Genzyme Delivers Strong Fourth Quarter to Conclude Outstanding Year

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 new 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 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(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 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(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 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                               $(58,101) $(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       $(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.

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