EX-99.1 2 a08-5535_1ex99d1.htm EX-99.1

Exhibit 99.1

Final

For Immediate Release	Media Contact:	Investor Contact:
February 13, 2008	Bo Piela	Patrick Flanigan
	(617) 768-6579	(617) 768-6563

Genzyme Delivers Strong Fourth Quarter to Conclude Outstanding Year

Reaffirms Outlook for Continued Growth

CAMBRIDGE, MA — Genzyme Corporation (NASDAQ: GENZ) today reported financial results for the full year and fourth quarter of 2007 and provided an outlook for continued strong growth in 2008 and beyond.

Full-Year 2007

· Total revenue in 2007 increased 20 percent to $3.8 billion from $3.2 billion in 2006. The increase was broadly driven by growth across all segments of the company.

· GAAP net income was $480.2 million, or $1.74 per diluted share, compared with a net loss of $16.8 million, or $0.06 per diluted share, for the previous year.

· Non-GAAP net income increased 27 percent to $939.9 million, compared with $742.7 million in 2006.

· Non-GAAP earnings increased 25 percent to $3.47 per diluted share from $2.77, exceeding the increased guidance of $3.35-$3.40 that Genzyme provided in July.

· The company generated approximately $1 billion in cash from operations and increased its ending cash position to $1.5 billion while completing two acquisitions, expanding its manufacturing infrastructure, and repurchasing approximately 3.5 million shares under a three-year program to reduce the dilutive effect of equity compensation.

· Genzyme also continued to make excellent progress in building its business to drive future growth. The company:

- Expanded its emerging oncology franchise by securing worldwide rights to its leukemia drug Clolar^® (clofarabine) through the acquisition of Bioenvision Inc.

- Obtained marketing approval for four new products—Renvela^® (sevelamer carbonate) in the United States, Synvisc-ONE^™ (hylan G-F 20) and Cholestagel^® (colesevelam hydrochloride) in the European Union, and Elaprase^® (idursulfase) in Japan—and secured expanded U.S. labeling for Campath^® (alemtuzumab) and Thyrogen^® (thyrotropin alfa for injection).

- Reported highly encouraging clinical trial results for two key late stage product candidates: Mozobil^™ (plerixafor) for stem-cell transplantation and alemtuzumab for multiple sclerosis.

Fourth-Quarter 2007 Highlights

· Revenue increased 21 percent in the fourth quarter to $1.04 billion, up from $854.2 million in the prior fourth quarter.

· GAAP net income increased to $78.9 million, or $0.29 per diluted share, compared with an acquisition-related net loss of $268.2 million or $1.02 per diluted share, in the prior fourth quarter.

· Non-GAAP net income increased 19 percent to $249.2 million, compared with $209.0 million in the previous fourth quarter.

· Non-GAAP earnings rose 18 percent to $0.91 per diluted share from $0.77. The increased operating expenses and decreased interest income associated with Genzyme’s fourth-quarter acquisition of Bioenvision reduced earnings by $0.01 per diluted share. The company had noted previously that the impact of this transaction would be reflected in its fourth-quarter results.

· Individual product sales for the fourth quarter and the year, along with expectations for the longer-term growth of Genzyme’s business segments, were detailed in a January 8, 2008, press release coinciding with the company’s presentation at the JPMorgan Healthcare Conference.

“We delivered outstanding financial results last year while continuing to build the company to meet our goal of 20 percent compound non-GAAP earnings growth through 2011,” said Henri A. Termeer, chairman and chief executive officer. “In the year ahead, we expect to continue this strong performance while investing in our future to ensure that we sustain our growth beyond 2011.”

Financial Guidance for 2008

Revenue

· Genzyme expects revenue to reach $4.5-$4.7 billion in 2008. This estimate includes sales of Aldurazyme^® (laronidase), which now will be reflected in Genzyme’s top line under a restructured agreement with BioMarin Pharmaceutical Inc. Genzyme’s goal is to increase its top line at a compound average rate of 16-17 percent over the five-year period from 2006-2011. Annual revenue is expected to reach approximately $7 billion by 2012.

Earnings

· Genzyme is committed to increasing non-GAAP earnings over this five year period at a compound average rate of 20 percent. Non-GAAP earnings are projected to increase to approximately $4.00 per diluted share in 2008 and to rise to approximately $7.00 per diluted share by 2011.

· GAAP earnings in 2008 are expected to increase to approximately $2.75 per share. GAAP figures include anticipated amortization and stock-compensation expenses and the effect of contingent convertible debt.

· Genzyme expects non-GAAP earnings per share in the first quarter of this year in the low $0.90s. This estimate reflects several factors: (1) the continued integration of Bioenvision and the expanded introduction of Clolar in Europe; (2) investments in late-stage clinical trials—particularly the phase 3 study of alemtuzumab for multiple sclerosis; and (3) product launches, including the U.S. launch of Renvela and associated sales force expansion. This estimate also reflects the U.S. introduction of Myozyme^® (alglucosidase alfa), which has been constrained by limited product supply, as the FDA has yet to approve the larger scale manufacturing process for this product. This supply constraint will have an estimated impact of $0.03 per diluted share during the first quarter.

Product Sales

· Sales of Myozyme are expected to increase to $320-$330 million this year, compared with $201 million last year. The launch of this product has been the most rapid for any of Genzyme’s lysosomal storage disorder treatments. In December, Genzyme announced that its post-marketing Late-Onset Treatment Study of Myozyme met its co-primary endpoints, confirming the benefit of the product for patients across the spectrum of Pompe disease. The company has begun submitting the results of this study for presentation at medical meetings and will pursue the inclusion of the trial results in the product’s labeling.

· Sales of Fabrazyme^® (agalsidase beta) are expected to reach $495-$505 million this year, compared with $424 million in 2007. The European Commission has granted full marketing authorization for Fabrazyme, making the product the only Fabry disease treatment to earn this designation in Europe.

· Sales of Cerezyme^® (imiglucerase for injection) are expected to reach $1.22-$1.24 billion this year, compared with $1.13 billion in 2007.

· Sales of sevelamer therapies Renagel^® (sevelamer hydrochloride) and Renvela^® (sevelamer carbonate) are expected to rise to $690-$700 million this year, compared with $603 million in 2007. Renvela was approved by the FDA in October for the treatment of hemodialysis patients, and Genzyme plans to launch the product on March 1. Genzyme is currently engaged in active discussions with the FDA to expand the product’s labeling to include chronic kidney disease patients with hyperphosphatemia who have not progressed to dialysis. Therefore it will not be necessary for the company to file an sNDA for this indication. A CKD indication will

expand the market for sevelamer and help sustain the long-term growth of the Renal franchise.

· Sales of Synvisc^® (hylan G-F 20) and Synvisc-ONE are expected to reach $270-$280 million this year, compared with $242 million in 2007. Synvisc-One received CE Mark approval in the European Union in December. This single-injection regimen has the potential to redefine the market for viscosupplementation products and expand the benefits of this therapeutic approach to a broader set of patients by simplifying osteoarthritis pain management. Genzyme will pursue marketing approvals for Synvisc-One in Canada, Asia and Latin America based on the European CE mark approval. Action on a marketing application in the United States is expected later this year.

· Transplant revenue is expected to increase to $210-$220 million this year, compared with $175 million in 2007, driven by increasing global demand for Thymoglobulin^® (Anti-thymocyte Globulin [Rabbit]). Thymoglobulin’s growth is being driven by its launch in new geographic markets and by publications and clinical studies. The product’s growth over the past several quarters has been affected by manufacturing challenges resulting in stability issues affecting the appearance of the product. Genzyme has worked closely with the FDA in addressing these challenges, and has implemented process changes at its Thymoglobulin manufacturing plant in Lyon, France. These changes have resulted in improved stability, and Genzyme continues to work to optimize its processes. The company is confident that it is making progress toward fully resolving the production issues that emerged in mid-2007. In addition, the FDA has accepted the company’s responses to the warning letter issued last year.

· Total revenue for the Diagnostics/Genetics business is expected to reach $475-$485 million this year, compared with $411 million in 2007. The Genetics business has been experiencing particularly strong growth, driven by an increasing demand for diagnostic testing services. Genzyme is investing in additional information technology and infrastructure to continue to strengthen the competitive advantages the Genetics unit has created.

· Sales of Aldurazyme are expected to increase to $135-$145 million this year, compared with $123 million in 2007. Genzyme will record sales of Aldurazyme and make tiered payments to BioMarin on worldwide product sales. These payments will be recorded as a cost of goods sold.

Gross Margin

· Genzyme’s recognition of Aldurazyme revenue and the associated payments to BioMarin will reduce the gross margin by approximately 1 percentage point without any net impact on the bottom line. The non-GAAP gross margin for 2008 is expected to be approximately 77 percent of revenue.

Expenses

· Non-GAAP selling, general and administrative expenses are expected to represent approximately 27 percent of revenue in 2008, consistent with SG&A expenses in 2007. SG&A spending reflects the integration of Bioenvision and the European rollout of Clolar, the ongoing introduction of Myozyme, the sales force expansion associated with the launch of Renvela, and the expanded U.S. sales effort for Sepra^® products.

· Non-GAAP research and development spending is expected to represent approximately 17 percent of revenue in 2008, consistent with R&D spending in 2007. Genzyme’s pipeline is concentrated on programs in mid- to late-stage development and includes more than 25 phase 2 studies and several major pivotal studies. The company is re-prioritizing its R&D programs to make space for mipomersen, a lipid-lowering product currently in phase 3 clinical trials for high-risk cardiovascular disease patients. Mipomersen, which Genzyme is in the process of licensing from Isis Pharmaceuticals Inc., will strengthen an already substantial pipeline. The product will join Mozobil and alemtuzumab at the forefront of a development portfolio with significant potential to drive Genzyme’s growth beyond 2011.

Tax Rate

· Genzyme’s non-GAAP net tax rate this year is expected to be approximately 31 percent. The GAAP tax rate is expected to be 30 percent.

Capital Expenditures

· Capital expenditures are expected to total approximately $500 million this year. Genzyme continues to make a significant investment in manufacturing capacity to support the growth of existing products and to prepare for the launch of products in late-stage development.

· Genzyme is making steady progress toward beginning commercial production of Myozyme at its Geel, Belgium, manufacturing plant. Process validation runs for Myozyme production at the site are expected to occur this year, with approval of commercial production anticipated next year. Genzyme is beginning the construction of a new manufacturing facility in Lyon for Thymoglobulin production.

Development Programs

Mozobil for stem-cell transplantation

· Mozobil is an innovative product intended to facilitate and improve the outcome of stem-cell transplantation procedures. In two pivotal clinical studies, Mozobil showed the ability to quickly and predictably prepare cancer patients for a transplant to treat their disease. Genzyme plans to file mid year for U.S. and European approval for the product’s use in treating patients with multiple myeloma and patients with lymphoma. The company plans to launch the product early next year upon approval

and to rapidly expand the product’s availability around the world. The company expects peak annual sales of the product in the transplant setting of $400 million. Genzyme is also exploring additional indications for Mozobil, including its near-term potential use in chemosensitization procedures.

Clolar for adult AML

· Clolar is approved in the United States and Europe for the treatment of acute lymphoblastic leukemia in relapsed and refractory pediatric patients. Genzyme is developing the product for use globally as a first-line therapy for the treatment of adult acute myeloid leukemia and myelodysplastic syndromes, significantly larger indications that the company estimates will drive peak annual sales of the product to approximately $600 million. The company intends to submit a supplemental new drug application in the United States later this year to include an adult AML indication, following the completion of its CLASSIC II clinical trial involving older adult AML patients. The company also expects to provide additional clinical data to European authorities to supplement the regulatory submission filed previously by Bioenvision.

Mipomersen for high-risk cardiovascular disease

· Mipomersen is being developed primarily for patients at significant cardiovascular risk who are unable to achieve target cholesterol levels with statins alone or who are intolerant of statins. Mipomersen is currently in phase 3 development for patients with homozygous familial hypercholesterolemia, and a U.S. marketing application for this indication is anticipated in 2009. The product offers an innovative approach to addressing a real, unmet medical need, and Genzyme believes it could prove to be the most effective lipid-lowering agent for high risk cardiovascular disease patients for whom conventional therapies are not sufficient. The product may potentially provide significant benefit over the standard of care and targets a well-defined and severely ill patient population.

Alemtuzumab for multiple sclerosis

· Genzyme is enrolling patients in two phase 3 trials examining the safety and efficacy of alemtuzumab for the treatment of multiple sclerosis. One study includes previously untreated patients and one involves patients whose disease remains active following treatment with an approved therapy. Alemtuzumab’s effect in treating MS, observed in clinical studies, exceeds that of any currently marketed products and any products in development. Genzyme believes that alemtuzumab has the potential to be the best therapy in a market for MS drugs that is projected to reach $8-9 billion annually when the treatment is expected to be ready for launch in 2011-2012. Alemtuzumab is being developed in collaboration with Bayer Schering Pharma AG, Germany.

Genz-112638 for Gaucher disease

· Genzyme is investing in the development of an innovative, next-generation product for the treatment of Gaucher disease. The company has completed enrollment in a phase 2 trial of the small molecule Genz-112638, a novel oral therapy that could provide an additional treatment option for physicians and patients. Initial results for the first group of participants enrolled in the study were encouraging, and one-year data from the study will be available this year. Final results from the trial will be available in the first quarter of 2009.

Newborn Screening for lysosomal storage disorders

· Based on its belief that early diagnosis can lead to improved outcomes for patients with lysosomal storage disorders, and as part of its commitment to serve this community, Genzyme has been working with researchers to develop technologies useful for newborn screening. Last month, the company provided a first shipment of reagents for newborn screening to the Centers for Disease Control and Prevention (CDC) for worldwide distribution to public health laboratories. Several laboratories in the United States and around the world have begun the process of implementing LSD newborn screening programs.

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. Since 1981, the company has grown from a small start-up to a diversified enterprise with more than 10,000 employees in locations spanning the globe and 2007 revenues of $3.8 billion. In 2007, Genzyme was chosen to receive the National Medal of Technology, the highest honor awarded by the President of the United States for technological innovation.

With many established products and services helping patients in nearly 90 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 diagnostic testing. Genzyme’s commitment to innovation continues today with a substantial development program focused on these fields, as well as immune disease, infectious disease, and other areas of unmet medical need.

Conference Call Information

Genzyme will host a conference call today at 11:00 a.m. Eastern to discuss results for the fourth quarter of 2007 and financial guidance for 2008. To participate in the call, please dial 773-799-3828 and refer to pass code “Genzyme.” A replay of this call will be available by dialing 203-369-1503. 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 February 20, 2008.

Upcoming Events

Genzyme will host a conference call on April 23 at 11: 00 a.m. Eastern to discuss financial results for the first quarter of 2008. To participate in the call, please dial 773-799-3828 and refer to pass code “Genzyme.” A replay of this call will be available by dialing 402-998-1342. 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 30, 2008.

This press release contains forward-looking statements regarding Genzyme financial outlook and business plans and strategies, including without limitation: its anticipated compound average earnings growth rate from 2006-2011; its Q1 2008, YE 2008 and YE 2011 EPS guidance; its projected revenue growth for the company, for the Diagnostics/Genetics business and for certain products, including Myozyme, Fabrazyme, Cerezyme, Renagel/Renvela, Synvisc/Synvisc-ONE and Thymoglobulin, as well as the anticipated drivers of such revenue growth; its gross margin and SG&A estimates and anticipated growth rates; the expected impact on the Myozyme supply constraint on Q1 2008 EPS; its plans to seek regulatory approvals of existing products for use in new indications, including Renvela for a CKD indication, the timetables therefore and the impact of such approvals on the company; its plans and estimated timetables for new and next-generation product filings, approvals and launches, including for Mozobil, Clolar, alemtuzumab-MS, mipomersen, Genz-112638 and Synvisc-ONE and the assessment of the market potential of such products and product candidates; its projected SG&A and R&D expenses as a percentage of revenues in 2008; its expected tax rate for 2008; its expected capital expenditures for 2008; and its expected time line for securing approval for Myozyme manufacturing at its Belgium facility. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those forecasted. These risks and uncertainties include, among others: Genzyme’s ability to successfully complete preclinical and clinical development of its products and product candidates, including Mozobil, Clolar, alemtuzumab-MS, mipomersen, Genz-112638; Genzyme’s ability to expand the use of current and next-generation products in existing and new indications, including Synvisc-ONE and Renvela; Genzyme’s ability to obtain and maintain regulatory approvals for products and manufacturing facilities, including the larger-scale production of Myozyme and the timing of receipt of such approvals; Genzyme’s ability to manufacture products and product candidates in a timely and cost effective manner and in sufficient quantities to meet demand; Genzyme’s ability to maintain and enforce intellectual property rights; Genzyme’s ability to successfully identify and market to new patients; the scope of third-party reimbursement coverage for Genzyme’s products and services; and the risks and uncertainties described in Genzyme’s SEC reports filed under the Securities Exchange Act of 1934, including the factors discussed under the caption “Risk Factors” in Genzyme’s Quarterly Report on Form 10-Q for the period ended September 30, 2007. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of today’s date and Genzyme undertakes no obligation to update or revise the statements.

Genzyme®, Myozyme®, Fabrazyme®, Cerezyme®, Renagel®, Renvela®, Thymoglobulin®, Synvisc®, Campath® and Clolar® are registered trademarks of and Mozobil™ and Synvisc-ONE™ are unregistered trademarks of Genzyme or its

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 1-678-999-4572 outside the United States.

# # #

GENZYME CORPORATION (GENZ)

Consolidated Statements of Operations (Unaudited, amounts in thousands, except per share amounts)	Three Months Ended December 31,						Year Ended December 31,
	2007			2006			2007			2006

Total revenues	$	1,036,758		$	854,241		$	3,813,519		$	3,187,013

Operating costs and expenses:
Cost of products and services sold (1,2)	262,657			198,712			927,330			735,671
Selling, general and administrative (1,3)	307,631			266,551			1,186,438			1,010,400
Research and development (1,4)	191,588			166,394			731,950			649,951
Amortization of intangibles	51,804			53,238			201,105			209,355
Purchase of in-process research and development (5)	106,350			552,900			106,350			552,900
Charge for impaired goodwill (6)	—			—			—			219,245
Total operating costs and expenses	920,030			1,237,795			3,153,173			3,377,522
Operating income (loss)	116,728			(383,554		)	660,346			(190,509		)

Other income (expenses):
Equity in income of equity method investments (7)	8,489			5,075			7,398			15,705
Minority interest	—			2,677			3,932			10,418
Gain (loss) on investments in equity securities (8)	(969		)	(1,807		)	13,067			73,230
Other (9)	(7,228		)	(714		)	(7,118		)	(2,045		)
Investment income	18,509			16,600			70,196			56,001
Interest expense	(2,864		)	(3,233		)	(12,147		)	(15,478		)
Total other income (expenses)	15,937			18,598			75,328			137,831
Income (loss) before income taxes (1)	132,665			(364,956		)	735,674			(52,678		)
(Provision for) benefit from income taxes (1)	(53,766		)	96,722			(255,481		)	35,881
Net income (loss) (1)	$	78,899		$	(268,234	)	$	480,193		$	(16,797	)

Net income (loss) per share:
Basic	$	0.30		$	(1.02	)	$	1.82		$	(0.06	)

Diluted (1,10)	$	0.29		$	(1.02	)	$	1.74		$	(0.06	)

Weighted average shares outstanding:
Basic	265,418			262,803			263,895			261,124

Diluted (1,10)	283,374			262,803			280,767			261,124

(1) In accordance with the provisions of Financial Accounting Standards Board, or FASB, Statement of Financial Accounting Standards No., or FAS, 123R, “Share-Based Payment, an amendment of FASB Statement Nos. 123 and 95,” we recorded pre-tax charges for stock-based compensation expense and related tax benefits of:

	Three Months Ended December 31,						Year Ended December 31,
	2007			2006			2007			2006
Cost of products and services sold	$	(7,137	)	$	(8,537	)	$	(25,677	)	$	(21,430	)
Selling, general and administrative	(23,334		)	(25,262		)	(106,172		)	(121,822		)
Research and development	(13,128		)	(14,566		)	(58,101		)	(65,248		)
Total pre-tax charges for stock-based compensation expense	(43,599		)	(48,365		)	(189,950		)	(208,500		)
Tax benefit	12,920			14,094			58,148			66,331
Stock-based compensation expense, net of tax	$	(30,679	)	$	(34,271	)	$	(131,802	)	$	(142,169	)

Diluted earnings per share and diluted weighted average shares outstanding for the three months and years ended December 31, 2007 and 2006 were computed according to the provisions of FAS 123R.

(2) Includes charges of $(9,143)K recorded in December 2007 to write off five finished lots of our Thymoglobulin inventory which did not meet our specifications and $(11,773)K recorded in September 2007 to write off four finished lots of our Thymoglobulin inventory which did not meet our specifications.

(3) Includes a charge of $(64,000)K recorded in June 2007 to settle the litigation related to the consolidation of our former tracking stocks.

(4) Includes a charge of $(25,000)K for an upfront milestone payment paid to Ceregene Inc. in June 2007 for the development and commercialization of certain gene therapy products.

(5) Includes charges for the purchase of in-process research and development of $(106,350)K related to our acquisition of Bioenvision, Inc. in October 2007 and $(552,900)K related to our acquisition of AnorMED Inc. in November 2006.

(6) Represents the write off of the goodwill related to our Genetics reporting unit in September 2006 in accordance with FAS 142, “Goodwill and Other Intangible Assets.”

(7) Includes charges of $(570)K for the three months ended and $(21,102)K for the year ended December 31, 2007 related to our completion of the first step of the two step process under which we acquired Bioenvision. In July 2007, we acquired approximately 22% of the outstanding shares of Bioenvision common stock on an as-converted basis, including all of the outstanding shares of Bioenvision preferred stock for $(72,229)K of cash. Subsequently, in October 2007, following a favorable merger vote by Bioenvision’s shareholders, we completed the second step of the acquisition and, effective October 23, 2007, acquired the remaining outstanding shares of Bioenvision common stock for $(245,055)K of cash. In the fourth quarter of 2007, we also paid $(11,975)K of cash for the outstanding options to purchase shares of Bioenvision common stock. The full purchase accounting for the acquisition of Bioenvision, including the impact of the second step, is reflected in our consolidated financial statements for the three months and year ended December 31, 2007 and as of December 31, 2007.

(8) For the year ended December 31, 2007, includes a pre-tax gain of $10,848K recorded on the sale of our entire investment in the common stock of Therapeutic Human Polyclonals Inc. in March 2007, which had a zero cost basis. For the year ended December 31, 2006, includes pre-tax gains of $69,359K related to the liquidation of our investment in the common stock of Cambridge Antibody Technology Group plc in May and June 2006.

(9) Includes charges totaling $(5,735)K recorded in December 2007 to write off costs associated with the manufacture of tolevamer at our manufacturing facilities in Ireland and the United Kingdom.

(10) All periods except for the three months and year ended December 31, 2006, reflect 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 outstanding 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 these notes of $1.9 million, net of tax, for the three months ended December 31, 2007 and $7.5 million, net of tax, for the twelve months ended December 31, 2007, have been added back to net income and 9,686K shares have been added to diluted weighted average shares outstanding for each of those periods for purposes of computing diluted earnings per share.

For the three months and year ended December 31, 2006, excludes: (i) the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock and (ii) the potentially dilutive effect of the assumed conversion of our convertible senior notes because the effect would be anti-dilutive due to our net loss for both of those periods.

GENZYME CORPORATION (GENZ)

Condensed Consolidated Balance Sheets (Unaudited, amounts in thousands)	December 31, 2007		December 31, 2006

Cash and all marketable securities	$	1,460,394	$	1,285,604
Other current assets	1,629,820		1,377,437
Property, plant and equipment, net	1,968,402		1,610,593
Intangibles, net	2,964,810		2,790,819
Other assets (1)	265,282		126,735
Total assets	$	8,288,708	$	7,191,188

Current liabilities	$	1,462,059	$	651,439
Noncurrent liabilities (1)	186,399		879,038
Stockholders’ equity	6,640,250		5,660,711
Total liabilities and stockholders’ equity	$	8,288,708	$	7,191,188

(1) Other assets as of December 31, 2007 includes $109,221K of net deferred tax assets, as compared to net deferred tax liabilities of $10,909K as of December 31, 2006, which were included as a component of noncurrent liabilities.

Genzyme Corporation (GENZ)

Analyst Schedule

(Unaudited, amounts in thousands, except percentage amounts)

											Q4-07
											vs. Q4-06						YTD
	Q4-06		Q1-07		Q2-07		Q3-07		Q4-07		% B/(W)		FY 2005		FY 2006		12/31/07
Total revenues:
Renal
Renagel phosphate binder (including Sevelamer)	$	135,143	$	137,384	$	144,954	$	154,159	$	166,173	23	%	$	417,485	$	515,119	$	602,670
Hectorol	26,562		28,293		27,295		30,265		29,855		12	%	34,515		93,360		115,708
Other Renal	—		—		—		—		—				—		—		—
Total Renal product and service revenue	161,705		165,677		172,249		184,424		196,028		21	%	452,000		608,479		718,378
Renal R&D revenue	—		—		—		—		—				—		—		—
Total Renal	161,705		165,677		172,249		184,424		196,028		21	%	452,000		608,479		718,378

Therapeutics
Cerezyme enzyme	261,811		263,791		282,979		286,071		300,312		15	%	932,322		1,007,036		1,133,153
Fabrazyme enzyme	96,560		100,664		104,349		104,610		114,661		19	%	305,064		359,274		424,284
Thyrogen hormone	24,575		26,338		29,540		26,828		30,881		26	%	77,740		93,687		113,587
Myozyme enzyme	30,254		37,919		46,745		53,568		62,496		107	%	3,827		59,238		200,728
Other Therapeutics	183		167		705		153		7,289		3883	%	2,292		410		8,314
Total Therapeutics product and service revenue	413,383		428,879		464,318		471,230		515,639		25	%	1,321,245		1,519,645		1,880,066
Therapeutics R&D revenue	68		638		431		121		12		(82	)%	789		1,068		1,202
Total Therapeutics	413,451		429,517		464,749		471,351		515,651		25	%	1,322,034		1,520,713		1,881,268

Transplant
Thymoglobulin/Lymphoglobuline	39,250		39,442		41,376		41,036		44,032		12	%	127,739		149,541		165,886
Other Transplant	1,997		1,655		2,048		1,845		3,392		70	%	18,143		6,425		8,940
Total Transplant product and service revenue	41,247		41,097		43,424		42,881		47,424		15	%	145,882		155,966		174,826
Transplant R&D revenue	—		180		—		—		—				30		—		180
Total Transplant	41,247		41,277		43,424		42,881		47,424		15	%	145,912		155,966		175,006

Biosurgery
Synvisc viscosupplementation product and services	61,075		53,596		64,863		61,175		62,685		3	%	218,908		233,858		242,319
Sepra products	22,908		23,115		25,076		26,381		29,746		30	%	68,171		85,338		104,318
Other Biosurgery	16,312		19,934		16,724		16,893		21,122		29	%	65,953		67,480		74,673
Total Biosurgery product and service revenue	100,295		96,645		106,663		104,449		113,553		13	%	353,032		386,676		421,310
Biosurgery R&D revenue	888		1,748		1,226		1,697		666		(25	)%	144		893		5,337
Total Biosurgery	101,183		98,393		107,889		106,146		114,219		13	%	353,176		387,569		426,647

Genetics
Genetic Testing	61,004		66,158		73,714		73,050		72,192		18	%	222,328		240,857		285,114
Total Genetics product and service revenue	61,004		66,158		73,714		73,050		72,192		18	%	222,328		240,857		285,114
Genetics R&D revenue	—		—		—		—		—				—		—		—
Total Genetics	61,004		66,158		73,714		73,050		72,192		18	%	222,328		240,857		285,114

Other
Other product and service revenue	70,605		75,615		67,589		74,825		86,381		22	%	220,195		257,904		304,410
Total Other product and service revenue	70,605		75,615		67,589		74,825		86,381		22	%	220,195		257,904		304,410
Other R&D revenue	5,046		6,546		3,805		7,482		4,863		(4	)%	19,197		15,525		22,696
Total Other	75,651		82,161		71,394		82,307		91,244		21	%	239,392		273,429		327,106
Total revenues	$	854,241	$	883,183	$	933,419	$	960,159	$	1,036,758	21	%	$	2,734,842	$	3,187,013	$	3,813,519

Genzyme Corporation (GENZ)

Analyst Schedule

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

																Q4-07
																vs. Q4-06								YTD
	Q4-06			Q1-07			Q2-07			Q3-07			Q4-07			% B/(W)		FY 2005			FY 2006			12/31/07
Revenues:
Total product and service revenue	$	848,239		$	874,071		$	927,957		$	950,859		$	1,031,217		22	%	$	2,714,682		$	3,169,527		$	3,784,104
Total R&D revenue	6,002			9,112			5,462			9,300			5,541			(8	)%	20,160			17,486			29,415
Total revenues	854,241			883,183			933,419			960,159			1,036,758			21	%	2,734,842			3,187,013			3,813,519

Total product and service gross profit (1,2)	649,527			671,608			710,359			706,247			768,560			18	%	2,082,030			2,433,856			2,856,774

SG&A expense (1,3)	266,551			269,021			339,480			270,306			307,631			(15	)%	787,839			1,010,400			1,186,438

R&D expense (1,4)	166,394			166,120			198,442			175,800			191,588			(15	)%	502,657			649,951			731,950

Amortization of intangibles	53,238			50,017			49,465			49,819			51,804			3	%	181,632			209,355			201,105

Purchase of in-process research and development (5)	552,900			—			—			—			106,350			81	%	29,200			552,900			106,350

Charge for impaired goodwill (6)	—			—			—			—			—					—			219,245			—

Operating income (loss)	(383,554		)	195,562			128,434			219,622			116,728			130	%	600,862			(190,509		)	660,346

Other income (expenses):
Equity in income (loss) of equity method investments (7)	5,075			5,612			5,945			(12,648		)	8,489			67	%	151			15,705			7,398
Minority interest	2,677			3,912			15			5			—			(100	)%	11,952			10,418			3,932
Gain (loss) on investments in equity securities (8)	(1,807		)	12,788			143			1,105			(969		)	46	%	5,698			73,230			13,067
Other (9)	(714		)	(525		)	(278		)	913			(7,228		)	(912	)%	(1,535		)	(2,045		)	(7,118		)
Investment income	16,600			16,219			17,246			18,222			18,509			12	%	31,429			56,001			70,196
Interest expense	(3,233		)	(4,188		)	(3,621		)	(1,474		)	(2,864		)	11	%	(19,638		)	(15,478		)	(12,147		)

Income (loss) before income taxes (1)	(364,956		)	229,380			147,884			225,745			132,665			136	%	628,919			(52,678		)	735,674

(Provision for) benefit from income taxes (1)	96,722			(71,193		)	(64,090		)	(66,432		)	(53,766		)	(156	)%	(187,430		)	35,881			(255,481		)

Net income (loss) (1)	$	(268,234	)	$	158,187		$	83,794		$	159,313		$	78,899		129	%	$	441,489		$	(16,797	)	$	480,193

Net income (loss) per share-diluted (1,10,11)	$	(1.02	)	$	0.57		$	0.31		$	0.58		$	0.29		128	%	$	1.65		$	(0.06	)	$	1.74

Weighted average shares outstanding-diluted (1,10,11)	262,803			279,924			280,564			279,206			283,374			8	%	272,224			261,124			280,767

Genzyme Corporation (GENZ)

Analyst Schedule

(Unaudited, amounts in thousands, except percentage amounts)

																						YTD
	Q4-06			Q1-07			Q2-07			Q3-07			Q4-07			FY 2005			FY 2006			12/31/07
Total product and service revenue	$	848,239		$	874,071		$	927,957		$	950,859		$	1,031,217		$	2,714,682		$	3,169,527		$	3,784,104
As a % of total product and service revenue:
Renagel phosphate binder (including Sevelamer)	16		%	16		%	16		%	16		%	16		%	15		%	16		%	16		%
Hectorol	3		%	3		%	3		%	3		%	3		%	1		%	3		%	3		%
Cerezyme enzyme	31		%	30		%	31		%	30		%	29		%	34		%	32		%	30		%
Fabrazyme enzyme	11		%	12		%	11		%	11		%	11		%	11		%	11		%	11		%
Thyrogen hormone	3		%	3		%	3		%	3		%	3		%	3		%	3		%	3		%
Myozyme enzyme	3		%	4		%	5		%	6		%	6		%	0		%	2		%	5		%
Thymoglobulin/Lymphoglobuline	5		%	5		%	4		%	4		%	4		%	5		%	5		%	4		%
Synvisc viscosupplementation product and services	7		%	6		%	7		%	6		%	6		%	8		%	7		%	7		%
Sepra products	3		%	3		%	3		%	3		%	3		%	3		%	3		%	3		%
Genetics testing	7		%	7		%	8		%	8		%	7		%	8		%	8		%	7		%
Other	11		%	11		%	9		%	10		%	12		%	12		%	10		%	11		%
	100		%	100		%	100		%	100		%	100		%	100		%	100		%	100		%

Total product and service gross margin	77		%	77		%	77		%	74		%	75		%	77		%	77		%	75		%

Total revenues	$	854,241		$	883,183		$	933,419		$	960,159		$	1,036,758		$	2,734,842		$	3,187,013		$	3,813,519

SG&A expense as a % of total revenue	31		%	30		%	36		%	28		%	30		%	29		%	32		%	31		%
R&D expense as a % of total revenue	19		%	19		%	21		%	18		%	18		%	18		%	20		%	19		%
Operating income (loss) as a % of total revenue	(45		)%	22		%	14		%	23		%	11		%	22		%	(6		)%	17		%

Benefit from income taxes as a % of profit (loss) before tax	27		%	31		%	43		%	29		%	41		%	30		%	68		%	35		%

Condensed Consolidated Balance Sheet Information:	12/31/06			3/31/07			6/30/07			09/30/07			12/31/07			12/31/05			12/31/06			12/31/07
Cash and all marketable securities	$	1,285,604		$	1,450,125		$	1,497,648		$	1,449,548		$	1,460,394		$	1,089,102		$	1,285,604		$	1,460,394
Other current assets	1,377,437			1,436,061			1,503,734			1,587,600			1,629,820			1,179,093			1,377,437			1,629,820
Property, plant and equipment, net	1,610,593			1,670,848			1,742,651			1,850,754			1,968,402			1,320,813			1,610,593			1,968,402
Intangibles, net (6)	2,790,819			2,756,036			2,720,421			2,689,126			2,964,810			3,078,461			2,790,819			2,964,810
Other assets (12)	126,735			161,595			190,411			265,273			265,282			211,396			126,735			265,282
Total assets	$	7,191,188		$	7,474,665		$	7,654,865		$	7,842,301		$	8,288,708		$	6,878,865		$	7,191,188		$	8,288,708

Current liabilities	$	651,439		$	661,321		$	710,377		$	693,208		$	1,462,059		$	550,023		$	651,439		$	1,462,059
Noncurrent liabilities (12)	879,038			866,893			866,068			865,322			186,399			1,178,975			879,038			186,399
Stockholders’ equity	5,660,711			5,946,451			6,078,420			6,283,771			6,640,250			5,149,867			5,660,711			6,640,250
Total liabilities and stockholders’ equity	$	7,191,188		$	7,474,665		$	7,654,865		$	7,842,301		$	8,288,708		$	6,878,865		$	7,191,188		$	8,288,708

Notes:

(1) Reflects the adoption of Financial Accounting Standards Board, or FASB, Statement of Financial Accounting Standards No., or FAS, 123R, “Share-Based Payment, an amendment of FASB Statement Nos. 123 and 95,” using the modified prospective basis effective January 1, 2006. For the periods presented, we recorded pre-tax charges for stock-based compensation expense and related tax benefits of:

																YTD			YTD
	Q4-06			Q1-07			Q2-07			Q3-07			Q4-07			12/31/06			12/31/07
Cost of products and services sold	$	(8,537	)	$	(5,896	)	$	(6,865	)	$	(5,779	)	$	(7,137	)	$	(21,430	)	$	(25,677	)
Selling, general and administrative expense	(25,262		)	(22,499		)	(35,248		)	(25,091		)	(23,334		)	(121,822		)	(106,172		)
Research and development expense	(14,566		)	(12,312		)	(19,143		)	(13,518		)	(13,128		)	(65,248		)	(58,101		)
Total pre-tax charges for stock compensation expense	(48,365		)	(40,707		)	(61,256		)	(44,388		)	(43,599		)	(208,500		)	(189,950		)
Tax benefit	14,094			12,432			18,703			14,093			12,920			66,331			58,148
Stock-based compensation expense, net of tax	$	(34,271	)	$	(28,275	)	$	(42,553	)	$	(30,295	)	$	(30,679	)	$	(142,169	)	$	(131,802	)

Diluted earnings per share and diluted weighted average shares outstanding for these periods were computed according to the provisions of FAS 123R.

(2) Includes charges of $(9,143)K recorded in December 2007 to write off five finished lots of our Thymoglobulin inventory, which did not meet our specifications and $(11,773)K recorded in September 2007 to write off four finished lots of our Thymoglobulin inventory, which did not meet our specifications.

(3) Includes a charge of $(64,000)K recorded in June 2007 to settle the litigation related to the consolidation of our former tracking stocks.

(4) Includes a charge of $(25,000)K for an upfront milestone payment paid to Ceregene Inc. in June 2007 for the development and commercialization of certain gene therapy products.

(5) Includes charges for the purchase of in-process research and development of $(106,350)K related to our acquisition of Bioenvision, Inc. in October 2007, $(552,900)K related to our acquisition of AnorMED Inc. in November 2006, $(7,000)K related to our acquisition of Avigen, Inc. in December 2005, $(12,700)K related to our acquisition of Bone Care International, Inc. in July 2005 and $(9,500)K related to our acquisition of Verigen AG in February 2005.

(6) Represents the write off of the goodwill related to our Genetics reporting unit in September 2006 in accordance with FAS 142, “Goodwill and Other Intangible Assets.”

(8) Includes pre-tax gains of $69,359K related to the liquidation of our investment in the common stock of Cambridge Antibody Technology Group plc in May and June 2006, and $10,848K related to the sale of our entire investment in the common stock of Therapeutic Human Polyclonals, Inc. in March 2007, which had a zero cost-basis.

(9) Includes charges totaling $(5,735)K recorded in December 2007 to write off costs associated with the manufacture of tolevamer at our manufacturing facilities in Ireland and the United Kingdom.

(10) All periods, except the three months and the year ended December 31, 2006, include: (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 1.25% convertible senior notes.

(11) All periods, except for the three months and year ended December 31, 2006, reflect 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, interest and debt fees, net of tax, related to our $690.0 million in principal of 1.25% convertible senior notes, which were issued in December 2003, have been added back to net income and the 9,686K shares issuable upon conversion of these notes are now included in diluted weighted average shares outstanding for purposes of computing diluted earnings per share, unless the effect would be anti-dilutive.

(12) Other assets includes net deferred tax assets of $54,401K as of June 30, 2007, $78,243K as of September 30, 2007 and $109,221K as of December 31, 2007, as compared to net deferred tax liabilities reported as a component of noncurrent liabilities in all other periods presented.

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

For the Three Months Ended December 31, 2007

(Amounts in thousands, except per share data)

				Dilution
				Due to
				Common Stock			Manufacturing			Acquisition						FAS 123R			GAAP
	NON-GAAP			Equivalents			Related			Related			Amortization			Expense			As Reported
Income Statement Classification:

Total revenues	$	1,036,758																	$	1,036,758

Cost of products and services sold	$	(246,377	)				$	(9,143	)							$	(7,137	)	$	(262,657	)

Selling, general and administrative	$	(284,297	)													$	(23,334	)	$	(307,631	)

Research and development	$	(178,460	)													$	(13,128	)	$	(191,588	)

Amortization of intangibles	$	—											$	(51,804	)				$	(51,804	)

Purchase of in-process research and development	$	—								$	(106,350	)							$	(106,350	)

Equity in income (loss) of equity method investments	$	9,319											$	(830	)				$	8,489

Minority interest	$	—																	$	—

Gains (losses) on investments in equity securities	$	(969	)																$	(969	)

Other	$	(1,493	)				$	(5,735	)										$	(7,228	)

Investment income	$	18,509																	$	18,509

Interest expense	$	(2,864	)																$	(2,864	)

Summary:

Income (loss) before income taxes	$	350,126		$	—		$	(14,878	)	$	(106,350	)	$	(52,634	)	$	(43,599	)	$	132,665

(Provision for) benefit from income taxes	$	(100,918	)	$	—		$	5,428		$	8,819		$	19,985		$	12,920		$	(53,766	)

Net income (loss)	$	249,208		$	—		$	(9,450	)	$	(97,531	)	$	(32,649	)	$	(30,679	)	$	78,899

Net income (loss) per share:
Basic	$	0.94		$	—		$	(0.036	)	$	(0.367	)	$	(0.123	)	$	(0.116	)	$	0.30

Diluted (1)	$	0.91		$	(0.024	)	$	(0.033	)	$	(0.344	)	$	(0.115	)	$	(0.108	)	$	0.29

Weighted average shares outstanding:
Basic	265,418																		265,418

Diluted (1)	273,688			9,686															283,374

(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 $1,884K, net of tax, have been added back to net income and approximately 9,686K 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

Year to Date as of December 31, 2007

(Amounts in thousands, except per share data)

				Dilution			Gain on
				Due to			Investments
				Common Stock			in Equity			Litigation			Milestone			Manufacturing			Acquisition						FAS 123R			Effect of			GAAP
	NON-GAAP			Equivalents			Securities			Settlement			Payment			Related			Related			Amortization			Expense			FIN 46			As Reported
Income Statement Classification:

Total revenues	$	3,813,519																													$	3,813,519

Cost of products and services sold	$	(880,737	)													$	(20,916	)							$	(25,677	)				$	(927,330	)

Selling, general and administrative	$	(1,016,066	)							$	(64,000	)													$	(106,172	)	$	(200	)	$	(1,186,438	)

Research and development	$	(641,388	)										$	(25,000	)										$	(58,101	)	$	(7,461	)	$	(731,950	)

Amortization of intangibles	$	—																				$	(201,105	)							$	(201,105	)

Purchase of in-process research and development	$	—																	$	(106,350	)										$	(106,350	)

Equity in income (loss) of equity method investments	$	23,548																	$	(19,150	)	$	(830	)				$	3,830		$	7,398

Minority interest	$	101																										$	3,831		$	3,932

Gains (losses) on investments in equity securities	$	2,219					$	10,848																							$	13,067

Other	$	(1,383	)													$	(5,735	)													$	(7,118	)

Investment income	$	70,196																													$	70,196

Interest Expense	$	(12,147	)																												$	(12,147	)


Summary:

Income (loss) before income taxes	$	1,357,862		$	—		$	10,848		$	(64,000	)	$	(25,000	)	$	(26,651	)	$	(125,500	)	$	(201,935	)	$	(189,950	)	$	—		$	735,674

(Provision for) benefit from income taxes	$	(417,932	)	—			(2,698		)	—			9,069			9,702			15,781			72,449			58,148			—			(255,481		)

Net income (loss)	$	939,930		$	—		$	8,150		$	(64,000	)	$	(15,931	)	$	(16,949	)	$	(109,719	)	$	(129,486	)	$	(131,802	)	$	—		$	480,193


Net income (loss) per share:
Basic	$	3.56		$	—		$	0.03		$	(0.24	)	$	(0.06	)	$	(0.06	)	$	(0.41	)	$	(0.49	)	$	(0.50	)	$	—		$	1.82

Diluted (1)	$	3.47		$	(0.09	)	$	0.03		$	(0.23	)	$	(0.06	)	$	(0.06	)	$	(0.39	)	$	(0.46	)	$	(0.47	)	$	—		$	1.74

Weighted average shares outstanding:
Basic	263,895																														263,895

Diluted (1)	271,081			9,686																											280,767

(1) Non-GAAP basic and diluted earnings per share reflects the sum of the quarterly Non-GAAP diluted earnings per share activity for Q1-Q4 2007.

(2) 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 $7,543K, net of tax, have been added back to net income and approximately 9,686K shares have been added to diluted weighted average shares for purposes of computing GAAP As-Reported diluted earnings per share.

GENZYME 2008 GUIDANCE

	2008 Guidance
DESCRIPTION	Ranges
Renagel / Renvela	$	690	$	700
Total Renal	800		815

Cerezyme	1,215		1,240
Fabrazyme	495		505
Myozyme	320		330
Aldurazyme	135		145
Total Therapeutics	2,325		2,385

Total Transplant	210		220

Synvisc	270		280
Total Biosurgery	490		505

Total Diag/Genetics	475		485

Total Other	260		270
TOTAL REVENUE	$	4,500	$	4,700

**GROSS MARGIN	approx.		77		%

**SG&A	approx.		27		%
**R&D	approx.		17		%
Net Interest / Other	approx.		60

TAX RATE - GAAP	approx.		30		%
*TAX RATE - NON-GAAP	approx.		31		%

GENZ GAAP EPS	approx.		$	2.75
AMORTIZATION	approx.		$	0.55
FAS123 EXPENSE	approx.		$	0.60
CONTINGENT CONVERTIBLE DEBT	approx.		$	0.10
**GENZ NON-GAAP EPS			$	4.00

***WTD AVERAGE SHARES O/S	approx.		274

CAPITAL EXPENDITURES	approx.		$	500

This financial guidance, which is provided as part of a press release dated February 13, 2008, 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, FIN 46, FAS123 expense and EITF 04-08.

**Non-GAAP excludes the impact of amortization, one-time events, FIN 46, FAS123 expense and EITF 04-08.

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