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Genzyme Delivers Strong Fourth Quarter to Conclude Outstanding Year
Date:2/13/2008

Reaffirms Outlook for Continued Growth

CAMBRIDGE, Mass., Feb. 13 /PRNewswire-FirstCall/ -- 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(R) (clofarabine) through the

acquisition of Bioenvision Inc.

-- Obtained marketing approval for four 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 http://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 http://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(R), Myozyme(R), Fabrazyme(R), Cerezyme(R), Renagel(R), Renvela(R), Thymoglobulin(R), Synvisc(R), Campath(R) and Clolar(R) are registered trademarks of and Mozobil(TM) and Synvisc-ONE(TM) are unregistered trademarks of Genzyme or its subsidiaries. Aldurazyme(R) is a registered trademark of BioMarin/Genzyme LLC. All rights reserved.

Genzyme's press releases and other company information are available at http://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.

Media Contact: Investor Contact:

Bo Piela Patrick Flanigan

(617) 768-6579 (617) 768-6563

GENZYME CORPORATION (GENZ)

Consolidated Statements of Operations

(Unaudited, amounts in thousands,

except per share amounts)

Three Months Ended Year Ended

December 31, 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 Year Ended

December 31, 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 December 31, December 31,

(Unaudited, amounts in thousands) 2007 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

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

Year to Date as of December 31, 2007

(Amounts in thousands, except per share data)

Dilution

Due to Gain on

Common Invest- Litig-

Stock ments ation Mile- Manufact

Equiv- in Equity Settle- stone -uring

NON-GAAP alents Securities ment Payment Related

Income Statement

Classification:

Total revenues $3,813,519

Cost of products

and services

sold $(880,737) $(20,916)

Selling,

general and

administrative $(1,016,066) $(64,000)

Research and

development $(641,388) $(25,000)

Amortization of

intangibles $-

Purchase of

in-process

research and

development $-

Equity in income

(loss) of equity

method

investments $23,548

Minority interest $101

Gains (losses) on

investments in

equity securities $2,219 $10,848

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

Investment income $70,196

Interest Expense $(12,147)

Summary:

Income (loss) before

income taxes $1,357,862 $ - $10,848 $(64,000) $(25,000) $(26,651)

(Provision for)

benefit from

income taxes $(417,932) - (2,698) - 9,069 9,702

Net income (loss) $939,930 $ - $8,150 $(64,000) $(15,931) $(16,949)

Net income (loss)

per share:

Basic $3.56 $ - $0.03 $(0.24) $(0.06) $(0.06)

Diluted (1) $3.47 $(0.09) $0.03 $(0.23) $(0.06) $(0.06)

Weighted average

shares outstanding:

Basic 263,895

Diluted (1) 271,081 9,686

Acquisition Amortization FAS 123R Effect of GAAP

Related Expense FIN 46 As Reported

Income Statement

Classification:

Total revenues $3,813,519

Cost of products

and services sold $(25,677) $(927,330)

Selling, general

and administrative $(106,172) $(200) $(1,186,438)

Research and

development $(58,10new products-Renvela(R)

(sevelamer carbonate) in the United States, Synvisc-ONE(TM) (hylan

G-F 20) and Cholestagel(R) (colesevelam hydrochloride) in the

European Union, and Elaprase(R) (idursulfase) in Japan-and secured

expanded U.S. labeling for Campath(R) (alemtuzumab) and Thyrogen(R)

(thyrotropin alfa for injection).

-- Reported highly encouraging clinical trial results for two key late

stage product candidates: Mozobil(TM) (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 goa1) $(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 $(19,150) $(830) $3,830 $7,398

Minority interest $3,831 $3,932

Gains (losses) on

investments in

equity securities $13,067

Other $(7,118)

Investment income $70,196

Interest Expense $(12,147)

Summary:

Income (loss)

before income

taxes $(125,500) $(201,935) $(189,950) $- $735,674

(Provision for)

benefit from

income taxes 15,781 72,449 58,148 - (255,481)

Net income

(loss) $(109,719) $(129,486) $(131,802) $- $480,193

Net income

(loss) per share:

Basic $(0.41) $(0.49) $(0.50) $- $1.82

Diluted (1) $(0.39) $(0.46) $(0.47) $- $1.74

Weighted average

shares outstanding:

Basic 263,895

Diluted (1) 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 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

NON-GAAP Equivalents Related Related

Income Statement

Classification:

Total revenues $1,036,758

Cost of products and

services sold $(246,377) $(9,143)

Selling, general and

administrative $(284,297)

Research and

development $(178,460)

Amortization of

intangibles $-

Purchase of in-process

research and development $- $(106,350)

Equity in income (loss)

of equity method

investments $9,319

Minority interest $-

Gains (losses) on

investments in

equity securities $(969)

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

Investment income $18,509

Interest expense $(2,864)

Summary:

Income (loss) before

income taxes $350,126 $- $(14,878) $(106,350)

(Provision for) benefit

from income taxes $(100,918) $- $5,428 $8,819

Net income (loss) $249,208 $- $(9,450) $(97,531)

Net income (loss) per

share:

Basic $0.94 $- $(0.036) $(0.367)

Diluted (1) $0.91 $(0.024) $(0.033) $(0.344)

Weighted average shares

outstanding:

Basic 265,418

Diluted (1) 273,688 9,686

FAS 123R GAAP

Amortization Expense As Reported

Income Statement Classification:

Total revenues $1,036,758

Cost of products and services sold $(7,137) $(262,657)

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

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

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

Purchase of in-process

research and development $(106,350)

Equity in income (loss) of

equity method investments $(830) $8,489

Minority interest $-

Gains (losses) on investments

in equity securities $(969)

Other $(7,228)

Investment income $18,509

Interest expense $(2,864)

Summary:

Income (loss) before income taxes $(52,634) $(43,599) $132,665

(Provision for) benefit from

income taxes $19,985 $12,920 $(53,766)

Net income (loss) $(32,649) $(30,679) $78,899

Net income (loss) per

share:

Basic $(0.123) $(0.116) $0.30

Diluted (1) $(0.115) $(0.108) $0.29

Weighted average shares

outstanding:

Basic 265,418

Diluted (1) 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 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.

l 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(R) (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(R) (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(R) (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(R) (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(R) (sevelamer hydrochloride) and

Renvela(R) (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(R) (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(R) (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(R)

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
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SOURCE Genzyme Corporation
Copyright©2008 PR Newswire.
All rights reserved

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4. Genzyme and Bayer Schering Pharma AG, Germany to Present New Data on Alemtuzumab in Multiple Sclerosis at ECTRIMS
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