<PAGE> 1
As filed with the Securities and Exchange Commission on March 8, 1996.
Registration No. 33-44960
=========================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
GENZYME CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 06-1047163
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
ONE KENDALL SQUARE, CAMBRIDGE, MASSACHUSETTS 02139 (617) 252-7500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------------
HENRI A. TERMEER
Chief Executive Officer
Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
(617) 252-7500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with a copy to:
Peter Wirth, Esq.
Palmer & Dodge
One Beacon Street
Boston, Massachusetts 02108
(617) 573-0100
----------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
----------------------
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
----------------------
Page 1 of 27 Sequential Pages
Exhibit Index appears on Page 25
<PAGE> 2
GENZYME CORPORATION
1,891,252 SHARES
GENERAL DIVISION COMMON STOCK
($.01 PAR VALUE)
255,319 SHARES
TISSUE REPAIR DIVISION COMMON STOCK
($.01 PAR VALUE)
Genzyme Corporation ("Genzyme" or the "Company"), a Massachusetts
corporation, intends to issue from time to time up to 1,891,252 shares of its
General Division Common Stock ("General Division Stock") and up to 255,319
shares of its Tissue Repair Division Common Stock ("TR Stock") to holders of
$100,000,000 aggregate principal amount of its 6 3/4% Convertible Subordinated
Notes due October 1, 2001 (the "Notes") upon conversion of the Notes in
accordance with the terms thereof. The Notes were issued on October 11, 1991 in
a private placement to institutional investors pursuant to exemptions from
registration under the Securities Act of 1933, as amended.
On February 20, 1996, the Company provided notice to all holders of
record of the Notes as of such date calling the entire principal amount of the
Notes for redemption on March 21, 1996 (the "Redemption Date") at a price of
102.893 of principal plus accrued interest to the Redemption Date. The Notes
are convertible at any time prior to the close of business on the fifth business
day (March 14, 1996) prior to the Redemption Date into shares of common stock at
a conversion price of $52.875 per share, subject to adjustment in certain
circumstances, as set forth under "PLAN OF DISTRIBUTION." Prior to December 16,
1994, Genzyme had one class of common stock. On December 16, 1994, the
authorized shares of Genzyme common stock were redesignated as General Division
Stock, a second class of common stock, TR Stock, was authorized and .135 of one
share of TR Stock was distributed by Genzyme for each share of General Division
Stock held of record as of December 16, 1994. In connection with the
redesignation of the common stock and the distribution of the TR Stock, the
conversion privilege of the Notes was adjusted to provide that upon conversion
of any Note, the holder thereof shall receive (i) a number of shares of General
Division Stock equal to the number of shares of Genzyme common stock into which
the Note was previously convertible and (ii) .135 of one share of TR Stock for
each share of General Division Stock issuable upon such conversion. No
additional consideration is payable upon conversion of the Notes.
---------------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN SHARES OF GENERAL DIVISION STOCK AND TR STOCK, SEE "RISK
FACTORS" BEGINNING ON PAGE 4 HEREIN.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
---------------------------
The date of this Prospectus is March 8, 1996.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance with the Exchange Act files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). The
Company has filed a registration statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with the Commission with respect to the General Division Stock and TR Stock
offered hereby. This Prospectus, which constitutes part of the Registration
Statement, does not contain all the information set forth in the Registration
Statement and reference is made to the Registration Statement and the exhibits
thereto for further information with respect to the Company, the General
Division Stock and the TR Stock. Such reports, proxy statements, Registration
Statement and exhibits and other information omitted from this Prospectus can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at
the Commission's Regional Offices located at Seven World Trade Center, Suite
1300, New York, NY 10048 and 500 West Madison Street, Suite 1400, Chicago, IL
60661-2511. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
following documents heretofore filed with the Commission pursuant to the
Exchange Act: (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, as amended by Amendment Nos. 1 and 2 thereto on Form 10-K/A,
filed with the Commission on June 15, 1995 and September 13, 1995, respectively;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995 and June 30, 1995, filed with the Commission on May 15, 1995 and August
11, 1995, respectively, each as amended by Amendment No. 1 thereto on Form
10-Q/A, filed with the Commission on September 13, 1995; (iii) the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, filed
with the Commission on November 14, 1995; (iv) the Company's Current Reports on
Form 8-K, filed with the Commission on September 21, 1995, October 12, 1995 and
February 23, 1996; (v) the description of TR Stock contained in the Company's
Registration Statement on Form 8-A, filed with the Commission on September 9,
1994, as amended by Form 8-A/A, filed with Commission on December 14, 1994; (vi)
the description of Tissue Repair Division Common Stock Purchase Rights contained
in the Company's Registration Statement on Form 8-A, filed with the Commission
on November 28, 1994; (vii) the financial statements appearing at pages III-19
to III-42 of Annex III, pages IV-38 to IV-41 of Annex IV, pages V-37 to V-41 of
Annex V and pages VI-2 to VI-6 of Annex VI to the Prospectus/Joint Proxy
Statement included in Genzyme's Registration Statement on Form S-4 (File No.
33-83346), which became effective on November 9, 1994; and (viii) the Quarterly
Report of BioSurface Technology, Inc. ("BioSurface") on Form 10-Q for the
quarter ended September 30, 1994, filed with the Commission on November 12, 1994
(File No. 0-21020).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to termination of the offering made hereby shall be deemed to be incorporated in
this Prospectus by reference and to be a part hereof from the respective dates
of the filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is, or is deemed to be, incorporated by reference herein, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any and all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents which are not specifically incorporated by
reference into such documents. Requests for such copies should be directed to
the executive offices of the Company, One Kendall Square, Cambridge,
Massachusetts 02139, Attention: Shareholder Services, telephone (617)252-7526.
-2-
<PAGE> 4
PROSPECTUS SUMMARY
The shares of General Division Stock and TR Stock offered hereby involve
a high degree of risk. Investors should carefully consider the information set
forth under the heading "Risk Factors."
GENZYME CORPORATION
Genzyme is a diversified, integrated human health care products company
operating in five major business areas. Genzyme's business activities with
respect to therapeutics, diagnostic services, diagnostic products and
pharmaceuticals are organized as the Genzyme General Division (the "General
Division"). Genzyme's activities to develop, produce and market technologically
advanced products and services for the treatment and prevention of serious
tissue damage are conducted through the Genzyme Tissue Repair Division ("GTR").
Genzyme currently has two classes of common stock outstanding, General
Division Stock and TR Stock, which are intended to reflect the value and track
the performance of the General Division and GTR, respectively. Holders of both
classes of common stock are stockholders of Genzyme, which owns all of the
assets and is responsible for all liabilities of the Company.
Genzyme's principal executive offices are located at One Kendall Square,
Cambridge, Massachusetts 02139. Its telephone number is (617) 252-7500.
-3-
<PAGE> 5
RISK FACTORS
RISKS RELATED TO TWO CLASSES OF COMMON STOCK:
Genzyme currently has two classes of common stock outstanding: General
Division Stock and TR Stock. Upon conversion of any Note, the holder thereof
will receive shares of General Division Stock and TR Stock. Accordingly,
Noteholders should carefully consider the following factors in evaluating
whether to convert any Note.
STOCKHOLDERS OF ONE COMPANY; FINANCIAL IMPACTS ON ONE DIVISION COULD AFFECT
THE OTHER. Genzyme continues to hold title to all of its assets and is
responsible for all of its liabilities, and the holders of the General Division
Stock and the TR Stock have no specific claim against the assets attributed for
financial statement presentation purposes to the division whose performance is
associated with the class of stock they hold. Liabilities or contingencies of
either division that affect Genzyme's resources or financial condition could
affect the financial condition or results of operations of both divisions.
Noteholders should, therefore, read Genzyme's consolidated financial statements
in conjunction with the financial statements of the General Division and GTR.
NO RIGHTS OR ADDITIONAL DUTIES WITH RESPECT TO THE DIVISIONS; POTENTIAL
CONFLICTS. Holders of General Division Stock and TR Stock have only the rights
of stockholders of Genzyme, and, except in limited circumstances, do not have
any rights specifically related to the General Division or GTR, respectively.
The existence of separate classes of common stock may give rise to
occasions when the interests of holders of General Division Stock and holders of
TR Stock may diverge or appear to diverge. Although Genzyme is aware of no
precedent concerning the manner in which Massachusetts law would be applied to
the duties of a board of directors in the context of multiple classes of common
stock with divergent interests, Genzyme believes that a Massachusetts court
would hold that a board of directors owes an equal duty to all stockholders
regardless of class and does not have separate or additional duties to any group
of stockholders. That duty is the fiduciary duty to act in good faith and in a
manner it reasonably believes to be in the best interests of the corporation.
Genzyme believes that, under Massachusetts law, a good faith determination by a
disinterested and adequately informed board of directors that an action is in
the best interests of the corporation should represent an appropriate defense to
any challenge by or on behalf of the holders of any class of stock that such
action could have a disparate effect on different classes of common stock.
Disproportionate ownership interests of members of the Genzyme Board in
either class of common stock or disparate values in such stock could create or
appear to create potential conflicts of interest when directors are faced with
decisions that could have different implications for each class of stock.
Nevertheless, Genzyme believes that a director would be able to discharge his or
her fiduciary responsibilities even if his or her interests in shares of such
various classes were disproportionate or had disparate values. The Genzyme
Board may also from time to time establish one or more committees to review
matters presented to it that raise conflict issues, which committee(s) would
report to the full Genzyme Board on such matters.
NO ADDITIONAL SEPARATE VOTING RIGHTS. Holders of General Division Stock
and holders of TR Stock vote together as a single class on all matters as to
which common stockholders generally are entitled to vote. Except in certain
limited circumstances provided under Massachusetts law, in Genzyme's Articles of
Organization, as amended, and in the management and accounting policies adopted
by the Genzyme Board, holders of each class of common stock have no rights to
vote on matters as a separate class. Accordingly, except in limited
circumstances, holders of shares of one class of common stock could not bring a
proposal to a vote of the holders of that class of common stock only, but would
be required to bring any proposal to a vote of both classes of common stock.
On all matters as to which common stockholders generally are entitled to
vote, each share of General Division Stock has one vote, and each share of TR
Stock will, through December 31, 1996, have .29 vote. On January 1, 1997 and on
January 1 every two years thereafter, the number of votes to which each share of
TR Stock
-4-
<PAGE> 6
will be entitled will be adjusted to equal the ratio of the Fair Market
Value of one share of TR Stock to the Fair Market Value of one share of General
Division Stock as of such date.
Fair Market Value as of any date means the average of the daily closing
prices as reported by the Nasdaq National Market (or the appropriate exchange on
which such shares are traded) for the 20 consecutive trading days commencing on
the 30th trading day prior to such date. In the event such closing prices are
unavailable, Fair Market Value will be determined by the Genzyme Board.
Certain matters as to which the holders of common stock are entitled to
vote may involve a divergence or the appearance of a divergence of the interests
of holders of General Division Stock and holders of TR Stock. If, when a
stockholder vote is taken on any matter as to which a separate vote by either
class is not required and the holders of either class of common stock would have
more than the number of votes required to approve any such matter, the holders
of that class would control the outcome of the vote on such matter. Holders of
General Division Stock and holders of TR Stock currently have approximately 90%
and 10%, respectively, of the total voting power of Genzyme. As a result, on
matters which are submitted to a vote of the holders of both classes of common
stock, the preferences of the holders of General Division Stock are likely to
dominate and determine the outcome of such vote unless and until the relative
number of shares outstanding and/or the market value of General Division Stock
and TR Stock materially changes.
NO ADJUSTMENT TO LIQUIDATING DISTRIBUTIONS. In the event of a voluntary or
involuntary dissolution, liquidation or winding up of the affairs of Genzyme
(other than pursuant to a merger, business combination or sale of substantially
all assets), holders of outstanding shares of General Division Stock and TR
Stock would receive the assets, if any, remaining for distribution to common
stockholders on a per share basis in proportion to the respective per share
liquidation unit of such class. Currently, each share of General Division Stock
has one liquidation unit and each share of TR Stock has .29 liquidation unit.
Because the liquidation units will not be adjusted to reflect changes in the
relative market value or performance of the General Division and GTR, the per
share liquidating distribution to a holder of General Division Stock or TR Stock
will not necessarily correspond to the value of the assets of the Genzyme
General Division or GTR, respectively, at the time of a dissolution, liquidation
or winding up of Genzyme.
EXCHANGE OF TR STOCK. The Board can, in its sole discretion, determine to
exchange shares of TR Stock for cash or shares of General Division Stock (or any
combination thereof) at a 30% premium over Fair Market Value of the TR Stock at
any time. In addition, following a disposition of all or substantially all
assets of GTR, the shares of TR Stock are subject to mandatory exchange by
Genzyme for cash and/or shares of General Division Stock at a 30% premium over
Fair Market Value of the TR Stock as determined by the trading prices during a
specified period prior to public announcement of the disposition. Consequently,
holders of TR Stock may receive a greater or lesser premium for their shares
than any premium paid by a third party buyer of all or substantially all of the
assets of GTR. In addition, any such exchange of shares of General Division
Stock could be made at a time when General Division Stock may be considered to
be undervalued and would dilute the interests of the holders of General Division
Stock. See "Management and Accounting Policies Governing the Relationship of
Genzyme Divisions -Open Market Purchases of Shares of any Class."
MANAGEMENT AND ACCOUNTING POLICIES SUBJECT TO CHANGE. The Genzyme Board has
adopted certain management and accounting policies applicable to the
preparation of the financial statements of both divisions, the allocation of
corporate expenses, assets and liabilities and other accounting matters, the
reallocation of assets between divisions and other matters. These policies may,
except as stated therein, be modified or rescinded in the sole discretion of the
Genzyme Board without the approval of Genzyme's stockholders, subject to the
Genzyme Board's fiduciary duty to all holders of Genzyme's capital stock,
although there is no present intention to do so. The Genzyme Board may also
adopt additional policies depending upon the circumstances. See "Management and
Accounting Policies Governing the Relationship of Genzyme Divisions."
-5-
<PAGE> 7
LIMITED TRADING HISTORY. As discussed above, the General Division Stock and
the TR Stock are intended to reflect the value and track the performance of
the General Division and GTR, respectively. Since the General Division Stock
and the TR Stock have only a limited trading history, there can be no assurance
as to the degree to which the market price of such classes of common stock will
reflect the value and track the performance of the General Division and GTR as
reflected in their respective financial statements. In addition, Genzyme cannot
predict the impact that certain terms of the securities, such as the ability of
Genzyme to exchange each share of TR Stock for cash and/or shares of General
Division Stock, will have on the market prices of each class of common stock.
RISKS RELATED TO GENZYME:
Upon conversion of any Note, the holder thereof will become a
stockholder of Genzyme and will receive shares of General Division Stock and TR
Stock. Such an investment involves a high degree of risk. Accordingly,
Noteholders should carefully consider the following factors in evaluating the
businesses of Genzyme, the General Division and GTR and whether to convert any
Note.
DEPENDENCE ON CEREDASE [REGISTERED TRADEMARK] AND CEREZYME [REGISTERED
TRADEMARK] ENZYME SALES. Genzyme's results of operations and cash flows are
highly dependent upon sales of its Ceredase [registered trademark] enzyme, a
biotherapeutic product for the treatment of Gaucher disease, and
Cerezyme [registered trademark] enzyme, a recombinant form of the enzyme.
Commercial sales of Ceredase [registered trademark] and Cerezyme [registered
trademark] began in April 1991 and June 1994, respectively, following receipt of
United States Food and Drug Administration ("FDA") marketing approval and during
1994, sales from these two products totalled $172.0 million, or 72% of General
Division product sales and 56% of total sales.
The Ceredase [registered trademark] and Cerezyme [registered trademark]
products have each been given orphan drug status by the FDA, which entitles
Genzyme to market exclusivity for these products until April 1998 and May 2001,
respectively. Legislation has been periodically introduced in recent years to
amend the Orphan Drug Act to limit market exclusivity in certain situations.
See "Risk Factors - Regulation by Government Agencies."
LIMITED SUPPLY OF KEY RAW MATERIAL; NECESSITY OF APPROVALS FOR PRODUCTION OF
CEREZYME [REGISTERED TRADEMARK] . GENZYME produces Ceredase [registered
trademark] enzyme from raw material extracted from human placental tissue.
Pasteur Merieux, located in France, is the only significant source of this
material. Under its agreement with Genzyme, Pasteur Merieux is obligated to
process at least 50% of its placental tissue and supply all of its output to
Genzyme. Currently, it is processing all of its available material and
supplying the output to Genzyme. If this agreement were terminated prior to the
scheduled expiration in 2001 due to Pasteur Merieux's inability or failure to
perform its obligations thereunder, or if Pasteur Merieux were to reduce the
amount of material it processes, Genzyme might not be able to obtain alternative
sources of such raw material at a commercially reasonable cost, if at all.
The supply of starting material available for the production of Ceredase
[registered trademark] enzyme effectively limits the amount of product that can
be produced. During 1994, Genzyme and its supplier were successful in improving
the yield of enzyme obtained from the starting material, thereby increasing the
amount of product that could be produced. However, there can be no assurance
that further improvements in yield will occur. Any disruption in the supply or
manufacturing process of Ceredase [registered trademark] enzyme may have a
material adverse effect on revenue in any period. To address supply
constraints, Genzyme has developed Cerezyme [registered trademark] enzyme, a
recombinant form of the enzyme that is not derived from human placental tissue.
In 1994, Genzyme received approval to market this product in the U.S. and Israel
and currently is working to expedite the foreign approvals needed to market
Cerezyme [registered trademark] enzyme elsewhere abroad. Manufacturing
constraints on Cerezyme [registered trademark] enzyme, presently produced in
Genzyme's small scale cell culture plant, will limit the availability of the
product for new patients until receipt of regulatory approval to use Genzyme's
large scale mammalian cell culture manufacturing plant in Allston, Massachusetts
for production of Cerezyme [registered trademark] enzyme.
NO ASSURANCE OF COMMERCIAL SUCCESS OF THE SURGICAL PRODUCTS. The successful
commercialization of the General Division's line of biomaterials products
based on hyaluronic acid to limit the formation of postoperative adhesions
-6-
<PAGE> 8
and to replace synovial fluid (the "Surgical Products") will depend on
many factors, including the breadth of labeling claims allowed by the FDA, the
response of surgeons to the data from clinical trials, the General Division's
ability to create or access a sales force able to market the Surgical Products,
the General Division's ability to supply sufficient product to meet market
demand, the degree to which third-party reimbursement for use of the Surgical
Products is available, and the number and relative efficacy of competitive
products that may subsequently enter the market. There can be no assurance that
the General Division will be successful in its efforts to develop and implement
a commercialization strategy for the Surgical Products.
The Surgical Products will require FDA approval prior to marketing in
the United States, and the General Division filed a PMA in October 1995 for the
marketing of Seprafilm [Trademark] (formerly referred to as HAL-F [Trademark]
Bioresorbable Membrane) for abdominal and gynecological surgery applications and
a PMA in January 1996 for marketing of Sepracoat [Trademark] (formerly referred
to as HAL-C [Trademark] Coating Solution) for gynecological surgical
applications. There can be no assurance that the FDA will allow the General
Division's labeling claims and permit the marketing of these products for a
broad range of applications, if at all. In addition, the successful
commercialization of the Surgical Products will require that surgeons become
convinced of the efficacy of the products in preventing the formation of
postoperative adhesions and incorporate the products as standard surgical
practice in procedures where adhesions are a potential postoperative
complication. There can be no assurance that the Surgical Products will be
widely accepted by surgeons and used to the extent anticipated by the General
Division.
The General Division may require a specialized, hospital-based sales
force to market the Surgical Products. Genzyme does not currently have such a
sales force. Accordingly, Genzyme will need to hire and train additional sales
personnel, enter into marketing and distribution agreements with one or more
companies with an established presence in the hospital supply industry or
acquire a company with such a presence. No discussions with potential
distribution partners have taken place and there is no assurance that, if the
General Division desires such a partnering opportunity, it will be available on
acceptable terms. The General Division may encounter difficulty or unforeseen
delays in hiring and training or acquiring such a sales force, which may have an
adverse effect on the commercialization of the Surgical Products.
The General Division has developed manufacturing facilities in the
United Kingdom for bulk production of HA powder, from which Seprafilm
[Trademark] and Sepracoat [Trademark] are produced. Seprafilm [Trademark]
production facilities have been built in Framingham, Massachusetts with a
capacity sufficient for the market introduction and initial commercialization of
the product. The General Division will need to expand its manufacturing
capacity for Seprafilm [Trademark] in order to meet any additional market
demand over and above its present capacity, and initial planning for that
expansion is underway. Although the General Division has successfully produced
finished product in its existing manufacturing facilities, the General Division
has not operated these facilities at a capacity anticipated to be required for
commercial production of the Surgical Products. There can be no assurance that
the General Division will be successful in producing material at such capacity
that conforms to established product specifications while maintaining production
efficiency.
Third-party payors are increasingly attempting to contain health care
costs by limiting both coverage and the level of reimbursement for new
therapeutic products. The General Division has not yet formulated a pricing
policy with respect to the Surgical Products. The successful commercialization
of the Surgical Products is dependent on obtaining coverage and reimbursement
from these third-party payors for the use of these products. See "Risk Factors
- - Risks Relating to Genzyme - Third Party Reimbursement and Health Care Cost
Containment Initiatives."
The Surgical Products will also face significant competition both from
other HA-based products and from non-HA-based products intended to reduce
adhesions resulting from surgical trauma. See "Risk Factors - Risks Relating to
Genzyme - Intense Competition."
-7-
<PAGE> 9
EARLY STAGE OF COMMERCIALIZATION OF THE CARTICEL [SM] SERVICE. GTR's future
success depends in large part on the successful commercialization of its
CARTICEL [SM] Autologous Chondrocyte Service (the "CARTICEL [SM] Service"),
which provides orthopedic surgeons with the cell culturing services and other
support necessary to utilize a patient's own articular cartilage cells to repair
articular cartilage defects in that patient's knee. GTR is engaged in the
process of gathering data concerning the efficacy of the CARTICEL [SM] Service,
and GTR plans to continue gathering such data as the CARTICEL [SM] Service is
being marketed. The commercialization of the CARTICEL [SM] Service could be
materially adversely affected if such data were to raise questions concerning
the efficacy, or the duration of the efficacy, of the CARTICEL [SM] Service.
The commercialization of the CARTICEL [SM] Service by GTR is in its
early stages, and GTR has not yet grown cartilage cell cultures in the
quantities that will be necessary to meet the demands of the market that GTR
expects will develop for the CARTICEL [SM] Service. In order to produce such
quantities of cartilage cells, GTR will need to continue to make substantial
expenditures for production facilities and will need to hire and train
additional production and support staff. Any significant delays encountered in
these activities may delay the commercialization of the CARTICEL [SM] Service
and have a material adverse effect on GTR's results of operations.
GTR is marketing the CARTICEL [SM] Service to orthopedic surgeons. In
order to commercialize the CARTICEL [SM] Service successfully, GTR will need to
continue to hire and train additional sales personnel, which will market the
CARTICEL [SM] Service to surgeons and hospitals directly. The success of the
CARTICEL [SM] Service depends on the success of such sales force in creating
demand for the CARTICEL [SM] Service and the extent to which sufficient numbers
of orthopedic surgeons who are trained by GTR incorporate the CARTICEL [SM]
Service into their existing practices. There can be no assurance that GTR will
be successful in marketing the CARTICEL [SM] Service to such surgeons or that
such surgeons will use the CARTICEL [SM] Service to the extent anticipated by
GTR.
FLUCTUATION IN GTR'S QUARTERLY RESULTS. The commercialization of the CARTICEL
[SM] Service is in its early stages. Revenues generated from the CARTICEL [SM]
Service are expected to fluctuate as GTR's sales force enrolls orthopedic
surgeons for training, such surgeons are trained by GTR, and the CARTICEL [SM]
Service continues to gain market acceptance. GTR's management is unable to
predict the timing or magnitude of such fluctuations. In addition, GTR's
revenues to date have derived primarily from sales of the Epicel [SM] Service
for the treatment of severe burns. Revenues realized from the Epicel [SM]
Service fluctuate from quarter to quarter due to the dependency of such
revenues on many unpredictable factors, including the number and survival rate
of patients for which the Epicel [SM] Service is the indicated treatment. Since
production of the Epicel [SM] Service requires GTR to maintain extensive tissue
culture facilities and a staff of trained personnel, a significant portion of
GTR's costs are fixed and, therefore, fluctuations in demand can have a material
adverse effect on GTR's results of operations.
RELIANCE ON AGREEMENTS WITH KEY COLLABORATORS. GTR's CARTICEL [SM]
Service has been developed based on the work of a group of Swedish physicians,
the two leaders of which are exclusively involved with GTR in the
commercialization and further development of the CARTICEL [SM] Service. These
two physicians are parties to research and development consulting agreements
with GTR (the "Consulting Agreements") which prohibit them from performing
consulting services for others related to cartilage and bone repair without
GTR's consent. In addition, pursuant to the Consulting Agreements, each
physician (i) is prohibited from engaging in any business activity that is in
competition with the products or services being developed, manufactured or sold
by GTR during the term of the Consulting Agreements (currently through 1998) and
for a period of one year after termination thereof, (ii) is subject to
non-disclosure obligations, and (iii) has assigned to GTR all rights to
inventions resulting from work performed by each physician as a consultant to
GTR, subject to royalties payable to the inventing physician. There can be no
assurance that the two physicians will honor their obligations under the
Consulting Agreements. In addition, there can be no assurance that individuals
who are familiar with the know-how underlying GTR's CARTICEL [SM] Service
through their association with these physicians will not disclose such
information to GTR's competitors. The occurrence of either of these events
could have a material adverse effect on GTR's results of operations.
-8-
<PAGE> 10
GTR is conducting additional research in connection with its CARTICEL
[SM] Service pursuant to a sponsored research agreement with the University of
Gotenburg in Sweden and certain physicians, including the two referred to above.
The sponsored research agreement requires that all members of the investigative
team maintain the confidentiality of all information pertaining to GTR and its
business that may become known to them in connection with their work under the
agreement. The agreement also states that all inventions conceived or reduced
to practice during the course of the research program will be the property of
GTR, subject to royalties payable to the inventing physician. There can be no
assurance that the sponsored research agreement will be honored by the
individuals performing services thereunder.
UNCERTAINTY OF PRODUCT DEVELOPMENT. Genzyme's future success is largely
dependent upon its ability to develop, manufacture and sell technologically
advanced new products. Such products must be developed, tested and, in most
cases, approved for use by appropriate government agencies. Once approved, they
must be manufactured in commercial quantities and marketed successfully. Each
of these steps, as well as the process taken as a whole, involves significant
time and expense. There can be no assurance that any of Genzyme's products
under development, if and when fully developed and tested, will perform in
accordance with Genzyme's expectations, that necessary regulatory approvals will
be obtained in a timely manner, if at all, or that these products can be
successfully and profitably manufactured and sold.
TECHNOLOGY TRANSFERRED TO GENZYME DEVELOPMENT PARTNERS AND NEOZYME II.
Genzyme organized two special purpose research and development entities, Genzyme
Development Partners, L.P. ("Genzyme Development Partners") and Neozyme II
Corporation ("Neozyme II"), to which it transferred technology and commercial
rights to certain products that Genzyme previously had under development.
Genzyme has options to purchase the limited partnership interests in Genzyme
Development Partners under certain circumstances and to acquire all of the
outstanding shares of the callable common stock of Neozyme II.
On January 31, 1996, Genzyme made an offer to a special committee of the
independent directors of the general partner of Genzyme Development Partners to
acquire substantially all the assets of Genzyme Development Partners for
approximately $93,000,000 in shares of General Division Stock. Such offer was
made in lieu of Genzyme's option to purchase the limited partnership interests
of Genzyme Development Partners and could result in dilution to holders of
General Division Stock and negatively affect the market price of such stock.
There can be no assurance that Genzyme's offer will be accepted by the general
partner or that alternative terms proposed by the general partner, if any, will
be acceptable to Genzyme.
It is also uncertain at this time whether Genzyme will exercise its
option to purchase the limited partnership interests in the event that no
agreement is reached with the general partner in respect of the purchase of the
assets of Genzyme Development Partners or whether Genzyme will exercise its
option to purchase the outstanding shares of Neozyme II callable common stock.
If Genzyme does not exercise these options or otherwise reach agreements to
acquire the rights to products of Genzyme Development Partners or Neozyme II, it
will have no rights to the related products of Neozyme II and limited rights in
revenues generated from the sale of the Genzyme Development Partners' products.
If Genzyme does exercise these options, it will be required to make substantial
cash payments or to issue shares of General Division Stock, or both. Cash
payments will diminish Genzyme's capital resources. Payments in General
Division Stock could result in dilution to holders of General Division Stock and
could negatively affect the market price of such stock.
FUTURE CAPITAL NEEDS. Although Genzyme currently has substantial cash
resources, it has committed to utilize a portion of such funds for certain
purposes, such as making certain payments to third parties in connection with
strategic collaborations and acquisitions. In addition, should Genzyme exercise
its option to acquire Neozyme II callable common stock or its option to acquire
the partnership interests in Genzyme Development Partners using cash to pay some
or all the exercise price, its cash resources will be diminished. As a result,
Genzyme may have to obtain additional financing. There can be no assurance that
such financing will be available on acceptable terms.
-9-
<PAGE> 11
Genzyme anticipates that GTR's existing cash balances and revenues
generated from the CARTICEL [SM] and Epicel [SM] Services will be sufficient to
fund GTR's operations through the end of 1996. GTR may require additional funds
sooner if demand for the CARTICEL [SM] Service grows more rapidly than
anticipated. Significant additional funds will continue to be required to
expand further the CARTICEL [SM] Service, including for working capital and
additional processing capacity, and to fund the development, clinical testing,
and commercialization of GTR's other products and services.
In addition, GTR's cash requirements may vary materially from those now
planned as a result of revenue fluctuations, results of research and development
and clinical testing by GTR and its collaborators, competitive advances and
other factors. There can be no assurance that additional funding will be
available on terms that are acceptable to GTR, if at all. Insufficient funds
may require GTR to delay, scale back or eliminate certain of its programs or to
license third parties to commercialize technologies or products that GTR would
otherwise undertake itself. Such actions may adversely affect the market price
of the TR Stock.
GTR OPERATING LOSSES. GTR is expected to experience significant
operating losses at least through the first half of 1997 as the marketing of its
CARTICEL [SM] Service continues and its research and development and clinical
trial programs progress. There can be no assurance that GTR will ever achieve a
profitable level of operations or that profitability, if achieved, can be
sustained on an ongoing basis. In addition, the management and accounting
policies adopted by the Genzyme Board provide that to the extent GTR is unable
to utilize its operating losses to reduce its allocated current or deferred
income tax expense, such losses will be reallocated to the General Division on a
quarterly basis. Accordingly, although the actual payment of taxes is a
corporate liability of Genzyme as a whole, separate financial statements are
prepared for each division and any losses on GTR's financial statements that
cannot be utilized currently by GTR will not be carried forward to reduce the
taxes allocable to GTR's earnings in the future. This will result in GTR
recognizing a larger tax expense and reporting lower earnings after taxes in the
future than would have been the case if GTR had retained its losses in the form
of a net operating loss carryforward.
UNCERTAINTY REGARDING PATENTS AND PROTECTION OF PROPRIETARY TECHNOLOGY.
Genzyme's success depends, to a large extent, on its ability to maintain a
competitive technological position in its product areas. Proprietary rights
relating to Genzyme's products are protected from unauthorized use by third
parties only to the extent that they are covered by patents or are maintained in
confidence as trade secrets. Genzyme has filed for patents and has rights to
numerous patents and patent applications worldwide. While certain of Genzyme's
patents have been allowed or issued, there can be no assurance that any
additional patents will be allowed or will issue or that, to the extent issued,
such patents will effectively protect the proprietary technology of Genzyme. In
addition, GTR does not yet have significant patent protection covering the
methodologies used in providing the CARTICEL [SM] Service. Consequently, GTR is
unable to prevent a competitor from developing the ability to grow cartilage
cell cultures and from offering a service that is similar or superior to the
CARTICEL [SM] Service. GTR's results of operations could be materially and
adversely affected if a competitor were to develop such know-how.
Genzyme has also relied upon trade secrets, proprietary know-how and
continuing technological innovation to develop and maintain its competitive
position. There can be no assurance that others will not independently develop
such know-how or otherwise obtain access to Genzyme's technology. While
Genzyme's employees, consultants and corporate partners with access to
proprietary information are generally required to enter into confidentiality
agreements, there can be no assurance that these agreements will be honored.
Certain of Genzyme's consultants have developed portions of Genzyme's
proprietary technology at their respective universities or in government
laboratories. There can be no assurance that such universities or governmental
authorities will not assert rights to intellectual property arising out of
university or government based research conducted by such consultants. In
addition, patent litigation is widespread in the biotechnology industry and it
is not possible to predict how any such litigation will affect Genzyme.
Parties not affiliated with Genzyme may hold pending or issued patents
relating to the technology utilized by Genzyme in its products presently
available or under development. Genzyme may, depending on the final
-10-
<PAGE> 12
formulation of such products, need to acquire licenses to, or contest the
validity of, such patents or any other similar patents that may be issued. The
extent to which Genzyme may need to license such rights or contest the validity
of such patents depends on the scope and validity of such patents and
ultimately on the final design or formulation of its products under
development. The cost and ability to license any such rights and the
likelihood of successfully contesting the validity of such patents are
uncertain.
INTENSE COMPETITION. Genzyme is engaged in a segment of the human health
care products industry that is extremely competitive. Competitors in the
United States and elsewhere are numerous and include major pharmaceutical,
chemical and biotechnology companies, many of which have substantially greater
capital resources, marketing experience, research and development staffs and
facilities than Genzyme. These companies may succeed in developing products
that are more effective than any that have been or may be developed by Genzyme
and may also be more successful than Genzyme in producing and marketing these
products.
RAPID TECHNOLOGICAL CHANGE. The field of biotechnology is expected to
continue to undergo significant and rapid technological change. Although
Genzyme will seek to expand its technological capabilities in order to remain
competitive, there can be no assurance that research and discoveries by others
will not render Genzyme's products or processes obsolete.
UNCERTAINTY REGARDING SUCCESS OF CLINICAL TRIALS. Several of Genzyme's
products are currently in clinical trials to test safety and efficacy in
humans for various conditions. There can be no assurance that GTR will not
encounter problems in clinical trials that will cause it to delay or suspend
clinical trials. In addition, there can be no assurance that such clinical
testing, if completed, will ultimately show these products to be safe and
efficacious.
REGULATION BY GOVERNMENT AGENCIES. Most of the products Genzyme plans to
manufacture and sell will require approval by governmental agencies in the
United States and elsewhere. In particular, human therapeutic and diagnostic
products are subject to pre-marketing approval by the FDA and comparable
agencies in foreign countries. The process of obtaining these approvals varies
according to the nature and use of the product and can involve lengthy and
detailed laboratory and clinical testing, sampling activities and other costly
and time-consuming procedures. There can be no assurance that any of the
required approvals will be granted on a timely basis, if at all.
Certain of Genzyme's products, including its Ceredase [registered
trademark] and Cerezyme [registered trademark] enzymes, have been designated as
orphan drugs under the Orphan Drug Act, which provides incentives to
manufacturers to develop and market drugs for rare diseases. The Orphan Drug
Act generally entitles the first developer to receive FDA marketing approval for
an orphan drug to a seven-year exclusive marketing period in the United States
for that product. However, legislation has been periodically introduced in
recent years to amend the Orphan Drug Act. Such legislation has generally been
directed to shortening the period of automatic market exclusivity and granting
certain marketing rights to simultaneous developers of a drug. The effect on
Genzyme of any amendments ultimately adopted cannot be assessed at this time.
Although Genzyme has filed for or received orphan drug designation for
various other products, Genzyme believes that the commercial success of these
products will depend more significantly on the associated safety and efficacy
profile and on the price and other characteristics of each product relative to
competitive or alternative treatments than on any exclusivity afforded by the
Orphan Drug Act. Additionally, these products may be protected by patents and
other means. Nonetheless, it is not possible to predict precisely what effect a
lessening of the market exclusivity protection afforded by the Orphan Drug Act
would have on Genzyme's results of operations.
In addition, in November 1995 the FDA held a public hearing on the
subject of autologous cells for structural purposes as a starting point for the
development of new regulations. GTR participated in this hearing, presenting
information regarding the development, clinical application and processing
related to the CARTICEL [SM] and Epicel [SM] Services. GTR also advocated the
development of appropriate regulations to guide further development
-11-
<PAGE> 13
of products and services in this area. The public comment period following the
November meeting will close in February 1996. The FDA has announced that it
will review its position and determine if regulations are required in the area
of autologous cells for structural and reconstructive purposes. The FDA has
indicated that it will provide GTR with sufficient time to comply with any
regulations that it may promulgate relating to autologous cells.
A federal criminal statute prohibits the transfer of any human organ for
valuable consideration for use in human transplantation but permits recovery of
reasonable costs associated with such activities. This statute has not been
applied to the CARTICEL [SM] or Epicel [SM] Services to date. In addition,
certain states have laws requiring the licensure of tissue and organ banks and
laws governing the sale of human organs and the safety and efficacy of drugs,
devices and biologics, including skin, all of which could be interpreted to
apply to GTR's production and distribution of cultured tissue products.
Provisions in certain states' statutes prohibit the receipt of valuable
consideration in connection with the sale of human tissue by a tissue bank but
permit licensed tissue banks, including companies, to recover their reasonable
costs associated with such sales. One state's Department of Health has notified
GTR that it believes GTR must obtain a license under that state's tissue bank
licensure statute with respect to distribution of the Epicel [SM] Service. The
Company has applied for such a license.
FOREIGN SALES ACTIVITIES. Foreign sales accounted for 37% of the
General Division's total revenues in 1994, and Genzyme anticipates that foreign
sales will continue to represent a significant percentage of Genzyme's revenues.
Accordingly, a substantial portion of Genzyme's revenues may be subject to
currency fluctuations and other risks associated with foreign operations. In
addition, the strength of the United States dollar in relation to certain
foreign currencies may adversely affect Genzyme's sales to foreign customers.
THIRD PARTY REIMBURSEMENT AND HEALTHCARE COST CONTAINMENT INITIATIVES.
A majority of Genzyme's revenues are attributable directly or indirectly to
payments received from third party payors. Genzyme's revenues and profitability
may be affected by ongoing efforts of third party payors to contain such costs.
In addition, during 1994 the Clinton administration and Congress proposed the
implementation of broad-based healthcare cost containment measures. While these
proposals were not implemented, it is likely that renewed health care measures
will again be proposed in the present or future Congressional sessions.
Accordingly, the effects on Genzyme of any such measures that are ultimately
adopted cannot be assessed at this time.
PRODUCT LIABILITY AND LIMITATIONS OF INSURANCE. Genzyme could be subject to
product liability claims in connection with the use or misuse of its products
during testing or after commercialization. While Genzyme has taken, and
continues to take, what it believes are appropriate precautions, there can
be no assurance that Genzyme will avoid significant liability exposure. Genzyme
has only limited amounts of product liability insurance and, although Genzyme
believes the coverage provided by such insurance is adequate for its businesses
as presently conducted and in light of its experience to date, there can be no
assurance that such insurance will provide sufficient coverage against any or
all potential product liability claims. If Genzyme attempts to obtain
additional insurance in the future, there can be no assurance that it will be
able to do so on acceptable terms, if at all, or that such insurance will
provide adequate coverage against claims asserted.
POTENTIAL CONFLICTS OF INTEREST OF DIRECTORS. Certain directors of Genzyme
are also directors of other companies in the biotechnology and pharmaceutical
industries or provide consulting or similar services to other companies doing
business in such industries. As such, those directors may be subject to
conflicts of interest with respect to business opportunities that may be of
interest to two or more of the entities with which they have fiduciary or
contractual relationships. In addition, the scope of research and development
being conducted by Genzyme is very broad, and such other entities may be engaged
in research and development activities with respect to products that may compete
directly with products marketed by Genzyme in the future. Each director of
Genzyme has been advised that he has an obligation to disclose any competitive
relationship and any interest that he or a company with which he is affiliated
may have in any transaction involving Genzyme. Should the Genzyme Board be
presented with any matters in which a director has such a conflicting interest,
the decision would be made by the Genzyme Board or a committee thereof without
participation by the interested director. Notwithstanding this policy, it is
-12-
<PAGE> 14
possible that a conflict of interest may affect the actions of a director in
performing his duties on the Genzyme Board.
POSSIBLE VOLATILITY OF SHARE PRICE AND ABSENCE OF DIVIDENDS. The market
prices for securities of biotechnology companies have been volatile. Factors
such as announcements of technological innovations or new commercial products by
Genzyme or its competitors, governmental regulation, patent or proprietary
rights developments, public concern as to the safety or other implications of
biotechnology products and market conditions in general may have a significant
impact on the market price of General Division Stock. No cash dividends have
been paid on General Division Stock to date and Genzyme does not anticipate
paying cash dividends on either class of its common stock in the foreseeable
future.
CHANGE IN CONTROL. Certain provisions of Genzyme's Articles of
Organization and By-Laws and the terms of Genzyme's Stockholder Rights Plan may
have the effect of delaying, deferring or preventing a change in control of
Genzyme, thereby possibly having the effect of depriving stockholders of the
opportunity to receive a premium for their shares. Certain provisions of
Massachusetts law may have a similar effect.
LEGAL PROCEEDINGS
On November 9, 1995, Genzyme was named as a defendant in a lawsuit
commenced in the United States District Court for the District of Massachusetts
by Michael Spielman, on his own behalf and purportedly on behalf of a class of
approximately two hundred others. Mr. Spielman was a limited partner of Genzyme
Clinical Partners, L.P. ("GCP"). The general partner of GCP was Genzyme
Development Corporation ("GDC"), a former subsidiary of Genzyme that was
dissolved in 1990 after the Company purchased the assets of GCP. The nature of
Mr. Spielman's claims is that Genzyme and GDC breached a duty to him (and other
limited partners) to provide certain tax information, and to subsequently notify
them of a potential state tax liability (that was previously disclosed) several
years after the dissolution of GCP. Genzyme has answered the complaint, denying
liability. No action has been taken by the court on the plaintiff's request to
certify the case as a class action. In February 1996 Genzyme filed a motion for
summary judgment, requesting that the court enter judgment for Genzyme on all
claims asserted in the complaint. The court denied this motion pending
discovery.
-13-
<PAGE> 15
PLAN OF DISTRIBUTION
GENERAL
The Notes were issued under an Indenture (the "Indenture") between the
Company and State Street Bank and Trust Company, as Trustee (the "Trustee").
The Notes are general unsecured obligations of the Company in an aggregate
principal amount of $100,000,000, subordinated to all existing and future Senior
Indebtedness, as defined in the Indenture. The Notes were issued in
denominations of $1,000 and integral multiples thereof in fully registered form
only. The Notes will mature on October 1, 2001 and bear interest from October
11, 1991 at a rate of 6 3/4%. Interest is payable semiannually, on April 1 and
October 1, commencing April 1, 1992, to the registered holders of record on the
preceding March 15 and September 15, respectively. On February 20, 1996, the
Company provided notice to all holders of record of the Notes as of such date
calling the entire principal amount of the Notes for redemption on March 21,
1996 (the "Redemption Date") at a price of 102.893 of principal plus accrued
interest to the Redemption Date.
CONVERSION RIGHTS
The Notes are convertible at their principal amount into common stock at
any time prior to the close of business on the fifth business day (March 14,
1996) prior to the Redemption Date, initially at a conversion price of $52.875
subject to adjustment as described below. Prior to December 16, 1994, Genzyme
had one class of common stock. On December 16, 1994, the authorized shares of
Genzyme common stock were redesignated as General Division Stock, a second class
of common stock, TR Stock, was authorized and .135 of one share of TR Stock was
distributed by Genzyme for each share of General Division Stock held of record
as of December 16, 1994. In connection with the redesignation of the common
stock and the distribution of the TR Stock, the conversion privilege of the
Notes was adjusted to provide that upon conversion of any Note, the holder
thereof shall receive (i) a number of shares of General Division Stock equal to
the number of shares of Genzyme common stock into which the Note was previously
convertible and (ii) .135 of one share of TR Stock for each share of General
Division Stock issuable upon such conversion. As noted above, the right to
convert Notes which are called for redemption or which are to mature will
terminate at the close of business on the fifth business day immediately
preceding the redemption or maturity date and will be lost if not exercised
prior to that time, even if redemption occurs at a time when conversion of the
Notes or portion thereof is in the best interests of the holder. The conversion
privilege and price is subject to adjustment upon the occurrence of certain
events, including (i) the issuance of capital stock of the Company as a dividend
(or other distribution) on the common stock, (ii) the distribution to all
holders of common stock of rights or warrants entitling them to subscribe for or
purchase common stock at less than the current market price (as defined in the
Indenture) on the record date for such issuance, (iii) subdivisions,
combinations and certain reclassifications of common stock, and (iv) the
distribution to all holders of common stock of cash, debt securities or other
assets (including other evidences of indebtedness), except to the extent paid
out of current or accumulated earnings. A purchase of common stock by the
Company pursuant to a cash tender offer to all holders of common stock shall be
deemed to be a distribution of cash for purposes of (iv) above.
No adjustment in the conversion price is required unless such adjustment
would require a change of at least 1% in the conversion price then in effect;
provided that any adjustment that would otherwise be required to be made shall
be carried forward and taken into account in any subsequent adjustment. No
adjustment need be made, however, if holders of the Notes are entitled to
participate in any such event on a basis the Company's Board of Directors
determines to be fair and appropriate under the circumstances. The Company from
time to time may voluntarily reduce the conversion price for a period of at
least twenty days. Fractional shares of common stock will not be issued upon
conversion, but, in lieu thereof, the Company will pay a cash adjustment based
upon the market price of the common stock. No payment or adjustment will be
made for interest accrued on a converted Note, or for dividends or distributions
on any common stock issued upon conversion of any Note.
-14-
<PAGE> 16
If the Company consolidates with or merges into or transfers or leases
all or substantially all of its assets to any person, or is a party to a merger
that reclassifies or changes its outstanding common stock, the holder of each
Note then outstanding has the right after such consolidation, merger, transfer
or lease to convert such Note into the kind and amount of shares of stock, other
securities or property (which may include cash), that such holder would have
been entitled to receive upon such consolidation, merger, transfer or lease if
such holder had held the common stock issuable upon the conversion of such Note
immediately prior to such consolidation, merger, transfer or lease.
REDEMPTION RIGHTS
The Notes are redeemable at Genzyme's option, in whole or in part, on or
after October 1, 1993 at a redemption price which is a premium of the principal
amount outstanding, starting at 104.821% of principal amount until October 1,
1994 and decreasing to 100% on October 1, 1998 and thereafter. In the event of
certain fundamental changes in the control, management or capital structure of
the Company, the Notes are redeemable at the option of the holder at 100% of the
principal amount thereof, plus accrued interest. The Indenture defines a
"Fundamental Change" generally to mean (i) a person or group becoming the
beneficial owner of more than 50% of the total voting power of all outstanding
voting shares of the Company, (ii) a change in a majority of the Board of
Directors of the Company in a two-year period, (iii) any consolidation of the
Company with, or merger of the Company into, any other person, any merger of
another person into the company, or any sale or transfer of all or substantially
all of the assets of the Company to another person, (iv) the acquisition by the
Company in a twelve month period, directly or indirectly, of beneficial
ownership of its voting shares exceeding 30% of all voting shares of the
Company, or (v) certain distributions by the Company of cash, securities or
other property in respect of its common stock or certain purchases by the
Company or any subsidiary of the Company of common stock of the Company.
CONVERSION PROCEDURE
The holder of a Note may convert the Note into common stock at any time
before the close of business on the fifth business day immediately preceding its
maturity date. If the Note is called for redemption as provided above, the
holder may convert such Note at any time before the close of business on the
fifth business day immediately preceding the redemption date. The initial
conversion price is $52.875 per share of General Division Stock, subject to
adjustment as described above. The number of shares of General Division Stock
issuable upon conversion of a Note is determined by dividing the principal
amount to be converted by the conversion price in effect on the conversion date.
In addition, .135 of one share of TR Stock will be issued for each share of
General Division Stock issued upon conversion. Upon conversion, no payment or
adjustment for accrued interest on a converted Note (other than the payment of
interest to the holder of a Note at the close of business on a record date for
establishing those holders entitled to interest payments on the interest payment
date) or for dividends or distributions on the common stock will be made. The
Company will deliver a check for the current market value of any fractional
share issuable upon conversion. The current market value of a fraction of a
share is determined by multiplying the current market price of a full share by
the fraction, and rounding the result to the nearest cent. The current market
price of a share of General Division Stock and TR Stock is the quoted price of
the common stock on the last trading day prior to the conversion date.
To convert a Note held in book-entry form, a holder must (1) complete
the appropriate instruction form for conversion pursuant to The Depository Trust
Company's book-entry conversion program, (2) deliver to the Conversion Agent (as
defined in the Indenture and the Note), by book-entry delivery, the interest in
the Note in global form to be converted, (3) furnish the appropriate
endorsements and transfer documents if required by the Registrar or the
Conversion Agent (each as defined in the Indenture or the Note), and (4) pay any
transfer or similar tax if required.
To convert a Note held in definitive form, a holder must (1) complete
and sign the conversion notice on the back of the Note, (2) surrender the Note
to the Conversion Agent, (3) furnish appropriate endorsements and
-15-
<PAGE> 17
transfer documents if required by the Registrar or Conversion Agent, and (4)
pay any transfer or similar tax if required.
A holder may convert a portion of a Note, held in book-entry or
definitive form, if the portion is $1,000 or an integral multiple of $1,000.
TRANSFERABILITY
The shares issuable upon conversion of the Notes will be freely
transferable in the hands of persons other than affiliates of Genzyme. The
General Division Stock is listed on The Nasdaq National Market under the symbol
"GENZ," and the TR Stock is listed on The Nasdaq National Market under the
symbol "GENZL."
MANAGEMENT AND ACCOUNTING POLICIES GOVERNING
THE RELATIONSHIP OF GENZYME DIVISIONS
Genzyme has adopted the following policies to govern the management of
GTR and its relationship to the General Division. Except as otherwise stated
below, the policies may be modified or rescinded in the sole discretion of the
Board without approval of Genzyme stockholders, subject only to the Board's
fiduciary duty to Genzyme's stockholders. The Board may also adopt additional
policies depending upon the circumstances. Any determination of the Board to
modify or rescind such policies, or to adopt additional policies, including any
such decision that would have disparate impacts upon holders of the two classes
of common stock, would be governed by the principles of Massachusetts law
discussed under "Risk Factors - Risks Related to Two Classes of Common Stock -
No Rights or Additional Duties with Respect to the Divisions; Potential
Conflicts." In addition, generally accepted accounting principles require that
any change in policy be preferable (in accordance with such principles) to the
previous policy.
PURPOSE OF GTR. The purpose of GTR is to create a business with a
comprehensive approach to the field of tissue repair by developing and
commercializing a portfolio of novel products for the treatment and prevention
of serious tissue injury (excluding products developed on behalf of Genzyme
Development Partners, L.P.). In addition to the programs initially assigned to
GTR, it is expected that the GTR portfolio will expand through the addition of
complementary products and programs developed either internally or externally to
the division, including acquiring or in-licensing from outside of Genzyme.
Other than the method of financing, GTR is operated and managed similarly to
other Genzyme divisions.
REVENUE ALLOCATION. Revenues from the sale of a division's products are
credited to that division. The cost of research done by one division for the
benefit of another division is charged to the division for which the work is
done in the manner described in the following paragraph. The division
performing the research does not recognize revenue as a result of such research.
EXPENSE ALLOCATION. All direct expenses are charged to the division for
the benefit of which they are incurred. Corporate and general and
administrative expenses and other shared services or other indirect costs are
allocated to each division in a reasonable and consistent manner based on
utilization by the division of the services to which such costs relate. To the
extent borrowings are deemed to occur between divisions, inter-division accounts
will be established with interest imputed at the rate then available to Genzyme
for short-term borrowings.
TAX ALLOCATIONS. Income taxes are allocated to each division based upon
the financial statement income, taxable income, credits and other amounts
properly allocable to such division under generally accepted accounting
principles as if each division were a separate taxpayer; provided, however, that
as of the end of any fiscal quarter of Genzyme, any projected tax benefit
attributable to any division that cannot be utilized by such division to offset
or reduce its current or deferred income tax expense may be allocated to any
other division without any compensating payment or allocation.
-16-
<PAGE> 18
ACQUISITIONS OF PROGRAMS, PRODUCTS OR ASSETS. Upon the acquisition by
Genzyme from a third party of any additional programs, products or assets
(whether by acquisition of assets or stock, merger, consolidation or otherwise),
the aggregate cost of the acquisition and the programs, products or assets
acquired will be allocated among the divisions to which such programs, products
or assets are assigned. Such assignment and allocation will be made by the
Board taking into account such matters as the Board and its financial advisors,
if any, deem relevant. Any such determination by the Board will be final and
binding on all holders of all classes of common stock.
DISPOSITION OF PROGRAMS, PRODUCTS OR ASSETS. Upon any sale, transfer,
assignment or other disposition by Genzyme of any product, program or asset not
consisting of all or substantially all of the assets of a division, all proceeds
from such disposition will be allocated to the division to which the program,
product or asset had been allocated, and such proceeds will be used for the
benefit of such division. If a program, product or asset is allocated to more
than one division, the proceeds of the disposition will be allocated among such
divisions based on their respective interests in such program, product or asset.
Such allocation will be made by the Board taking into account such matters that
the Board and its financial advisors, if any, deem relevant. Any such
determination by the Board will be final and binding on all holders of all
classes of common stock.
INTER-DIVISION ASSET TRANSFERS. The Board may at any time and from time
to time reallocate any program, product or other asset from one division to any
other division. All such reallocations will be done at fair market value,
determined by the Board, taking into account, in the case of a program under
development, the commercial potential of such program, the phase of clinical
development of such program, the expenses associated with realizing any income
from such program, the likelihood and timing of any such realization and other
matters that the Board and its financial advisors deem relevant. The
consideration for such reallocation may be paid by one division to another in
cash or, in lieu of cash or other consideration, the Board may elect to account
for a reallocation of assets from GTR to the General Division as an increase in
the number of General Designated Shares and a reallocation of assets from the
General Division to GTR as either an increase in the number of TR Designated
Shares or a reduction in the General Designated Shares, if any, except that a
reallocation of assets from GTR to the General Division may not be accounted for
as an increase in General Designated Shares without a class vote of the holders
of the TR Stock.
Notwithstanding the foregoing, no Key TR Program, as defined below, may
be transferred out of GTR without a class vote of the holders of TR Stock unless
the Board determines that such Key TR Program has application outside of the
field of tissue repair (in which case it may be transferred out only for the
non-tissue repair applications). A "Key TR Program" is any of the following:
(i) Vianain [registered trademark] Debriding Product for debridement of necrotic
or damaged tissue; (ii) TGF-[Beta]2 for all indications licensed from Celtrix
Pharmaceuticals, Inc. as of December 16, 1994; (iii) Epicel [SM] cultured
epithelial cell autografts for tissue replacement or repair; (iv) Acticel [SM]
cultured epithelial cell allografts for tissue replacement or repair; (v)
CARTICEL [SM] Autologous Chondrocyte Service; and (vi) any additional tissue
repair program or product being developed from time to time in GTR which (a)
constituted 20% or more of the research and development budget of GTR in any of
three most recently completed fiscal years or (b) has had a cumulative
investment of $8 million or more in research and development expenses by GTR.
The foregoing policies regarding transfers of assets between divisions
may not be changed by the Board without a class vote of the holders of TR Stock.
ACCESS TO TECHNOLOGY AND KNOW-HOW. GTR and the General Division each have free
access to all technology and know-how of Genzyme that may be useful in such
division's business, subject to any obligations or limitations applicable to
Genzyme.
DISPOSITION OF TR DESIGNATED SHARES. The TR Designated Shares may be (i) issued
upon the exercise of outstanding stock options and warrants and the conversion
of outstanding convertible notes allocated to the General
-17-
<PAGE> 19
Division, (ii) subject to the restrictions set forth in the following
paragraph, sold for any valid business purpose, or (iii) distributed as a
dividend to the holders of shares of General Division Stock, all as determined
from time to time by the Board in its sole discretion. Genzyme distributed
approximately 3.4 million of the initial 5.0 million TR Designated Shares as a
stock dividend to holders of Genzyme common stock of record on December 16,
1994, and reserved the remaining 1.6 million initial TR Designated Shares for
issuance upon the exercise or conversion of stock options, warrants and
convertible notes outstanding as of December 15, 1994. To the extent that any
such remaining initial TR Designated Shares are not used for such purposes, the
Board may issue them for any other valid business purposes without crediting any
proceeds to GTR.
ISSUANCE OF ADDITIONAL SHARES OF ANY CLASS OF GENERAL DIVISION STOCK.
If additional shares of any class of common stock are issued and sold by
Genzyme, Genzyme will identify (i) the number of such shares issued and sold
for the account of the division to which they relate, the proceeds of which
will be allocated to and reflected in the financial statements of such division
and (ii) the number of such shares issued and sold that will reduce the number
of Designated Shares from such division and the proceeds of which may be used
for any valid business purpose. Notwithstanding the foregoing, Genzyme will
not sell any shares of TR Stock without allocating the proceeds to GTR (except
upon exercise or conversion of options, warrants or convertible notes
outstanding as of December 16, 1994) unless (i) the Board determines that GTR
has cash sufficient to fund its operations for at least the next 12 months or
(ii) shares of TR Stock concurrently being sold for the account of GTR will
produce proceeds sufficient to fund GTR's cash needs for the next 12 months.
RESERVATION OF SHARES OF TR STOCK. Genzyme has reserved approximately
2,000,000 shares of TR Stock for issuance to Genzyme employees pursuant to
grants made after December 15, 1994 under one or more employee incentive plans.
OPEN MARKET PURCHASES OF SHARES OF ANY CLASS. Genzyme may make open
market purchases of any class of its common stock in accordance with applicable
securities law requirements; provided, however, that such purchases of TR Stock
may not be made if as an immediate result thereof the number of TR Designated
Shares would represent more than 60% of the number of TR Designated Shares plus
the number of outstanding shares of TR Stock. Such restriction is intended to
prevent Genzyme from using open market purchases to effect a redemption of the
TR Stock without paying the 30% premium required for a complete redemption of
TR Stock under the terms of Genzyme's Articles of Organization. In addition,
within 90 days of any open market purchase of any class of common stock,
Genzyme may not exchange shares of such class for cash or shares of any other
class of common stock.
CLASS VOTING. In addition to any shareholder approval required by
Massachusetts law, whenever the approval of the holders of a class of common
stock is required to take any action pursuant to these policies or Genzyme's
Articles of Organization, such requirement will be satisfied if a meeting of
the holders of such class is held at which a quorum is present and the votes
cast in favor of the proposed action exceed the votes cast against.
NON-COMPETE. Genzyme will not develop products outside of GTR that
compete or would compete in the market with products being developed or sold by
GTR.
-18-
<PAGE> 20
EXPERTS
The consolidated financial statements and financial statement schedule
of Genzyme Corporation, the combined financial statements of Genzyme General
Division and the combined financial statements of Genzyme Tissue Repair
Division as of December 31, 1993 and 1994 and for each of the three years in
the period ended December 31, 1994 included in Genzyme's Annual Report on Form
10-K for the year ended December 31, 1994, as amended by Amendments No. 1 and 2
thereto on Form 10-K/A, incorporated by reference in this Prospectus have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The financial statements and financial statement schedules of
BioSurface Technology, Inc. as of December 31, 1992 and 1993 and for each of
the three years in the period ended December 31, 1993, appearing at pages
III-19 to III-42 of Annex III to the Company's Registration Statement on Form
S-4 (File No. 33-83346), that have been incorporated by reference into this
Prospectus have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of that firm as
experts in accounting and auditing.
LEGAL OPINIONS
The validity of the common stock to be issued upon conversion of the
Notes will be passed upon for Genzyme by Palmer & Dodge, Boston, Massachusetts.
Peter Wirth, a partner at Palmer & Dodge, is a Senior Vice President, the
General Counsel and the Clerk of Genzyme. As of February 1, 1996, Mr. Wirth
beneficially owned 5,611 shares of General Division Stock and 2,500 shares of
TR Stock subject to options exercisable within 60 days.
-19-
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
The expenses to be borne by the Company in connection with this offering are as follows:
<CAPTION>
<S> <C>
SEC registration fee. . . . . . . . . $31,250
Blue Sky fees and expenses. . . . . . $ 5,000
Legal fees and expenses . . . . . . . $ 7,500
Miscellaneous expenses. . . . . . . . $ 3,750
-------
Total. . . . . . . . . . . . . . . $47,500
=======
<FN>
All of the above figures, except the SEC registration fee, are estimates.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 67 of chapter 156B of the Massachusetts Business Corporation Law
grants Genzyme the power to indemnify any director, officer, employee or agent
to whatever extent permitted by Genzyme's Articles of Organization, By-Laws or a
vote adopted by the holders of a majority of the shares entitled to vote
thereon, unless the proposed indemnitee has been adjudicated in any proceeding
not to have acted in good faith in the reasonable belief that his or her actions
were in the best interests of the corporation or, to the extent that the matter
for which indemnification is sought relates to service with respect to an
employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan. Such indemnification may include
payment by Genzyme of expenses incurred in defending a civil or criminal action
or proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he or she shall be adjudicated to be not entitled to indemnification under
the statute.
Article VI of Genzyme's By-Laws provides that Genzyme shall, to the
extent legally permissible, indemnify each person who may serve or who has
served at any time as a director or officer of the corporation or of any of its
subsidiaries, or who at the request of the corporation may serve or at any time
has served as a director, officer or trustee of, or in a similar capacity with,
another organization or an employee benefit plan, against all expenses and
liabilities (including counsel fees, judgments, fines, excise taxes, penalties
and amounts payable in settlements) reasonably incurred by or imposed upon such
person in connection with any threatened, pending or completed action, suit or
other proceeding, whether civil, criminal, administrative or investigative, in
which he or she may become involved by reason of his or her serving or having
served in such capacity (other than a proceeding voluntarily initiated by such
person unless he or she is successful on the merits, the proceeding was
authorized by the corporation or the proceeding seeks a declaratory judgment
regarding his or her own conduct). Such indemnification shall include payment
by Genzyme of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he or she shall be adjudicated to be not entitled to indemnification under
Article VI, which undertaking may be accepted without regard to the financial
ability of such person to make repayment.
The indemnification provided for in Article VI is a contract right
inuring to the benefit of the directors, officers and others entitled to
indemnification. In addition, the indemnification is expressly not exclusive of
any other rights to which such director, officer or other person may be entitled
by contract or otherwise under law, and inures to the benefit of the heirs,
executors and administrators of such a person.
II-1
<PAGE> 22
Genzyme also has in place agreements with certain officers and directors
which affirm Genzyme's obligation to indemnify them to the fullest extent
permitted by law and contain various procedural and other provisions which
expand the protection afforded by Genzyme's By-Laws.
Section 13(b)(1 1/2) of chapter 156B of the Massachusetts Business
Corporation Law provides that a corporation may, in its articles of
organizatwion, eliminate a director's personal liability to the corporation and
its stockholders for monetary damages for breaches of fiduciary duty, except in
circumstances involving (i) a breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
unauthorized distributions and loans to insiders and (iv) transactions from
which the director derived an improper personal benefit. Section VI.C.5. of
Genzyme's Articles of Organization provides that no director shall be personally
liable to the corporation or its stockholders for monetary damages for any
breach of fiduciary duty as a director, except to the extent that such
exculpation is not permitted under the Massachusetts Business Corporation Law as
in effect when such liability is determined.
<TABLE>
ITEM 16. EXHIBITS
<CAPTION>
<S> <C>
4.1 Articles of Organization, as amended, of Genzyme. Filed as Exhibit 3.1 to Genzyme's Form 10-K for the year ended December
31, 1994, and incorporated herein by reference.
4.2 By-laws of Genzyme. Filed as Exhibit 3.2 to Genzyme's Form 8-K dated December 31, 1991, and incorporated herein by
reference.
4.3 Amended and Restated Rights Agreement dated as of October 13, 1994 between Genzyme and American Stock Transfer and
Trust Company. Filed as Exhibit 4 to Genzyme's Form 8-K dated December 29, 1994, and incorporated herein by reference.
*5 Opinion of Palmer & Dodge.
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants to Genzyme Corporation. Filed herewith.
23.2 Consent of Price Waterhouse LLP, independent accountants to BioSurface Technology, Inc. Filed herewith.
*23.3 Consent of Palmer & Dodge (contained in Exhibit 5).
*24.1 Power of Attorney (included in the signature pages hereto).
*24.2 Certified Copy of Board Resolution authorizing signatures pursuant to Power of Attorney.
<FN>
* Previously filed on January 8, 1992 as the same numbered exhibit to this Registration Statement on Form S-3 (File No. 33-44960).
</TABLE>
II-2
<PAGE> 23
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for the purpose of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions referred to in Item 15 of
this registration statement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the financial adjudication of such issue.
II-3
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and has duly caused this
Post-Effective Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Cambridge,
Commonwealth of Massachusetts, on March 8, 1996.
GENZYME CORPORATION
By: * Henri A. Termeer
---------------------------
Henri A. Termeer, President
POWER OF ATTORNEY
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C> <C>
* Henri A. Termeer Director and Principal March 8, 1996
- ---------------------------------- Executive Officer
Henri A. Termeer
/s/ David J. McLachlan Principal Financial and March 8, 1996
- ---------------------------------- Accounting Officer
David J. McLachlan
* Constantine E. Anagnostopoulos Director March 8, 1996
- ----------------------------------
Constantine E. Anagnostopoulos
* Douglas A. Berthiaume Director March 8, 1996
- ----------------------------------
Douglas A. Berthiaume
* Henry E. Blair Director March 8, 1996
- ----------------------------------
Henry E. Blair
* Robert J. Carpenter Director March 8, 1996
- ----------------------------------
Robert J. Carpenter
* Charles L. Cooney Director March 8, 1996
- ----------------------------------
Charles L. Cooney
* Henry R. Lewis Director March 8, 1996
- ----------------------------------
Henry R. Lewis
* By:/s/ David J. McLachlan
----------------------------------
David J. McLachlan
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 25
<TABLE>
EXHIBIT INDEX
-------------
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NO.
- ------- ----------- ----------
<S> <C>
4.1 Articles of Organization, as amended, of Genzyme. Filed as Exhibit 3.1 to Genzyme's Form 10-K for
the year ended December 31, 1994, and incorporated herein by reference.
4.2 By-laws of Genzyme. Filed as Exhibit 3.2 to Genzyme's Form 8-K dated December 31, 1991, and
incorporated herein by reference.
4.3 Amended and Restated Rights Agreement dated as of October 13, 1994 between Genzyme and
American Stock Transfer and Trust Company. Filed as Exhibit 4 to Genzyme's Form 8-K dated
December 29, 1994, and incorporated herein by reference.
*5 Opinion of Palmer & Dodge.
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants to Genzyme Corporation. Filed herewith.
23.2 Consent of Price Waterhouse LLP, independent accountants to BioSurface Technology, Inc. Filed
herewith.
*23.3 Consent of Palmer & Dodge (contained in Exhibit 5).
*24.1 Power of Attorney (included in the signature pages hereto).
*24.2 Certified Copy of Board Resolution authorizing signatures pursuant to Power of Attorney.
<FN>
* Previously filed on January 8, 1992 as the same numbered exhibit to this Registration Statement on Form S-3,
File No. 33-44960.
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Genzyme Corporation on the Post-Effective Amendment No. 1 to Form S-3
(Registration No. 33-44960) of our reports dated March 1, 1995 on our audits
of the consolidated financial statements and financial statement schedule of
Genzyme Corporation, the combined financial statements of Genzyme General
Division and the combined financial statements of Genzyme Tissue Repair Division
as of December 31, 1993 and 1994 and for each of the three years in the period
ended December 31, 1994, which reports are included in Genzyme Corporation's
1994 Annual Report on Form 10-K, as amended by Amendments Nos. 1 and 2 thereto
on Form 10-K/A.
We also consent to the reference to our firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 8, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Genzyme
Corporation of our report dated February 8, 1994, except as to Note 11, which is
as of July 25, 1994 relating to the financial statements of BioSurface
Technology, Inc. as of December 31, 1992 and 1993 and for each of the three
years in the period ended December 31, 1993, appearing on page III-20 of Annex
III to the Prospectus/Joint Proxy Statement included in Genzyme Corporation's
Registration Statement on Form S-4 (No. 33-83346).
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ PRICE WATERHOUSE, LLP
Boston, Massachusetts
March 8, 1996
