8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 8-K

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

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
February 15, 2006

GENZYME CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts	0-14680	06-1047163
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(IRS employer identification number)

500 Kendall Street, Cambridge, Massachusetts  02142

(Address of Principal Executive Offices)  (Zip Code)

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

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

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

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

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

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

Item 2.02Results of Operations and Financial Condition.

On February 15, 2006, Genzyme Corporation issued a press release containing its results of operations and financial condition for the three and twelve month periods ended December 31, 2005.  A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01Financial Statements and Exhibits.

(c)	Exhibits
99.1	Press Release of Genzyme Corporation dated February 15, 2006.

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SIGNATURE

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

	GENZYME CORPORATION
Dated: February 15, 2006	By:	/s/ Michael S. Wyzga
		Michael S. Wyzga
		Executive Vice President, Finance;
		Chief Financial Officer; and Chief Accounting Officer

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EX-99.1

Exhibit 99.1

For Immediate Release	Media Contact:	Investor Contact:
February 15, 2006	Bo Piela	Sally Curley
	(617) 768-6579	(617) 768-6140

Genzyme Reports Financial Results for Fourth Quarter of 2005 and Full Year

Provides Outlook for Growth in 2006

CAMBRIDGE, Mass. – Genzyme Corporation (Nasdaq: GENZ) today reported fourth-quarter and full-year financial results for 2005.  The company also provided guidance for 2006 that underscored its positive outlook for the year, which will be one of continued growth, investment, and progress for the company.

In the fourth quarter, GAAP net income increased to $106.6 million, or $0.39 per diluted share, compared with a net loss of $157.3 million, or $0.68 per diluted share, in the same period a year ago.  On a non-GAAP basis, fourth-quarter net income grew 31 percent to $162.7 million from $124.3 million, and earnings increased to $0.60 per diluted share from $0.52 per diluted share.  Non-GAAP figures exclude special items and amortization.

Special items included $22.2 million in acquisition-related expenses, consisting of charges to write off in-process research and development assets acquired from Avigen Inc., expiring Clolar^® inventory acquired from ILEX Oncology Inc., and the turnover of the stepped-up value of Hectorol^® inventory acquired from Bone Care International Inc.  Genzyme also recorded $16.9 million in charges for unsuccessful production runs of Cerezyme^® that occurred as the company’s Allston Landing manufacturing plant shifted to full capacity following a 50 percent expansion of the facility.  Improved

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systems for managing the higher volume at this multi-product facility have been implemented.

For the full year, GAAP net income was $441.5 million, or $1.65 per diluted share, compared with $86.5 million, or $0.37 per diluted share, in the previous year.  Non-GAAP net income increased 41 percent to $603.2 million, or $2.28 per diluted share, from $428.1 million, or $1.82 per diluted share, a year earlier.  Non-GAAP figures exclude special items, amortization, and the impact of contingent convertible debt in the first three quarters.

Fourth-quarter revenue increased 23 percent to $728.7 million from $591.1 million, while revenue for the full year increased 24 percent to $2.7 billion from $2.2 billion in the previous year.

“Last year, we solidified the diversified business model we have been building over the past five years, and this year we will start to exploit this diversified picture more directly,” said Henri A. Termeer, chairman and chief executive officer of Genzyme Corp.  “Our newer products will have an increasingly greater impact on the top line as they continue to grow, while Cerezyme sales in 2006 will represent just 30 percent of our overall revenue.  We also expect to make significant progress in many areas within our broad late-stage clinical pipeline, where we are advancing a number of major programs that will fuel our continued growth and diversification.  The first of these is Myozyme^® for patients with Pompe disease, which we expect to launch in the second quarter and which will begin to have an impact on our business later in the year.”

Over the past five years, Genzyme’s financial performance has been reliably strong, with a compound annual revenue growth rate of 29 percent.  Within that time,

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the company has transformed itself, making major investments to build a platform for consistent and sustainable future growth.  This growth will be based on three drivers:  (1) a diversified set of standard-of-care products now in the early stages of market penetration, augmented by new products from a deep research pipeline; (2) the facilities and expertise to manufacture these products; and (3) the global reach to make these products available to patients worldwide.  Genzyme estimates that, five years from now, it will generate more than $5 billion in annual revenue from the group of products that it currently markets, along with Myozyme^® (alglucosidase alfa), a product nearing approval.

2006 Guidance

Revenue & Earnings

Genzyme today confirmed the revenue and earnings guidance for 2006 that it provided in January.  The company expects revenue of $3.1-$3.3 billion; GAAP earnings of $1.78-$1.88 per share; and non-GAAP earnings of $2.65-$2.75 per share.  Non-GAAP earnings estimates exclude approximately $0.46 per share in amortization costs, $0.35 per share in costs associated with stock-option expensing, and $0.06 per share for the impact of contingent convertible debt.

Given the significant investments Genzyme will make during the first half of this year in late-stage clinical trials and product-launch activities, the company expects that earnings per share will increase at a greater rate in the second half of the year than in the first.

Product Sales

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Revenue for Renagel^® (sevelamer hydrochloride) for patients with end-stage renal disease is expected to reach $495-$505 million this year, compared with $417 million in 2005.  The product’s growth this year and in the near term will be supported by the expected publication of clinical and economic findings from the Dialysis Clinical Outcomes Revisited study, which compared the difference in mortality and morbidity outcomes for patients receiving Renagel with those using calcium-based phosphate binders.
Renagel’s growth will also be supported by expanded insurance coverage in the United States among patients enrolled in Medicare Part D plans, and by increasing adoption of the product in Europe and other parts of the world.

Sales of Fabrazyme^® (agalsidase beta) are expected to reach $370-$390 million this year, compared with $305 million in 2005.  Fabrazyme’s growth will continue to be based primarily on the number of newly identified patients beginning treatment.  The publication of results from the Phase 4 study of Fabrazyme’s clinical benefit—anticipated this year—will further reinforce the product’s profile among physicians and health authorities.

Sales of Cerezyme^® (imiglucerase for injection) are expected to reach $970-$980 million this year, compared with $932 million in 2005.  As Genzyme has long noted, Cerezyme is in a mature phase after 14 years on the market, though the product remains an important contributor within the company’s diversified product portfolio and is the standard of care throughout the world for patients with Type 1 Gaucher disease.

Sales of Synvisc^® (hylan G-F 20) are expected to reach $255-$265 million this year, compared with $219 million in 2005.  The product’s near term growth will be driven by expanded marketing support, particularly the launch this quarter of a new promotional campaign in the United States designed to differentiate Synvisc clinically

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from competing products.  Longer term, Synvisc’s growth will be driven by the expanding market for viscosupplementation products used to treat the pain of osteoarthritis.  Genzyme is working to capture this opportunity by investing in market-development activities and in clinical programs designed to extend the use of the current formulation to the hip, shoulder and ankle, and to introduce new formulations that would increase patient convenience by reducing the number of injections required for treatment.

Revenue for the Diagnostics/Genetics business is expected to reach $365-$375 million this year, compared with $327 million in 2005.  Growth in this area is expected from continued penetration of the cancer and reproductive testing markets and the launch of new personalized medicine tests that allow physicians to determine how patients are likely to respond to targeted therapies.

Gross Margin

Genzyme’s gross margin prior to FIN 46 and special items is expected to be approximately 78 percent of revenue this year, consistent with the gross margin for 2005.

Expenses

Selling, general and administrative expenses prior to FIN 46 and special items are expected to be relatively consistent as a percentage of revenue with SG&A expenses in 2005, which represented 29 percent of revenue.  Estimates for this year reflect the anticipated launch of Myozyme in Europe and the United States, along with increased marketing support for Synvisc.

Research and development spending prior to FIN 46 and special items is expected to increase to approximately $560 million this year.

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Throughout the course of this year, Genzyme expects to initiate, conduct or complete 16 pivotal trials for new products or new indications and more than 20 Phase 1 or Phase 2 studies.

Tax Rate

Genzyme’s effective net tax rate this year is expected to be approximately 30 percent on a GAAP basis and 31 percent on a non-GAAP basis, which excludes amortization and one-time items.

Capital Expenditures

Capital expenditures are expected to total approximately $250-$300 million this year.  Genzyme is making a significant investment in adding manufacturing capacity for products in late-stage clinical development and is constructing two new laboratory buildings to expand its research and development capacity.

Pipeline Outlook

Genzyme’s research and development program is focused on the areas of medicine where it markets commercial products, namely rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune diseases, and diagnostic testing.  It also conducts research in cardiovascular disease and other areas of unmet medical need.  The company expects to make significant progress this year within its late-stage clinical pipeline:

Inherited Disorders

•Commercial approval for Myozyme is expected within the next two months in both Europe and the United States.  Myozyme has been developed for the treatment of Pompe disease, a debilitating, progressive and often fatal muscular disorder.  The European Committee for Human Medicinal Products unanimously recommended full approval for the product last month, and marketing authorization from the European Commission is expected in March or April.  The Food and Drug Administration is expected to act on the U.S. marketing

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application by April 28.   Genzyme expects to complete enrollment soon in a clinical study involving patients with late-onset Pompe disease, which is intended to provide further support for Myozyme’s use.  The trial will continue throughout this year, and results will be available early next year.

•Enrollment is expected to begin in the first half of this year in an international, multi-center Phase 2 clinical trial evaluating the safety and efficacy of the small molecule GENZ-112638 for the treatment of Gaucher disease.  GENZ-112638 has the potential to be applicable across a range of lysosomal storage disorders in addition to Gaucher disease.

•Genzyme and Dyax Corp. are expected to continue enrollment this year in the Phase 3 study of DX-88.  The partners are developing DX-88 for the treatment of hereditary angioedema, a debilitating and life-threatening inflammatory condition characterized by recurrent attacks of severe pain and swelling in the limbs, abdomen and larynx. 

Kidney Disease

•Genzyme is conducting several clinical studies to support marketing approval of sevelamer carbonate, a potential next-generation phosphate binder.  Enrollment has been completed in a trial evaluating the product’s equivalence to sevelamer hydrochloride for patients with chronic kidney disease on hemodialysis.  Enrollment has begun in a study evaluating the product’s potential to benefit patients with chronic kidney disease who are not on dialysis, a significantly larger population.

Orthopaedics

•Genzyme is conducting pivotal trials of Synvisc 2 and hylastan, potential next-generation viscosupplementation products under development for the treatment of osteoarthritis pain.  Enrollment has been completed in the trial of Synvisc 2, and Genzyme anticipates product launch next year in Europe and the United States.

Immune and Infectious Diseases

•Patient enrollment will continue in the Phase 3 study of tolevamer, a novel non-absorbed polymer therapy that could be the first non-antibiotic treatment for Clostridium difficile-associated diarrhea, a widespread and growing global problem among hospital and nursing home patients.  The prevalence and impact of Clostridium difficile are becoming increasingly more visible as public health officials and others look for new ways to address this disease.

•Genzyme and Schering AG Germany await comments from the FDA, following which they hope to resume dosing soon in the Phase 2 clinical trial evaluating Campath for the treatment of multiple sclerosis.  The

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companies submitted a risk-management plan to the FDA and the EMEA earlier this month, which was approved by the study’s Data Safety Monitoring Board.   Results from a pre-planned interim analysis of the Phase 2 trial were highly encouraging, and the companies are working with participating clinical investigators and regulatory authorities to ensure that a comprehensive program is in place to manage patient safety in both the ongoing Phase 2 and planned Phase 3 studies.  Genzyme will request a meeting with the FDA during the first half of this year to review the proposed protocol for the Phase 3 study, which is now expected to begin during the second half of this year.  Additional interim data from the Phase 2 study is expected to be available this year.

Cancer

•Genzyme expects to begin enrollment this year in two Phase 3 clinical studies evaluating the use of Clolar^® (clofarabine for intravenous infusion) in patients with acute myelogenous leukemia (AML), the most common type of leukemia in adults.  Clolar is currently indicated for the treatment of pediatric patients with relapsed or refractory acute lymphoblastic leukemia after at least two prior regimens.  One of the new studies is expected to enroll patients with relapsed or refractory AML, while the other will enroll untreated patients for whom standard induction chemotherapy is not an appropriate option.

•Results from the clinical trial CAM-307 are expected to be available this year.  This Phase 3 study evaluated the use of Campath^® (alemtuzumab for injection) as a first-line therapy for patients with B-cell chronic lymphocytic leukemia.  Campath is currently indicated for the treatment of patients with this type of leukemia who have been treated with alkylating agents and who have failed fludarabine therapy.

Genzyme has a longstanding commitment to ensure that physicians and patients have access to all relevant information about the medicines it markets and the investigational products it develops.  Genzyme previously registered all of its active, company-sponsored Phase 2, 3 and 4 hypothesis-testing clinical trials on the National Institutes of Health Web site www.clinicaltrials.gov.  This information is now available on the company’s own Web site at www.GenzymeClinicalResearch.com.  Also included here are results from pivotal and post-marketing trials of Genzyme’s approved drugs and biologics.  Currently, the site includes results for five products, and results for several

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more products will be added over the coming months.  This initiative is consistent with Genzyme’s support for transparency regarding drug-development information.

About Genzyme

One of the world’s leading biotechnology companies, Genzyme is dedicated to making a major positive impact on the lives of people with serious diseases.  This year marks the 25^th anniversary of Genzyme’s founding.  Since 1981, the company has grown from a small start-up to a diversified enterprise with more than 8,000 employees in locations spanning the globe and 2005 revenues of $2.7 billion.  Genzyme has been selected by FORTUNE as one of the “100 Best Companies to Work for” in the United States.

With many established products and services helping patients in more than 80 countries, Genzyme is a leader in the effort to develop and apply the most advanced technologies in the life sciences. The company’s products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune diseases, and diagnostic testing. Genzyme’s commitment to innovation continues today with a substantial development program focused on these fields, as well as heart disease and other areas of unmet medical need.

This press release contains forward-looking statements, including statements regarding earnings, revenue, product sales, gross margin, expense, tax rate and capital expenditure estimates for fiscal year 2006, receipt of approval for Myozyme in the EU and the US, including the timing thereof, the anticipated timing of a Myozyme launch, and plans regarding a clinical study for patients with late-onset Pompe disease, expected drivers of Genzyme’s future growth, as well as the growth drivers for certain products, including Renagel, Fabrazyme, Synvisc and diagnostic testing products and services, anticipated progress of clinical trials, including for GENZ-112638, DX-88, sevelamer carbonate, hylastan, Synvisc 2, tolevamer, Campath MS, Clolar and CAM-307, Genzyme’s annual revenue estimate for 2010, the number of clinical trials Genzyme plans to initiate, conduct or complete in 2006, and other statements regarding Genzyme’s future performance and strategy. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those forecast in

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these forward-looking statements. These risks and uncertainties include, among others, Genzyme’s ability to successfully complete preclinical and clinical development of its products and services, Genzyme’s ability to expand the use of current products in existing and new indications; Genzyme’s ability to maintain and obtain regulatory approvals for products and services, and the timing of receipt of such approvals, including for Myozyme; Genzyme’s ability to successfully identify and market to new patients; the scope of third-party reimbursement coverage for Genzyme’s products and services; Genzyme’s ability to successfully expand its sales and marketing teams in existing and new markets; Genzyme’s ability to manufacture products and product candidates in a timely and cost effective manner; and the risks and uncertainties described in Genzyme’s SEC reports filed under the Securities Exchange Act of 1934, including the factors discussed under the caption “Factors Affecting Future Operating Results” in Genzyme’s Quarterly Report on Form 10-Q for the period ended September 30, 2005. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of February 15, 2006 and Genzyme undertakes no obligation to update or revise the statements.

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

Genzyme^®, Renagel^®, Fabrazyme^®, Cerezyme^®, Synvisc^®, Myozyme^®, Campath^®, Clolar^® and Hectorol^® are registered trademarks of Genzyme Corporation or its subsidiaries.  All rights reserved.

# # #

Conference Call Information

Genzyme Corporation will host a conference call today at 11:00 a.m. Eastern Time to discuss fourth-quarter and full-year 2005 financial results and financial guidance for 2006.  To participate in the call, please dial 706-679-8722.  A replay of this call will be available by dialing 706-645-9291.  Please refer to reservation number 1549029.  This call will also be Webcast live on the investor events section of www.genzyme.com.  Both replays will be available until February 22, 2006.

Upcoming Events

Genzyme Corporation will host a conference call April 19 at 11:00 a.m. Eastern Time to discuss first-quarter financial results.  To participate in the call, please dial 706-679-8722.

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A replay of this call will be available by dialing 706-645-9291.  Please refer to reservation number 5531792.  This call will also be Webcast live on the investor events section of www.genzyme.com.  Replays of the call and the Webcast will be available until midnight on April 26, 2006.

# # #

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

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GENZYME CORPORATION (GENZ)

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

	Three Months Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004
Total revenues	$	728,691		$	591,077		$	2,734,842		$	2,201,145
Operating costs and expenses:
Cost of products and services sold	188,601			163,897			632,652			588,586
Selling, general and administrative	207,613			155,432			787,839			599,388
Research and development	138,186			107,428			502,657			391,802
Amortization of intangibles	49,494			28,326			181,632			109,473
Purchase of in-process research and development (1)	7,000			254,520			29,200			254,520
Charge for impaired assets (2)	—			4,463			—			4,463
Total operating costs and expenses	590,894			714,066			2,133,980			1,948,232
Operating income (loss)	137,797			(122,989		)	600,862			252,913
Other income (expenses):
Equity in income (loss) of equity method investments	1,346			(3,157		)	151			(15,624		)
Minority interest	2,731			2,284			11,952			5,999
Gain (loss) on investments in equity securities	526			1,030			5,698			(1,252		)
Other	(707		)	376			(1,535		)	(357		)
Investment income	9,194			6,399			31,429			24,244
Interest expense (3)	(4,615		)	(4,977		)	(19,638		)	(38,227		)
Total other income (expenses)	8,475			1,955			28,057			(25,217		)
Income (loss) before income taxes	146,272			(121,034		)	628,919			227,696
Provision for income taxes	(39,626		)	(36,308		)	(187,430		)	(141,169		)
Net income (loss)	$	106,646		$	(157,342	)	$	441,489		$	86,527
Net income (loss) per share of Genzyme Stock:
Basic	$	0.41		$	(0.68	)	$	1.73		$	0.38
Diluted (4)	$	0.39		$	(0.68	)	$	1.65		$	0.37
Weighted average shares outstanding:
Basic	258,535			232,255			254,758			228,175
Diluted (4)	276,428			232,255			272,224			234,318

(1)   Includes charges for the purchase of in-process research and development of $(7,000)K related to our acquisition of gene therapy assets from Avigen, Inc. in December 2005, $(12,700)K related to our acquisition of Bone Care International, Inc. in July 2005, $(9,500)K related to our acquisition of Verigen AG in February 2005 and $(254,520)K related to our acquisition of ILEX Oncology, Inc. in December 2004.

(2)   Includes an impairment charge of $(4,463)K recorded in December 2004 to write down assets related to a manufacturing facility in Oklahoma.

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

(4)   Reflects the retroactive application of the adoption of Emerging Issues Task Force Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings Per Share,” or EITF 04-8.  As a result of the adoption of EITF 04-8, the 9,686K shares issuable upon conversion of our $690.0 million in principal of 1.25% convertible senior notes, which were issued in December 2003, are now included in diluted weighted average shares for purposes of computing diluted earnings per share, unless the effect would be anti-dilutive.  In accordance with EITF 04-8, interest and debt fees related to the notes of $1.9 million, net of tax, for the three months ended December 31, 2005 and $7.5 million, net of tax, for the year ended December 31, 2005 have been added back to net income and approximately 9.7 million shares have been added to diluted weighted average shares outstanding for each of those periods for purposes of computing diluted earnings per share.

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

Net income per share on a diluted basis and weighted average shares - diluted for the year ended December 31, 2004 exclude the potentially dilutive effect of the assumed conversion of our convertible senior notes because the effect would be anti-dilutive.

GENZYME CORPORATION (GENZ)

Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)

	December 31, 2005		December 31, 2004
Cash and all marketable securities	$	1,089,102	$	1,079,454
Other current assets	1,179,093		1,082,437
Property, plant and equipment, net	1,320,813		1,310,256
Intangibles, net	3,078,461		2,360,315
Other assets	211,396		236,959
Total assets	$	6,878,865	$	6,069,421
Current liabilities	$	543,501	$	624,398
Noncurrent liabilities	1,180,965		1,064,867
Stockholders’ equity	5,154,399		4,380,156
Total liabilities and stockholders’ equity	$	6,878,865	$	6,069,421

Genzyme Corporation (GENZ)

Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)

	Q4-04(1)		Q1-05(1)		Q2-05(1)		Q3-05(1)		Q4-05(1)		Q4-05 vs. Q4-04 % B/(W)		FY 2003(1)		FY 2004(1)		YTD 12/31/05(1)
Total revenues:
Renal
Renagel phosphate binder (including Sevelamer)	$	99,272	$	99,403	$	100,847	$	106,869	$	110,366	11	%	$	281,701	$	363,720	$	417,485
Hectorol	—		—		—		14,138		20,377				—		—		34,515
Other Renal	—		—		—		—		—				—		—		—
Total Renal product and service revenue	99,272		99,403		100,847		121,007		130,743		32	%	281,701		363,720		452,000
Renal R&D revenue	—		—		—		—		—				—		—		—
Total Renal	99,272		99,403		100,847		121,007		130,743		32	%	281,701		363,720		452,000
Therapeutics
Cerezyme enzyme	218,647		225,951		235,953		238,329		232,089		6	%	733,817		839,366		932,322
Fabrazyme enzyme	63,918		70,026		74,424		79,076		81,538		28	%	80,617		209,637		305,064
Thyrogen hormone	17,731		17,715		20,699		18,503		20,823		17	%	43,438		63,454		77,740
Other Therapeutics	655		807		1,281		1,903		2,128		225	%	1,802		2,462		6,119
Total Therapeutics product and service revenue	300,951		314,499		332,357		337,811		336,578		12	%	859,674		1,114,919		1,321,245
Therapeutics R&D revenue	—		554		235		—		—				1		—		789
Total Therapeutics	300,951		315,053		332,592		337,811		336,578		12	%	859,675		1,114,919		1,322,034
Transplant
Thymoglobulin/Lymphoglobuline	30,314		27,221		33,576		32,434		34,508		14	%	29,953		108,928		127,739
Other Transplant	6,999		3,917		1,465		1,677		11,084		58	%	14,367		42,125		18,143
Total Transplant product and service revenue	37,313		31,138		35,041		34,111		45,592		22	%	44,320		151,053		145,882
Transplant R&D revenue	49		17		—		13		—		(100	)%	—		310		30
Total Transplant	37,362		31,155		35,041		34,124		45,592		22	%	44,320		151,363		145,912
Biosurgery
Synvisc viscosupplementation product and services	13,783		44,016		58,778		57,748		58,366		323	%	55,579		88,296		218,908
Sepra products	16,771		16,652		17,099		17,025		17,395		4	%	25,959		61,647		68,171
Other Biosurgery	13,533		14,250		16,395		18,028		17,280		28	%	32,414		55,332		65,953
Total Biosurgery product and service revenue	44,087		74,918		92,272		92,801		93,041		111	%	113,952		205,275		353,032
Biosurgery R&D revenue	1,391		134		9		1		—		(100	)%	5,127		4,241		144
Total Biosurgery	45,478		75,052		92,281		92,802		93,041		105	%	119,079		209,516		353,176
Diagnostics/Genetics
Diagnostic Products	23,001		26,866		22,121		25,302		29,913		30	%	88,588		90,955		104,202
Genetic Testing	54,698		52,507		54,396		59,368		56,057		2	%	102,147		188,166		222,328
Total Diagnostics/Genetics product and service revenue	77,699		79,373		76,517		84,670		85,970		11	%	190,735		279,121		326,530
Diagnostics/Genetics R&D revenue	—		—		—		—		—				—		—		—
Total Diagnostics/Genetics	77,699		79,373		76,517		84,670		85,970		11	%	190,735		279,121		326,530
Other
Other product and service revenue	27,332		24,496		26,348		33,050		32,099		17	%	71,710		74,495		115,993
Other R&D revenue	2,983		5,417		4,513		4,599		4,668		56	%	7,597		8,011		19,197
Total Other	30,315		29,913		30,861		37,649		36,767		21	%	79,307		82,506		135,190
Total revenues	$	591,077	$	629,949	$	668,139	$	708,063	$	728,691	23	%	$	1,574,817	$	2,201,145	$	2,734,842

Genzyme Corporation (GENZ)

Analyst Schedule
(Unaudited, amounts in thousands, except percentage and per share amounts)

	Q4-04(1)			Q1-05(1)			Q2-05(1)			Q3-05(1)			Q4-05(1)			Q4-05 vs. Q4-04 % B/(W)		FY 2003(1)			FY 2004(1)			YTD 12/31/05(1)
Revenues:
Total product and service revenue	$	586,654		$	623,827		$	663,382		$	703,450		$	724,023		23	%	$	1,562,092		$	2,188,583		$	2,714,682
Total R&D revenue	4,423			6,122			4,757			4,613			4,668			6	%	12,725			12,562			20,160
Total revenues	591,077			629,949			668,139			708,063			728,691			23	%	1,574,817			2,201,145			2,734,842
Total product and service gross profit	422,757			477,734			518,132			550,742			535,422			27	%	1,143,123			1,599,997			2,082,030
SG&A expense	155,432			181,839			196,385			202,002			207,613			(34	)%	455,395			599,388			787,839
R&D expense	107,428			114,745			121,726			128,000			138,186			(29	)%	295,725			391,802			502,657
Amortization of intangibles	28,326			41,186			40,105			50,847			49,494			(75	)%	64,720			109,473			181,632
Purchase of in-process research and development (2)	254,520			9,500			—			12,700			7,000			97	%	158,000			254,520			29,200
Charges for impaired assets (3)	4,463			—			—			—			—			100	%	7,996			4,463			—
Operating income (loss)	(122,989		)	136,586			164,673			161,806			137,797			212	%	174,012			252,913			600,862
Other income (expenses):
Equity in income (loss) of equity method investments	(3,157		)	(1,718		)	(417		)	940			1,346			143	%	(16,743		)	(15,624		)	151
Minority interest	2,284			2,194			3,357			3,670			2,731			20	%	2,232			5,999			11,952
Gain (loss) on investments in equity securities	1,030			141			4,817			214			526			(49	)%	(1,201		)	(1,252		)	5,698
Gain on sale of product line (4)	—			—			—			—			—					1,709			—			—
Other	376			(60		)	253			(1,021		)	(707		)	(288	)%	994			(357		)	(1,535		)
Investment income	6,399			6,618			7,544			8,073			9,194			44	%	42,312			24,244			31,429
Interest expense (5)	(4,977		)	(3,808		)	(4,466		)	(6,749		)	(4,615		)	7	%	(22,380		)	(38,227		)	(19,638		)
Income (loss) before income taxes	(121,034		)	139,953			175,761			166,933			146,272			221	%	180,935			227,696			628,919
Provision for income taxes	(36,308		)	(44,395		)	(52,130		)	(51,279		)	(39,626		)	(9	)%	(98,792		)	(141,169		)	(187,430		)
Division net income (loss) before allocated tax benefits	(157,342		)	95,558			123,631			115,654			106,646			168	%	82,143			86,527			441,489
Allocated tax benefits	—			—			—			—			—					12,140			—			—
Net income (loss) allocated to Genzyme Stock (1)	$	(157,342	)	$	95,558		$	123,631		$	115,654		$	106,646		168	%	$	94,283		$	86,527		$	441,489
Net income (loss) per share of Genzyme Stock-diluted (1,6,7)	$	(0.68	)	$	0.36		$	0.46		$	0.43		$	0.39		157	%	$	0.42		$	0.37		$	1.65
Weighted average shares outstanding-diluted (6,7)	232,255			267,893			270,084			274,492			276,428			19	%	225,976			234,318			272,224

Genzyme Corporation (GENZ)

Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)

	Q4-04(1)			Q1-05(1)			Q2-05(1)			Q3-05(1)			Q4-05(1)			FY 2003(1)			FY 2004(1)			YTD 12/31/05(1)
Total product and service revenue	$	586,654		$	623,827		$	663,382		$	703,450		$	724,023		$	1,562,092		$	2,188,583		$	2,714,682
As a % of total product and service revenue:
Renagel phosphate binder (including Sevelamer)	17		%	16		%	15		%	15		%	15		%	18		%	17		%	15		%
Hectorol	0		%	0		%	0		%	2		%	3		%	0		%	0		%	1		%
Cerezyme enzyme	37		%	36		%	36		%	34		%	32		%	47		%	38		%	34		%
Fabrazyme enzyme	11		%	11		%	11		%	11		%	11		%	5		%	9		%	11		%
Thyrogen hormone	3		%	3		%	3		%	3		%	3		%	3		%	3		%	3		%
Thymoglobulin/Lymphoglobuline	5		%	4		%	5		%	5		%	5		%	2		%	5		%	5		%
Synvisc viscosupplementation product and services	3		%	7		%	9		%	8		%	8		%	3		%	4		%	8		%
Sepra products	3		%	3		%	3		%	2		%	2		%	2		%	3		%	3		%
Diagnostics/Genetics	13		%	13		%	11		%	12		%	12		%	12		%	13		%	12		%
Other	8		%	7		%	7		%	8		%	9		%	8		%	8		%	8		%
Total product and service gross margin	72		%	77		%	78		%	78		%	74		%	73		%	73		%	77		%
Total revenues	$	591,077		$	629,949		$	668,139		$	708,063		$	728,691		$	1,574,817		$	2,201,145		$	2,734,842
SG&A expense as a % of total revenue	26		%	29		%	29		%	29		%	28		%	29		%	27		%	29		%
R&D expense as a % of total revenue	18		%	18		%	18		%	18		%	19		%	19		%	18		%	18		%
Operating income (loss) as a % of total revenue	(21		)%	22		%	25		%	23		%	19		%	11		%	11		%	22		%
Provision for income taxes as a % of profit (loss) before tax	(30		)%	32		%	30		%	31		%	27		%	48		%	62		%	30		%
Condensed Balance Sheet Information:	12/31/04		(8)	03/31/05		(8)	06/30/05		(8)	09/30/05		(8)	12/31/05		(8)	12/31/03		(8)	12/31/04		(8)	12/31/05		(8)
Cash and all marketable securities	$	1,079,454		$	1,042,267		$	1,638,481		$	950,342		$	1,089,102		$	1,227,460		$	1,079,454		$	1,089,102
Other current assets	1,082,437			1,077,182			1,084,917			1,198,359			1,179,093			909,490			1,082,437			1,179,093
Property, plant and equipment, net	1,310,256			1,297,802			1,275,087			1,294,990			1,320,813			1,151,133			1,310,256			1,320,813
Intangibles, net	2,360,315			2,466,938			2,447,344			3,124,176			3,078,461			1,517,791			2,360,315			3,078,461
Other assets	236,959			208,390			207,430			214,098			211,396			198,654			236,959			211,396
Total assets	$	6,069,421		$	6,092,579		$	6,653,259		$	6,781,965		$	6,878,865		$	5,004,528		$	6,069,421		$	6,878,865
Current liabilities	$	624,398		$	519,445		$	913,099		$	616,983		$	543,501		$	392,025		$	624,398		$	543,501
Noncurrent liabilities	1,064,867			1,054,506			1,041,186			1,184,766			1,180,965			1,676,091			1,064,867			1,180,965
Stockholders’ equity	4,380,156			4,518,628			4,698,974			4,980,216			5,154,399			2,936,412			4,380,156			5,154,399
Total liabilities and stockholders’ equity	$	6,069,421		$	6,092,579		$	6,653,259		$	6,781,965		$	6,878,865		$	5,004,528		$	6,069,421		$	6,878,865

Notes:
(1)	Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating earnings to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our earnings are allocated to Genzyme Corporation, formerly Genzyme General. Earnings or losses allocated to Genzyme Biosurgery and Genzyme Molecular Oncology prior to July 1, 2003 remain allocated to those divisions and are not affected by the elimination of our tracking stock structure.
	From July 1, 2003 through May 27, 2004, we referred to our outstanding series of common stock as Genzyme General Stock. At our annual meeting of shareholders on May 27, 2004, our shareholders approved an amendment to our charter that eliminated the designation of separate series of common stock, resulting in 690,000,000 authorized shares of a single series of common stock, which we refer to as Genzyme Stock.
(2)	Includes charges for the purchase of in-process research and development of $(7,000)K related to our acquisition of gene therapy assets from Avigen, Inc. in December 2005, $(12,700)K related to our acquisition of Bone Care International, Inc. in July 2005, $(9,500)K related to our acquisition of Verigen AG in February 2005, $(254,520)K related to our acquisition of ILEX Oncology, Inc. in December 2004, and $(158,000)K related to our acquisition of SangStat Medical Corporation in September 2003.
(3)	Includes impairment charges of $(4,463)K recorded in December 2004 to write down the assets of a manufacturing facility in Oklahoma and $(7,996)K recorded in September 2003 to write down the assets of our FocalSeal business.
(4)	Represents the final adjustment to the net loss recorded on the sale of our cardiothoracic devices business to Teleflex Inc. in accordance with the sale agreement. We recorded an estimated net loss of $(29,367)K in June 2003, which we allocated to Genzyme Biosurgery. However, as a result of the elimination of our tracking stock capital structure effective July 1, 2003, the final adjustment to the net loss is allocated to Genzyme General.
(5)	In June 2004, we completed the redemption of our 3% convertible subordinated debentures for cash, including $575.0 million in principal, accrued interest of approximately $0.8 million and $4.3 million in premium. Interest expense for the year ended December 31, 2004 includes charges of $(4,313)K for the premium paid upon redemption and $(5,329)K to write off the unamortized debt fees associated with these debentures.
(6)	Reflects the retroactive application of the adoption of Emerging Issues Task Force Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings Per Share,” or EITF 04-8. As a result of the adoption of EITF 04-8, the 9,686K shares issuable upon conversion of our $690.0 million in principal of 1.25% convertible senior notes, which were issued in December 2003, are now included in diluted weighted average shares for purposes of computing diluted earnings per share, unless the effect would be anti-dilutive.
(7)	For all periods except Q4-04 and the year ended December 31, 2004, includes the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock, and the potentially dilutive effect of the assumed conversion of our 1.25% convertible senior notes. Dilutive earnings per share for the year ended December 31, 2003 was not impacted by the adoption of EITF 04-8 because our convertible senior notes were only outstanding for a portion of the month in December 2003.
	In Q4-04, excludes the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock, and the potentially dilutive effect of the assumed conversion of our 1.25% convertible senior notes because the effect would be anti-dilutive due to our net loss for the period.
	For the year ended December 31, 2004, excludes the potentially dilutive effect of the assumed conversion of our convertible senior notes because the effect would be anti-dilutive.
(8)	Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating assets and liabilities to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our assets and liabilities are allocated to Genzyme Corporation, formerly Genzyme General.

GENZYME GENERAL

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

Quarter Ended March 31, 2005

(Amounts in thousands, except per share data)

	Before Charges, Amortization, FIN 46 & EITF 04-8			Dilution Due to Contingently Convertible Debt (EITF 04-8)			Amortization			IPR&D			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues	$	629,949											$	629,949					$	629,949
Cost of products and services sold	$	(146,093	)										$	(146,093	)				$	(146,093	)
Selling, general and administrative	$	(181,780	)										$	(181,780	)	$	(59	)	$	(181,839	)
Research and development	$	(110,417	)										$	(110,417	)	$	(4,328	)	$	(114,745	)
Amortization of intangibles	$	—					$	(41,186	)				$	(41,186	)				$	(41,186	)
Purchase of in-process research and development	$	—								$	(9,500	)	$	(9,500	)				$	(9,500	)
Equity in loss of equity method investments	$	(3,911	)										$	(3,911	)	$	2,193		$	(1,718	)
Minority interest	$	—											$	—		$	2,194		$	2,194
Other	$	81											$	81					$	81
Investment income	$	6,618											$	6,618		$	—		$	6,618
Interest expense	$	(3,808	)										$	(3,808	)				$	(3,808	)
Summary:
Income (loss) before income taxes	$	190,639		$	—		$	(41,186	)	$	(9,500	)	$	139,953		$	—		$	139,953
Provision for income taxes	$	(59,551	)	—			15,156			—			(44,395		)	—			(44,395		)
Net income allocated to Genzyme Stock	$	131,088		$	—		$	(26,030	)	$	(9,500	)	$	95,558		$	—		$	95,558
Net income per share of Genzyme Stock:
Basic	$	0.52		$	—		$	(0.10	)	$	(0.04	)	$	0.38		$	—		$	0.38
Diluted (1)	$	0.51		$	(0.01	)	$	(0.10	)	$	(0.04	)	$	0.36		$	—		$	0.36
Weighted average shares outstanding:
Basic	250,921			—			—			—			250,921			—			250,921
Diluted (1)	258,207			9,686			—			—			267,893			—			267,893

(1)GAAP As-Reported diluted earnings per share and diluted weighted average shares outstanding reflect the adoption of EITF
04-8. In accordance with the provisions of EITF 04-8, interest and debt fees related to our 1.25% convertible senior notes of $1.9 million, net of tax, have been added back to net income and approximately 9.7 million shares have been added to diluted weighted average shares for purposes of computing GAAP As-Reported diluted earnings per share.

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

Quarter Ended June 30, 2005

(Amounts in thousands, except per share data)

	Before Amortization, FIN 46 & EITF 04-8			Dilution Due to Contingently Convertible Debt (EITF 04-8)			Amortization			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues	$	668,139								$	668,139					$	668,139
Cost of products and services sold	$	(145,250	)							$	(145,250	)				$	(145,250	)
Selling, general and administrative	$	(196,107	)							$	(196,107	)	$	(278	)	$	(196,385	)
Research and development	$	(115,290	)							$	(115,290	)	$	(6,436	)	$	(121,726	)
Amortization of intangibles	$	—					$	(40,105	)	$	(40,105	)				$	(40,105	)
Equity in loss of equity method investments	$	(3,773	)							$	(3,773	)	$	3,356		$	(417	)
Minority interest	$	—								$	—		$	3,357		$	3,357
Other	$	5,070								$	5,070					$	5,070
Investment income	$	7,543								$	7,543		$	1		$	7,544
Interest expense	$	(4,466	)							$	(4,466	)				$	(4,466	)
Summary:
Income (loss) before income taxes	$	215,866		$	—		$	(40,105	)	$	175,761		$	—		$	175,761
Provision for income taxes	$	(66,889	)	—			14,759			(52,130		)	—			(52,130		)
Net income allocated to Genzyme Stock	$	148,977		$	—		$	(25,346	)	$	123,631		$	—		$	123,631
Net income per share of Genzyme Stock:
Basic	$	0.59		$	—		$	(0.10	)	$	0.49		$	—		$	0.49
Diluted (1)	$	0.57		$	(0.01	)	$	(0.10	)	$	0.46		$	—		$	0.46
Weighted average shares outstanding:
Basic	253,086			—			—			253,086			—			253,086
Diluted (1)	260,398			9,686			—			270,084			—			270,084

(1)GAAP As-Reported diluted earnings per share and diluted weighted average shares outstanding reflect the adoption of EITF
04-8. In accordance with the provisions of EITF 04-8, interest and debt fees related to our 1.25% convertible senior notes of $1.9 million, net of tax, have been added back to net income and approximately 9.7 million shares have been added to diluted weighted average shares for purposes of computing GAAP As-Reported diluted earnings per share.

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

Quarter Ended September 30, 2005

(Amounts in thousands, except per share data)

	Before Charges, Amortization, FIN 46 & EITF 04-8			Dilution Due to Contingently Convertible Debt (EITF 04-8)			Amortization			IPR&D			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues	$	708,063											$	708,063					$	708,063
Cost of products and services sold	$	(152,708	)										$	(152,708	)				$	(152,708	)
Selling, general and administrative	$	(201,830	)										$	(201,830	)	$	(172	)	$	(202,002	)
Research and development	$	(120,834	)										$	(120,834	)	$	(7,166	)	$	(128,000	)
Amortization of intangibles	$	—					$	(50,847	)				$	(50,847	)				$	(50,847	)
Purchase of in-process research and development	$	—								$	(12,700	)	$	(12,700	)				$	(12,700	)
Equity in income (loss) of equity method investments	$	(2,728	)										$	(2,728	)	$	3,668		$	940
Minority interest	$	—											$	—		$	3,670		$	3,670
Other	$	(807	)										$	(807	)				$	(807	)
Investment income	$	8,073											$	8,073					$	8,073
Interest expense	$	(6,749	)										$	(6,749	)				$	(6,749	)
Summary:
Income (loss) before income taxes	$	230,480		$	—		$	(50,847	)	$	(12,700	)	$	166,933		$	—		$	166,933
Provision for income taxes	$	(69,991	)	$	—		$	18,712		$	—		$	(51,279	)	$	—		$	(51,279	)
Net income allocated to Genzyme Stock	$	160,489		$	—		$	(32,135	)	$	(12,700	)	$	115,654		$	—		$	115,654
Net income per share of Genzyme Stock:
Basic	$	0.63		$	—		$	(0.13	)	$	(0.05	)	$	0.45		$	—		$	0.45
Diluted (1)	$	0.61		$	(0.01	)	$	(0.12	)	$	(0.05	)	$	0.43		$	—		$	0.43
Weighted average shares outstanding:
Basic	256,490			—			—			—			256,490			256,490			256,490
Diluted (1)	264,806			9,686			—			—			274,492			274,492			274,492

(1)GAAP As-Reported diluted earnings per share and diluted weighted average shares outstanding reflect the adoption of EITF
04-8. In accordance with the provisions of EITF 04-8, interest and debt fees related to our 1.25% convertible senior notes of $1.9 million, net of tax, have been added back to net income and approximately 9.7 million shares have been added to diluted weighted average shares for purposes of computing GAAP As-Reported diluted earnings per share.

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

Quarter Ended December 31, 2005

(Amounts in thousands, except per share data)

	NON-GAAP Before Charges Amortization & FIN 46			Manufacturing Related			Acquisition Related			Amortization			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues	$	728,691											$	728,691					$	728,691
Cost of products and services sold	$	(156,475	)	(16,912		)	(15,214		)				$	(188,601	)				$	(188,601	)
Selling, general and administrative	$	(207,332	)										$	(207,332	)	$	(281	)	$	(207,613	)
Research and development	$	(133,004	)										$	(133,004	)	$	(5,182	)	$	(138,186	)
Amortization of intangibles	$	—								(49,494		)	$	(49,494	)				$	(49,494	)
Purchase of in-process research and development	$	—					(7,000		)				$	(7,000	)				$	(7,000	)
Equity in income (loss) of equity method investments	$	(1,385	)										$	(1,385	)	$	2,731		$	1,346
Minority interest	$	—											$	—		$	2,731		$	2,731
Other	$	(181	)										$	(181	)				$	(181	)
Investment income	$	9,193											$	9,193		$	1		$	9,194
Interest Expense	$	(4,615	)										$	(4,615	)				$	(4,615	)
Summary:
Income (loss) before income taxes	$	234,892		$	(16,912	)	$	(22,214	)	$	(49,494	)	$	146,272		$	—		$	146,272
Provision for (benefit from) income taxes		(72,239	)	6,224			8,175			18,214			(39,626		)	—			(39,626		)
Net income (loss)	$	162,653		$	(10,688	)	$	(14,039	)	$	(31,280	)	$	106,646		$	—		$	106,646
Net income (loss) per share of Genzyme Stock:
Basic	$	0.63		$	(0.041	)	$	(0.054	)	$	(0.121	)	$	0.413		$	—		$	0.41
Diluted (1)	$	0.60		$	(0.039	)	$	(0.051	)	$	(0.113	)	$	0.393		$	—		$	0.39
Weighted average shares outstanding:
Basic	258,535												258,535			258,535			258,535
Diluted (1)	276,428												276,428			276,428			276,428

(1)GAAP As-Reported and Non-GAAP diluted earnings per share and diluted weighted average shares outstanding reflect the adoption of EITF 04-8. In accordance with the provisions of EITF 04-8, interest and debt fees related to our 1.25% convertible senior notes of $1.9 million, net of tax, have been added back to net income and approximately 9.7 million shares have been added to diluted weighted average shares for purposes of computing GAAP As-Reported and Non-GAAP diluted earnings per share.

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

For the Year Ended December 31, 2005

(Amounts in thousands, except per share data)

	NON-GAAP Before EITF 04-8, Charges, Amortization & FIN 46			Dilution Due to Contingently Convertible Debt (EITF 04-8) Q1-Q3			Manufacturing Related			Acquisition Related			Amortization			Non- Deductible IPR&D			NON-GAAP Before Effect of FIN 46			Effect of FIN 46			GAAP As Reported
Income Statement Classification:
Total revenues	$	2,734,842																	$	2,734,842					$	2,734,842
Cost of products and services sold	$	(600,526	)				(16,912		)	(15,214		)							$	(632,652	)				$	(632,652	)
Selling, general and administrative	$	(787,049	)																$	(787,049	)	$	(790	)	$	(787,839	)
Research and development	$	(479,545	)																$	(479,545	)	$	(23,112	)	$	(502,657	)
Amortization of intangibles	$	—											(181,632		)				$	(181,632	)				$	(181,632	)
Purchase of in-process research and development	$	—								(7,000		)				(22,200		)	$	(29,200	)				$	(29,200	)
Equity in income (loss) of equity method investments	$	(11,797	)																$	(11,797	)	$	11,948		$	151
Minority interest	$	—																	$	—		$	11,952		$	11,952
Other	$	4,163																	$	4,163					$	4,163
Investment income	$	31,427																	$	31,427		$	2		$	31,429
Interest Expense	$	(19,638	)	—			—												$	(19,638	)				$	(19,638	)
Summary:
Income (loss) before income taxes	$	871,877		$	—		$	(16,912	)	$	(22,214	)	$	(181,632	)	$	(22,200	)	$	628,919		$	—		$	628,919
Provision for income taxes		(268,670	)		—		6,224			8,175			66,841			—			(187,430		)	—				(187,430	)
Net income allocated to Genzyme Stock	$	603,207		$	—		$	(10,688	)	$	(14,039	)	$	(114,791	)	$	(22,200	)	$	441,489		$	—		$	441,489
Net income per share of Genzyme Stock:
Basic	$	2.37		$	—		$	(0.041	)	$	(0.054	)	$	(0.450	)	$	(0.087	)	$	1.733		$	—		$	1.73
Diluted (1,2)	$	2.28		$	(0.026	)	$	(0.039	)	$	(0.051	)	$	(0.423	)	$	(0.093	)	$	1.649		$	—		$	1.65
Weighted average shares outstanding:
Basic	254,758																		254,758			254,758			254,758
Diluted (1,2)	262,538																		272,224			272,224			272,224

(1)GAAP As-Reported diluted earnings per share and diluted weighted average shares outstanding reflect the adoption of EITF
04-8. In accordance with the provisions of EITF 04-8, interest and debt fees related to our 1.25% convertible senior notes of $7.5 million, net of tax, for the year ended December 31, 2005 have been added back to net income and approximately 9.7 million shares have been added to diluted weighted average shares for purposes of computing GAAP As-Reported diluted earnings per share.

(2)Non-GAAP basic and diluted earnings per share reflects the sum of the quarterly Non-GAAP basic and diluted earnings per share activity for Q1-Q4 2005.

GENZYME 2006 GUIDANCE

DESCRIPTION	2006 Guidance Ranges
Renagel	$	495	$	505
Total Renal	590		610
Cerezyme	970		980
Fabrazyme	370		390
Total Therapeutics	1,470		1,510
Total Transplant	150		160
Synvisc	255		265
Total Biosurgery	395		415
Total Diag/Genetics	365		375
Total Other	150		200
TOTAL REVENUE	$	3,100	$	3,300
GROSS MARGIN	approx.		78		%
SG&A	approx.		(895		)
R&D	approx.		(560		)
TAX RATE - GAAP	approx.		30		%
*TAX RATE - NON-GAAP	approx.		31		%
GENZ GAAP EPS	$	1.78	$	1.88
AMORTIZATION	approx.		$	0.46
FAS123 EXPENSE	approx.		$	0.35
CONTINGENT CONVERTIBLE DEBT	approx.		$	0.06
**GENZ NON-GAAP EPS	$	2.65	$	2.75
***WTD AVERAGE SHARES O/S	approx.		275
CAPITAL EXPENDITURES	$	250	$	300

This financial guidance, which is provided as part of a press release dated February 15, 2006, is subject to all of the qualifications and limitations described therein.  Actual results may differ from these forward-looking statements due to the numerous factors described in the press release.

*Non-GAAP tax rate excludes the impact of amortization, one-time events, FAS123 expense and EITF 04-08.

**Non-GAAP EPS excludes the impact of amortization, one-time events, FAS123 expense and EITF 04-08.

***WTD Average Shares Outstanding excludes the impact of EITF 04-08 .