaution, (b) is fatal or life threatening, (c) is permanently disabling, (d) requires or prolongs inpatient hospitalization, (e) involves a congenital anomaly, cancer or overdose or (f) is one not identified in nature, specificity, severity or frequency in the current investigator brochure or the United States labeling for the Collaboration Product.

5.2.3 Clinical and Regulatory Audits. Each of BioMarin and Genzyme shall permit BioMarin/Genzyme LLC and the other Party or the representatives of BioMarin/Genzyme LLC or the other Party to have access during regular business hours and upon reasonable advance notice, at the auditing Party’s own expense and no more than once in each calendar year during the Term, to the non-auditing Party’s records and facilities relating to the Development Program for the purpose of monitoring compliance with Good Clinical Practice and other applicable requirements of the Regulatory Scheme in connection with such Party’s performance of its obligations hereunder.

5.3 Regulatory Approval Filings. Except as set forth in the Manufacturing, Marketing and Sales Agreement, Regulatory Approval filings in the Territory for the Collaboration Products and for the facilities used to manufacture such Collaboration Products shall be filed in the name of BioMarin/Genzyme LLC or, if required with respect to filings to be made with governmental authorities or deemed to be in the best interest of the Parties by the Steering Committee, in the name of such other entity as may be agreed upon by the Steering Committee (such as filings with European regulatory authorities). Prior to submission to the FDA, the Parties, through the Program Management Team, shall consult, cooperate in preparing and mutually agree on the content and scope of such Regulatory Approval filings. In the event that Regulatory Approvals are required to be filed in the name of an entity other than BioMarin/Genzyme LLC, the Steering Committee shall ensure that a duly authorized officer of such entity agrees in writing that (a) such entity shall hold the licenses issued in respect of such Regulatory Approval filings, maintain control over the manufacturing facilities, equipment and personnel, and engage in pharmacovigilence to the extent required by the Regulatory Scheme, (b) such entity shall maintain compliance with applicable Regulatory Schemes, (c) such entity shall provide manufacturing and supply services to BioMarin/Genzyme LLC at the Fully Absorbed Cost of Goods of Collaboration Products so manufactured and supplied, (d) the Parties shall have an irrevocable right of access and reference to such Regulatory Approval filings, licenses and facilities and (e) such entity agrees to comply with the provisions of Article 12 of the Manufacturing, Marketing and Sales Agreement with respect to the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

ownership and/or disposition of such Regulatory Approvals in the event this Agreement is terminated and to provide the level of cooperation described in Section 14.1 hereof in connection therewith.

5.4 Clinical Data. In all agreements with Third Parties or Affiliates involving the development of preclinical or clinical data for a Collaboration Product, Genzyme and BioMarin shall require that such Third Parties and Affiliates provide BioMarin/Genzyme LLC and the other Party access to all such data, to the extent such data is required to be obtained from such Third Parties by the Japanese Ministry of Health and Welfare, the U.S. FDA, the Commission of Proprietary Medicines of the European Community, the European Medicines Evaluation Agency or other regulatory agency, in each case with respect to Regulatory Approvals.

5.5 Facilities Visit. Representatives of BioMarin and Genzyme may visit all manufacturing sites and the sites of any clinical trials or other experiments being conducted by the other Party or BioMarin/Genzyme LLC in connection with the Development Program. If requested by the other Party, BioMarin and Genzyme shall cause appropriate individuals working on the Development Program to be available for meetings at the location of the facilities where such individuals are employed at times reasonably convenient to the Party responding to such request.

ARTICLE VI

[RESERVED]

ARTICLE VII

MANUFACTURE AND SUPPLY; SALES AND MARKETING

Subject to the terms and conditions of this Agreement, Collaboration Products shall be manufactured and supplied for preclinical and clinical testing and for commercial sale upon the following terms and conditions. For purposes of this Article 7, the term “Collaboration Products” shall be deemed to exclude Aldurazyme except as explicitly provided below.

7.1 General. For any Collaboration Product that may be commercialized, the Parties shall negotiate in good faith to include the additional Collaboration Product to the Manufacturing Marketing and Sales Agreement to allow for BioMarin to manufacture such Collaboration Product and for Genzyme to commercialize such Collaboration Product (the “Commercializing Party”) on financial terms and such other terms and conditions appropriate for such Collaboration Product as may be mutually agreed upon by the Parties.

7.2 Manufacture and Supply of Collaboration Products. BioMarin/Genzyme LLC shall manufacture (or, subject to Section 7.2.1, have manufactured) and supply Collaboration Products for

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

preclinical and clinical activities upon the following terms and conditions (and such other terms and conditions established by the Steering Committee consistent with the provisions of this Agreement):

7.2.1 General. All decisions relating to the manufacture of Collaboration Products shall be subject to the approval of, or modification by, the Steering Committee.

7.2.2 Facilities. Notwithstanding any provision of this Agreement to the contrary, the Parties acknowledge and agree that BioMarin/Genzyme LLC shall not bear any costs relating to the construction of manufacturing facilities for a Collaboration Product (other than through normal depreciation and amortization included in Fully Absorbed Cost of Goods).

7.3 Manufacture and Supply of Aldurazyme for the Development Program. BioMarin shall use commercially reasonable and diligent efforts to manufacture and supply Aldurazyme (either itself or through Third Parties) for activities undertaken pursuant to the Development Plan in quantities and within a time period sufficient to conduct the activities set forth in the Development Plan and BioMarin/Genzyme LLC and the Fully Absorbed Cost of Goods of such Aldurazyme shall be included as Development Costs.

7.4 Certificates of Analysis. The Manufacturing Party shall perform, or cause its contract manufacturer(s) to perform, quality assurance and control tests on each lot of Collaboration Products before delivery and shall prepare, or cause its contract manufacturer(s) to prepare and deliver, a written report of the results of such tests (for purposes of Sections 7.2, 7.3 and 7.4, such contract manufacturer(s) shall be included in the definition of the term “Manufacturing Party”). Each test report shall set forth for each lot delivered the items tested, specifications and results in a certificate of analysis containing the types of information which shall have been approved by the Program Management Team or required by the FDA or other applicable regulatory authority. The Manufacturing Party shall maintain such certificates for a period of not less than five (5) years from the date of manufacture or for such longer period as required under applicable requirements of the FDA or other applicable regulatory authority.

7.5 Certificates of Manufacturing Compliance. The Manufacturing Party shall prepare, or cause to be prepared and delivered, and maintain for a period of not less than five (5) years or for such longer period as required under applicable requirements of the FDA or other applicable regulatory authority for each lot of Collaboration Products manufactured a certificate of manufacturing compliance containing the types of information which shall have been approved by the Program Management Team or required by the FDA or other applicable regulatory authority, which certificate will certify that the lot of Collaboration Products was manufactured in accordance with the Specifications and the Good Manufacturing Practices of the FDA or other applicable regulatory authority as the same may be amended from time to time. The Manufacturing Party shall advise the other Parties immediately if an authorized agent of the FDA or other regulatory authority visits any of the Manufacturing Party’s manufacturing facilities, or the facilities where the Collaboration Products are being manufactured, for an inspection with respect to the Collaboration Products. The Manufacturing Party shall furnish to the other Parties the report by such agency of such visit, to the extent that such report relates to Collaboration Products, within ten (10) business

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

days of the Manufacturing Party’s receipt of such report, and the other Parties shall have the right to comment on any response by the Manufacturing Party to such inspecting agency.

7.6 Access to Facilities. Each Party shall have the right to audit annually those portions of the manufacturing, finish processing or storage facilities of the Manufacturing Party where Collaboration Products are being manufactured, finished or stored, or any subcontractor who is manufacturing, finishing or storing Collaboration Products for the Manufacturing Party, at any time during regular business hours and upon reasonable advance notice to ascertain compliance with the Good Manufacturing Practices of the FDA or other applicable regulatory authority, as the same may be amended from time to time. Subject to the terms and conditions of Section 10.1 below, confidential information disclosed to or otherwise gathered by the Party conducting such inspection during any such inspection shall be maintained as confidential.

7.7 Responsibilities of the Other Parties. No Party other than the Commercialization Party shall actively solicit for its own account sales of Collaboration Products in the Territory. Any solicitations or requests to purchase Collaboration Products received by a Party other than the Commercialization Party from any customer or prospective shall be immediately referred to the Commercialization Party.

ARTICLE VIII

MANAGEMENT

8.1 Program Management Team.

8.1.1 General. The Parties have established a Program Management Team to oversee and control development of Collaboration Products. The Program Management Team is and shall continue to be composed of four (4) representatives appointed by BioMarin and four (4) representatives appointed by Genzyme. Such representatives will include individuals with expertise and responsibilities in such areas as preclinical development, clinical development, manufacturing, and regulatory affairs. The Program Management Team shall meet as needed but not less than monthly. The Program Management Team shall appoint one of its members to act as Secretary. Such meetings shall be at times and places or in such form (e.g., telephone or video conference) as the members of the Program Management Team shall agree. A Party may change one or more of its representatives to the Program Management Team at any time. Members of the Program Management Team may be represented at any meeting by another member of the Program Management Team or by a deputy. Any approval, determination or other action agreed to by a majority of the members of the Program Management Team appointed by each of BioMarin and Genzyme or their deputies present at the relevant Team meeting shall be the approval, determination or other action of the Program Management Team, provided at least two (2) representatives of each of BioMarin and Genzyme are present at such meeting. Representatives of either BioMarin and Genzyme who are not members of the Program Management Team may attend meetings of the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Program Management Team as agreed to by the representative members of the other Party. The Program Management Team may designate project leaders to the extent it deems it necessary or advisable. The Parties specifically agree that the Product Management Team has no authority to oversee or control the manufacture or commercialization of Aldurazyme and that all such activities shall be governed by the Manufacturing, Marketing and Sales Agreement.

8.1.2 Development Program Functions. During the term of the Development Program, the Program Management Team shall coordinate, expedite and control the development of Collaboration Products. The Program Management Team will (a) develop and recommend to the Steering Committee Development Plans (including annual development budgets), (b) facilitate the flow of information with respect to development work being conducted for each Collaboration Product throughout the Territory and (c) discuss and cooperate regarding the conduct of such development work.

8.1.3 Minutes. The Program Management Team shall keep accurate minutes of its deliberations which shall record all proposed decisions and all actions recommended or taken. The Secretary shall be responsible for the preparation of draft minutes. Draft minutes shall be sent to all members of the Program Management Team within five (5) working days after each meeting and shall be approved, if appropriate, at the next meeting. All records of the Program Management Team shall at all times be available to all of the Parties.

8.2 Steering Committee.

8.2.1 General. The Parties have established a Steering Committee to oversee and manage the collaboration contemplated by this Agreement. The Steering Committee is and shall continue to be composed of three (3) representatives appointed by BioMarin and three (3) representatives appointed by Genzyme. Such representatives will be senior officers and/or managers of their respective companies. Genzyme and BioMarin shall each designate one (1) of their respective representatives on the Steering Committee to act as Co-Chairman. The Steering Committee shall appoint one (1) of its members to act as Secretary. The Steering Committee will meet as needed but not less than once each calendar quarter. Such meetings shall be at times and places or in such form (e.g., telephone or video conference) as the members of the Steering Committee shall agree. A Party may change one or more of its representatives to the Steering Committee at any time. Members of the Steering Committee may be represented at any meeting by another member of the Steering Committee or by a deputy. Any approval, determination or other action agreed to by unanimous consent of the members of the Steering Committee or their deputies present at the relevant Steering Committee meeting shall be the approval, determination or other action of the Steering Committee, provided at least two (2) representatives of each of BioMarin and Genzyme are present at such meeting. Representatives of either BioMarin and Genzyme who are not members of the Steering Committee may attend meetings of the Steering Committee as agreed to by the representative members of the other Party. Each Party shall bear its own personnel and travel costs and expenses relating to Steering Committee meetings, which costs and expenses shall not be included in the Program Costs. The Parties specifically agree that the Steering Committee has no

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

authority to oversee or control the manufacture or commercialization of Aldurazyme and that all such activities shall be governed by the Manufacturing, Marketing and Sales Agreement.

8.2.2 Functions. The Steering Committee shall perform the following functions: (a) determine the overall strategy for the Program in the manner contemplated by this Agreement; (b) coordinate the activities of the Parties hereunder; (c) settle disputes or disagreements that are unresolved by the Program Management Team; (d) approve any agreements with Third Parties regarding a Collaboration Product or which involve the grant of any rights related to the development of a Collaboration Product or manufacturing of a Collaboration Product other than Aldurazyme; (e) review and approve each Development Plan, including each change and annual update thereto, submitted to it pursuant to Section 5.1.3 hereof; (f) serve as the governing body of BioMarin/Genzyme LLC; and (g) perform such other functions as appropriate to further the purposes of this Agreement as determined by the Parties.

8.2.3 Minutes. The Steering Committee shall keep accurate minutes of its deliberations which shall record all proposed decisions and all actions recommended or taken. The Secretary shall be responsible for the preparation of draft minutes. Draft minutes shall be sent to all members of the Steering Committee within ten (10) working days after each meeting and shall be approved, if appropriate, at the next meeting. All records of the Steering Committee shall at all times be available to both BioMarin and Genzyme.

8.3 General Disagreements. All disagreements within the Program Management Team or the Steering Committee shall be subject to the following:

(a) The representatives to the Program Management Team or Steering Committee (as the case may be) will negotiate in good faith for a period of not less than thirty (30) days to attempt to resolve the dispute. In the case of the Program Management Team, any unresolved dispute shall be referred to the Steering Committee for good faith negotiations for an additional period of not less than thirty (30) days to attempt to resolve the dispute.

(b) In the event that the dispute is not resolved after the period specified in clause (a), the representatives shall promptly present the disagreement to the Chief Executive Officers of BioMarin and Genzyme or a designee of such Chief Executive Officer reasonably acceptable to the other Party.

(c) Such executives shall meet or discuss in a telephone or video conference each of BioMarin and Genzyme’s views and explain the basis for such dispute.

(d) If such executives cannot resolve such disagreement within thirty (30) days after such issue has been referred to them, then such dispute shall be referred to arbitration as described in Section 14.10 hereof.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

ARTICLE IX

INTELLECTUAL PROPERTY RIGHTS

9.1 Ownership. The Parties acknowledge that the ownership rights set forth herein (a) shall not be affected by the participation in the discovery or development of an Invention (as defined below) by the Program Management Team or the Steering Committee in the course of discharging their duties hereunder and (b) are subject to the license grants set forth in Article 3 above.

9.1.1 Ownership and Assignment of Discoveries and Improvements. All right, title and interest in all writings, inventions, discoveries, improvements and other technology, whether or not patentable or copyrightable, and any patent applications, patents or copyrights based thereon (collectively, the “Inventions”) that are discovered, made or conceived during and in connection with the Program solely by employees of BioMarin or others acting on behalf of BioMarin (“BioMarin Inventions”) shall be owned by BioMarin. All right, title and interest in all Inventions that are discovered, made or conceived during and in connection with the Program solely by employees of Genzyme or others acting on behalf of Genzyme (“Genzyme Inventions”) shall be owned by Genzyme. All right, title and interest in all Inventions that are discovered, made or conceived during and in connection with the Program jointly by employees of BioMarin and Genzyme (“Joint Inventions”) shall be jointly owned by Genzyme and BioMarin. Each of BioMarin and Genzyme shall promptly disclose to BioMarin/Genzyme LLC and the other Party the making, conception or reduction to practice of Inventions by employees or others acting on behalf of such Party. All BioMarin Inventions, Genzyme Inventions and Joint Inventions shall be automatically licensed to BioMarin/Genzyme LLC pursuant to Section 3.1 hereof. Except as expressly provided in this Agreement, it is understood that neither BioMarin nor Genzyme shall have any obligation to account to the other Party for profits, or obtain any approval of the other to grant a license or exploit a Joint Invention outside of the Field by reason of joint ownership of such Invention or other intellectual property. For avoidance of doubt, in any jurisdiction where consent of all owners of a Joint Invention is required in order to grant a license to such Invention, BioMarin and Genzyme each grants the other Party consent to grant a non-exclusive license to Joint Invention outside the Field.

9.1.2 Ownership of Trademarks. The Steering Committee shall select and as between the Parties hereto BioMarin/Genzyme LLC shall own all trademarks for the sale and use of Collaboration Products in the Territory (collectively, “Product Marks”) and all goodwill therein shall inure to the benefit of BioMarin/Genzyme LLC, and all expenses incurred by a Party with respect thereto shall be considered Program Costs. All Product Marks shall be registered in the name of BioMarin/Genzyme LLC if and when registered. In the event that the applicable laws and regulations of any country in which the Steering Committee elects to register any Product Marks require that such trademark(s) be registered in the name of an entity other than BioMarin/Genzyme LLC, or if the Steering Committee determines that it is in the best interests of the Parties, then the Steering Committee shall select such entity and ensure that a duly authorized officer of such entity agrees in writing that such entity shall (a) grant BioMarin/Genzyme LLC a worldwide, exclusive, fully-paid, royalty-free, irrevocable right and license (with the right to grant and authorize

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

sublicenses) to use such Product Marks and (b) comply with the provisions of Article 12 of the Manufacturing, Marketing and Sales Agreement with respect to the ownership and/or disposition of such Product Marks in the event this Agreement is terminated and provide the level of cooperation described in Section 14.1 hereof in connection therewith. Each Party hereby acknowledges agrees that at no time during of this Agreement to challenge or assist others to challenge the Product Marks or the registration thereof or attempt to register any trademarks, marks or trade names confusingly similar to such Product Marks.

9.1.3 Cooperation of Employees. Each of BioMarin and Genzyme represents and agrees that all employees or others acting on its behalf in performing its obligations under this Agreement shall be obligated under a binding written agreement to assign to such Party, or as such Party shall direct, all Inventions made or conceived by such employee or other person. In the case of non-employees working for other companies or institutions on behalf of BioMarin or Genzyme, BioMarin or Genzyme, as applicable, shall have the right to obtain licenses for all Inventions made by such non-employees on behalf of BioMarin or Genzyme, as applicable, in accordance with the policies of said company or institution. BioMarin and Genzyme agree to undertake to enforce such agreements (including, where appropriate, by legal action) considering, among other things, the commercial value of such Inventions.

9.2 Filing, Prosecution and Maintenance of Patent Rights. BioMarin shall be responsible, at BioMarin’s expense, for the filing, prosecution and maintenance of Patent Rights within the BioMarin Patent Rights and BioMarin/Genzyme Patent Rights, and Genzyme shall be responsible, at Genzyme’s expense, for the filing, prosecution and maintenance of Patent Rights within the Genzyme Patent Rights. For so long as any of the license grants set forth in Article 3 hereof remain in effect and upon request of the other Party, each of BioMarin and Genzyme agrees to file and prosecute patent applications and maintain the Patent Rights for which it is responsible in all countries in the Territory selected by the Steering Committee. Each of BioMarin and Genzyme shall consult with and keep the other Party fully informed of important issues relating to the preparation and filing (if time permits), prosecution and maintenance of such patent applications and patents, and shall furnish to the other Party copies of documents relevant to such preparation, filing, prosecution or maintenance in sufficient time prior to filing such document or making any payment due thereunder to allow for review and comment by the other Party and, to the extent possible in the reasonable exercise of its discretion, the responsible Party shall incorporate all such comments.

9.3 Cooperation. Each of BioMarin and Genzyme shall make available to the other Party (or to the other Party’s authorized attorneys, agents or representatives) its employees, agents or consultants to the extent necessary or appropriate to enable BioMarin to file, prosecute and maintain patent applications and resulting patents with respect to inventions owned by a Party and for periods of time sufficient for such Party to obtain the assistance it needs from such personnel. Where appropriate, each of BioMarin and Genzyme shall sign or cause to have signed all documents relating to said patent applications or patents at no charge to the other Party.

9.4 Notification of Patent Term Restoration. BioMarin shall notify Genzyme of (a) the issuance of each patent included within the Patent Rights, giving the date of issue and patent number

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

for each such patent, and (b) each notice pertaining to any patent included within the Patent Rights which it receives as patent owner pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984, including notices pursuant to §§101 and 103 of such Act from persons who have filed an abbreviated NDA. Such notices shall be given promptly, but in any event within ten (10) business days after receipt of each such notice pursuant to such Act. BioMarin shall notify Genzyme of each filing for patent term restoration under such Act, any allegations of failure to show due diligence and all awards of patent term restoration (extensions) with respect to the Patent Rights.

9.5 No Other Technology Rights. Except as otherwise expressly provided in this Agreement and the Related Agreements, under no circumstances shall a Party hereto, as a result of this Agreement, obtain any ownership interest in or other right to the Patent Rights, Technology or Manufacturing Know-How of the other Party, including items owned, controlled or developed by the other Party, or transferred by the other Party to said Party at any time pursuant to this Agreement. It is understood and agreed that this Agreement does not grant either Party any license or other right in the Patent Rights of the other Party except as expressly provided in Article 3 hereof and this Article 9.

9.6 Defense of Third Party Infringement Claims. If the manufacture, production, sale or use of any Collaboration Product pursuant to this Agreement results in a claim, suit or proceeding (collectively, “Actions”) alleging patent infringement against BioMarin or Genzyme (or their respective Affiliates), such Party shall promptly notify the other Party hereto in writing. The Party subject to such Action (for purposes of this Section 9.6, the “Controlling Party”) shall have the exclusive right to defend and control the defense of any such Action using counsel of its own choice; provided, however, that if such Action is directed to the subject of the Patent Rights of the other Party (i.e., the BioMarin Patent Rights or the Genzyme Patent Rights), such other Party may participate in the defense and/or settlement thereof at its own expense with counsel of its choice. Except as agreed in writing by Genzyme and BioMarin, the Controlling Party shall not enter into any settlement relating to a Collaboration Product, if such settlement admits the invalidity or unenforceability of any Patent Rights within the BioMarin Patent Rights or the Genzyme Patent Rights, as applicable, of the other Party. The Controlling Party agrees to keep the other Party hereto reasonably informed of all material developments in connection with any such Action. Any cost, liability or expense (including amounts paid in settlement) incurred by the Controlling Party as a result of such Action shall be included in Development Costs for the Collaboration Product(s) that are the subject of such Action and shall not be subject to the limitations of Sections 1.11, 4.2 and 5.1.3 above provided that the other Party consents to incurrence of such cost, liability or expense, with such consent not to be unreasonably withheld, delayed or conditioned.

9.7 Enforcement of Patent Rights.

9.7.1 Enforcement. Subject to the provisions of this Section 9.7, in the event that BioMarin or Genzyme reasonably believes that any BioMarin Patent Rights, BioMarin Technology, Genzyme Patent Rights, Genzyme Technology, BioMarin/Genzyme Patent Rights or BioMarin/Genzyme Technology necessary for the manufacture, use or sale of a Collaboration Product in the Field is infringed or misappropriated by a Third Party or is subject to a declaratory

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

judgment action arising from such infringement in a country, in each case with respect to the manufacture, sale or use of a product potentially competitive with a Collaboration Product within the Field, Genzyme or BioMarin (respectively) shall promptly notify the other Party hereto. Promptly after such notice the Parties shall meet to discuss the course of action to be taken with respect to an Enforcement Action (as defined below) with respect to such infringement or misappropriation, including the control thereof and sharing of costs and expenses related thereto, for the purposes of entering into a litigation agreement setting forth the same (“Litigation Agreement”). If the Parties do not enter such Litigation Agreement, the Party whose Patent Rights or Technology is so allegedly infringed or misappropriated, or is subject to such declaratory judgment action, (for purposes of this Section 9.7, the “Owner”) shall have the initial right (but not the obligation) to enforce the intellectual property rights within such Patent Rights or Technology, or defend any declaratory judgment action with respect thereto (for purposes of this Section 9.7, an “Enforcement Action”); provided that the Owner agrees to indemnify the other Party for any and all liabilities and expenses (including, without limitation, reasonable attorneys’ fees and other expenses of litigation) incurred by such other Party as a result of such Enforcement Action.

9.7.2 Information. Absent a Litigation Agreement, the Party initiating or defending any such Enforcement Action shall keep the other Party hereto reasonably informed of the progress of any such Enforcement Action, and such other Party shall have the right to participate with counsel of its own choice at its own expense.

9.7.3 Enforcement Costs; Recoveries. Unless otherwise agreed, the Party initiating an Enforcement Action shall, at the option of such Party, have the right to either: (i) assume responsibility for all costs and expenses of such Enforcement Action, in which case all amounts recovered in the Enforcement Action (including without limitation amounts resulting from a settlement thereof) shall be retained by such Party; or (ii) include such costs and expenses within the Development Costs, in which case all amounts recovered in the Enforcement Action, after reimbursing the Party initiating the Action for any costs and expenses not previously so offset, shall be shared by BioMarin and Genzyme in accordance with their respective Percentage Interests.

9.8 Third Party Rights. The foregoing provisions of this Article 9 shall be subject to and limited by any agreements pursuant to which BioMarin and Genzyme, as the case may be, acquired any particular BioMarin Patent Rights, BioMarin Technology or Genzyme Patent Rights or Genzyme Technology.

9.9 Third Party Agreements—Reports. To the extent that a Party is obligated to provide reports to a Third Party pursuant to a Third Party Agreement as a result of or reporting on the status of activities of the other Party hereunder, the other Party hereto shall reasonably assist the reporting Party by providing information in its possession or control and in sufficient detail to complete and submit such reports as required.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

ARTICLE X

CONFIDENTIALITY

10.1 Nondisclosure Obligations. Except as otherwise provided in this Article 10, during the Term and for a period of five (5) years thereafter, the Parties shall, and BioMarin shall cause BioMarin Genetics to, maintain in confidence and use only for purposes specifically authorized under this Agreement any information furnished to it by the other Party hereto pursuant to this Agreement which if disclosed in tangible form is marked “Confidential” or with other similar designation to indicate its confidential or proprietary nature or if disclosed orally or by inspection is indicated orally to be confidential or proprietary by the Party disclosing such information at the time of such disclosure and is confirmed in writing as confidential or proprietary by the disclosing Party (describing in reasonable detail the information to be treated as confidential) within a reasonable time after such disclosure (collectively, “Information”).

To the extent it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under this Agreement or a Related Agreement, a Party may disclose Information of the other Party it is otherwise obligated under this Section 10.1 not to disclose to its Affiliates, permitted sublicensees, consultants, outside contractors and clinical investigators, on a need-to-know basis and on the condition that such entities or persons agree to keep the Information confidential for the same time periods and to substantially the same extent as such Party is required to keep such Information confidential; and a Party or its permitted sublicensees may disclose such Information to government or other regulatory authorities to the extent that such disclosure is reasonably necessary to obtain patents or authorizations to conduct clinical trials or to file and maintain Regulatory Approvals with and to market commercially Collaboration Products. The obligation not to disclose Information shall not apply to any part of such Information that: (i) is or becomes patented, published or otherwise becomes publicly known other than by acts of the Party obligated not to disclose such Information or its Affiliates or sublicensees in contravention of this Agreement; (ii) can be shown by written documents to have been disclosed to the receiving Party or its Affiliates or sublicensees by a Third Party, provided that such Information was not obtained by such Third Party directly or indirectly from the disclosing Party under this Agreement; (iii) prior to disclosure under this Agreement, was already in the possession of the receiving Party or its Affiliates or sublicensees, provided that such Information was not obtained directly or indirectly from the disclosing Party under this Agreement; (iv) can be shown by written documents to have been independently developed by the receiving Party or its Affiliates without breach of any of the provisions of this Agreement; or (v) is required to be disclosed by the receiving Party to comply with applicable laws or regulations, or with a court or administrative order, provided that the receiving Party notifies the disclosing Party in writing prior to any such disclosure and agrees to use reasonable efforts to secure confidential treatment thereof prior to its disclosure (whether by protective order or otherwise).

10.2 Terms of this Agreement; Press Releases. The Parties agree to seek confidential treatment for any filing of this Agreement with the Securities and Exchange Commission and shall agree upon the content of the request for confidential treatment made by each Party in respect of such

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

filing. Except as permitted by the foregoing provisions or as otherwise required by law, BioMarin and Genzyme each agree not to disclose any terms or conditions of this Agreement to any Third Party without the prior consent of the other Party; provided that each Party shall be entitled to disclose the terms of this Agreement without such consent to its advisors and potential investors or other financing sources on the condition that such entities or persons agree to keep such terms confidential for the same time periods and to the same extent as such Party is required to keep such terms confidential. The Parties agree that all press releases related to the Program shall be issued jointly by BioMarin and Genzyme and that the Party preparing any such press release shall provide the other Party with a draft thereof reasonably in advance of disclosure so as to permit the other Party to review and comment on such press release. Notwithstanding the foregoing, the Parties shall agree upon a press release to announce the execution of this Agreement, together with a corresponding Question & Answer outline for use in responding to inquiries about the Agreement; thereafter, BioMarin and Genzyme may each disclose to Third Parties the information contained in such press release and Question & Answer outline without the need for further approval by the other.

10.3 Publications. Each Party recognizes the mutual interest in obtaining valid patent protection. Consequently, any Party, its employees or consultants wishing to make a publication (including any oral disclosure made without obligation of confidentiality) relating to work performed by such Party as part of the Program (the “Publishing Party”) shall transmit to the other Party (the “Reviewing Party”) a copy of the proposed written publication at least forty-five (45) days prior to submission for publication, or an abstract of such oral disclosure at least fifteen (15) days prior to submission of the abstract or the oral disclosure, whichever is earlier. The Reviewing Party shall have the right to (a) request a delay in publication or presentation in order to protect patentable information, (b) propose modifications to the publication for patent reasons or (c) request that the information be maintained as a trade secret. With respect to publications or disclosures by investigators or other Third Parties, such publications and disclosures shall be subject to review by the Reviewing Party under this Section 10.3 only to the extent that the submitting Party has the right to do so.

10.3.1 Patents. If the Reviewing Party requests a delay as described in clause (a) above, the Publishing Party shall delay submission or presentation of the publication for a period of ninety (90) days to enable patent applications protecting each Party’s rights in such information to be filed. Upon the expiration of forty-five (45) days, in the case of proposed written disclosures, or fifteen (15) days, in the case of an abstract of proposed oral disclosures, from transmission of such proposed disclosures to the Reviewing Party, the Publishing Party shall be free to proceed with the written publication or the oral presentation, respectively, unless the Reviewing Party has requested the delay described above.

10.3.2 Other. To the extent possible in the reasonable exercise of its discretion, the Publishing Party shall incorporate all modifications proposed under clause (b) above. If a trade secret that is the subject of a request made under clause (c) above cannot be otherwise protected without unreasonable expense to the Reviewing Party, such information shall be omitted from the publication.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

ARTICLE XI

REPRESENTATIONS AND WARRANTIES

11.1 Authorization. Each Party warrants and represents to the other Parties that (a) it has the legal right and power to enter into this Agreement, to extend the rights and licenses granted to the other in this Agreement, and to perform fully its obligations hereunder, (b) this Agreement has been duly executed and delivered and is a valid and binding agreement of such Party, enforceable in accordance with its terms, (c) such Party has obtained all necessary approvals to the transactions contemplated hereby and (d) such Party has not made and will not make any commitments to others in conflict with or in derogation of such rights or this Agreement.

11.2 Intellectual Property Rights.

11.2.1 BioMarin hereby represents and warrants that that as of the Effective Date (a) it possesses an exclusive right, title and interest in or to, the BioMarin Patent Rights and the BioMarin Technology, (b) the BioMarin Patent Rights and the BioMarin Technology are free and clear of any lien or other encumbrance and (c) it has the right to (i) enter into the obligations set forth in this Agreement and (ii) grant the rights and licenses set forth in Article 3 hereof.

11.2.2 Each of the Parties hereby represents and warrants that it is not aware of any issued patent that would be infringed by the manufacture and sale of Collaboration Products as contemplated by this Agreement.

11.2.3 Genzyme hereby represents and warrants that as of the Effective Date (a) it possesses an exclusive right, title and interest in the Genzyme Patent Rights and the Genzyme Technology, (b) the Genzyme Patent Rights and the Genzyme Technology are free and clear of any lien or other encumbrance and (c) it has the right to (i) enter into the obligations set forth in this Agreement and (ii) grant the rights and licenses set forth in Article 3 hereof.

11.3 Warranties.

11.3.1 Genzyme Warranties. Genzyme warrants that the Collaboration Products delivered by Genzyme pursuant to Section 7.1 hereof, if any, will conform in all material respects to the Specifications, the conditions of any applicable Regulatory Approvals regarding the manufacturing process and any applicable requirements of the Regulatory Scheme regarding the manufacturing process.

11.3.2 BioMarin Warranties. BioMarin warrants that the Collaboration Products delivered by BioMarin pursuant to Section 7.1 hereof will conform in all material respects to the Specifications, the conditions of any applicable Regulatory Approvals regarding the manufacturing process and any applicable requirements of the Regulatory Scheme regarding the manufacturing process.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

11.4 Disclaimer of Representations and Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN A RELATED AGREEMENT, NONE OF BIOMARIN, GENZYME OR BIOMARIN/GENZYME LLC MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND THE NON-INFRINGEMENT OF ANY THIRD-PARTY PATENTS OR PROPRIETARY RIGHTS. ALL UNIFORM COMMERCIAL CODE WARRANTIES ARE EXPRESSLY DISCLAIMED BY THE PARTIES.

11.5 Limitation of Liability. EXCEPT WITH RESPECT TO CLAIMS FOR INDEMNIFICATION UNDER ARTICLE 12 HEREOF AND AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY RELATED AGREEMENT, IT IS AGREED BY THE PARTIES THAT NO PARTY SHALL BE LIABLE TO ANOTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT OR THE RELATED AGREEMENTS, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME.

ARTICLE XII

INDEMNITY

12.1 BioMarin/Genzyme LLC Indemnity Obligations. The Operating Agreement shall provide that BioMarin/Genzyme LLC shall indemnify each of the Members and its Affiliates, employees and agents (each an “Indemnified Person”) for any act performed by such Indemnified Person within the scope of the authority conferred upon such Indemnified Person under this Agreement; provided that it shall be a condition to such indemnity that (a) the Indemnified Person seeking indemnification acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of BioMarin/Genzyme LLC, (b) the act for which indemnification is sought did not constitute gross negligence or willful misconduct by such Indemnified Person and (c) payment and indemnification of any matter disposed of by a compromise payment by such Indemnified Person, pursuant to consent decree or otherwise, shall have been approved by the Members, which approval shall not be unreasonably withheld or delayed, or by a court of competent jurisdiction. For the avoidance of doubt, such indemnification of the Indemnified Persons shall include indemnification for acts performed by such Indemnified Person since the Original Date of Execution, [**].

12.2 Insurance. BioMarin/Genzyme LLC shall maintain clinical trial and product liability insurance with respect to development, manufacture and sales of Collaboration Products in an

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

amount reasonably believed by Genzyme and BioMarin to be adequate and customary for the development, manufacture and sale of novel therapeutic products. Genzyme and BioMarin shall be named as additional insureds on any such policy. Genzyme and BioMarin shall each maintain similar clinical trial and product liability insurance coverage in amounts reasonably determined by the Steering Committee from time to time.

ARTICLE XIII

TERM AND TERMINATION

13.1 Term. The term of this Agreement shall be perpetual unless terminated pursuant to Section 13.3 below.

13.2 Termination of the Development Program Only.

13.2.1 By Mutual Agreement. The Parties may terminate the Development Program (but not this Agreement) at any time by mutual written consent.

13.2.2 For Default. If either BioMarin or Genzyme (a) fails to use commercially reasonable and diligent efforts to perform any material duty imposed upon such Party under this Agreement or the Development Plan or (b) fails to make [**] or more capital contributions in accordance with Section 4.2 hereof, and such failure to perform is not cured within ninety (90) days of written notice thereof from the non-breaching Party, the non-breaching Party may elect, in its sole discretion, to (i) in the case of clause (b) above, waive the terms of Article 4 hereof with respect to any one or more required capital contributions and cause the respective Percentage Interests and future funding responsibilities of the Parties to be adjusted in accordance with Section 4.1 of the Operating Agreement or (ii) terminate the Development Program. Such 90-day period shall be extended to one hundred eighty (180) days if the breaching Party has engaged in good faith efforts to remedy such default within such 90-day period and indicated in writing to the non-breaching Party prior to the expiration of such 90-day period that it believes that it will be able to remedy the default within such 180-day period, but such extension shall apply only so long as the breaching Party is engaging in good faith efforts to remedy such default.

13.3 Termination of this Agreement in its Entirety. This Agreement shall automatically terminate upon the effective date of the termination of the Manufacturing, Marketing and Sales Agreement. This Agreement may not be terminated independently from the Manufacturing, Marketing and Sales Agreement.

13.4 Effects of Termination of this Agreement. Upon any termination of this Agreement in its entirety, Parties shall have the respective rights and duties set forth under Article 12 of Manufacturing, Marketing and Sales Agreement.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

13.5 Survival of Rights and Duties. No termination of this Agreement shall eliminate any rights or duties of the Parties accrued prior to such termination. The provisions of Article 1, Sections 3.3, 4.3 through 4.5, 9.1.1, 9.3, 9.5, Article 10, Section 11.5, Article 12, Sections 13.3 through 13.5, 14.1, 14.3 through 14.5, and 14.8 through 14.17 and the first sentence of Section 7.5, the second to last sentence of Section 2.2 and the last sentences of Sections 2.2, 7.4 and 9.1.3 hereof shall survive any termination of this Agreement.

ARTICLE XIV

MISCELLANEOUS

14.1 Cooperation. If either BioMarin or Genzyme (the “Assuming Party”) shall assume the Program rights from the other Party (the “Responsible Party”) in accordance with the provisions of Article 12 of the Manufacturing, Marketing and Sales Agreement, the Responsible Party shall promptly provide to the Assuming Party (or any Third Party or Affiliate designated by the Assuming Party) all Technology, Manufacturing Know-How and access to regulatory filings filed hereunder reasonably necessary to allow the Assuming Party to perform the duties assumed and otherwise exercise the rights and licenses granted hereunder. The Responsible Party shall further use its best efforts to provide reasonable assistance required by the Assuming Party with respect to such transfer so as to permit the Assuming Party to begin to perform such duties as soon as possible to minimize any disruption in the continuity of supply or marketing of Collaboration Products. If the Responsible Party is the Manufacturing Party for a Collaboration Product, the Responsible Party shall, at the option of the Assuming Party, supply such Collaboration Product until the earlier of []. In addition, if upon the date this Agreement is terminated Collaboration Products are being manufactured in facilities owned or leased by the Responsible Party (including facilities subleased by BioMarin/Genzyme LLC from the Responsible Party), the Responsible Party agrees to lease such facilities to the Assuming Party on commercially reasonable terms for a period of up to [] at the option of the Assuming Party.

14.2 Exchange Controls. All payments due hereunder shall be paid in United States dollars. If at any time legal restrictions prevent the prompt remittance of part or all payments with respect to any country in which Collaboration Products (other than Aldurazyme) are sold, payment shall be made through such lawful means or methods as the Parties may determine in good faith.

14.3 Withholding Taxes. If applicable laws or regulations require that taxes be withheld from payments made hereunder, the Party paying such taxes will (a) deduct such taxes, (b) timely pay such taxes to the proper authority and (c) send written evidence of payment to the Party from whom such taxes were withheld within sixty (60) days after payment. Each Party will assist the other Party or Parties in claiming tax refunds, deductions or credits at such other Party’s request and will cooperate to minimize the withholding tax, if available, under various treaties applicable to any payment made hereunder.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

14.4 Interest on Late Payments. Any payments to be made hereunder that are not paid on or before the date such payments are due under this Agreement shall bear interest, to the extent permitted by applicable law, at the Base Rate of interest declared from time to time by Bank of America, N.A. in Boston, Massachusetts, calculated on the number of days payment is delinquent.

14.5 Force Majeure. Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, including without limitation fire, floods, embargoes, war, acts of war (whether war is declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or the other Party; provided, however, that the Party so affected shall use commercially reasonable and diligent efforts to avoid or remove such causes of non-performance, and shall continue performance hereunder with reasonable dispatch wherever such causes are removed. Each Party shall provide the other Parties with prompt written notice of any delay or failure to perform that occurs by reason of force majeure. The Parties shall mutually seek a resolution of the delay or the failure to perform in good faith.

14.6 Assignment. This Agreement may not be assigned or otherwise transferred by any Party without the consent of the other Parties; provided, however, that either BioMarin or Genzyme may, without such consent, assign its rights and obligations under this Agreement (a) in connection with a corporate reorganization, to any member of an affiliated group, all or substantially all of the equity interest of which is owned and controlled by such Party or its direct or indirect parent corporation or (b) in connection with a merger, consolidation or sale of substantially all of such Party’s assets to an unrelated Third Party; provided, however, that such Party’s rights and obligations under this Agreement shall be assumed by its successor in interest in any such transaction and shall not be transferred separate from all or substantially all of its other business assets, including without limitation those business assets that are the subject of this Agreement and the Manufacturing, Marketing and Sales Agreement. Any permitted assignee shall assume all obligations of its assignor under this Agreement; accordingly, all references herein to the assigning Party shall be deemed references to the assignee to whom the Agreement is so assigned. Any purported assignment in violation of this Section 14.6 shall be void.

14.7 Severability. Each Party hereby agrees that it does not intend to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any government agency or executive body thereof of any country or community or association of countries. Should one or more provisions of this Agreement be or become invalid, the Parties hereto shall substitute, by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic effect are sufficiently similar to the invalid provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such valid provisions. In case such valid provisions cannot be agreed upon, the invalidity of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole, unless the invalid provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid provisions.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

14.8 Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one of the Parties hereto to the other shall be in writing, delivered personally or by facsimile (and promptly confirmed by personal delivery or courier), by a next business day delivery service of a nationally recognized overnight courier service or by courier, postage prepaid (where applicable), addressed to such other Party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor in accordance with this Section 14.8 and shall be effective upon receipt by the addressee.

If to BioMarin:		BioMarin Pharmaceutical Inc. 105 Digital Drive Novato, California 94949 Attention: Chief Executive Officer Facsimile: (415) 382-7889

with a copy to:		BioMarin Pharmaceutical Inc. 105 Digital Drive Novato, California 94949 Attention: General Counsel Facsimile: (415) 382-7889

If to Genzyme:		Genzyme Corporation 500 Kendall Street Cambridge, Massachusetts 02142 Attention: President, LSD Therapeutics Facsimile: (617) 768-6419

with a copy to:		Genzyme Corporation 500 Kendall Street Cambridge, Massachusetts 02142 Attention: General Counsel Facsimile: (617) 252-7553

If to BioMarin/Genzyme LLC (if such notice is sent by BioMarin):		BioMarin/Genzyme LLC c/o Genzyme Corporation 500 Kendall Street Cambridge, Massachusetts 02142 Attention: President, LSD Therapeutics Facsimile: (617) 768-6419

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

with a copy to:		Genzyme Corporation 500 Kendall Street Cambridge, Massachusetts 02142 Attention: General Counsel Facsimile: (617) 252-7553

If to BioMarin/Genzyme LLC (if such notice is sent by Genzyme):		BioMarin/Genzyme LLC c/o BioMarin Pharmaceutical Inc. 105 Digital Drive Novato, California 94949 Attention: Chief Executive Officer Facsimile: (415) 382-7889

with a copy to:		BioMarin Pharmaceutical Inc. 105 Digital Drive Novato, California 94949 Attention: General Counsel Facsimile: (415) 382-7889

14.9 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to any choice of law principle that would dictate the application of the laws of another jurisdiction.

14.10 Arbitrate. Any disputes arising between the Parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by either Party of its obligations hereunder, whether before or after termination of this Agreement (a “Dispute”), which has not resolved in accordance with the provisions of Section 8.3 hereof, shall be finally resolved by binding arbitration as herein provided.

14.10.1 General. Except as otherwise provided in this Section 14.10, any arbitration hereunder shall be conducted under the commercial rules of the American Arbitration Association. Each such arbitration shall be conducted in the English language by a single arbitrator appointed in accordance with such rules, provided that if either Party requests the arbitration shall be conducted by a panel of three (3) arbitrators (the “Arbitration Panel”). In the case of three (3) arbitrators, each of BioMarin and Genzyme shall appoint one (1) arbitrator to the Arbitration Panel and the third arbitrator shall be appointed by the two (2) arbitrators appointed by BioMarin and Genzyme. The Arbitration Panel shall be convened upon delivery of the Notice of Arbitration (as herein defined).

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Any such arbitration shall be held in Chicago, Illinois. The Arbitration Panel shall have the authority to grant specific performance, and to allocate between the Parties the costs of arbitration in such equitable manner as it shall determine. Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be.

14.10.2 Procedure.

(a) Whenever a Party (the “Claimant”) shall decide to institute arbitration proceedings, it shall give written notice to that effect (the “Notice of Arbitration”) to the other Party (the “Respondent”). The Notice of Arbitration shall set forth in detail the nature of the Dispute, the facts upon which the Claimant relies and the issues to be arbitrated (collectively, the “Arbitration Issues”). Within fifteen (15) days of its receipt of the Notice of Arbitration, the Respondent shall send the Claimant and the Arbitration Panel a written Response (the “Response”). The Response shall set forth in detail the facts upon which the Respondent relies. In addition, the Response shall contain all counterclaims which the Respondent may have against the Claimant which are within the Arbitration Issues, whether or not such claims have previously been identified. If the Response sets forth a counterclaim, the Claimant may, within fifteen (15) days of the receipt of the Response, deliver to the Respondent and the Arbitration Panel a rejoinder answering such counterclaim.

(b) Within fifteen (15) days after the later of (i) the expiration of the period provided in Section 14.10.2(a) above for the Claimant to deliver a rejoinder or (ii) the completion of any discovery proceedings authorized by the Arbitration Panel: (A) the Claimant shall send to the Arbitration Panel a proposed resolution of the Arbitration Issues and a proposed resolution of any counterclaims set forth in the Response, including without limitation the amount of monetary damages, if any, or other relief sought (the “Claimant’s Proposal”); and (B) the Respondent shall send to the Arbitration Panel a proposed resolution of the Arbitration Issues, a proposed resolution of any counterclaims set forth in the Response and a proposed resolution of any rejoinder submitted by the Claimant, including without limitation the amount of monetary damages, if any, or other relief sought (the “Respondent’s Proposal”). Once both the Claimant’s Proposal and the Respondent’s Proposal have been submitted, the Arbitration Panel shall deliver to each Party a copy of the other Party’s proposal.

(c) The Arbitration Panel shall issue an opinion with respect to any Dispute, which opinion shall explicitly accept either the Claimant’s Proposal or the Respondent’s Proposal in its entirety (the “Final Decision”). The Arbitration Panel shall not have the authority to reach a Final Decision that provides remedies or requires payments other than those set forth in the Claimant’s Proposal or the Respondent’s Proposal. The concurrence of two (2) arbitrators shall be sufficient for the entry of a Final Decision. The arbitrators shall issue a Final Decision within one (1) month from the later of (i) the last day for submission of proposals under Section 14.10.2(b) above or (ii) the date of the final hearing on any Dispute held by the Arbitration Panel. A Final Decision shall be binding on both Parties.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

14.11 Injunctive Relief. The Parties hereby acknowledge that a breach of their respective obligations under Article 10 hereof may cause irreparable harm and that the remedy or remedies at law for any such breach may be inadequate. The Parties hereby agree that, in the event of any such breach, in addition to all other available remedies hereunder, the non-breaching Party or Parties shall have the right to seek equitable relief to enforce Article 10 hereof.

14.12 Entire Agreement. This Agreement, together with the Related Agreements, contain the entire understanding of the Parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, heretofore made are expressly merged in and made a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both Parties hereto. Each of the Parties hereby acknowledges that this Agreement and the Related Agreements are all the result of mutual negotiation and therefore any ambiguity in their respective terms shall not be construed against the drafting Party.

14.13 Section 365(n) of the Bankruptcy Code. All rights and licenses now or hereafter granted under or pursuant to this Agreement, including in the event of termination pursuant to Article 12 of the Manufacturing, Marketing and Sales Agreement, are rights to “intellectual property” (as defined in Section 101(35A) of Title 11 of the United States Code, as amended (such Title 11, the “Bankruptcy Code”)). The licensing Party hereby grants to the licensee Party a right of access and to obtain possession of and to benefit from (i) copies of research data, (ii) laboratory samples, (iii) product samples, (iv) formulas, (v) laboratory notes and notebooks, (vi) data and results related to clinical trials, (vii) regulatory filings and approvals, (viii) rights of reference in respect of regulatory filings and approvals, (ix) manufacturing procedure documentation and manufacturing records, (x) marketing, advertising and promotional materials, and (xi) all other embodiments of such intellectual property, that are in the licensing Party’s possession or control, freely licenseable without further payment or restriction by the licensing Party, and necessary for the licensee Party’s exercise of the rights and licenses to such intellectual property, all of which constitute “embodiments” of intellectual property pursuant to Section 365(n) of the Bankruptcy Code. The licensing Party agrees not to interfere with the licensee’s exercise of rights and licenses to intellectual property licensed under this Agreement and embodiments thereof in accordance with this Agreement and agrees to use commercially reasonable efforts to assist the licensee Party to obtain such intellectual property and embodiments thereof in the possession or control of Third Parties as reasonably necessary or desirable for the licensee Party to exercise such rights and licenses in accordance with this Agreement.

14.14 Headings. The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely guides or labels to assist in locating and reading the several Articles and Sections hereof.

14.15 Independent Contractors. It is expressly agreed that BioMarin and Genzyme shall be independent contractors and that, except as Members of BioMarin/Genzyme LLC, the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither BioMarin nor Genzyme shall have the authority to make any statements, representations or commitments of

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

any kind, or to take any action, which shall be binding on the other, without the prior consent of the other Party to do so.

14.16 Waiver. Except as expressly provided herein, the waiver by either Party hereto of any right hereunder or of any failure to perform or any breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other failure to perform or breach by said other Party, whether of a similar nature or otherwise, nor shall any singular or partial exercise of such right preclude any further exercise thereof or the exercise of any other such right.

14.17 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signature pages may be exchanged by facsimile.

[SIGNATURE PAGE FOLLOWS]

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

	GENZYME CORPORATION

	By:	/s/ David P. Meeker

	Print Name: David P. Meeker

	Title: President LSD Therapeutics

	Date: 12/31/07

	BIOMARIN PHARMACEUTICAL INC.

	By:	/s/ G. Eric Davis

	Print Name: G. Eric Davis

	Title: Vice President, General Counsel

	Date: 12/31/07

	BIOMARIN/GENZYME LLC

	By: BIOMARIN PHARMACEUTICAL INC.

	By:	/s/ G. Eric Davis

	Print Name: G. Eric Davis

	Title: Vice President, General Counsel

	Date: 12/31/07


	By: GENZYME CORPORATION

	By:	/s/ David P. Meeker

	Print Name: David P. Meeker

	Title: President LSD Therapeutics

	Date: 12/31/07

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

SCHEDULE 1.47

THIRD PARTY AGREEMENTS

1.) License Agreement effective as of September 4, 1998 entered into by and between the University of Iowa Research Foundation, an Iowa corporation and BioMarin/Genzyme LLC, a Delaware limited liability company.

2.) License Agreement effective as of September 4, 1998 entered into by and between Research Corporation Technologies, Inc., a Delaware nonprofit corporation and BioMarin/Genzyme LLC, a Delaware limited liability company.

3.) Grant Terms and Conditions Agreement dated April 1, 1997 entered into by and among BioMarin Pharmaceuticals, Harbor-UCLA Research and Education Institute and Emil D. Kakkis, as amended.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

APPENDIX A

[**]

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

EX-10.2 3 a2185010zex-10_2.htm EXHIBIT 10.2

Exhibit 10.2

MANUFACTURING, MARKETING AND SALES AGREEMENT

THIS MANUFACTURING, MARKETING AND SALES AGREEMENT (this “Agreement”) is made effective as of the 1^st day of January, 2008 (the “Effective Date”), by and among BioMarin Pharmaceutical Inc., a Delaware corporation having its principal place of business at 105 Digital Drive, Novato, California 94949 (“BioMarin”); Genzyme Corporation, a Massachusetts corporation having its principal place of business at 500 Kendall Square, Cambridge, Massachusetts 02142 (“Genzyme”) and BioMarin/Genzyme LLC, a Delaware limited liability company having its principal place of business at 500 Kendall Street, Cambridge, Massachusetts 02142 (“BioMarin/Genzyme LLC”).

RECITALS

A. BioMarin, Genzyme and BioMarin/Genzyme LLC are parties to a Collaboration Agreement dated as of September 4, 1998 (the “Original Collaboration Agreement”) pursuant to which BioMarin and Genzyme through BioMarin/Genzyme LLC develop, manufacture, market and sell Aldurazyme (as defined herein).

B. The Parties no longer desire to develop, manufacture, market and sell Aldurazyme through a joint venture and instead have agreed that: (1) BioMarin will manufacture Aldurazyme and sell finished product to Genzyme; (2) Genzyme will label and commercially distribute, market and sell Aldurazyme globally; (3) each of Genzyme and BioMarin may conduct its own research and development of Aldurazyme and other Collaboration Products (as defined herein) in accordance with the terms of this Agreement and the Amended and Restated Collaboration Agreement (as defined herein); and (4) BioMarin/Genzyme LLC will maintain and provide intellectual property licenses and sublicenses to BioMarin and Genzyme so that they may fulfill their respective obligations under this Agreement, the Amended and Restated Collaboration Agreement and the Fill Agreement (as defined herein).

C. BioMarin and Genzyme have amended and restated the Original Collaboration Agreement so that hereafter BioMarin/Genzyme LLC will no longer engage in commercial activities and will solely (1) hold the intellectual property relating to Aldurazyme and license all such intellectual property on the terms set forth herein to BioMarin and Genzyme on the terms set forth in the Amended and Restated Collaboration Agreement (as defined below) and (2) and engage in research and development activities that are mutually selected and funded by BioMarin and Genzyme.

D. To effect the foregoing, the Parties are also entering into (1) a separate Fill Agreement of even date herewith pursuant to which Genzyme will continue to provide fill services for Aldurazyme to BioMarin (the “Fill Agreement”); (2) the aforementioned amendment and restatement of the Original Collaboration Agreement of even date herewith (the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

“Amended and Restated Collaboration Agreement”); and (3) a Members Agreement of even date herewith pursuant to which certain current assets and liabilities of BioMarin/Genzyme LLC and its subsidiaries will be distributed to its Members (the “Members Agreement”).

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

1. DEFINITIONS.

1.1 “Adverse Experience” shall mean any undesirable physical, psychological or behavioral effect experienced by a human Patient or subject that is associated with the use of Aldurazyme, whether or not considered product-related, including an adverse experience occurring: in the course of the use of Aldurazyme in professional practice; from an overdose of Aldurazyme (whether accidental or intentional); from the abuse of Aldurazyme; from the withdrawal of Aldurazyme; or from any failure of Aldurazyme’s expected pharmacological action.

1.2 “Affiliate” shall mean any corporation, limited liability company, firm, partnership, limited liability partnership or other entity, whether de jure or de facto, which, at the time in question, is directly or indirectly owned by or controlled by, or under common control with, BioMarin or Genzyme, as the case may be. For the purposes of this definition, a Party shall be deemed to have “control” if such Party: (a) owns, directly or indirectly, fifty percent (50%) or more (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of (i) the voting stock or shareholders’ equity of a corporation, (ii) the partnership interests in a partnership, (iii) the membership interests in a limited liability company, or (iv) in the case of any other entity, the right to receive fifty percent (50%) or more of either the profits or the assets upon dissolution; or (b) possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect more than fifty percent (50%) of the members of the governing body of the corporation, limited liability company or other entity.

1.3 “Agreement” shall have the meaning set forth in the introductory paragraph hereof.

1.4 “Aldurazyme” shall mean alpha-L-iduronidase meeting the Specifications.

1.5 “alpha-L-iduronidase” shall mean recombinant human alpha-L-iduronidase.

1.6 “Amended and Restated Collaboration Agreement” shall have the meaning set forth in the recitals.

1.7 “Annual Net Sales” shall have the meaning set forth in Section 6.1(a).

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

1.8 “Batch” or “Lot” shall mean each separate and distinct quantity of Aldurazyme processed under continuous conditions and designated by BioMarin with a batch or lot number.

1.9 “BioMarin Companies” shall mean BioMarin and BioMarin Genetics.

1.10 “BioMarin Genetics” shall mean BioMarin Genetics, Inc., a Delaware corporation and wholly-owned subsidiary of BioMarin.

1.11 “BLA” shall mean a Biologics License Application or similar application as approved by the FDA on April 30, 2003, that provides for marketing approval for Aldurazyme in the United States, as the same may be updated or amended from time to time.

1.12 “cGMP Regulations” means the applicable current Good Manufacturing Practices as promulgated under ICH Q7A-Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients, U.S. Federal Food, Drug and Cosmetic Act at 21 CFR and the EEC Guide to Good Manufacturing Practices for Medical Products (Vol. IV — rules governing medical products in the European Community 1989) in the most recent version.

1.13 “Certificate of Analysis” or “COA” shall mean a document in the form attached as Exhibit B executed by BioMarin to certify that a Batch or Lot of Aldurazyme meets the Specifications.

1.14 “Certificate of Compliance” or “COC” shall mean a document certifying a Batch or Lot of Aldurazyme meets Genzyme’s product release criteria and was produced in compliance with cGMP requirements.

1.15 “Collaboration Product” shall mean Aldurazyme and any other pharmaceutical compositions of alpha-L-iduronidase, including without limitation any and all improvements, derivatives, analogs, combination products, delivery systems and dosage forms related thereto.

1.16 “commercially reasonable and diligent efforts” will mean that level of effort which, consistent with the exercise of prudent scientific and business judgment, is applied by the Party in question to its other therapeutic products at a similar stage of development and with similar commercial potential.

1.17 “Control” shall mean possession of the ability to grant a license or sublicense as provided for herein without violating the terms of an agreement with a Third Party.

1.18 “Effective Date” shall mean January 1, 2008.

1.19 “EMEA” shall mean the European Agency for the Evaluation of Medical Products or any successor agency.

1.20 “European Commission” shall mean that body of the European Union that grants Marketing Application Approvals.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

1.21 “FDA” shall mean the United States Food and Drug Administration, or any successor agency.

1.22 “Field” shall mean any and all therapeutic applications of alpha-L-iduronidase for MPS I and other alpha-L-iduronidase deficiencies. Notwithstanding the foregoing, the Field shall not include Gene Therapy for MPS I or other alpha-L-iduronidase deficiencies. For purposes of this Agreement, “Gene Therapy” shall mean treatment or prevention of MPS I or other alpha-L-iduronidase deficiencies by means of ex vivo or in vivo introduction (via viral or nonviral gene transfer systems) of nucleotide sequences (including without limitation, DNA, RNA and complementary and reverse complementary nucleotide sequences thereto, whether coding or non-coding).

1.23 “Fill Agreement” shall have the meaning set forth in the recitals.

1.24 “GAAP” shall mean the then-current United States generally accepted accounting principles, consistently applied.

1.25 “Insolvency Event” shall mean, with respect to a Party, that the Party (i) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian for itself or of all or a substantial part of its property; (ii) becomes unable, or admits in writing its inability, to pay its debts generally as they mature; (iii) makes a general assignment for the benefit of its or any of its creditors; (iv) is dissolved or liquidated in full or in part; (v) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consents to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or (vi) takes any action for the purpose of effecting any of the foregoing; or (vii) the Party has commenced against it proceedings for the appointment of a receiver, trustee, liquidator or custodian, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect and such proceeding is not dismissed or discharged within sixty (60) calendar days of commencement.

1.26 “Labeling Materials” shall have the meaning set forth in Section 3.1.

1.27 “MAA” shall mean the Marketing Application as approved by the EMEA on June 10, 2003 that provides for marketing approval for Aldurazyme in the European Union, as the same may be updated or amended from time to time.

1.28 “Manufacturing Know-How” shall mean all information, techniques, inventions, discoveries, improvements, practices, methods, knowledge, skill, experience and other technology, whether or not patentable or copyrightable, and any copyrights based thereon, relating to or necessary or useful for the production, purification, packaging, storage and transportation of Collaboration Products, including without limitation specifications, acceptance criteria, manufacturing batch records, standard operating procedures, engineering plans, installation, operation and process qualification

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

protocols for equipment, validation records, master files submitted to the FDA, process validation reports, environmental monitoring processes, test data including pharmacological, toxicological and clinical test data, cost data and employee training materials.

1.29 “Marketing Application” shall mean a marketing authorization application filed by or under authority of Genzyme with the requisite health regulatory authority of any country requesting approval for commercialization of Aldurazyme for a particular indication in such country, including as applicable, the MAA.

1.30 “Marketing Application Approval” shall mean, with respect to each country approval of the Marketing Application filed in such country by the health regulatory authority in such country, including as applicable, the MAA.

1.31 “Marketing Costs” with respect to Aldurazyme shall mean the sales and marketing costs and expenses incurred by Genzyme with respect to work performed by Genzyme and its Affiliates and subcontractors in connection with the performance of and in accordance with the marketing plan for Aldurazyme, including without limitation, sales and marketing costs related to performing market research, advertising, producing promotional literature, sponsoring seminars and symposia, sales training meetings and seminars, originating sales, providing reimbursement and other patient support services, recruitment costs and salaries and associated expenses for sales and marketing personnel and support staff, and distribution fees.

1.32 “Master Batch Record” shall mean a written description of the procedure to be followed by BioMarin in processing of a Batch of Aldurazyme, which description shall include, but not be limited to, a complete list of all active and inactive ingredients, components, weights and measures and procedures used in processing the Aldurazyme within the meaning of 21 CFR part 211.186, or its successor as in effect from time to time.

1.33 “Members Agreement” shall have the meaning set forth in the recitals.

1.34 “MPS-I” shall mean mucopolysaccharidosis I.

1.35 “Multiple Products Sale” shall mean a sale of Aldurazyme by Genzyme or its Affiliates to an independent Third Party customer that is associated, by contract or course of dealing, with the use or sale or one or more other products or services [**]. In determining the consideration received for Aldurazyme, the following shall be excluded: (i) Aldurazyme from the quantities provided to Genzyme pursuant to Section 6.1(d)(i), and (ii) transfers of Aldurazyme that are excluded from the definition of Net Sales under Section 1.36 below.

1.36 “Net Sales” with respect to Aldurazyme shall mean the gross invoiced sales price of Aldurazyme billed to independent Third Party customers, including without limitation Third Party distributors, in fully legitimate, arms length transactions, less: (a) credits or allowances granted upon billing corrections, (b) credits or allowances granted upon

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

returns or rejections, provided that such Aldurazyme shall be deemed to be unsold and treated in accordance with Section 6.7; (c) freight, shipping and insurance costs (incurred in transporting Aldurazyme to such customers to the extent separately billed); (d) quantity, cash and other trade discounts [**], credits or allowances actually allowed and taken; (e) customs duties, surcharges and taxes and other governmental charges incurred in connection with the production, sale, transportation, delivery, use, exportation or importation of Aldurazyme in final form; (f) amounts incurred resulting from governmental mandated rebate or discount programs; and (g) Third Party rebates and charge backs, hospital buying group/group purchasing organization administration fees or managed care organization rebates; all in accordance with standard allocation procedures, allowance methodologies and accounting requirements consistently applied, which procedures, methodologies and requirements are in accordance with GAAP. “Net Sales” with respect to Aldurazyme sold in Multiple Products Sales shall be calculated by Genzyme in good faith and shall equal a fair and equitable allocation of all consideration received by Genzyme in connection with a Multiple Products Sale, considering the nature and economic value of each component of the Multiple Products Sale. The transfer of Aldurazyme by Genzyme or one of its Affiliates to another Affiliate of Genzyme in furtherance of a sale to a Third Party shall not be considered a sale; in such cases, Net Sales shall be determined based on the invoiced sales price by the Affiliate to its customer, less the deductions allowed under this Section 1.36. “Net Sales” shall not include transfers of Aldurazyme for use for clinical purposes, in compassionate or expanded access programs, or in programs for patients paying a nominal price for Aldurazyme.

1.37 “Operating Agreement” shall mean that certain Operating Agreement of BioMarin/Genzyme LLC dated as of September 4, 1998 entered into by and among the BioMarin Companies and Genzyme.

1.38 “Order” shall mean a firm purchase order originated by Genzyme and sent to BioMarin which sets forth, at a minimum, the quantities of Aldurazyme ordered, the delivery dates and other material information as set forth in Section 3.3.

1.39 “Original Collaboration Agreement” shall have the meaning set forth in the recitals.

1.40 “Party” shall mean BioMarin, Genzyme or BioMarin/Genzyme LLC, as applicable, and “Parties” shall mean BioMarin, Genzyme and BioMarin/Genzyme LLC, collectively.

1.41 “Patent Rights” shall mean all US and foreign patents and patent applications (including continuations, continuations-in-part, divisionals, reissues, re-examinations, renewals, supplemental protection certificates and extensions) which are or become owned or controlled by a Party or to which such Party has, now or in the future, the right to grant licenses and other rights, which generically or specifically claim Collaboration Products, a process for manufacturing Collaboration Products, an intermediate used in such process or a use of a Collaboration Product.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

1.42 “Patient” shall mean any person who is the actual recipient of Aldurazyme for clinical or medical purposes.

1.43 “Percentage Interest” shall have the meaning set forth in the Operating Agreement.

1.44 “Post-Marketing Studies” shall mean any clinical trial using Aldurazyme performed by Genzyme or its Affiliates required by regulatory authorities as a condition to the issuance, continuation, or maintenance of a Marketing Application Approval. Post-Marketing Studies shall not include registries.

1.45 “Regulatory Approvals” shall mean all approvals from regulatory authorities in any country required lawfully to manufacture and market Aldurazyme in any such country, including without limitation approval of any BLA, any establishment license application filed with the FDA to obtain approval of the facilities and equipment to be used to manufacture Aldurazyme, any Marketing Application Approval and any product pricing approvals where applicable.

1.46 “Regulatory Scheme” shall mean the U.S. Food, Drug and Cosmetics Act and the regulations, interpretations and guidelines promulgated thereunder by the FDA or the regulatory scheme applicable to Aldurazyme in any country other than the United States, as such statutes, regulations, interpretations and guidelines or regulatory schemes may be amended from time to time.

1.47 “Related Agreements” shall mean the Amended and Restated Collaboration Agreement, the Members Agreement, the Fill Agreement and the Operating Agreement.

1.48 “Serious Adverse Experience” shall mean any Adverse Experience associated with the use of any of Aldurazyme that results in one or more of the following outcomes: death; a life-threatening experience; required or prolonged inpatient hospitalization; persistent or significant disability or incapacity; a congenital anomaly or defect; or the occurrence of an important medical event that may jeopardize the health of a Patient or subject, and may require medical or surgical intervention to prevent one of the outcomes listed above.

1.49 “SOP” shall mean standard operating procedure.

1.50 “Specifications” shall mean the written specifications for Aldurazyme set forth in Exhibit A hereto; provided that such specifications shall at all times comply with the relevant Regulatory Scheme in the country of sale and in the country of use. The Specifications with respect to any particular country shall automatically be amended upon receipt of required Regulatory Approvals from the regulatory authorities in such country for any changes thereto. Copies of the then-current Specifications shall be maintained by both BioMarin and Genzyme and shall become a part of this Agreement as if incorporated herein.

1.51 “Taxes” shall have the meaning set forth in Section 6.5.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

1.52 “Technology” shall mean inventions, trade secrets, copyrights, know-how, data and other intellectual property of any kind (including without limitation any proprietary biological or other materials, compounds or reagents, but not including Patent Rights).

1.53 “Technical Agreement” shall have the meaning set forth in Section 3.18.

1.54 “Territory” shall mean the world.

1.55 “Third Party” shall mean any entity other than BioMarin/Genzyme LLC, BioMarin or Genzyme and their respective Affiliates.

1.56 “Third Party Licenses” shall mean those licenses between BioMarin/Genzyme LLC and Third Parties set forth on Schedule 1.56. If after the Effective Date any Party enters into an agreement to license or acquire rights from a Third Party with respect to subject matter to be utilized in connection with Aldurazyme in accordance with Section 3.1.4 of the Amended and Restated Collaboration Agreement, such agreements shall also be included in the definition of Third Party Licenses for purposes of this Agreement.

2. EXCLUSIVE RELATIONSHIP.

2.1 Non-Compete. Except as otherwise expressly provided herein or in the Amended and Restated Collaboration Agreement and the Fill Agreement, during the term of this Agreement, neither BioMarin/Genzyme LLC, Genzyme nor BioMarin, nor any of their respective Affiliates, shall independently, or with or through a Third Party, conduct research or development activities regarding, or engage in the manufacture, marketing, sale or distribution of, Collaboration Products in the Field and in the Territory.

3. MANUFACTURING.

3.1 Manufacturing. Subject to the terms and conditions of this Article 3, during the term of this Agreement, BioMarin shall supply Genzyme with filled (but not labeled) Aldurazyme, and Genzyme shall exclusively purchase its requirements from BioMarin except as provided herein. The Aldurazyme supplied to Genzyme (i) shall conform in all respects to the Specifications, (ii) will be manufactured under cGMP using the process licensed or approved by regulatory authorities, (iii) shall have a remaining shelf life at the time of delivery to Genzyme of at least [**] of the total expiry of the product and (iv) shall not have experienced any manufacturing process deviations that would require notice to any regulatory authorities unless, prior to delivery to Genzyme, such regulatory authorities have been notified and have approved the deviations. BioMarin shall ensure that Genzyme has a complete and accurate copy of the Master Batch Record (as it may be modified from time to time pursuant to this Agreement). BioMarin and Genzyme shall be responsible for release testing as provided in the Technical Agreement; provided, however, that BioMarin agrees to complete all release testing for which is responsible under the Technical Agreement and provide the testing and release documentation to Genzyme within [**] of delivery of each such Lot. Genzyme shall prepare all Aldurazyme in final packaged form, including, without

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

limitation, all product labeling and other package inserts and materials required by applicable regulatory agencies (collectively, “Labeling Materials”).

3.2 Forecasts.

3.2.1 Initial Forecast and Initial Shipments. Prior to the Effective Date, Genzyme will provide to BioMarin a written initial forecast of sales and estimates of forthcoming orders of Aldurazyme from BioMarin that will cover the fifteen (15) month period commencing on the Effective Date. On the Effective Date, BioMarin will deliver sufficient vials of Aldurazyme to Genzyme such that Genzyme will hold at least [**] of filled Aldurazyme. Thereafter, BioMarin will promptly deliver all additional quantities of filled Aldurazyme as soon as each Lot is available for delivery in accordance with the delivery schedule specified in the initial forecast through September 30, 2008.

3.2.2 Rolling Forecasts. Beginning on March 17, 2008, Genzyme will provide to BioMarin a rolling written fifteen (15) month forecast of sales and estimates of forthcoming orders of Aldurazyme from BioMarin that will cover the period commencing at the beginning of the third (3^rd) following calendar quarter. For example, assuming that this Agreement is effective as of January 1, 2008, the forecast delivered by March 17, 2008 would cover the period of October 1, 2008 through December 31, 2009. Genzyme shall update such rolling fifteen-month forecast every calendar quarter (such that each forecast shall cover fifteen (15) months on a rolling basis), and such updates shall be provided not later than fifteen (15) days prior to the commencement of each quarterly period during the term hereof. The first three (3) months of each such forecast (i.e. October 1, 2008 through December 31, 2008 in the above example) shall constitute a binding commitment to order the quantity of Aldurazyme forecast for such period (the “Firm Period”). Projections for months four (4) through fifteen (15) (i.e., January 1, 2009 through December 31, 2009 in the above example) shall constitute Genzyme’s reasonable best estimates of future orders, but shall not be binding on Genzyme. To the extent that any new quarterly forecast calls for BioMarin to provide vials of Aldurazyme in quantities that exceed the average quarterly volume sold by Genzyme for the previous [**] period by more than [**], BioMarin shall not be required to provide such increased quantity of Aldurazyme without its consent; provided, however, that BioMarin will use its commercially reasonable and diligent efforts to supply the entire quantity of Aldurazyme ordered by Genzyme during such period. Additionally, BioMarin shall not be obligated to supply vials of Aldurazyme in quantities that exceed [**] of Genzyme’s estimate for vials of Aldurazyme for the relevant twelve-month non-binding period (based on the lowest non-binding forecast for each respective calendar quarter); provided, however, that BioMarin will use its commercially reasonable and diligent efforts to supply the entire quantity of Aldurazyme ordered by Genzyme

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

during such period, provided further, that BioMarin shall be under no obligation to alter its scheduled manufacturing of other products.

3.3 Orders. Genzyme shall submit to BioMarin an Order with each rolling fifteen-month forecast covering the Firm Period reflected in each such forecast. Each Order shall specify the quantity ordered, the required delivery date (provided that such delivery date is not earlier than [**] after the date of such Order), and any special instructions or invoicing information. For example, the forecast delivered by March 17, 2008 shall state a required delivery date no earlier than [**], 2008 for the Order covering the Firm Period (i.e., the quarterly period running from October 1, 2008 through December 31, 2008) reflected in such forecast. With respect to the quantity ordered, Genzyme shall indicate in the Order the number of vials of Aldurazyme (specifying the number of vials of Aldurazyme meeting each different Specification) to be used for each of the following categories, based on Genzyme’s good faith estimates at such time: (a) commercial sales, (b) compassionate use or expanded access programs, (c) Post-Marketing Studies (other than Post-Marketing Studies conducted under the Amended & Restated Collaboration Agreement), and (d) acceptance and in-country testing, final Lot release and regulatory requirements. Each Order issued shall be governed by the terms of this Agreement. BioMarin shall accept and fill all properly placed Orders that are consistent with the rolling forecasts and the limitations set forth in Section 3.2. BioMarin shall notify Genzyme (i) within [**] business days of the date of the Order with respect to all Orders that conform to this Agreement of its acceptance of such Order and (ii) within [**] business days of the date of the Order with respect to all Orders that BioMarin questions, in good faith, the consistency of such Order with the rolling forecasts or the limitations set forth in Section 3.2, whether or not it is accepting such Order. Any terms or conditions of any such Order that conflict or are inconsistent with the terms of the Agreement are hereby rejected. Genzyme agrees to use its commercially reasonable and diligent efforts to manage the purchase and delivery cycle so that Genzyme or its Affiliates is at all times after October 1, 2008 holding at least [**] of filled inventory of Aldurazyme, with the exact amount being held in inventory to be determined based on anticipated demand as determined by Genzyme in good faith.

3.4 Safety Stock. Except as provided below, BioMarin agrees to use its commercially reasonable and diligent efforts to hold at least [**] inventory of Aldurazyme at all times after October 1, 2008, with the exact amount being held in inventory to be determined based on anticipated demand as reflected in Genzyme’s rolling forecasts. In addition, in the event that there is a proposed change in the facilities used to manufacture Aldurazyme pursuant to Section 3.10 below or a proposed modification of the Specifications or the processes used to manufacture Aldurazyme pursuant to Section 3.11, BioMarin shall (i) hold ready for immediate transfer to Genzyme sufficient additional inventory of filled Aldurazyme (“Change Control Safety Stock”) to reasonably ensure uninterrupted supply of such Aldurazyme in each country in the Territory in which Aldurazyme is distributed, marketed and sold until the necessary Regulatory Approvals for such change or modification are obtained in such country; and (ii) ensure that all such Change Control Safety Stock shall at all times be manufactured and produced using the facilities, Specifications or processes approved by

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

the appropriate government or regulatory authorities in each country in the Territory as appropriate to enable sale of such Change Control Safety Stock in such country until the necessary Regulatory Approvals for such change or modification are obtained in such country.

3.5 Shipping of Aldurazyme. BioMarin will deliver Aldurazyme sold to Genzyme [**] by such means of transportation as shall be reasonably determined by BioMarin from time to time. BioMarin shall use its commercially reasonable and diligent efforts to ship Aldurazyme so that it will arrive at Genzyme’s facility on or within [**] business days of the date specified in the relevant Order. To the extent BioMarin incurs any shipping charges, premiums for freight insurance, customs duties or other import or export fees, or other transportation costs in connection with shipments of Aldurazyme to Genzyme, BioMarin will be solely responsible for such amounts. Included with each shipment or provided separately but concurrently with such shipment shall be the Certificate of Analysis for the drug product, Certificate(s) of Analysis for each Lot of drug substance or intermediate that went into the drug product, and a certificate of cGMP compliance in a form reasonably agreed to by BioMarin and Genzyme. All other obligations of BioMarin relating to the documents to be provided in connection with each shipment of Aldurazyme shall be governed by the Technical Agreement.

3.6 Compliance with Laws. BioMarin shall comply with all applicable laws, rules and regulations applicable to the manufacture, storage, handling and shipment of Aldurazyme.

3.7 Direct Shipment to Customers. BioMarin shall not be required to ship Aldurazyme directly to a customer of Genzyme unless Genzyme first seeks and obtains BioMarin’s prior written approval for such a shipment. BioMarin shall not ship Aldurazyme to any Third Party (other than bulk material to vendors for the sole purpose of filling Aldurazyme on behalf of BioMarin), without Genzyme’s prior written authorization.

3.8 Risk of Loss. [**].

3.9 Testing; Rejection.

(a) [**]

(b) [**]

(c) [**]

(d) [**]

(e) [**]

(f) [**]

(g) Genzyme shall not be obligated under any circumstances to accept delivery of any Lot of Aldurazyme unless it meets the Specifications and Regulatory

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Approvals for the relevant country in the Territory (as determined through the mechanism set forth in this Section 3.9) and the applicable warranties set forth herein. Genzyme shall be entitled to return to BioMarin any Aldurazyme which the Parties reasonably agree cannot or should not be sold due to a change in the Specifications or Regulatory Approvals, and BioMarin shall promptly replace, at no additional expense to Genzyme, such Aldurazyme with new Aldurazyme that does conform with the approved Specifications and Regulatory Approvals for the relevant country in the Territory.

3.10 Suppliers. Without limiting BioMarin’s responsibility under this Agreement, BioMarin shall have the right at any time to satisfy its supply obligations to Genzyme hereunder, either in whole or in part, through arrangements with Third Parties engaged to perform services or supply facilities or goods in connection with the manufacture, testing, and/or packaging of Aldurazyme. BioMarin shall ensure that all such facilities comply with applicable regulations and will give Genzyme written notice at least [**] days in advance of any such arrangement to determine whether such arrangement would require changes to a Marketing Application Approval application filed in any country and, if so, whether prior approval of any such changes is required by the regulatory authority in such country. To the extent that a change is required, after receipt of all necessary data from BioMarin, Genzyme shall, at BioMarin’s expense, use its commercially reasonable and diligent efforts to prepare and make such filings and, if required, seek approval for such change in such countries that Genzyme has responsibility for pursuant to Section 5.1.2(a); and BioMarin shall, at its own expense, use its commercially reasonable and diligent efforts to make such filings and, if required, seek approval for such change in the United States. BioMarin shall be required to continue to supply drug product using materials or testing from previously approved suppliers for each country in the Territory until such Regulatory Approvals are received in such country and to clearly mark which Lots use the new suppliers or testing laboratories at the time of shipment.

3.11 Changes to Aldurazyme.

(a) BioMarin may, at its election and in its sole discretion, modify the Specifications of or processes used to manufacture Aldurazyme at any time, subject to (i) BioMarin generating such data, including without limitation development, comparability, stability and validation data, as may be necessary to obtain Regulatory Approvals for such changes and (ii) such Regulatory Approvals being obtained; provided, however, that to the extent that any such modification would require clinical trials with MPS-I patients in order to obtain the necessary Regulatory Approvals for such modification, BioMarin may not implement such modification without the prior written consent of Genzyme, which consent shall not be unreasonably withheld, delayed or conditioned. BioMarin will give Genzyme written notice of any such change at least [**] days prior to its implementation, together with a proposed amendment to Exhibit A reflecting and identifying such change. Exhibit A shall not be amended to reflect any such change unless and until any necessary amendments to any Marketing Applications

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

and Regulatory Approvals to implement such changes are approved by the appropriate regulatory authorities.

(b) [**]

(c) Additionally, Genzyme may be required, as a result of negotiations with or directions from a regulatory authority of a country in the Territory, to propose changes in the Specifications as a condition to marketing or continuing to market Aldurazyme in that country. BioMarin shall use its commercially reasonable and diligent efforts to accommodate such changes to the Specifications for such country; provided that BioMarin may decide not accommodate any such change to the extent that it would require a change to the manufacturing process, if (i) historical data does not support such proposed Specification changes, (ii) such change would increase BioMarin’s cost of goods sold, or (iii) such change would jeopardize BioMarin’s ability to manufacture Aldurazyme for global demand. BioMarin recognizes that any such failure to accommodate any changes required by a regulatory authority in the Territory (or any delay in accommodating any such changes) may result in the prevention or suspension of distribution and sales of Aldurazyme in that country.

(d) Subject to Sections 3.2 and 3.3, BioMarin shall continue to supply Genzyme with Aldurazyme for each country in the Territory conforming to the then-approved Specifications or manufacturing process for such country as requested by Genzyme until such time as any change in the Specifications or manufacturing process, as applicable, is approved by the relevant regulatory authority(ies) for such country.

3.12 Responsibility for Costs. BioMarin shall be solely responsible for all costs resulting from decisions made by BioMarin pursuant to Sections 3.10 and 3.11 above, including without limitation, Genzyme’s fully burdened costs incurred in accordance with such Sections (including Genzyme’s FTE costs, filing fees, translation costs, and the costs of any changes to Labeling Materials resulting from decisions or changes made pursuant to such Sections) unless the change is related to (a) updating filings for raw materials, reagents, replacements for obsolete equipment or other material used in the manufacture or testing of Aldurazyme that are no longer available on commercially reasonable terms or (b) updating filings related to material used in the manufacture, release or testing of Aldurazyme based on the process and procedures included with then current Regulatory Approvals (such as validation of quantities of reference material), in which cases Genzyme shall make such filings and secure such Regulatory Approvals outside of the United States at Genzyme’s sole expense and BioMarin shall make such filings and secure such Regulatory Approvals in the United States at BioMarin’s sole expense. Genzyme shall provide BioMarin with quarterly, reasonably detailed invoices for all such costs, and BioMarin shall reimburse Genzyme for such costs within forty-five (45) days after receipt thereof. Notwithstanding any of the above, (i) any changes resulting from the request or direction of the FDA, EMEA or any other regulatory authority other than as a direct result of a change proposed or implemented by BioMarin pursuant to Section 3.10 or 3.11, (ii) those changes set forth on Schedule 3.12 and (iii) the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

validation of a Third Party [**] pursuant to Section 3.8 of the Fill Agreement shall not be deemed to be decisions made by BioMarin pursuant to Section 3.10 and 3.11 above and Genzyme shall bear all costs and expenses related to making all filings and seeking approval for such changes in all countries outside of the United States while BioMarin shall bear all costs and expenses related to making all filings and seeking approval for such changes in the United States; provided, however, that with respect to the changes set forth in Schedule 3.12, priority shall be given to those changes that fall into the categories described in clauses (a), (b) and (i) above; provided further that Genzyme’s responsibility under this Section 3.12 with respect to the cost of making regulatory filings and securing Regulatory Approvals outside of the United States (A) for the changes set forth in Schedule 3.12 shall end upon the earlier of (x) completion of such regulatory activities or (y) such time as the costs incurred with respect to such regulatory activities equal [**] and (B) related to the validation of a Third Party pursuant to clause (iii) above shall be for the first [**] of such costs (thereafter, BioMarin shall be responsible for the next [**], of such costs and BioMarin and Genzyme shall share equally any such costs in excess of [**] (with BioMarin reimbursing Genzyme for BioMarin’s portion of all such costs within forty-five (45) days after receipt of reasonably detailed invoices therefor)).

3.13 Failure to Supply.

(a) In the event that technical, regulatory or other reasons or events beyond BioMarin’s reasonable control prevent BioMarin from producing Aldurazyme, BioMarin will use its commercially reasonable and diligent efforts to secure a Third Party contract manufacturer in a timely manner. All such contract manufacturing activities will be at BioMarin’s sole cost and expense and BioMarin shall have full authority to direct and control the contract manufacturer and Genzyme, except as provided below, shall continue to purchase Aldurazyme from BioMarin. Notwithstanding the foregoing, during the technology transfer to and validation of any Third Party contract manufacturer, Genzyme may, at its election and expense, have technical representatives present for such activities and BioMarin will consider, but will have no obligation to implement, any suggestions or recommendations made by such representatives.

(b) In the event that BioMarin is unable to secure a Third Party contract manufacturer within [**] days, then BioMarin shall offer Genzyme the opportunity to produce Aldurazyme. If Genzyme agrees to produce Aldurazyme, then BioMarin and Genzyme shall promptly negotiate in good faith commercially reasonable and diligent terms and conditions for such arrangement; provided, however, BioMarin and Genzyme shall negotiate in good faith for payment amounts and structures to compensate Genzyme for its out of pocket and internal expenses incurred in the technology transfer and regulatory process, cost of involvement to allow it to manufacture Aldurazyme and variable costs associated with the actual production of Aldurazyme. If BioMarin and Genzyme enter into such arrangement, then BioMarin will promptly initiate a technology transfer process during which BioMarin and its

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

subcontractors, as appropriate, will provide Genzyme or its designee with all know-how, data and information necessary or desirable to enable Genzyme to manufacture or have manufactured Aldurazyme for the Territory. Additionally, BioMarin will make such employees involved in the development, manufacture and release of Aldurazyme available to ensure a complete technology transfer is achieved in a timely fashion.

(c) In the event that BioMarin and Genzyme enter into an arrangement pursuant to clause (b) above and BioMarin is subsequently able to resume production of Aldurazyme, BioMarin may elect, upon [**] days prior written notice to Genzyme to reacquire such production responsibilities from Genzyme. If BioMarin elects to reacquire production responsibilities from Genzyme, then BioMarin will promptly reimburse Genzyme the total amount of costs incurred by Genzyme (including, without limitation any and all capital expenditures) in connection with the technology transfer process described in clause (b) above, building or acquiring capacity and resources to manufacture Aldurazyme, filing for and obtaining all necessary Regulatory Approvals to produce Aldurazyme, and transferring such manufacturing responsibility back to BioMarin. Such amounts to be reimbursed by BioMarin to Genzyme pursuant to the previous sentence shall be offset by the amount such costs have already been recovered by Genzyme pursuant to payments made by BioMarin pursuant to clause (b) above. BioMarin shall reimburse Genzyme for such amounts within forty-five (45) days after receipt of reasonably detailed invoices therefor. Upon BioMarin resuming production responsibilities from Genzyme with respect to Aldurazyme, the royalty payable by Genzyme to BioMarin shall be increased to those levels set forth in Section 6.1 for Aldurazyme produced by BioMarin.

(d) BioMarin will use its commercially reasonable and diligent efforts to continue to produce Aldurazyme for supply to such countries in the Territory where Aldurazyme is used or sold until such time as this Third Party manufacturer or Genzyme, as the case may be, has been approved in all countries in the Territory. If BioMarin is not able to do so, then Genzyme will not be held in breach of any of its obligations due to an inability to supply Patients and commercialize Aldurazyme in such country resulting from BioMarin’s failure to supply product that meets the regulatory requirements in such country.

3.14 Certificates of Analysis. BioMarin shall perform, or cause its contract manufacturer(s) to perform, quality assurance, control tests, and release on each Lot of Aldurazyme, to the extent specified in and in compliance with the Technical Agreement, before delivery and shall prepare, or cause its contract manufacturer(s) to prepare and deliver, a written report of the results of such tests (for purposes of Sections 3.14 through 3.17 (inclusive), such contract manufacturer(s) shall be included in the definition of the term “BioMarin”). Each test report shall set forth for each Lot delivered the items tested, specifications and results in a Certificate of Analysis containing the types of information typical for such reports or required by the FDA or other applicable regulatory authority. BioMarin shall maintain such certificates for a period of not less

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

than five (5) years from the date of manufacture or for such longer period as required under applicable requirements of the FDA or other applicable regulatory authority.

3.15 Certificates of Manufacturing Compliance. BioMarin shall prepare, or cause to be prepared and delivered, and maintain for a period of not less than five (5) years or for such longer period as required under applicable requirements of the FDA or other applicable regulatory authority for each Lot of Aldurazyme manufactured a certificate of manufacturing compliance containing the types of information typical for such reports or required by the FDA or other applicable regulatory authority, which certificate will certify that the Lot of Aldurazyme was manufactured in accordance with the Specifications and the cGMP Regulations as the same may be amended from time to time.

3.16 Regulatory Inspections; Reports. BioMarin shall advise Genzyme immediately if an authorized agent of the FDA or other regulatory authority visits any of manufacturing facilities used to produce Aldurazyme, for an inspection with respect to the Aldurazyme, and of any written or oral inquiries by any such authority about such facilities or the procedures for the manufacture, storage or handling of Aldurazyme or the packaging, labeling, marketing, distribution, promotion, commercialization for sale and sale of Aldurazyme. BioMarin shall furnish to Genzyme the report and any and all correspondence issued by or provided to such agency in connection with such visit or inquiry, to the extent that such report or correspondence relates to Aldurazyme, within ten (10) business days after BioMarin’s receipt of such report or correspondence, as the case may be, and Genzyme shall have the right to comment on any response by BioMarin to such inspecting agency. Notwithstanding the prior sentence, BioMarin shall be under no obligation to accept any comments provided by Genzyme on any response by BioMarin to such inspecting agency and all submissions to such agency by BioMarin shall be at its sole and absolute discretion.

3.17 Access to BioMarin Facilities. Genzyme shall have the right to audit once annually each of those portions of the manufacturing, finish processing or storage facilities where Aldurazyme is being manufactured, finished or stored, or any subcontractor who is manufacturing, finishing or storing Aldurazyme for BioMarin, at any time during regular business hours and upon reasonable advance notice to ascertain compliance with the cGMP Regulations, as the same may be amended from time to time. Subject to the terms and conditions of Section 8.1 below, confidential information disclosed to or otherwise gathered by Genzyme during any such audit or provided by BioMarin shall be maintained as confidential.

3.18 Technical Agreement. Within ninety (90) days after the Effective Date, the Parties shall execute and deliver a new Technical Agreement containing customary provisions consistent with the allocation of responsibilities set forth in this Agreement. Until a new agreement is executed and delivered, the Parties shall operate under the existing Technical Agreement.

3.19 Hollister-Stier Agreement. BioMarin shall have sole responsibility for managing the relationship with Hollister-Stier Laboratories, LLC pursuant to the Supply Agreement

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

by and between Hollister-Stier Laboratories, LLC and BioMarin/Genzyme LLC dated as of November 6, 2006, as it may be amended from time to time (as amended, the “Hollister-Stier Agreement”) and shall be solely responsible for all amounts payable to Hollister-Stier and liabilities arising under such Agreement. As soon as practicable after the Effective Date, BioMarin shall use its commercially reasonable and diligent efforts to cause the Hollister-Stier Agreement to be assigned from BioMarin/Genzyme LLC to BioMarin.

4. MARKETING AND SALES

4.1 Exclusive Right to Market, Sell and Distribute. Subject to the terms and conditions of this Article 4, Genzyme shall have the exclusive right to distribute, market and sell Aldurazyme throughout the world, including without limitation all pricing and reimbursement activities. Genzyme agrees (by itself or through its Affiliates or Third Parties selected by Genzyme at its election and in its sole discretion) to use its commercially reasonable and diligent efforts to establish Aldurazyme in the markets, fulfill market demand and meet the marketing and distribution goals for Aldurazyme determined by Genzyme in its good faith, subject to the receipt of necessary Regulatory Approvals and subject to BioMarin’s performance of its obligations under Article 3.

4.2 Compliance With Laws. Genzyme shall comply with applicable laws, rules and regulations in each country in which Aldurazyme is licensed, marketed or sold relating to the marketing, sale and distribution of Aldurazyme. Without limiting the foregoing, Genzyme shall comply with all U.S. federal and state laws pertaining to price reporting and, except to the extent such compliance is BioMarin’s responsibility as the holder of the BLA and subject to BioMarin’s compliance with its obligations under Section 5.1.2, marketing disclosure.

4.3 Marketing and Distribution Expenses.

4.3.1 Genzyme shall be solely responsible for payment of all Marketing Costs.

4.3.2 Beginning on January 1, 2008 and continuing so long as this Agreement remains in force, Genzyme agrees to [**].

4.3.3 Genzyme shall keep complete and accurate books and records of all Marketing Costs relating to Aldurazyme. BioMarin shall have the right, at BioMarin’s expense, through a certified independent public accountant, to have reasonable access upon reasonable advance notice and during normal business hours to such books and records for the purpose of verifying the accuracy of such Marketing Costs; provided, however, that BioMarin shall not have the right to perform any audit work pursuant to this Section 4.3.3 unless and until [**]. BioMarin and Genzyme shall agree in good faith upon reasonable procedures before BioMarin’s auditors begin the audit work pursuant to this Section 4.3.3. The report issued by such auditor shall be final, binding and conclusive upon each of BioMarin and Genzyme. Such verifications may be conducted not more than once in each calendar year.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

The books and records for any particular calendar quarter may not be examined under this Section 4.4.3 more than once.

4.3.4 BioMarin agrees that all information subject to review under this Section 4.3 (other than information directly related to Aldurazyme) is Genzyme’s confidential information and that it shall cause its accounting firm to retain all such information in confidence (even as to BioMarin) subject to the confidentiality restrictions of Article 8 hereof. Notwithstanding the prior sentence, Genzyme acknowledges and agrees that such accounting firm’s obligation to retain all such information in confidence from BioMarin shall not apply in the event that BioMarin and Genzyme are involved in a dispute under Section 13.8 related to this Section 4.3 and such information is necessary for BioMarin’s use in connection with such dispute; provided, however, that BioMarin shall only use such information in connection with such dispute and such information shall remain subject to the confidentiality restrictions of Article 8.

4.4 Medical Information. Genzyme shall have sole responsibility for responding to all requests for medical information regarding Aldurazyme. If BioMarin receives any such requests, it shall promptly direct such requests to Genzyme. Notwithstanding the foregoing, BioMarin may maintain a website or other informational resources where it may publish general medical information relating to MPS I, so long as such website complies in all respects with applicable laws, rules and regulations. This Section 4.4 shall not prohibit BioMarin from publishing non-medical information in its investor relations communications, including on BioMarin’s website, provided that such publication is consistent with the terms and conditions of Article 8.

4.5 Pharmacovigilance.

4.5.1 Genzyme and its Affiliates will be responsible for continuing all pharmacovigilance activities with respect to Aldurazyme, including without limitation maintaining Aldurazyme Core Safety Information. BioMarin shall have the right to audit, at any time during regular business hours and upon reasonable advance notice to audit such pharmacovigiliance activities with respect to Aldurazyme. Such audit rights shall include the right to review, inspect and/or audit any systems or processes involved or utilized in such pharmacovigilance activities as well as the right to review, inspect or audit all information or data necessary to be filed with any regulatory or governmental authority.

4.5.2 In the event that the Aldurazyme Labeling Materials must be updated per new Core Safety Information, after receipt of all necessary information and data from Genzyme, BioMarin agrees to use its commercially reasonable and diligent efforts make all necessary regulatory filings to FDA and obtain approvals in order to ensure the content of Aldurazyme Labeling Materials in the United States is in-line with the Core Safety Information. Genzyme shall be responsible for using its commercially reasonable and diligent efforts to

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

make such filings and obtain such approvals outside of the United States. Each of BioMarin and Genzyme shall be given the opportunity to attend and participate in any meetings or discussions that the other Party may have with any regulatory authorities regarding any submissions or approvals and shall be provided with an opportunity to review and comment upon any correspondence, submission or communication that the other Party may have with any such regulatory authority prior to such correspondence, submission or communication being made or submitted to such regulatory authority.

4.5.3 As of the Effective Date and throughout the term of this Agreement, Genzyme shall maintain one or more written SOP(s) to collect Adverse Experience information. The content of any SOP(s) shall include, but not be limited to, specific instructions regarding the type of Adverse Experience information collected, the time frame for collection, provisions for secure transmissions, and inter-company processes to be used for notification of said information. In addition to the foregoing, the Parties shall update the current guidelines and procedures to govern receipt, processing, assessment and submission of Aldurazyme Adverse Experience and Serious Adverse Experience reports to the FDA, the European Commission and other regulatory authorities within sixty (60) days after the Effective Date. Procedures described therein shall ensure compliance with all applicable laws and regulations. The Parties acknowledge that Genzyme’s SOPs as they exist as of the Effective Date satisfy the requirements of this Section 5.2.1 for reports to the FDA.

4.5.4 BioMarin shall have responsibility for filing all 15-day alert reports, 15-day alert follow-up reports and periodic adverse event reports to the FDA per 21 CFR §600.80. Genzyme or its designee shall have responsibility for filing such reports outside of United States, including EMEA and other regulatory authorities according to the local regulations.

4.6 Complaints. Within sixty (60) days after the Effective Date, Genzyme and BioMarin shall develop a written protocol for exchanging information on product complaints concerning Aldurazyme of which either Party becomes aware, so as to allow each of Genzyme and BioMarin to comply with its regulatory obligations. At a minimum, such protocol shall provide that the Party receiving such complaint or information shall promptly, but in any event not later than twenty-four (24) hours after receipt, advise the other Party (excluding, for purposes of this Section, BioMarin/Genzyme LLC) in writing of the details of such complaint or information, after learning of such information. Promptly thereafter, Genzyme shall report such incident to the appropriate regulatory authorities in the countries in which Aldurazyme is being commercialized, in accordance with the appropriate laws and regulations of the relevant countries and authorities; provided, however, that with respect to reports that are to be made with the FDA, BioMarin shall make such report using the information prepared by Genzyme. Such reporting activities shall be coordinated between Genzyme and BioMarin where time and law permit. The Party initially receiving the complaint or information shall provide the other Party with all follow-up information related to such incident generated

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

by the receiving Party or required by the other Party to satisfy its regulatory filing obligations.

4.7 Registries; Post-Marketing Studies.

4.7.1 Registries. Genzyme shall have the responsibility for conducting the MPS-I registry program as it exists on the Effective Date at Genzyme’s sole expense. In the event that the scope of the registry program is expanded to implement any Post-Marketing Studies required by regulatory authorities to be conducted through or as part of the registry program, such costs above the general cost of maintaining the registry program as currently conducted will be funded by BioMarin/Genzyme LLC pursuant to the terms of the Amended and Restated Collaboration Agreement.

4.7.2 Post-Marketing Studies. With respect to any Post Marketing Studies required by a jurisdiction where Aldurazyme does not have Regulatory Approval as of the Effective Date, Genzyme shall, at its sole expense and in its sole discretion, have the responsibility for conducting any such Post-Marketing Studies that are not funded by BioMarin/Genzyme LLC pursuant to the terms of the Amended and Restated Collaboration Agreement.

4.8 Use of Trademarks. Aldurazyme shall be sold under trademarks determined by Genzyme and owned by or licensed to Genzyme or BioMarin/Genzyme LLC.

4.9 Records. Genzyme shall maintain complete and accurate records of all movements and transactions involving Aldurazyme by an appropriate identifier and by customer so that all such movements and transactions can be traced quickly and effectively. Genzyme shall maintain such records for a minimum period of five (5) years after the relevant movement or transaction contained in such record. The records maintained by Genzyme pursuant to this Section 4.9 shall be Genzyme’s confidential information under Article 8 and subject to BioMarin’s audit rights under Section 6.5.

4.10 Regulatory Inspections; Reports. Genzyme shall advise BioMarin immediately of any visit by an authorized agent of a regulatory authority to, or written or oral inquiries by any such authority about, any Genzyme facilities (or facilities of any subcontractors engaged by Genzyme) used to package, label or store Aldurazyme or procedures for the filling, manufacture, storage, or handling of Aldurazyme, or the packaging, labeling, marketing, distribution, promotion, commercialization for sale and sale of Aldurazyme. Genzyme shall furnish to BioMarin the report and any and all correspondence issued by or provided to such authority in connection with such visit or inquiry to the extent such report or correspondence relates to Aldurazyme, within ten (10) business days after Genzyme’s receipt of such report or correspondence, as the case may be, and BioMarin shall have the right to comment on any response by Genzyme to such inspecting agency. Notwithstanding the prior sentence, Genzyme shall be under no obligation to accept any comments provided by BioMarin on any response by Genzyme to such inspecting agency and all submissions to such agency by Genzyme shall be at its sole and absolute discretion.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

4.11 Access to Genzyme Facilities. BioMarin shall have the right to audit once annually each of those portions of the distribution or storage facilities of Genzyme or its Affiliates where Aldurazyme is being stored, sold or distributed, or any subcontractor or other Third Party who is storing, selling or distributing Aldurazyme for Genzyme, at any time during regular business hours and upon reasonable advance notice to ascertain compliance with cGMP Regulations, as the same may be amended from time to time. Such audit rights shall include the right to review, inspect and/or audit any systems or processes involved or utilized in the storage, selling or distribution of Aldurazyme as well as the right to review, inspect or audit all information or data necessary to be filed with any regulatory authority (including the FDA) or related to the BLA. Genzyme shall furnish to BioMarin any report or correspondence issued by or provided to any governmental authority in connection with any governmental visit or inquiry regarding the facilities at which Genzyme, its Affiliates or any Third Party stores, sells or distributes Aldurazyme or the procedures related thereto. Subject to the terms and conditions of Section 8.1 below, confidential information disclosed to or otherwise gathered by BioMarin during any such audit or provided by Genzyme shall be maintained as confidential.

4.12 Third Party Licenses. Genzyme hereby agrees to pay any and all royalties, sublicense fees and other costs owed by BioMarin/Genzyme LLC with respect to the manufacture or sale of Aldurazyme to any Third Party pursuant to the terms and conditions of the Third Party Licenses. Genzyme further agrees to fulfill any and all of the reporting obligations BioMarin/Genzyme LLC may have to any Third Party related to Aldurazyme by virtue of the Third Party Licenses.

4.13 Suspension of Distribution. Each Party shall notify the other promptly if it becomes aware of a problem with the quality of Aldurazyme distributed in the Territory, or a directive from the FDA, the EMEA or any other applicable regulatory authority related to Aldurazyme distributed in the Territory. Upon receipt of any such notice from BioMarin, Genzyme may suspend sales and distribution of Aldurazyme in the Territory, at its reasonable discretion. After any such suspension, BioMarin and Genzyme shall consult in good faith to determine whether and when to resume sales and distribution of Aldurazyme; provided, however, that no such suspension shall be deemed to be a default by Genzyme hereunder except to the extent that Genzyme does not resume sales and distribution of Aldurazyme within fifteen (15) business days after the Parties agree that such quality problem has been resolved.

5. REGULATORY MATTERS.

5.1 Marketing and Regulatory Approvals.

5.1.1 Marketing Applications. Genzyme shall be responsible, in its sole discretion and at its sole expense, for filing Marketing Applications for Aldurazyme in each country, other than as expressly provided in Sections 3.10, 3.11, 3.12 and 5.1.2, in which Aldurazyme is licensed, marketed or sold, up to and including Marketing Application Approval, and for thereafter maintaining such Marketing Application Approvals. In connection with Genzyme’s filing

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

of Marketing Applications, BioMarin shall provide Genzyme with a copy, in English, of all necessary supporting information and data when required, to prepare appropriate regulatory submissions affecting approval and maintenance of market or of product pricing. Nothing in this Article 5 shall be deemed to require Genzyme to file Marketing Applications and obtain Marketing Application Approvals in each country in the Territory; Genzyme shall determine in good faith where and when to file and maintain such applications and approvals in a manner consistent with its obligation to use its commercially reasonable and diligent efforts to commercialize Aldurazyme.

5.1.2 Regulatory Approvals.

(a) Genzyme shall be responsible at its sole expense: (i) for the filing of all reports, documents or other information regarding Aldurazyme required by the EMEA or any other governmental agency or body outside of the United States having jurisdiction related to Aldurazyme and for securing all necessary Regulatory Approvals and for ensuring that Aldurazyme remains in good standing with all such governmental agencies or bodies and all other applicable jurisdictions (other than the United States) for as long as Genzyme determines to market and sell Aldurazyme in such jurisdictions; and (ii) for obtaining and maintaining all permits and licenses necessary to enable Genzyme to distribute Aldurazyme under this Agreement. Genzyme agrees to provide BioMarin with copies of all filings, reports, documents or other information provided by it to any regulatory authority outside of the United States related to Aldurazyme within thirty (30) days of making such filing with such regulatory authority.

(b) BioMarin shall be responsible at its sole expense: (i) for the filing of all reports, documents or other information regarding Aldurazyme required by the FDA or any other governmental agency in the United States having jurisdiction related to Aldurazyme and for securing all necessary Regulatory Approvals and for ensuring that Aldurazyme remains in good standing with the FDA and such other governmental agencies; and (ii) for obtaining and maintaining all permits and licenses to enable BioMarin to produce Aldurazyme for the global market under this Agreement. BioMarin agrees to provide Genzyme with copies of all filings, reports, documents or other information provided by it to any regulatory authority in the United States related to Aldurazyme within thirty (30) days of making such filing with such regulatory authority.

(c) All regulatory filings for Aldurazyme in the United States will be filed by and in the name of BioMarin. BioMarin agrees that: (i) it shall hold the licenses issued in respect of such Regulatory Approval filings, and maintain control over the manufacturing facilities, equipment and personnel, to the extent required by the Regulatory Scheme; (ii) it shall maintain compliance with the applicable Regulatory Scheme; (iii) each of the Parties shall have an irrevocable right of access and reference to such Regulatory Approval filings, licenses and facilities in connection with its exercise of its rights and performance of its obligations under this Agreement, the Amended and Restated Collaboration Agreement and

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

the Fill Agreement; and (iv) it shall comply with the provisions of Article 12 hereof with respect to the ownership and/or disposition of such Regulatory Approvals in the event this Agreement is terminated and that it will provide the level of cooperation described in this Agreement in connection therewith.

(d) All regulatory filings for Aldurazyme outside of the United States will be filed by and in the name of Genzyme or its designee. Genzyme agrees that: (i) it shall hold the licenses issued in respect of such Regulatory Approval filings, maintain control over the distribution facilities, equipment and personnel, and engage in pharmacovigilence to the extent required by the Regulatory Scheme; (ii) it shall maintain compliance with the applicable Regulatory Scheme; (iii) each of the Parties shall have an irrevocable right of access and reference to such Regulatory Approval filings, licenses and facilities in connection with its exercise of its rights and performance of its obligations under this Agreement, the Amended and Restated Collaboration Agreement and the Fill Agreement; and (iv) it shall comply with the provisions of Article 12 hereof with respect to the ownership and/or disposition of such Regulatory Approvals in the event this Agreement is terminated and that it will provide the level of cooperation described in this Agreement in connection therewith.

(e) No Party may assign or otherwise transfer a Regulatory Approval for Aldurazyme without the prior written consent of the other Parties; provided, however, that either BioMarin or Genzyme may, without such consent, assign such Regulatory Approvals (i) in connection with a corporate reorganization, to any member of an affiliated group, all or substantially all of the equity interest of which is owned and controlled by such Party or its direct or indirect parent corporation or (ii) in connection with a merger, consolidation or sale of substantially all of such Party’s assets to an unrelated Third Party; provided, however, that such Regulatory Approvals shall not be transferred separate from this Agreement and the Related Agreements and all or substantially all of such Party’s other business assets, including without limitation those business assets that are the subject of this Agreement. Any purported assignment in violation of this Section 5.1.2(e) shall be void.

5.2 Recalls.

5.2.1 BioMarin may, in its sole discretion, determine whether or when to initiate any recalls of Aldurazyme in the United States and Genzyme may, in its sole discretion, determine whether or when to initiate any recalls of Aldurazyme anywhere else in the world. As of the Effective Date and throughout the term of this Agreement, BioMarin and Genzyme shall prepare and maintain a written SOP, to handle any recalls of Aldurazyme. Such SOP shall include, without limitation, prior notice to and consultation with the other Party of any recall; provided, however, that in no event shall such consultation be deemed to limit or supersede the Parties’ ability to make recall decisions in their sole discretion pursuant to the first sentence hereof. Genzyme shall transmit recall decision information to BioMarin to Vice President,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Regulatory Affairs, by phone at (415) 506-6708 or facsimile at (415) 506-6306. BioMarin shall transmit recall decision information to Genzyme to Regulatory Affairs/QA, attention: Vice President, Regulatory Affairs and Corporate Quality Compliance, by phone at (508) 661-6172 or facsimile at (508) 661-8851. In the event that (i) any regulatory authority or other governmental agency or authority issues a request or directive or orders that Aldurazyme be recalled or retrieved, (ii) a court of competent jurisdiction orders that Aldurazyme be recalled or retrieved or (iii) a Party determines that Aldurazyme should be recalled, retrieved or a “Dear Doctor” letter is required relating to restrictions on use of Aldurazyme in a country for which it is responsible, the Party responsible for the relevant country pursuant to the first sentence hereof shall conduct such activity and the Parties shall take all appropriate corrective actions and shall execute the steps detailed in the SOP. To the extent practicable, the Parties shall coordinate the notices of any such recall to be delivered to regulatory authorities (including the timing thereof). Genzyme and BioMarin shall cooperate fully with one another in conducting such action. Genzyme shall destroy units of Aldurazyme lawfully recalled only upon BioMarin’s (or any regulatory authority’s) written instruction to destroy such units of Aldurazyme, and only then in accordance with BioMarin’s procedures and instructions. Otherwise, Genzyme may return the recalled units of Aldurazyme to BioMarin in accordance with BioMarin’s instructions within thirty (30) days after completion of the action. In the event that either BioMarin or Genzyme becomes aware of circumstances that may necessitate a recall of Aldurazyme in any country for which it is not responsible pursuant to this Section 5.2, it will promptly notify the other Party of such circumstances.

5.2.2 In the event a recall results from the manufacture of Aldurazyme (including without limitation changes made pursuant Sections 3.11 and 3.12 hereof) or BioMarin’s negligence or willful misconduct, BioMarin shall be responsible for the expenses thereof. In the event a recall results from Genzyme’s filling, packaging, labeling or storage of Aldurazyme, or Genzyme’s negligence or willful misconduct (including without limitation any negligence or willful misconduct resulting in adulteration of Aldurazyme), Genzyme shall be responsible for the expenses thereof. Otherwise, the Parties shall share equally the expenses of the action. For purposes of this Agreement, the expenses of the action shall be the expenses of notification and return or destruction (if such destruction is authorized by BioMarin or the applicable regulatory authority) of units of the recalled Aldurazyme, the cost of replacement of the recalled Aldurazyme, and any costs directly associated with the distribution of replacement Aldurazyme. For the avoidance of doubt, amounts payable under Article 6 hereof shall only be payable on Aldurazyme used to replace the recalled Aldurazyme (not on the returned Aldurazyme itself).

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

6. PAYMENTS.

6.1 Transfer Royalties.

(a) For the Aldurazyme supplied by BioMarin to Genzyme pursuant to Article 3, Genzyme shall pay to BioMarin the following royalties based upon the Annual Net Sales of Aldurazyme:

Annual Net Sales	Royalty Payment %

of between $0 and $130,000,000	39.5	%

of between $130,000,001 and $140,000,000	40	%

of between $140,000,001 and $155,000,000	42	%

of between $155,000,001 and $170,000,000	44	%

of between $170,000,001 and $185,000,000	46	%

of between $185,000,001 and $200,000,000	48	%

of $200,000,001 and above	50	%

As used herein, “Annual Net Sales” shall mean total aggregate Net Sales of all Aldurazyme sold in the particular calendar year.

(b) It is expressly understood that the royalty payment to be made by Genzyme to BioMarin pursuant to Section 6.1(a) shall be based on a tiered structure. For instance, if total Annual Net Sales are $145,000,000, the royalty payable from Genzyme to BioMarin pursuant to the methodology outlined in Section 6.1(a) would be equal to $57,450,000, calculated as follows: ($130,000,000 x 39.5%) + ($10,000,000 x 40%) + ($5,000,000 x 42%).

(c) In the event that the [**] Aldurazyme in any country in which Aldurazyme has received all necessary Regulatory Approvals and, if applicable, pricing approvals as of the Effective Date (“Existing Markets”) is [**] over any calendar quarter, then [**]. The term [**] for purposes of this clause (c) shall mean a [**] of Aldurazyme.

(d) Notwithstanding the foregoing,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

(i) BioMarin agrees to supply Genzyme’s requirements of Aldurazyme for compassionate use and expanded access programs free of charge, concurrent with delivery of commercial vials, in an amount equal to [**]. Thereafter, BioMarin agrees to supply additional vials to Genzyme during the relevant calendar year for such compassionate use and expanded access programs for [**] until it has provided an additional [**] of Aldurazyme. Thereafter, any additional vials required by Genzyme in the relevant calendar year for such compassionate use and expanded access programs shall be provided by BioMarin at [**]. The term “vial” for purposes of this clause (d)(i) shall mean a 2.9 mg vial of Aldurazyme; and

(ii) BioMarin agrees that Genzyme may use up to [**] vials per Lot of Aldurazyme delivered to Genzyme to supply Genzyme’s requirements of Aldurazyme for appropriate acceptance testing and required in-country release testing and final Lot testing free of charge. Genzyme shall account for any Aldurazyme so used in the quarterly report described in Section 6.4.

6.2 Quarterly Payments. Genzyme shall pay all amounts owed to BioMarin for Aldurazyme pursuant to Section 6.1 on a quarterly basis within forty-five (45) days after the end of each calendar quarter. In computing the royalty payable for any quarter, the Parties shall take into account the aggregate Net Sales to date from the beginning of the relevant calendar year.

6.3 Monthly Reports. Within [**] business days after the end of each calendar month, Genzyme shall provide BioMarin with a preliminary report of Net Sales of Aldurazyme for the immediately proceeding month (a “Flash Report”). As soon as practicable, but in no event later than [**] business days after the end of each calendar month, Genzyme shall provide BioMarin with a final report of Net Sales of Aldurazyme for the immediately proceeding month. Such monthly reports shall not include inventory data.

6.4 Quarterly Reports. Within forty-five (45) business days after the end of each calendar quarter, Genzyme shall provide BioMarin with a true accounting of all payment obligations, if any, owed in accordance with this Article 6, together with a statement setting out all details necessary to calculate the amounts actually due hereunder with respect to Net Sales made in that calendar quarter, including vials of Aldurazyme sold on a country-by-country basis, gross sales of Aldurazyme in that calendar quarter including vials of Aldurazyme sold on a country-by-country basis, Net Sales in that calendar quarter on a country-by-country basis, all relevant deductions, and all relevant exchange rate conversions. Any additional payments owed by Genzyme to BioMarin shall accompany such statement.

6.5 Sales Records; Audit.

6.5.1 Genzyme shall keep complete and accurate books and records of all Net Sales of Aldurazyme on a country-by-country basis. BioMarin shall have the right, at BioMarin’s expense, through a certified independent public accountant, to have reasonable access upon reasonable advance notice and during normal business hours to such books and records for the sole purpose of verifying the accuracy of the royalty report and payments under this

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Article 6 in respect of any calendar quarter ending not more than thirty-six (36) months prior to the date of such notice. BioMarin and Genzyme shall agree in good faith upon reasonable procedures before BioMarin’s auditors begin the audit work pursuant to this Section 6.5.1. Such verifications may be conducted not more than once in each calendar year during the term of this Agreement and once during the three (3) year period following the expiration or termination of this Agreement. The records and royalty reports for any particular calendar quarter may not be examined under this Section 6.5.1 more than once.

6.5.2 In the event such audit concludes that adjustments should be made in BioMarin’s favor, then any appropriate payments (plus accrued interest as determined by Section 6.8) shall be paid by Genzyme within [**] days after the date Genzyme receives BioMarin’s accounting firm’s written report so concluding, unless Genzyme shall have a good faith dispute as to the conclusions set forth in such written report in which case Genzyme shall provide written notice to BioMarin within such [**] day period of the nature of its disagreement with such written report. The Parties shall thereafter, for a period of sixty (60) days, attempt in good faith to resolve such dispute and if they are unable to do so then the matter will be submitted to dispute resolution in accordance with Section 13.8 hereof. Any overpayments by Genzyme will be promptly refunded by BioMarin to Genzyme with interest calculated as provided in Section 6.8 from the date such overpayment was made. If any such examination reveals an underpayment to BioMarin in excess of [**] for the examined period, then Genzyme shall promptly reimburse BioMarin for the costs of such examination within forty-five (45) days after receipt of a reasonably detailed invoice therefor unless Genzyme is disputing such conclusion as provided above.

6.5.3 BioMarin agrees that all information subject to review under this Section 6.5 (other than information directly related to Aldurazyme) is Genzyme’s confidential information and that it shall cause its accounting firm to retain all such information in confidence (even as to BioMarin) subject to the confidentiality restrictions of Article 8 hereof. Notwithstanding the prior sentence, Genzyme acknowledges and agrees that such accounting firm’s obligation to retain all such information in confidence from BioMarin shall not apply in the event that BioMarin and Genzyme are involved in a dispute under Section 13.8 related to this Section 6.5 and such information is necessary for BioMarin’s use in connection with such dispute; provided, however, that BioMarin shall only use such information in connection with such dispute and such information shall remain subject to the confidentiality restrictions of Article 8.

6.6 Taxes. Any taxes, levies or similar governmental charges, now in force or enacted in the future, however designated (“Taxes”) including related penalties and interest, imposed by any governmental authority on or measured or incurred by the sale or shipment of Aldurazyme by BioMarin to Genzyme or the sale of Aldurazyme by Genzyme shall be

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

paid by Genzyme. Notwithstanding anything to the contrary herein, each Party shall be solely responsible with respect to its own income Taxes.

6.7 Payment for Unsold Aldurazyme. [**].

6.8 Payment Terms. All sums due under this Agreement shall be payable in United States dollars. Monetary conversion from the currency of a foreign country in which Aldurazyme is sold into United States currency shall be calculated in accordance with GAAP using the average of the relevant daily exchange rates for each month of the calendar quarter based on rates published by Bloomberg. All payments to be made under this Agreement shall be paid by check or wire transfer as selected by paying Party, and shall be delivered to such address or wired to such account or accounts as the Party owned such payment shall designate from time to time in writing to the paying Party. Any such payment shall be deemed to have been paid when received with respect to check payments or when recorded in the proper account with respect to wire transfer payments.

6.9 Late Fees; Collection Costs. If any amounts due under this Agreement are not made when due, the Party from whom such payment was due will be charged a late charge of [**] per month determined on a daily basis from the date due until the date paid. Payment of such late charges alone (i.e., without the late payment itself) will not excuse or cure the breach or default for late payment. If either BioMarin or Genzyme retains a collection agency, attorney or other person or entity to collect overdue payments, all collection costs, including but not limited to reasonable attorneys’ fees and expenses, will be paid by the Party from whom such payment was due.

6.10 No Deductions. No part of any amount payable by a Party may be reduced due to any counterclaim, set-off, adjustment or other right that such Party may have against another Party, except with respect to Aldurazyme that is returned to BioMarin in accordance with Section 3.9 or 5.2.

7. RESEARCH AND DEVELOPMENT

7.1 Independent Research and Development Activities. Except as otherwise provided herein or in the Amended and Restated Collaboration Agreement, to the extent that the Steering Committee (as defined in the Amended and Restated Collaboration Agreement) does not exercise the right of first refusal granted to BioMarin/Genzyme LLC under Section 3.1.5 or Article 5 of the Amended and Restated Collaboration Agreement, each of BioMarin and Genzyme shall have the right to independently conduct, at its own expense, any research or development of Aldurazyme, including without limitation Post-Marketing Studies and through investigator-initiated studies.

7.2 Access to Data. Each Party shall provide the other Party will full access to the data generated in any research and development activities conducted with Aldurazyme, and the other Party shall be free to use such information to perform its obligations under this Agreement or any Related Agreement.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

8. CONFIDENTIALITY.

8.1 Nondisclosure Obligations. Except as otherwise provided in this Article 8, during the term of this Agreement and for a period of five (5) years thereafter, the Parties shall maintain in confidence and use only for purposes specifically authorized under this Agreement any information furnished to it by the other Party hereto pursuant to this Agreement which if disclosed in tangible form is marked “Confidential” or with other similar designation to indicate its confidential or proprietary nature or if disclosed orally or by inspection is indicated orally to be confidential or proprietary by the Party disclosing such information at the time of such disclosure and is confirmed in writing as confidential or proprietary by the disclosing Party (describing in reasonable detail the information to be treated as confidential) within a reasonable time after such disclosure (collectively, “Information”).

To the extent it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under this Agreement, the Amended and Restated Collaboration Agreement or the Fill Agreement, a Party may disclose Information of the other Party it is otherwise obligated under this Section 8.1 not to disclose to its Affiliates, permitted sublicensees, consultants, outside contractors and clinical investigators, on a need-to-know basis and on the condition that such entities or persons agree to keep the Information confidential for the same time periods and to substantially the same extent as such Party is required to keep such Information confidential; and a Party or its permitted sublicensees may disclose such Information to government or other regulatory authorities to the extent that such disclosure is reasonably necessary to obtain patents or authorizations to conduct clinical trials or to file and maintain Regulatory Approvals with and to market commercially Aldurazyme. The obligation not to disclose Information shall not apply to any part of such Information that: (i) is or becomes patented, published or otherwise becomes publicly known other than by acts of the Party obligated not to disclose such Information or its Affiliates or sublicensees in contravention of this Agreement; (ii) can be shown by written documents to have been disclosed to the receiving Party or its Affiliates or sublicensees by a Third Party, provided that such Information was not obtained by such Third Party directly or indirectly from the disclosing Party under this Agreement; (iii) prior to disclosure under this Agreement was already in the possession of the receiving Party or its Affiliates or sublicensees, provided that such Information was not obtained directly or indirectly from the disclosing Party under this Agreement; (iv) can be shown by written documents to have been independently developed by the receiving Party or its Affiliates without breach of any of the provisions of this Agreement; or (v) is required to be disclosed by the receiving Party to comply with applicable laws or regulations, or with a court or administrative order, provided that the receiving Party notifies the disclosing Party in writing prior to any such disclosure and agrees to use reasonable efforts to secure confidential treatment thereof prior to its disclosure (whether by protective order or otherwise).

8.2 Terms of this Agreement; Press Releases. The Parties agree to seek confidential treatment for any filing of this Agreement with the Securities and Exchange Commission and shall agree upon the content of the request for confidential treatment

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

made by each Party in respect of such filing. Except as permitted by the foregoing provisions or as otherwise required by law, each of the Parties agrees not to disclose any terms or conditions of this Agreement to any Third Party without the prior consent of the other Parties; provided that each of BioMarin and Genzyme shall be entitled to disclose the terms of this Agreement without such consent to its advisors and potential investors or other financing sources on the condition that such entities or persons agree to keep such terms confidential for the same time periods and to the same extent as such Party is required to keep such terms confidential. The Parties agree that all press releases related to Aldurazyme shall be issued jointly by BioMarin and Genzyme and that the Party preparing any such press release shall provide the other Party with a draft thereof reasonably in advance of disclosure so as to permit the other Party to review and comment on such press release. Notwithstanding the foregoing, the Parties shall agree upon a press release to announce the execution of this Agreement, together with a corresponding Question & Answer outline for use in responding to inquiries about the Agreement; thereafter, BioMarin and Genzyme may each disclose to Third Parties the information contained in such press release and Question & Answer outline without the need for further approval by the other.

9. REPRESENTATIONS AND WARRANTIES.

9.1 General Representations and Warranties. Each Party hereby represents and warrants:

9.1.1 Duly Organized. It is a corporation (or limited liability company as the case may be) duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation (or organization as the case may be), is qualified to do business and is in good standing as a foreign corporation (or limited liability company as the case may be) in each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification and failure to have such would prevent it from performing its obligations under this Agreement and has all requisite corporate power (or limited liability power as the case may be) and authority to conduct its business as now being conducted, to own, lease and operate its properties and to execute, deliver and perform this Agreement.

9.1.2 Authorization. It is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder. The person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action.

9.1.3 No Third Party Approval. No authorization, consent, approval, license, exemption of, or filing or registration with, any court or governmental authority or regulatory body (other than health regulatory authorities) is required for the due execution, delivery or performance by it of this Agreement, except as provided herein.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

9.1.4 Enforceable Agreement. This Agreement has been duly and validly executed and delivered, and assuming it is a legally enforceable agreement of the other Parties hereto, constitutes the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws now or hereinafter in effect relating to creditors’ rights generally or to general principles of equity.

9.1.5 No Violation. None of the execution, delivery or performance of this Agreement by such Party, nor the consummation by such Party of the transactions contemplated hereby will (i) result in a violation of any provision of such Party’s charter documents or by-laws; or (ii) with or without the giving of notice or the lapse of time, or both, conflict with, or result in any violation or breach of, or constitute a default under, or result in any right to accelerate or result in the creation of any lien, charge or encumbrance pursuant to, or right of termination under, any provision of any material agreement to which such Party is a party or by which such Party or any of its assets or properties are bound or which is applicable to such Party or any of its assets or properties.

9.1.6 No Debarment. It is not currently debarred, suspended, or otherwise excluded by the FDA or any other regulatory authority from conducting business and shall not knowingly use in connection with this Agreement the services of any person debarred by the FDA.

9.1.7 Accuracy of Data. All laboratory, scientific, technical and/or other data submitted by or on behalf of such Party, as the case may be, relating to Aldurazyme shall, to the best of its knowledge, be true and correct and shall not contain any material falsification, misrepresentations or omissions.

9.2 Additional Representations and Warranties.

9.2.1 Genzyme Warranties. Genzyme warrants that the Aldurazyme sold pursuant to Article 4 hereof will be marketed and sold in all material respects in accordance with the conditions of any applicable Marketing Application Approvals, Regulatory Approvals, any applicable labeling claims and any applicable requirements of the Regulatory Scheme regarding the promotion, sale and marketing of Aldurazyme (except to the extent any of the foregoing is the responsibility of BioMarin as the holder of the BLA).

9.2.2 BioMarin Warranties.

(a) BioMarin warrants that the Aldurazyme delivered by BioMarin pursuant to Article 3 hereof will conform in all material respects to the Specifications, the conditions of any applicable Regulatory Approvals regarding the manufacturing process and any applicable requirements of the Regulatory Scheme regarding the manufacturing process.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

(b) When each Lot of Aldurazyme leaves BioMarin’s facility, such Lot shall be of good, merchantable and usable quality, free of defects in material and workmanship, suitable for the purposes for which Aldurazyme is to be used, and shall not be adulterated or misbranded due to any defect caused by BioMarin within the meaning of the U.S. Regulatory Scheme and other substantially similar laws and statutes in any country outside the United States in which Aldurazyme is to be sold.

(c) The manufacturing facilities for Aldurazyme shall conform in all material respects to the standards of those Regulatory Authorities with jurisdiction over such facilities, including, but not limited to, those set forth in the cGMP Regulations.

9.2.3 No Representations or Warranties as to Safety of Aldurazyme or Specifications as of the Effective Date.

(a) Each of the Parties acknowledges that none of the other Parties nor their respective personnel are obligated to engage in any refinement or development of Aldurazyme pursuant to the terms of this Agreement other than with respect to BioMarin, the production of Aldurazyme pursuant to the Specifications or as approved by BioMarin and any refinement and development required as a result of any changes to Aldurazyme made pursuant to Section 3.

(b) Each of the Parties acknowledges that the Specifications as they exist as of the Effective Date have been jointly developed by the Parties pursuant to the terms of the Original Collaboration Agreement.

(c) BioMarin/Genzyme LLC and Genzyme acknowledge that other than [**] each Lot of Aldurazyme by BioMarin as required by the Specifications, the applicable Regulatory Approvals and the applicable requirements of the Regulatory Scheme (including without limitation cGMP Regulations) and/or the Technical Agreement, BioMarin shall not be in any way responsible for [**].

9.3 Disclaimer of Representations and Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN A RELATED AGREEMENT, NONE OF BIOMARIN, GENZYME OR BIOMARIN/GENZYME LLC MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND THE NON-INFRINGEMENT OF ANY THIRD-PARTY PATENTS OR PROPRIETARY RIGHTS. ALL UNIFORM COMMERCIAL CODE WARRANTIES ARE EXPRESSLY DISCLAIMED BY THE PARTIES.

9.4 Limitation of Liability. EXCEPT WITH RESPECT TO CLAIMS FOR INDEMNIFICATION UNDER ARTICLE 11 HEREOF AND AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS AGREED BY THE PARTIES THAT NO PARTY SHALL BE LIABLE TO ANOTHER PARTY FOR

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME.

10. LICENSE GRANTS: PATENT PROSECUTION AND LITIGATION.

10.1 License Grants. Pursuant to the terms and conditions of Article 3 of the Amended and Restated Collaboration Agreement, the Parties have granted each other licenses with respect to all Patent Rights, Technology and Manufacturing Know-How owned or Controlled by the Parties related to Collaboration Products in the Field.

10.2 Rights and Obligations of the Parties. The rights and obligation of the Parties with respect to filing, prosecution and maintenance of all Patent Rights, defense of Third Party infringement claims and enforcement of Patent Rights are set forth in Article 9 of the Amended and Restated Collaboration Agreement.

11. INDEMNITY.

11.1 In Favor of BioMarin. Genzyme shall defend, indemnify and hold harmless each of BioMarin, its Affiliates and their respective officers, directors and employees (collectively, the “BioMarin Indemnified Parties”) from and against any and all claims, demands, losses, damages, liabilities, settlement amounts, costs or expenses whatsoever (including reasonable attorneys’ fees and costs) (collectively, “Losses”) (i) arising from or related to any claim, action or proceeding asserted by a Third Party (a “Third Party Claim”) against any BioMarin Indemnified Party arising from Genzyme’s breach of this Agreement or negligence or willful misconduct in connection with its performance of its obligations under this Agreement or (ii) allocated to it in Section 11.3, except to the extent (which shall reduce Genzyme’s indemnification obligation hereunder) in the case of (i) and (ii) such Losses also arise from BioMarin’s breach of any warranty or representation herein, BioMarin’s failure to perform any covenant herein, or any negligent or willful act or omission of BioMarin in performing its obligations under this Agreement.

11.2 In Favor of Genzyme. BioMarin shall defend, indemnify and hold harmless each of Genzyme, its Affiliates and their respective officers, directors and employees (collectively, the “Genzyme Indemnified Parties”) from and against any and all Losses (i) arising from or related to any Third Party Claim against any Genzyme Indemnified Party arising from BioMarin’s breach of this Agreement or negligence or willful misconduct in connection with its performance of its obligations hereunder, (ii) arising from or related to any Third Party Claim against any Genzyme Indemnified Party and lost profits of Genzyme, in each case, resulting from an interruption in the supply of Aldurazyme due to changes implemented by BioMarin pursuant to Section 3.10 or 3.11 (other than any change made at the request or direction of any regulatory

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

authority) or (iii) allocated to it in Section 11.3, except to the extent (which shall reduce BioMarin’s indemnification obligation hereunder), in each of case (i), (ii) and (iii) such Losses also arise from Genzyme’s breach of any warranty or representation herein, Genzyme’s failure to perform any covenant herein, or any negligent or willful act or omission of Genzyme in performing its obligations under this Agreement.

11.3 Product Liability. If any Party receives a Third Party Claim or suffers any Losses relating to product liability, the other Party shall contribute to such Losses to the extent set forth in this Section 11.3.

11.3.1 Alleged Design Defect Regarding Aldurazyme. Each of the Parties acknowledge and agree that Aldurazyme produced using the Specifications in effect as of the Effective Date was produced through their joint efforts. To the extent that a Third Party Claim is asserted against any of the Parties or any of their Affiliates related to a design defect in Aldurazyme meeting the Specifications in effect as of the Effective Date, the Parties acknowledge and agree that they shall each be responsible for fifty percent (50%) of all Losses incurred by the Parties and their Affiliates arising from such a Third Party Claim. To the extent that the Specifications are modified after the Effective Date pursuant to Sections 1.50 and 3.11 and any of the Parties is found to be responsible for any claims related to a design defect in the production of Aldurazyme pursuant to such modified Specifications, the Parties acknowledge and agree that BioMarin shall be responsible for one hundred percent (100%) of all Losses incurred by the Parties and their Affiliates arising from such a Third Party Claim except to the extent such Losses also arise from Genzyme’s breach of any warranty or representation herein, Genzyme’s failure to perform any covenant herein, or the negligent or willful act or omission of Genzyme in performing its obligations under this Agreement, in which case liability shall be apportioned between BioMarin and Genzyme as appropriate.

11.3.2 Alleged Manufacturing Defect Regarding Aldurazyme. Notwithstanding Section 11.3.1, the Parties acknowledge and agree that to the extent that a Third Party Claim is asserted against Genzyme or any of its Affiliates related to the manufacturing, storing, handling, delivery, US regulatory compliance of Aldurazyme by BioMarin or its Affiliates or Third Parties engaged by or on behalf of BioMarin (including without limitation Hollister-Stier), any and all Losses incurred by Genzyme or its Affiliates arising from such Third Party Claim shall be the sole responsibility of BioMarin except to the extent such Losses arise from Genzyme’s breach of any warranty or representation herein, Genzyme’s failure to perform any covenant herein, or the negligent or willful act or omission of Genzyme in performing its obligations under this Agreement, in which case liability shall be apportioned between BioMarin and Genzyme as appropriate.

11.3.3 Alleged Non-Manufacturing Defect Regarding Aldurazyme. Notwithstanding Section 11.3.1, the Parties acknowledge and agree that to the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

extent that a Third Party Claim is asserted against BioMarin or any of its Affiliates related to the storage, handling, delivery, non-US regulatory compliance, labeling, marketing, distribution or sale of Aldurazyme by Genzyme or its Affiliates or Third Parties engaged by or on behalf of Genzyme, any and all Losses incurred by BioMarin or its Affiliates arising from such Third Party Claim shall be the sole responsibility of Genzyme except to the extent such Losses arise from BioMarin’s breach of any warranty or representation herein, BioMarin’s failure to perform any covenant herein, or the negligent or willful act or omission of BioMarin in performing its obligations under this Agreement, in which case liability shall be apportioned between BioMarin and Genzyme as appropriate.

11.4 Indemnification and Contribution Procedures.

11.4.1 Indemnification Procedure. In a circumstance where one Party is required to indemnify the other Party for one hundred percent (100%) of the Losses arising from any Third Party Claim, a Party or any of its Affiliates or their respective directors, officers, employees or agents (the “Indemnitee”) that intends to claim indemnification under this Article 11 shall promptly notify the other Party (the “Indemnitor”) of any Losses in respect of which the Indemnitee intends to claim such indemnification, and if the Indemnitor confirms in writing that it will indemnify the Indemnitee for one hundred percent (100%) of such Loss, then the Indemnitor shall have the right to assume the defense thereof with counsel of its choice, subject to the consent of the non-Indemnifying Party, which consent will not be unreasonably withheld, delayed or conditioned; provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnitor, if representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential conflicting interests between such Indemnitee and any other Party represented by such counsel in such proceedings. The Indemnitor shall not be responsible for the fees and expenses of more than one counsel to all Indemnitees. The indemnity in this Article 11 shall not apply to amounts paid in settlement of any Third Party Claim if such settlement is effected without the prior written consent of any Indemnitor, which consent shall not be unreasonably withheld, delayed or conditioned. The failure to deliver notice to an Indemnitor within a reasonable time after the commencement of any such Third Party Claim shall not relieve such Indemnitor of any liability to the Indemnitee under this Article 11 with respect to such action, except to the extent that such failure materially prejudiced the Indemnitor’s ability to defend such action. Each Indemnitee under this Article 11, its employees and agents, shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any Claim or action covered by this indemnification.

11.4.2 Contribution Procedure. In a circumstance where responsibility for Losses arising out of any Third Party Claim is to be apportioned between Genzyme and BioMarin pursuant to Sections 11.1, 11.2, and 11.3, a Party that intends

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

to seek partial indemnification or contribution from the other Party for any such Losses must notify the other Party as promptly as practical. The failure to deliver such notice within a reasonable time will not relieve a Party of any obligations for indemnification or contribution hereunder with respect to such Losses, except to the extent that such failure materially prejudiced the Indemnitor’s ability to defend such Third Party Claim. If the Parties agree that one Party will have responsibility for more than fifty percent (50%) of the Losses arising out of a Third Party Claim, such Party shall have the right to assume the defense of the Third Party Claim with counsel of its choice, subject to the consent of the non-Indemnifying Party, which consent will not be unreasonably withheld, delayed or conditioned; provided, however, the Party not defending the Third Party Claim shall have the right to retain its own counsel to participate in the defense of the Third Party Claim at its own expense. In the absence of such agreement, each Party seeking indemnification or contribution may defend the Third Party Claim with counsel of its choosing at its own expense, and each Party’s counsel fees and costs related to the Third Party Claim will be excluded from the Losses to be apportioned in accordance with Section 11.1, 11.2, and 11.3. No Party shall be required to contribute to or indemnify the other Party for any Losses arising out of a Third Party Claim if the claim is settled without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Each Party, its employees and agents, shall cooperate fully with the other Party and its legal representatives in the investigation of any Third Party Claim covered by this Section 11.4.2. The Parties shall negotiate in good faith to enter into a joint defense agreement with respect to the defense of any Third Party Claim covered by this Section 11.4.2.

11.5 Insurance. Each Party shall, during the term of this Agreement, maintain commercially reasonable amounts of insurance or self-insurance given the size, nature and scope of its business from a reputable insurance carrier to cover against liability risks, including product liability insurance and business interruption insurance (for commercial value) for the benefit of the other Party. Each Party shall provide the other Party with evidence of such insurance.

12. TERM AND TERMINATION.

12.1 Term. The term of this Agreement shall be perpetual unless terminated pursuant to Section 12.2 below.

12.2 Termination. This Agreement may be terminated in the following circumstances:

12.2.1 For Certain Material Breaches. If either BioMarin or Genzyme fails to use commercially reasonable and diligent efforts to perform any material duty imposed upon such Party under this Agreement and such failure to perform is not cured within ninety (90) days of written notice thereof from the non-breaching Party, the non-breaching Party may elect, in its sole discretion, to terminate this Agreement with the consequences set forth in Section 12.3.1

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

below. Such 90-day period shall be extended to one hundred eighty (180) days if the breaching Party has engaged in good faith efforts to remedy such default within such 90-day period and indicated in writing to the non-breaching Party prior to the expiration of such 90-day period that it believes that it will be able to remedy the default within such 180-day period, but such extension shall apply only so long as the breaching Party is engaging in good faith efforts to remedy such default.

12.2.2 For Convenience. Either BioMarin or Genzyme may elect to terminate this Agreement for any reason upon one (1) year prior written notice to the other Party, during which one-year period the obligations of the Parties shall continue in full force and effect.

12.2.3 Upon Change of Control. Either BioMarin or Genzyme may terminate this Agreement in the event that the other Party is a party to a transaction involving (a) a merger or consolidation in which such Party is not the surviving entity or (b) the sale of all or substantially all of the assets of such Party to a Third Party. Termination of this Agreement pursuant to this Section 12.2.3 shall be effective as of the effective date of such transaction.

12.2.4 Upon Bankruptcy. Either BioMarin or Genzyme may terminate this Agreement if: (a) the other Party fails to meet any material obligation hereunder and (i) applies for or consents to the appointment of a receiver, trustee, liquidation or custodian of itself or of all or a substantial part of its property; (ii) becomes unable, or admits in writing its inability, to pay its debts generally as they mature; (iii) makes a general assignment for the benefit of its or any of its creditors; (iv) is dissolved or liquidated in full or in part; (v) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or (vi) takes any action for the purpose of effecting any of the foregoing; or (b) proceedings for the appointment of a receiver, trustee, liquidator or custodian of the other Party or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the other Party or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) calendar days of commencement.

12.3 Effects of Termination.

12.3.1 For Certain Material Breaches. In addition to the rights and duties set forth in Section 12.4 below, BioMarin and Genzyme shall have the following

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

rights and duties upon termination of this Agreement pursuant to Section 12.2.1 above:

(a) the non-breaching Party shall have an irrevocable right and license, with the right to grant and authorize sublicenses, to develop, make, have made, use, offer for sale, sell, have sold, import and export Aldurazyme and the breaching Party shall execute such documents and take all action as may be necessary or desirable to effect the foregoing; provided, that such license shall be for the same level of exclusivity as the rights granted with respect thereto under Article 3 or Article 4 hereof, as the case may be, immediately prior to such termination; provided further that any license granted hereunder shall be subject to the obligation of the non-breaching Party to use commercially reasonable and diligent efforts to manufacture, develop and market Aldurazyme pursuant to such license;

(b) the breaching Party shall assign and transfer all of its interest in BioMarin/Genzyme LLC to the non-breaching Party, and the non-breaching Party may dissolve BioMarin/Genzyme LLC in its sole discretion; provided that in the event that BioMarin is the breaching Party, it shall also cause BioMarin Genetics to assign and transfer all of its interest in BioMarin/Genzyme LLC to Genzyme.

(c) upon exercise of its license option by the non-breaching party provided in paragraph (a) of this Section 12.3.1: (i) all rights and licenses or rights granted pursuant to Article 3 or Article 4, as the case may be, shall be revoked; (ii) if BioMarin/Genzyme LLC is dissolved, any applicable Regulatory Approvals (other than any Regulatory Approvals filed in the name of an entity other than BioMarin/Genzyme LLC), “Orphan Drug” designations and clinical data owned or licensed by BioMarin/Genzyme LLC and any trademarks owned or licensed by BioMarin/Genzyme LLC (other than any trademarks registered in the name of an entity other than BioMarin/Genzyme LLC pursuant to Section 9.1.2 of the Amended and Restated Collaboration Agreement) shall be assigned or exclusively licensed to the non-breaching Party; and (iii) any Regulatory Approvals filed and any trademarks registered in the name of an entity other than BioMarin/Genzyme LLC shall be (A) exclusively licensed to BioMarin/Genzyme LLC, the non-breaching Party or any Third Party or Affiliate designated by the non-breaching Party until such time as BioMarin/Genzyme LLC, the non-breaching Party or its designee is qualified to hold such Regulatory Approvals or trademarks under the applicable provisions of the Regulatory Scheme and (B) transferred or assigned to BioMarin/Genzyme LLC, the non-breaching Party or its designee, as appropriate, as soon as practicable thereafter;

(d) the non-breaching Party shall become obligated to pay the breaching Party an amount equal to: [**] (iii) interest thereon at the Base Rate of interest declared from time to time by Bank of America, N.A. in Boston, Massachusetts from

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

the date of termination to the date payment is made (the “Breach Buyout Amount”), payable as follows:

(i) if the non-breaching Party elects to sell or otherwise dispose of all or any portion of its or its Affiliates’ right, title and interest in Aldurazyme, then the non-breaching Party shall, upon any such sale or other disposition, pay the breaching Party an amount equal to [**];

(ii) for as long as the non-breaching Party (together, in the case of BioMarin with BioMarin Genetics) has not sold or otherwise disposed of all or a portion of its (together in the case of BioMarin, with BioMarin Genetics) right, title and interest in Aldurazyme which is equal to or greater than the breaching Party’s (together in the case of BioMarin, with BioMarin Genetics) Percentage Interest as of the date of termination, the non-breaching Party shall pay the breaching Party (and, in the event that BioMarin is the breaching Party, BioMarin Genetics) [**] as described in the preceding paragraph; and

(iii) on the [**] of the date of termination, the non-breaching Party shall pay the breaching Party (and, in the event that BioMarin is the breaching Party, BioMarin Genetics) the difference between the aggregate amounts paid pursuant to clauses (i) and (ii) above and the Breach Buyout Amount; provided, that the aggregate amount of all payments made under clauses (i), (ii) and (iii) shall not exceed the Breach Buyout Amount.

12.3.2 For Convenience. In addition to the rights and duties set forth in Section 12.4 below, BioMarin and Genzyme shall have the following rights and duties upon termination of this Agreement pursuant to Section 12.2.2 above:

(a) the non-terminating Party shall have an option exercisable upon written notice to the terminating Party within the one-year period provided in Section 12.2.2 hereof to obtain from the terminating Party the irrevocable right and license, with the right to grant and authorize sublicenses, to develop, make, have made, use, offer for sale, sell, have sold, import and export Aldurazyme, and the terminating Party shall execute such documents and take all action as may be necessary or desirable to affect the foregoing; provided, that such license shall be for the same level of exclusivity as the rights granted with respect thereto under Article 3 or Article 4 hereof, as the case may be; provided further that any license granted hereunder shall be subject to the obligation of the non-terminating Party to use commercially reasonable and diligent efforts to develop and market Aldurazyme pursuant to such license;

(b) upon exercise of its license option provided in paragraph (a) of this Section 12.3.2, the terminating Party shall assign and transfer all of its interest

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

in BioMarin/Genzyme LLC to the non-terminating Party, and the non-terminating Party may dissolve BioMarin/Genzyme LLC in its sole discretion;

(c) upon exercise of its license option provided in paragraph (a) of this Section 12.3.2, (i) all licenses granted pursuant to Article 3 or Article 4, as the case may be, shall be revoked, (ii) if BioMarin/Genzyme LLC is dissolved, any applicable Regulatory Approvals (other than any Regulatory Approvals filed in the name of an entity other than BioMarin/Genzyme LLC pursuant to Section 5.3 of the Amended and Restated Collaboration Agreement), “Orphan Drug” designations and clinical data owned or licensed by BioMarin/Genzyme LLC and any trademarks owned or licensed by BioMarin/Genzyme LLC (other than any trademarks registered in the name of an entity other than BioMarin/Genzyme LLC pursuant to Section 9.1.2 of the Amended and Restated Collaboration Agreement) shall be assigned to the non-terminating Party and (iii) any Regulatory Approvals filed and any trademarks registered in the name of an entity other than BioMarin/Genzyme LLC shall be (A) exclusively licensed to BioMarin/Genzyme LLC, the non-terminating-Party or any Third Party or Affiliate designated by such Party until such time as BioMarin/Genzyme LLC, the non-terminating Party or its designee is qualified to hold such Regulatory Approvals or trademarks under the applicable provisions of the Regulatory Scheme and (B) transferred or assigned to BioMarin/Genzyme LLC, the non-terminating Party or its designee, as appropriate, as soon as practicable thereafter;

(d) upon the exercise of its license option provided in paragraph (a) of this Section 12.3.2, the non-terminating Party shall become obligated to pay to the terminating Party an amount equal to: [**] (iii) interest thereon at the Base Rate of interest declared from time to time by Bank of America, N.A. in Boston, Massachusetts from the date of termination to the date payment is made; payable on the terms and conditions and in accordance with the schedule of payments set forth in Section 12.3.1(d), mutatis mutandis; and

(e) if the license option provided in paragraph (a) of this Section 12.3.2 is not exercised, then all right, title and interest in Aldurazyme shall be sold to the highest bidder within eighteen (18) months from the date of termination and the proceeds shall be allocated between the Members in proportion to their Percentage Interests in BioMarin/Genzyme LLC as of the date of termination and BioMarin/Genzyme LLC shall be dissolved.

12.3.3 Upon a Change of Control. In addition to the rights and duties set forth in Section 12.4 below, BioMarin and Genzyme shall have the following rights and duties upon termination of this Agreement pursuant to Section 12.2.3 above:

(a) the terminating Party shall have the exclusive, irrevocable and, except as provided in Section 12.3.3(d), royalty-free right and license, with the right to grant sublicenses, to develop, make, have made, use, offer for sale, sell, have

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

sold, import and export Aldurazyme, and the non-terminating Party shall execute such documents and take all action as may be necessary or desirable to effect the foregoing; provided, that any license granted hereunder shall be subject to the obligation of the terminating Party to use commercially reasonable and diligent efforts to develop and market Collaboration Products pursuant to such license;

(b) the non-terminating Party shall assign and transfer all of its interest in BioMarin/Genzyme LLC to the terminating Party, and the terminating Party may dissolve BioMarin/Genzyme LLC in its sole discretion; provided that in the event that BioMarin is the non-terminating Party, it shall also cause BioMarin Genetics to assign and transfer all of its interest in BioMarin/Genzyme LLC to Genzyme;

(c) all licenses or rights granted pursuant to Article 3 or Article 4, as the case may be, shall be revoked and, if BioMarin/Genzyme LLC is dissolved, any applicable Regulatory Approval, “Orphan Drug” designations and clinical data owned or licensed by BioMarin/Genzyme LLC and any trademarks owned or licensed by BioMarin/Genzyme LLC shall be assigned or licensed to the terminating Party; and

(d) the terminating Party (the “Offeror”) shall, pursuant to the conditions set forth in this Section 12.3.3(d), give the other Party (Genzyme in the case BioMarin is terminating or the BioMarin Companies in the case Genzyme is terminating, in either case the “Offeree”) at the time of termination written notice of the Offeror’s intention to purchase Offeree’s entire interest in and to (i) Aldurazyme as of the date of termination and (ii) the Percentage Interest of the net asset value of BioMarin/Genzyme LLC as of the date of termination (the “Notice of Offer”). The Notice of Offer shall state therein the specific price, terms and conditions under which the Offeror agrees to purchase Offeree’s entire interest in and to (i) Aldurazyme as of the date of termination and (ii) the Percentage Interest of the net asset value of BioMarin/Genzyme LLC as of the date of termination; provided, however, that the purchase price shall be paid in cash, publicly-traded and registered securities or as the Parties otherwise agree. The Offeree shall then have ninety (90) days (the “Acceptance Period”) from the receipt of the Notice of Offer to give notice (the “Notice of Acceptance”) of the Offeree’s intention to accept the offer of the Offeror and shall sell Offeree’s entire interest in and to (i) Aldurazyme as of the date of termination and (ii) the Percentage Interest of the net asset value of BioMarin/Genzyme LLC as of the date of termination to Offeror for the price and upon such terms and conditions as set forth in the Notice of Offer. In the event the Offeree gives such Notice of Acceptance, a closing shall be held within ninety (90) days of the receipt of the Notice of Acceptance by the Offeror. In the event the Offeree elects not to accept the Offeror’s offer to purchase, by giving the Offeror written notice thereof, or by failing to give the appropriate Notice of Acceptance within the Acceptance Period, the Offeree shall thereby automatically be bound to purchase Offeror’s entire interest in and to (i) Aldurazyme as of the date of

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

termination and (ii) the Percentage Interest of the net asset value of BioMarin/Genzyme LLC as of the date of termination for the same price (as adjusted for Percentage Interest, if necessary) and upon such terms and conditions as specified in the Notice of Offer. In such event, a closing shall be held within ninety (90) days of the earlier to occur of the expiration of the Acceptance Period and the date of receipt of the written rejection, whichever is the first to occur. In addition to any other remedies provided by this Agreement, in the event the Offeree rejects the offer contained in the Notice of Offer, but thereafter fails for any reason to timely close as provided herein above, the Offeree shall, by such failure to close, be deemed to have accepted the original offer contained in the Notice of Offer, and shall thereafter sell Offeree’s entire interest in and to (i) Aldurazyme as of the date of termination and (ii) the Percentage Interest of the net asset value of BioMarin/Genzyme LLC as of the date of termination to the Offeror pursuant to the terms of the Notice of Offer. For purposes of Sections 12.3.3 (a)-(c) above, the Party purchasing the other Party’s interest in (i) Aldurazyme and (ii) the Percentage Interest of the net asset value of BioMarin/Genzyme LLC shall be deemed to be the terminating Party and the other Party shall be deemed to be the non-terminating Party.

12.3.4 Upon Bankruptcy. In addition to the rights and duties set forth in Section 12.4 below, BioMarin and Genzyme shall have the following rights and duties upon termination of this Agreement pursuant to Section 12.2.4 above:

(a) the terminating Party shall obtain from the non-terminating Party the irrevocable right and license, with the right to grant sublicenses, under the non-terminating Party’s Patent Rights, Technology and Manufacturing Know-How to develop, make, have made, use, offer for sale, sell, have sold, import and export Aldurazyme in the Field and in the Territory, and the non-terminating Party shall execute such documents and take all action as may be necessary or desirable to affect the foregoing; provided, that such license shall be for the same level of exclusivity as the rights granted with respect thereto under Article 3 or Article 4 hereof, as the case may be; provided further that any license granted hereunder shall be subject to the obligation of the terminating Party to use commercially reasonable and diligent efforts to develop and market Aldurazyme pursuant to such license;

(c) all licenses granted pursuant to Article 3 or Article 4, as the case may be, shall be revoked and, if BioMarin/Genzyme LLC is dissolved, any applicable Regulatory Approvals (other than any Regulatory Approvals filed in the name of

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

an entity other than BioMarin/Genzyme LLC pursuant to Section 5.3 of the Amended and Restated Collaboration Agreement), “Orphan Drug” designations and clinical data owned or licensed by BioMarin/Genzyme LLC and any trademarks owned or licensed by BioMarin/Genzyme LLC (other than any trademarks registered in the name of an entity other than BioMarin/Genzyme LLC pursuant to Section 9.1.2 of the Amended and Restated Collaboration Agreement) shall be assigned or licensed to the terminating Party and (iii) any Regulatory Approvals filed and any trademarks registered in the name of an entity other than BioMarin/Genzyme LLC shall be (A) exclusively licensed to BioMarin/Genzyme LLC, the terminating Party or any Third Party or Affiliate designated by such Party until such time as BioMarin/Genzyme LLC, the terminating Party or its designee is qualified to hold such Regulatory Approvals or trademarks under the applicable provisions of the Regulatory Scheme and (B) transferred or assigned to BioMarin/Genzyme LLC, the terminating Party or its designee, as appropriate, as soon as practicable thereafter,

(d) the terminating Party shall become obligated to pay to the non-terminating Party an amount equal to [**] from the date of termination to the date payment is made, payable on the terms and conditions and in accordance with the schedule of payments set forth in Section 12.3.1(d), mutatis mutandis.

12.3.5 Fair Value. For purposes of this Section 12.3, the “Fair Value” of a Party’s interest in Aldurazyme shall be [**], the Fair Value shall be determined by an investment, banking firm selected by mutual agreement of BioMarin and Genzyme, and the costs and expenses incurred in connection with the engagement of such investment banking firm shall be shared equally by BioMarin and Genzyme.

12.3.6 Other. In the event that a Party (the “Purchasing Party”) purchases the other Party’s (or in the case of BioMarin, the BioMarin Companies’, in each case the “Selling Party”) entire interest in and to (i) Aldurazyme and (ii) the Percentage Interest of the net asset value of BioMarin/Genzyme LLC pursuant to this Section 12.3, the Purchasing Party shall be deemed to assume all of the liabilities inuring to the Selling Party’s Percentage Interest being acquired. At closing, the Parties shall execute any and all documents necessary to effectuate such transfer, including an assignment of all of the Selling Party’s Percentage Interest and mutual releases which shall have the effect of releasing each Party from all claims or liabilities pertaining to BioMarin/Genzyme LLC (except for any liabilities specifically included in the terms of such sale).

12.4 Cooperation. If either BioMarin or Genzyme (the “Assuming Party”) shall assume Aldurazyme rights from the other Party (the “Responsible Party”) in accordance with the provisions of this Article 12, the Responsible Party shall promptly provide to the Assuming Party (or any Third Party or Affiliate designated by the Assuming Party) all Technology, Manufacturing Know-How and access to regulatory filings filed hereunder reasonably necessary to allow the Assuming Party to perform the duties assumed and

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

otherwise exercise the rights and licenses granted hereunder. The Responsible Party shall further use its commercially reasonable and diligent efforts to provide reasonable assistance required by the Assuming Party with respect to such transfer so as to permit the Assuming Party to begin to perform such duties as soon as possible to minimize any disruption in the continuity of supply or marketing of Aldurazyme. If the Responsible Party is manufacturing Aldurazyme the Responsible Party shall, at the option of the Assuming Party, supply Aldurazyme until the earlier of [**].

12.5 Survival of Rights and Duties. No termination of this Agreement shall eliminate any rights or duties of the Parties accrued prior to such termination. The provisions of Article 1, Sections 4.9, 5.2.2, 6.5, 6.9, 6.10 and 9.4, Article 8, Article 11, Sections 12.3 through 12.5, 13.2, 13.3, 13.6 through 13.15 and the first sentence of Section 3.15 and the last sentence of Section 3.14 hereof shall survive any termination of this Agreement.

13. MISCELLANEOUS

13.1 Exchange Controls. All payments due hereunder shall be paid in United States dollars. If at any time legal restrictions prevent the prompt remittance of part or all payments with respect to any country in which Aldurazyme is sold, payment shall be made through such lawful means or methods as the Parties may determine in good faith.

13.2 Withholding Taxes. If applicable laws or regulations require that taxes be withheld from payments made hereunder, the Party paying such taxes will (a) deduct such taxes, (b) timely pay such taxes to the proper authority and (c) send written evidence of payment to the Party from whom such taxes were withheld within sixty (60) days after payment. Each Party will assist the other Party or Parties in claiming tax refunds, deductions or credits at such other Party’s request and will cooperate to minimize the withholding tax, if available, under various treaties applicable to any payment made hereunder.

13.3 Force Majeure. Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, including without limitation fire, floods, embargoes, war, acts of war (whether war is declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or the other Party; provided, however, that the Party so affected shall use commercially reasonable and diligent efforts to avoid or remove such causes of non-performance, and shall continue performance hereunder with reasonable dispatch wherever such causes are removed. Each Party shall provide the other Parties with prompt written notice of any delay or failure to perform that occurs by reason of force majeure. The Parties shall mutually seek a resolution of the delay or the failure to perform in good faith.

13.4 Assignment. This Agreement may not be assigned or otherwise transferred by any Party without the consent of the other Parties; provided, however, that either BioMarin

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

or Genzyme may, without such consent, assign its rights and obligations under this Agreement (a) in connection with a corporate reorganization, to any member of an affiliated group, all or substantially all of the equity interest of which is owned and controlled by such Party or its direct or indirect parent corporation or (b) in connection with a merger, consolidation or sale of substantially all of such Party’s assets to an unrelated Third Party; provided, however, that such Party’s rights and obligations under this Agreement shall be assumed by its successor in interest in any such transaction and shall not be transferred separate from all or substantially all of its other business assets, including without limitation those business assets that are the subject of this Agreement and the Related Agreements. Any permitted assignee shall assume all obligations of its assignor under this Agreement; accordingly, all references herein to the assigning Party shall be deemed references to the assignee to whom the Agreement is so assigned. Any purported assignment in violation of this Section 13.4 shall be void.

13.5 Severability. Each Party hereby agrees that it does not intend to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any government agency or executive body thereof of any country or community or association of countries. Should one or more provisions of this Agreement be or become invalid, the Parties hereto shall substitute, by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic effect are sufficiently similar to the invalid provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such valid provisions. In case such valid provisions cannot be agreed upon, the invalidity of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole, unless the invalid provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid provisions. In the event a Party seeks to avoid a material provision of this Agreement upon an assertion that such provision is invalid, illegal or otherwise unenforceable, the other Party shall have the right to terminate this Agreement upon sixty (60) days prior written notice to the asserting Party, unless such assertion is eliminated and cured within such sixty (60) day period. Such a termination shall be deemed a termination by such Party for breach pursuant to Section 12.2.1.

13.6 Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one of the Parties hereto to the other shall be in writing, delivered personally or by facsimile (and promptly confirmed by personal delivery or courier), by a next business day delivery service of a nationally recognized overnight courier service or by courier, postage prepaid (where applicable), addressed to such other Party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor in accordance with this Section 13.6 and shall be effective upon receipt by the addressee.

If to BioMarin:

BioMarin Pharmaceutical Inc.
105 Digital Drive
Novato, California 94949
Attention: Chief Executive Officer
Facsimile: (415) 382-7889

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

with a copy to:	BioMarin Pharmaceutical Inc. 105 Digital Drive Novato, California 94949 Attention: General Counsel Facsimile: (415) 382-7889

If to Genzyme:	Genzyme Corporation 500 Kendall Street Cambridge, Massachusetts 02142 Attention: President, LSD Therapeutics Facsimile: (617) 768-6419

with a copy to:	Genzyme Corporation 500 Kendall Street Cambridge, Massachusetts 02142 Attention: General Counsel Facsimile: (617) 252-7553

If to BioMarin/Genzyme LLC (if such notice is sent by BioMarin):	BioMarin/Genzyme LLC c/o Genzyme Corporation 500 Kendall Street Cambridge, Massachusetts 02142 Attention: President, LSD Therapeutics Facsimile: (617) 768-6419

with a copy to:	Genzyme Corporation 500 Kendall Street Cambridge, Massachusetts 02142 Attention: General Counsel Facsimile: (617) 252-7553

If to BioMarin/Genzyme LLC (if such notice is sent by Genzyme):	BioMarin/Genzyme LLC c/o BioMarin Pharmaceutical Inc. 105 Digital Drive Novato, California 94949 Attention: Chief Executive Officer Facsimile: (415) 382-7889

with a copy to:	BioMarin Pharmaceutical Inc. 105 Digital Drive Novato, California 94949 Attention: General Counsel Facsimile: (415) 382-7889

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

13.7 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to any choice of law principle that would dictate the application of the laws of another jurisdiction.

13.8 Arbitrate. Any disputes arising between the Parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by either Party of its obligations hereunder, whether before or after termination of this Agreement (a “Dispute”) shall be finally resolved by binding arbitration as herein provided.

13.8.1 General. Except as otherwise provided in this Section 13.8, any arbitration hereunder shall be conducted under the commercial rules of the American Arbitration Association. Each such arbitration shall be conducted in the English language by a single arbitrator appointed in accordance with such rules, provided that if either Party requests the arbitration shall be conducted by a panel of three (3) arbitrators (the “Arbitration Panel”). In the case of three (3) arbitrators, each of BioMarin and Genzyme shall appoint one (1) arbitrator to the Arbitration Panel and the third arbitrator shall be appointed by the two (2) arbitrators appointed by BioMarin and Genzyme. The Arbitration Panel shall be convened upon delivery of the Notice of Arbitration (as herein defined). Any such arbitration shall be held in Chicago, Illinois. The Arbitration Panel shall have the authority to grant specific performance, and to allocate between the Parties the costs of arbitration in such equitable manner as it shall determine. Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be.

13.8.2 Procedure.

(a) Whenever a Party (the “Claimant”) shall decide to institute arbitration proceedings, it shall give written notice to that effect (the “Notice of Arbitration”) to the other Party (the “Respondent”). The Notice of Arbitration shall set forth in detail the nature of the Dispute, the facts upon which the Claimant relies and the issues to be arbitrated (collectively, the “Arbitration Issues”). Within fifteen (15) days of its receipt of the Notice of Arbitration, the Respondent shall send the Claimant and the Arbitration Panel a written Response (the “Response”). The Response shall set forth in detail the facts upon which the Respondent relies. In addition, the Response shall contain all counterclaims which the Respondent may have against the Claimant which are within the Arbitration Issues, whether or not such claims have previously been identified. If the Response sets forth a counterclaim, the Claimant may, within fifteen (15) days of the receipt of the Response, deliver to the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Respondent and the Arbitration Panel a rejoinder answering such counterclaim.

(b) Within fifteen (15) days after the later of (i) the expiration of the period provided in Section 13.8.2(a) above for the Claimant to deliver a rejoinder or (ii) the completion of any discovery proceedings authorized by the Arbitration Panel: (A) the Claimant shall send to the Arbitration Panel a proposed resolution of the Arbitration Issues and a proposed resolution of any counterclaims set forth in the Response, including without limitation the amount of monetary damages, if any, or other relief sought (the “Claimant’s Proposal”); and (B) the Respondent shall send to the Arbitration Panel a proposed resolution of the Arbitration Issues, a proposed resolution of any counterclaims set forth in the Response and a proposed resolution of any rejoinder submitted by the Claimant, including without limitation the amount of monetary damages, if any, or other relief sought (the “Respondent’s Proposal”). Once both the Claimant’s Proposal and the Respondent’s Proposal have been submitted, the Arbitration Panel shall deliver to each Party a copy of the other Party’s proposal.

(c) The Arbitration Panel shall issue an opinion with respect to any Dispute, which opinion shall explicitly accept either the Claimant’s Proposal or the Respondent’s Proposal in its entirety (the “Final Decision”). The Arbitration Panel shall not have the authority to reach a Final Decision that provides remedies or requires payments other than those set forth in the Claimant’s Proposal or the Respondent’s Proposal. The concurrence of two (2) arbitrators shall be sufficient for the entry of a Final Decision. The arbitrators shall issue a Final Decision within one (1) month from the later of (i) the last day for submission of proposals under Section 13.8.2(b) above or (ii) the date of the final hearing on any Dispute held by the Arbitration Panel. A Final Decision shall be binding on both Parties.

13.9 Injunctive Relief. The Parties hereby acknowledge that a breach of their respective obligations under Article 8 hereof may cause irreparable harm and that the remedy or remedies at law for any such breach may be inadequate. The Parties hereby agree that, in the event of any such breach, in addition to all other available remedies hereunder, the non-breaching Party or Parties shall have the right to seek equitable relief to enforce Article 8 hereof.

13.10 Entire Agreement. This Agreement, together with the Related Agreements, contains the entire understanding of the Parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, heretofore made are expressly merged in and made a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both Parties hereto. Each of the Parties hereby acknowledges that this Agreement is

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

the result of mutual negotiation and therefore any ambiguity in their respective terms shall not be construed against the drafting Party.

13.11 Bankruptcy Provision. All rights and licenses now or hereafter granted under or pursuant to this Agreement, including Sections 12.3 and 12.4, are rights to “intellectual property” (as defined in Section 101(35A) of Title 11 of the United States Code, as amended (such Title 11, the “Bankruptcy Code”)). The licensing Party hereby grants to the licensee Party a right of access and to obtain possession of and to benefit from (i) copies of research data, (ii) laboratory samples, (iii) product samples, (iv) formulas, (v) laboratory notes and notebooks, (vi) data and results related to clinical trials, (vii) regulatory filings and approvals, (viii) rights of reference in respect of regulatory filings and approvals, (ix) manufacturing procedure documentation and manufacturing records, (x) marketing, advertising and promotional materials, and (xi) all other embodiments of such intellectual property, that are in the licensing Party’s possession or control, freely licenseable without further payment or restriction by the licensing Party, and necessary for the licensee Party’s exercise of the rights and licenses to such intellectual property, all of which constitute “embodiments” of intellectual property pursuant to Section 365(n) of the Bankruptcy Code. The licensing Party agrees not to interfere with the licensee’s exercise of rights and licenses to intellectual property licensed under this Agreement and embodiments thereof in accordance with this Agreement and agrees to use commercially reasonable and diligent efforts to assist the licensee Party to obtain such intellectual property and embodiments thereof in the possession or control of Third Parties as reasonably necessary or desirable for the licensee Party to exercise such rights and licenses in accordance with this Agreement. The Parties acknowledge and agree that only the payments due under Section 6.1, as adjusted pursuant to this Agreement, constitute “royalties” within the meaning of Bankruptcy Code §365(n).

13.12 Headings. The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely guides or labels to assist in locating and reading the several Articles and Sections hereof.

13.13 Independent Contractors. It is expressly agreed that BioMarin and Genzyme shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither BioMarin nor Genzyme shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other, without the prior consent of the other Party to do so.

13.14 Waiver. Except as expressly provided herein, the waiver by either Party hereto of any right hereunder or of any failure to perform or any breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other failure to perform or breach by said other Party, whether of a similar nature or otherwise, nor shall any singular or partial exercise of such right preclude any further exercise thereof or the exercise of any other such right.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

13.15 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signature pages may be exchanged by facsimile.

[SIGNATURE PAGE FOLLOWS]

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the date first set forth above.

	GENZYME CORPORATION

	By:	/s/ David P. Meeker

	Print Name: David P. Meeker

	Title: President LSD Therapeutics

	Date: 12/31/07


	BIOMARIN PHARMACEUTICAL INC.

	By:	/s/ G. Eric Davis

	Print Name: G. Eric Davis

	Title: Vice President, General Counsel

	Date: 12/31/07


	BIOMARIN/GENZYME LLC

	By:	BIOMARIN PHARMACEUTICAL INC.

	By:	/s/ G. Eric Davis

	Print Name: G. Eric Davis

	Title: Vice President, General Counsel

	Date: 12/31/07


	By:	GENZYME CORPORATION

	By:	/s/ David P. Meeker

	Print Name: David P. Meeker

	Title: President LSD Therapeutics

	Date: 12/31/07

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Schedule 1.56

Third Party Licenses

3.) Grant Terms and Conditions Agreement dated April 1, 1997 entered into by and among BioMarin Pharmaceuticals, Harbor-UCLA Research and Education Institute and Emil D. Kakkis, as amended through the Effective Date.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Schedule 3.12

[**]

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit A

[**]

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

Exhibit B

[**]

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

EX-10.3 4 a2185010zex-10_3.htm EXHIBIT 10.3

Exhibit 10.3

Notice of Grant of Award	GENZYME CORPORATION
and Award Agreement	ID: 06-1047163
	500 Kendall Street
	Cambridge, MA 02142

[First Name][Last Name]	Award Number:	[Grant Number]
[Address Line 1]	Plan:	[Plan Number]
[City], [State] [Zip][Country]	ID:	[Social Security]

Effective [Grant Date], you have been granted an award of [Share Number] restricted stock units. These units are restricted until the vest date(s) shown below, at which time you will receive shares of GENZYME CORPORATION (the Company) common stock.

The current total value of the award is $[Dollar Amount].

The award will vest in increments on the date(s) shown.

Shares		Full Vest
[Share Number]		[Grant Date]

These awards are granted under and governed by the terms and conditions of the Company’s Equity Plan as

amended and the Award Agreement, all of which are attached and made a part of this document.

GENZYME CORPORATION 2004 EQUITY INCENTIVE PLAN

Restricted Stock Unit Award Agreement

Tier I Retirement Eligible

1. Plan Incorporated by Reference. This Restricted Stock Unit is issued pursuant to the terms of the Plan, as amended or may be amended, and this Restricted Stock Unit Award Agreement (“Award Agreement”), and may be amended as provided in the Plan. Capitalized terms used and not otherwise defined in this Award Agreement have the meanings given to them in the Plan. This Award Agreement does not set forth all of the terms and conditions of the Plan, which are incorporated herein by reference. Copies of the Plan may be obtained upon written request without charge from the Shareholder Relations Department of the Company.

2. Vesting Schedule. The Participant qualifies for a retirement eligible vesting schedule because the Participant has reached, or by December 31, 2008 can reach, at least 60 years of age and 5 years of service with the Company or its Affiliates. Accordingly, the Participant’s right to receive the number of shares of Stock set forth in the Notice of Grant of Award associated with this Award Agreement (“Notice”) shall vest with respect to one-third of such number of shares of Stock on each of the first three anniversaries of the date of grant set forth in the Notice, provided that on each such anniversary the Participant is then, and since the date of grant has been continuously, employed by the Company or its Affiliates, unless otherwise specified herein (each such anniversary, a “Vesting Date”). Notwithstanding the preceding sentence, all unvested shares of Stock subject to this Restricted Stock Unit shall vest, if applicable, on such date as prescribed by sections 4 and 6 below and the earliest of any such date to occur shall be the “Full Vesting Date.”

3. Delivery of Shares. As soon as practicable after each respective Vesting Date for this Restricted Stock Unit, and in no event later than March 15th of the calendar year following the calendar year in which the respective Vesting Date occurs, the Company shall deliver to the Participant, subject to sections 4 and 7 below, one-third of the number of shares of Stock set forth in the Notice. As soon as practicable after the Full Vesting Date for this Restricted Stock Unit, and in no event later than March 15th of the calendar year following the calendar year in which the Full Vesting Date occurs, the Company shall deliver to Participant, subject to sections 4 and 7 below, all shares of Stock subject to this Award that vested on the Full Vesting Date. The provisions of this section 3 and of section 2 shall not be construed as limiting the Administrator’s right to accelerate the vesting for, and therefore the Vesting Date in respect of, any portion of this Restricted Stock Unit or of the delivery of shares in respect of any vested portion of this Restricted Stock Unit for any reason.

4. Recapitalization, Mergers, Etc. In the event of a Covered Transaction, the Administrator may upon written notice to the Participant provide that this Restricted Stock Unit shall terminate on a date not less than 20 days after the date of such notice unless theretofore vested. In connection with such notice, the Administrator may in its sole discretion accelerate or waive any deferred vesting period. Notwithstanding the foregoing, in the event of a Change in Control of the Company (as defined in Participant’s employment agreement) during Participant’s employment with the Company or its Affiliates, this Restricted Stock Unit shall immediately vest as to all unvested shares without regard to any deferred vesting period under section 2 above. With respect to any portion of this Restricted Stock Unit the vesting of which is accelerated under the immediately preceding sentence, the date referred to in the last sentence of section 2 above shall be the date of the consummation of such Change in Control.

amounts due or vesting rights of the Participant in the event of the Participant’s death. In the absence of an effective designation by the Participant, “Designated Beneficiary” means the Participant’s estate.

6. Termination of Employment. If the Participant’s employment with (a) the Company, (b) an Affiliate, or (c) a corporation or other entity (or parent or subsidiary thereof) assuming this Award or issuing a substitute equity-based award pursuant to the Plan (collectively, “Group”), is terminated for any reason other than due to death, as result of disability, or by the Group without cause, the Participant shall not be entitled to any shares under this Restricted Stock Unit unless theretofore vested, and the remainder of this Restricted Stock Unit shall be immediately forfeited. If Participant’s employment is terminated upon Participant’s death or by the Group without cause (as defined in Participant’s employment agreement), this Restricted Stock Unit shall immediately vest as to all unvested shares without regard to any deferred vesting period under section 2 above. With respect to any portion of this Restricted Stock Unit the vesting of which is accelerated under the immediately preceding sentence, the date referred to in the last sentence of section 2 above shall be the date of the Participant’s death or termination of employment, as the case may be. If Participant’s employment is terminated by the Group as a result of disability (as defined in his employment agreement), this Restricted Stock Unit shall vest as to all unvested shares on the earlier of such termination and March 15th of the calendar year following the date the Participant is determined by the Administrator to have such a disability, all without regard to any deferred vesting period under section 2 above. With respect to any portion of this Restricted Stock Unit the vesting of which is accelerated under the immediately preceding sentence, the date referred to in the last sentence of section 2 above shall be the earlier of the two dates described in the immediately preceding sentence.

7. Tax Matters.

(a) Withholding. The Participant shall pay to the Company, or make provision satisfactory to the Company for payment of any taxes required by law to be withheld with respect to the vesting of this Restricted Stock Unit or the delivery of shares hereunder. The Administrator may, in its sole discretion, require that a portion of the shares of Stock that would have otherwise been delivered to the Participant upon vesting of this Restricted Stock Unit be sold by the Participant or retained by the Company to satisfy tax withholding and payment obligations, or in the case of any taxes due upon vesting and prior to distribution that the number of shares subject to this Restricted Stock Unit may be reduced to satisfy the tax withholding and payment obligations. Such shares shall be valued at the Fair Market Value on the date of sale if sold, or vesting if retained or reduced. All other terms of the sale or retention shall be determined by the Administrator in its sole discretion. The Administrator may, in its sole discretion, require any other federal, state or local taxes imposed on the sale of the shares to be paid by the Participant. In the Administrator’s sole discretion, such additional tax obligations may be paid in whole or in part in shares of Stock, including shares sold upon or retained from the vesting of this Restricted Stock Unit, valued at their Fair Market Value on the date of sale if sold, or of vesting if retained. Any cash proceeds resulting from a sale of Stock pursuant to this section 7 that are in excess of the taxes due shall be paid to the Participant. The Company and its Affiliates may, to the extent permitted by law, deduct any tax obligations from any payment of any kind otherwise due to the Participant.

(b) Section 409A. The Participant acknowledges that the Restricted Stock Unit is intended to qualify for the “short-term deferral” exemption from Section 409A and shall be construed by the Administrator accordingly. Notwithstanding the preceding sentence, neither the Group, nor the Administrator, nor any person acting on behalf of any of them, shall be liable to the Participant by reason of any acceleration of income, or any tax or additional tax, asserted by reason of any failure of the Award or any portion thereof to

satisfy the requirements for exemption from, or compliance with, Section 409A of the Code.

(c) Section 4999. Neither the Group, nor the Administrator, nor any person acting on behalf of any of them, shall be liable to the Participant by reason of any tax asserted under Section 4999 of the Code.

8. Notice of Sale of Stock Required. The Participant agrees to notify the Company in writing within 30 days of the disposition of any shares of Stock received upon vesting of this Restricted Stock Unit if such disposition occurs within two years of the date of the grant of this Restricted Stock Unit or within one year after such vesting.

9. Rights Limited. The Administrator, in its sole discretion, shall determine from the group of eligible persons whether an individual shall be a Participant under the Plan. Any grant made under the Plan shall be made in the sole discretion of the Administrator and no prior grant shall entitle a person to any future grant. Nothing in the Plan or any Restricted Stock Unit grant will be construed as giving any person the right to continued employment or service with the Group, or any rights as a shareholder except as to shares of Stock actually issued under the Plan. In no event shall the Plan, or any grant made under the Plan, form a part of an employee’s or consultant’s contract of employment or service, if any. The loss of existing or potential profit in Restricted Stock Units will not constitute an element of damages in the event of termination of employment or service for any reason, even if the termination is in violation of an obligation of the Group to the Participant.

10. Acceptance. Failure of the Participant to accept the terms and conditions of this Restricted Stock Unit in accordance with the requirements of the Administrator can result in adverse consequences to the Participant, including cancellation of the Restricted Stock Unit.

ACKNOWLEDGED AND AGREED:


Participant Signature


Participant Name (Print)


Date

GENZYME CORPORATION 2004 EQUITY INCENTIVE PLAN

Restricted Stock Unit Award Agreement

Tier I Not Retirement Eligible

2. Vesting Schedule. The Participant’s right to receive the number of shares of Stock set forth in the Notice of Grant of Award associated with this Award Agreement (“Notice”) shall vest on the earlier of (a) the third anniversary of the date of grant set forth in the Notice or (b) if applicable, the earliest to occur of the dates prescribed by sections 4 and 6 below, provided that the Participant is then, and since the date of grant has been continuously, employed by the Company or its Affiliates, unless otherwise specified herein (the earlier of the dates specified in (a) and (b) shall be the “Vesting Date”).

3. Delivery of Shares. As soon as practicable after the Vesting Date for this Restricted Stock Unit, and in no event later than March 15th of the calendar year following the calendar year in which the respective Vesting Date occurs, the Company shall deliver to the Participant, subject to sections 4 and 7 below, the number of shares of Stock set forth in the Notice. The provisions of this section 3 and of section 2 shall not be construed as limiting the Administrator’s right to accelerate the vesting for, and therefore the Vesting Date in respect of, any portion of this Restricted Stock Unit or of the delivery of shares in respect of any vested portion of this Restricted Stock Unit for any reason.

4. Recapitalization, Mergers, Etc. In the event of a Covered Transaction, the Administrator may upon written notice to the Participant provide that this Restricted Stock Unit shall terminate on a date not less than 20 days after the date of such notice unless theretofore vested. In connection with such notice, the Administrator may in its sole discretion accelerate or waive any deferred vesting period. Notwithstanding the foregoing, in the event of a Change in Control of the Company (as defined in Participant’s employment agreement) during Participant’s employment with the Company or its Affiliates, this Restricted Stock Unit shall immediately vest as to all shares without regard to any deferred vesting period under section 2 above, and the date referred to in clause (b) of such section shall be the date of the consummation of such Change in Control.

5. Restricted Stock Unit Not Transferable. This Restricted Stock Unit is not transferable by the Participant otherwise than by will or the laws of descent and distribution. The naming of a Designated Beneficiary does not constitute a transfer. A “Designated Beneficiary” means the beneficiary designated by the Participant, in a manner determined by the Administrator, to receive amounts due or vesting rights of the Participant in the event of the Participant’s death. In the absence of an effective designation by the Participant, “Designated Beneficiary” means the Participant’s estate.

be immediately forfeited. If Participant’s employment is terminated upon Participant’s death or by the Group without cause (as defined in Participant’s employment agreement), this Restricted Stock Unit shall immediately vest as to all shares without regard to any deferred vesting period under section 2 above, and the date referred to in clause (b) of such section shall be the date of Participant’s death or termination of employment, as the case may be. If Participant’s employment is terminated by the Group as a result of disability (as defined in his employment agreement), this Restricted Stock Unit shall vest as to all shares on the earlier of such termination and March 15th of the calendar year following the date the Participant is determined by the Administrator to have such a disability, all without regard to any deferred vesting period under section 2 above, and the date referred to in clause (b) of such section shall be the earlier of the two dates described in this sentence.

7. Tax Matters.

employment or service with the Group, or any rights as a shareholder except as to shares of Stock actually issued under the Plan. In no event shall the Plan, or any grant made under the Plan, form a part of an employee’s or consultant’s contract of employment or service, if any. The loss of existing or potential profit in Restricted Stock Units will not constitute an element of damages in the event of termination of employment or service for any reason, even if the termination is in violation of an obligation of the Group to the Participant.

ACKNOWLEDGED AND AGREED:


Participant Signature


Participant Name (Print)


Date

GENZYME CORPORATION 2004 EQUITY INCENTIVE PLAN

Restricted Stock Unit Award Agreement

Tier II Retirement Eligible

2. Vesting Schedule. The Participant qualifies for a retirement eligible vesting schedule because the Participant has reached, or by December 31, 2008 can reach, at least 60 years of age and 5 years of service with the Company or its Affiliates. Accordingly, the Participant’s right to receive the number of shares of Stock set forth in the Notice of Grant of Award associated with this Award Agreement (“Notice”) shall vest with respect to one-third of such number of shares of Stock on each of the first three anniversaries of the date of grant set forth in the Notice, provided that on each such anniversary, the Participant is then, and since the date of grant has been continuously, employed by the Company or its Affiliates, unless otherwise specified herein (each such anniversary, a “Vesting Date”). Notwithstanding the preceding sentence, all unvested shares of Stock subject to this Restricted Stock Unit shall vest, if applicable, on the earlier to occur of the dates prescribed by sections 4 and 6 below (the earlier of these two dates shall be the “Full Vesting Date”).

4. Recapitalization, Mergers, Etc. In the event of a Covered Transaction, the Administrator may upon written notice to the Participant provide that this Restricted Stock Unit shall terminate on a date not less than 20 days after the date of such notice unless theretofore vested. In connection with such notice, the Administrator may in its sole discretion accelerate or waive any deferred vesting period. Notwithstanding the foregoing, in the event of a Change in Control of the Company (as defined in a vote of the Compensation Committee adopted May 29, 2002) during Participant’s employment with the Company or its Affiliates, this Restricted Stock Unit shall immediately vest as to all unvested shares without regard to any deferred vesting period under section 2 above. With respect to any portion of this Restricted Stock Unit the vesting of which is accelerated under the immediately preceding sentence, the date referred to in the last sentence of section 2 above shall be the date of the consummation of such Change in Control.

transfer. A “Designated Beneficiary” means the beneficiary designated by the Participant, in a manner determined by the Administrator, to receive amounts due or vesting rights of the Participant in the event of the Participant’s death. In the absence of an effective designation by the Participant, “Designated Beneficiary” means the Participant’s estate.

7. Tax Matters.

ACKNOWLEDGED AND AGREED:


Participant Signature


Participant Name (Print)


Date

GENZYME CORPORATION 2004 EQUITY INCENTIVE PLAN

Restricted Stock Unit Award Agreement

Tier II Not Retirement Eligible

2. Vesting Schedule. The Participant’s right to receive the number of shares of Stock set forth in the Notice of Grant of Award associated with this Award Agreement (“Notice”) shall vest on the earlier of (a) the third anniversary of the date of grant set forth in the Notice or (b) if applicable, the earlier to occur of the dates prescribed by sections 4 and 6 below, provided that the Participant is then, and since the date of grant has been continuously, employed by the Company or its Affiliates, unless otherwise specified herein (the earlier of the dates specified in (a) and (b) shall be the “Vesting Date”).

4. Recapitalization, Mergers, Etc. In the event of a Covered Transaction, the Administrator may upon written notice to the Participant provide that this Restricted Stock Unit shall terminate on a date not less than 20 days after the date of such notice unless theretofore vested. In connection with such notice, the Administrator may in its sole discretion accelerate or waive any deferred vesting period. Notwithstanding the foregoing, in the event of a Change in Control of the Company (as defined in a vote of the Compensation Committee adopted May 29, 2002) during Participant’s employment with the Company or its Affiliates, this Restricted Stock Unit shall immediately vest as to all shares without regard to any deferred vesting period under section 2 above, and the date referred to in clause (b) of such section shall be the date of the consummation of such Change in Control.

employment with the Group, this Restricted Stock Unit shall immediately vest as to all unvested shares without regard to any deferred vesting period under section 2 above, and the date referred to in clause (b) of such section shall be the date of Participant’s death.

7. Tax Matters.

10. Acceptance. Failure of the Participant to accept the terms and conditions of this Restricted

Stock Unit in accordance with the requirements of the Administrator can result in adverse consequences to the Participant, including cancellation of the Restricted Stock Unit.

ACKNOWLEDGED AND AGREED:


Participant Signature


Participant Name (Print)


Date

EX-31.1 5 a2185010zex-31_1.htm EXHIBIT 31.1
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Exhibit 31.1

Certification Pursuant To
Rules 13a-14(a) And 15d-14(a) Under The Securities Exchange Act of 1934, as Amended

I, Henri A. Termeer, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Genzyme Corporation (the "Registrant");

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.

The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a): designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b): designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c): evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d): disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.

The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

(a): all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
(b): any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.

Date: May 9, 2008

/s/ HENRI A. TERMEER

Henri A. Termeer
Chief Executive Officer

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Exhibit 31.1

EX-31.2 6 a2185010zex-31_2.htm EXHIBIT 31.2
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Exhibit 31.2

Certification Pursuant To
Rules 13a-14(a) And 15d-14(a) Under The Securities Exchange Act of 1934, as Amended

I, Michael S. Wyzga, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Genzyme Corporation (the "Registrant");

2.

3.

4.

(a): designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b): designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c): evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d): disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.

(a): all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
(b): any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.

Date: May 9, 2008

/s/ MICHAEL S. WYZGA

Michael S. Wyzga
Chief Financial Officer

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Exhibit 31.2

EX-32.1 7 a2185010zex-32_1.htm EXHIBIT 32.1
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Exhibit 32.1

Certification by the Chief Executive Officer Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, I, the undersigned Chief Executive Officer of Genzyme Corporation (the "Company"), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2008 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ HENRI A. TERMEER

Henri A. Termeer
Chief Executive Officer
May 9, 2008

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Exhibit 32.1

EX-32.2 8 a2185010zex-32_2.htm EXHIBIT 32.2
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Exhibit 32.2

Certification by the Chief Financial Officer Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, I, the undersigned Chief Financial Officer of Genzyme Corporation (the "Company"), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2008 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ MICHAEL S. WYZGA

Michael S. Wyzga
Chief Financial Officer
May 9, 2008

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Exhibit 32.2

-----END PRIVACY-ENHANCED MESSAGE-----

ARTICLE I DEFINITIONS

1.2 “Aldurazyme” shall mean alpha-L-iduronidase meeting the Specifications.

1.3 “alpha-L-iduronidase” shall mean recombinant human alpha-L-iduronidase.

1.4 “BioMarin Companies” shall mean BioMarin and BioMarin Genetics, Inc., a Delaware corporation and a wholly-owned subsidiary of BioMarin (“BioMarin Genetics”).

1.7 “BioMarin Patent Rights” shall mean all Patent Rights Controlled by BioMarin during the Term to the extent that such Patent Rights relate to or are useful for the research, development, manufacture or commercialization of Collaboration Products for use in the Field.

1.8 “BioMarin Technology” shall mean all Technology Controlled by BioMarin during the Term to the extent that such Technology relates to or is useful for the research, development, manufacture or commercialization of Collaboration Products for use in the Field.

1.9 “BLA” shall mean a Biologics License Application or similar application filed with the FDA after completion of human clinical trials to obtain marketing approval for a Collaboration Product, including without limitation the BLA as approved by the FDA on April 30, 2003 that

provides for marketing approval for Aldurazyme in the United States, as the same may be updated or amended from time to time.

1.12 “Commercialization Party” shall have the meaning set forth in Section 7.1 below.

1.13 “Control” shall mean possession of the ability to grant a license or sublicense as provided for herein without violating the terms of an agreement with a Third Party.

1.15 “Development Plan” shall mean, with respect to a particular Collaboration Product, the comprehensive three (3) year rolling plan and budget for the development of such Collaboration Product under the Development Program, as more specifically described in Section 5.1.2 hereof.

1.17 “Effective Date” shall mean January 1, 2008.

1.19 “FDA” shall mean the United States Food and Drug Administration, any successor agency, or the regulatory authority of any country other than the United States with responsibilities comparable to those of the United States Food and Drug Administration.

1.22 “Genzyme Patent Rights” shall mean all Patent Rights Controlled by Genzyme during the Term to the extent that such Patent Rights relate to or are useful for the research, development, manufacture or commercialization of Collaboration Products for use in the Field.

1.23 “Genzyme Technology” shall mean all Technology Controlled by Genzyme during the Term to the extent such Technology relates to or is useful for the research, development manufacture or commercialization of Collaboration Products for use in the Field.

1.24 “Manufacturing Party” shall have the meaning set forth in Section 7.1.1.

1.26 “Manufacturing, Marketing and Sales Agreement” shall mean the Manufacturing, Marketing and Sales Agreement of even date herewith by and among the Parties.

1.27 “Member” shall have the meaning set forth in the Operating Agreement.

1.28 “Members Agreement” shall have the meaning set forth in the recitals.

1.29 “MPS-I” shall mean mucopolysaccharidosis I.

1.30 “Operating Agreement” shall mean the Operating Agreement of BioMarin/Genzyme LLC dated as of September 4, 1998 by and among the BioMarin Companies and Genzyme.

1.31 “Original Date of Execution” shall mean September 4, 1998.

1.32 “Patent Rights” shall mean any U.S. and foreign patents and patent applications (including continuations, continuations-in-part, divisionals, reissues, re-examinations, renewals, supplemental protection certificates and extensions).

1.33 “Percentage Interest” shall have the meaning set forth in the Operating Agreement.

1.34 “Program” shall mean the collaboration among BioMarin/Genzyme LLC, BioMarin and Genzyme described in this Agreement.

1.36 “Program Management Team” shall mean the joint team composed of representatives of Genzyme and BioMarin described in Section 8.1.1 hereof.

1.39 “Related Agreements” shall mean the Manufacturing, Marketing and Sales Agreement, the Members Agreement, the Fill/Finish Manufacturing Agreement and the Operating Agreement.

1.41 “Steering Committee” shall mean the governing body of BioMarin/Genzyme LLC composed of representatives of BioMarin and Genzyme appointed as described in Section 8.2.1 hereof.

1.42 “Technology” shall mean inventions, trade secrets, copyrights, know-how, data and other intellectual property of any kind (including without limitation any proprietary biological or other materials, compounds or reagents, but not including Patent Rights).

1.43 “Term” shall mean the period commencing on September 4, 1998 and ending with the effective date of any termination of this Agreement pursuant to Article 13 hereof.

1.44 “Territory” shall mean the world.

1.45 “Third Party” shall mean any entity other than BioMarin/Genzyme LLC, BioMarin or Genzyme and their respective Affiliates.

ARTICLE II SCOPE AND STRUCTURE OF THE COLLABORATION

ARTICLE III GRANTS AND RESERVATIONS OF RIGHTS

3.1 Licenses of Rights to BioMarin/Genzyme LLC.

3.2 Sublicenses of Rights from BioMarin/Genzyme LLC to BioMarin and Genzyme.

3.2.2 Further Sublicenses. The foregoing licenses granted to Genzyme and BioMarin, respectively, shall include the right to grant and further authorize sublicenses to Third Parties within the scope of such licenses.

3.3 Reservation of Rights.

ARTICLE IV PROGRAM FUNDING

4.1 Program Funding Commitments. Genzyme hereby undertakes to make capital contributions to BioMarin/Genzyme LLC in an amount equal to fifty percent (50%) of all Program Costs and BioMarin, on behalf of the BioMarin Companies, hereby undertakes to make capital

4.2 Program Funding Capital Contributions.

ARTICLE I

DEFINITIONS

ARTICLE II

SCOPE AND STRUCTURE OF THE COLLABORATION

ARTICLE III

GRANTS AND RESERVATIONS OF RIGHTS

ARTICLE IV

PROGRAM FUNDING