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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
COMMISSION FILE NO. 0-14680
------------------------
GENZYME CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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MASSACHUSETTS 06-1047163
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
ONE KENDALL SQUARE 02139
CAMBRIDGE, MASSACHUSETTS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
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(617) 252-7500
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
------------------------------
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
GENZYME GENERAL DIVISION COMMON STOCK, $0.01 PAR VALUE ("GENZYME GENERAL STOCK")
GENZYME MOLECULAR ONCOLOGY DIVISION COMMON STOCK, $0.01 PAR VALUE ("MOLECULAR
ONCOLOGY STOCK")
GENZYME SURGICAL PRODUCTS DIVISION COMMON STOCK, $0.01 PAR VALUE ("SURGICAL
PRODUCTS STOCK")
GENZYME TISSUE REPAIR DIVISION COMMON STOCK, $0.01 PAR VALUE ("TISSUE REPAIR
STOCK")
GENZYME GENERAL STOCK PURCHASE RIGHTS
MOLECULAR ONCOLOGY STOCK PURCHASE RIGHTS
SURGICAL PRODUCTS STOCK PURCHASE RIGHTS
TISSUE REPAIR STOCK PURCHASE RIGHTS
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES /X/ NO / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K / /.
Aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 1, 2000:
$5,874,532,711
Number of shares of the Registrant's Genzyme General Stock outstanding as of
March 1, 2000: 84,710,732
Number of shares of the Registrant's Molecular Oncology Stock outstanding as of
March 1, 2000: 13,514,512
Number of shares of the Registrant's Surgical Products Stock outstanding as of
March 1, 2000: 14,854,067
Number of shares of the Registrant's Tissue Repair Stock outstanding as of
March 1, 2000: 28,524,138
------------------------
DOCUMENTS INCORPORATED BY REFERENCE
The consolidated financial statements and related notes of Genzyme
Corporation and the combined financial statements and related notes of Genzyme
General, Genzyme Molecular Oncology, Genzyme Surgical Products and Genzyme
Tissue Repair contained in Exhibits 13.1 through 13.5 of this Form 10-K are
incorporated by reference into Parts I and II of this Form 10-K. Portions of the
Registrant's Proxy Statement for the Annual Meeting of Stockholders held on
May 25, 2000 are incorporated by reference into Part III of this Form 10-K.
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NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-K contains forward-looking statements, including statements
regarding our:
- Projected timetables for the preclinical and clinical development of,
regulatory submissions and approvals for, and market introduction of our
products and services;
- Estimates of the potential markets for our products and services;
- Sales and marketing plans;
- Assessments of competitors and potential competitors;
- Estimates of the capacity of manufacturing and other facilities to support
our products and services;
- Planned creation of a new division;
- Planned acquisition of Biomatrix, Inc.;
- Expected future revenues, operations and expenditures; and
- Projected cash needs.
These statements are based upon the current assumptions of our management and
are only expectations of future results. These statements are subject to risks
and uncertainties, and our actual results may differ significantly from those
that are described in this Form 10-K. These risks and uncertainties include:
- Our ability to successfully complete preclinical and clinical development
of our products and services;
- Our ability to manufacture sufficient amounts of our products for
development and commercialization activities;
- Our ability to obtain and maintain adequate patent and other proprietary
rights protection of our products and services;
- The content and timing of decisions made by the FDA and other regulatory
agencies;
- The accuracy of our estimates of the size and characteristics of the
markets to be addressed by our products and services;
- Market acceptance of our products and services;
- Our ability to obtain reimbursement for our products and services from
third-party payors;
- Our ability to establish and maintain licenses, strategic collaborations
and distribution arrangements;
- The continued funding of our joint ventures;
- The accuracy of our information regarding the products and resources of
our competitors and potential competitors; and
- The likelihood that the regulatory and other approvals required to create
a new division and to complete the Biomatrix acquisition will be obtained.
We have included more detailed descriptions of these risks and uncertainties
in Exhibit 99.2, "Factors Affecting Future Operating Results," to this
Form 10-K. We encourage you to read those descriptions carefully.
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NOTE REGARDING REFERENCES TO GENZYME DIVISIONS
Throughout this Form 10-K, the words "we," "us," "our" and "Genzyme" refer
to Genzyme Corporation and all of its operating divisions taken as a whole, and
"our board of directors" refers to the board of directors of Genzyme
Corporation. In addition, we refer to our four operating divisions as follows:
- Genzyme General Division = "Genzyme General;"
- Genzyme Molecular Oncology Division = "Genzyme Molecular Oncology;"
- Genzyme Surgical Products Division = "Genzyme Surgical Products;" and
- Genzyme Tissue Repair Division = "Genzyme Tissue Repair."
NOTE REGARDING INCORPORATION BY REFERENCE
The Securities and Exchange Commission allows us to disclose important
information to you by referring you to other documents we have filed with the
SEC. The information that we refer you to is "incorporated by reference" into
this Form 10-K. Please read that information.
NOTE REGARDING TRADEMARKS
Genzyme-Registered Trademark-, Cerezyme-Registered Trademark-,
Ceredase-Registered Trademark-, Thyrogen-Registered Trademark-,
N-geneous-REGISTERED TRADEMARK- LDL, N-geneous-REGISTERED TRADEMARK- HDL,
Contrast-REGISTERED TRADEMARK-, InSight-Registered Trademark-,
MASDA-Registered Trademark-, Sepra Film-Registered Trademark-,
Pleur-evac-Registered Trademark-, Thora-Klex-Registered Trademark-,
Tevdek-Registered Trademark-, Polydek-Registered Trademark-,
Deklene-REGISTERED TRADEMARK-, Cohn Cardiac Immobilizer-REGISTERED TRADEMARK-,
SaphLITE-REGISTERED TRADEMARK-, Sepragel-REGISTERED TRADEMARK-,
Diamond-Line-REGISTERED TRADEMARK-, Diamond-Flex-REGISTERED TRADEMARK-,
Diamond-Touch-REGISTERED TRADEMARK- and Carticel-REGISTERED TRADEMARK- are
registered trademarks of Genzyme. Fabrazyme-TM-, Afp4-TM-, GlyPro-TM-, SAGE-TM-,
EndoCABG-TM-, Sahara-TM-, Genzyme OPCAB Elite-TM-, Cohn Cardiac Stabilizer-TM-,
Switch-Blade-TM-, Seprafilm-TM-, Sepracoat-TM-, Sepramesh-TM-, Seprapack-TM-, CV
Seprafilm-TM-, Epicel-TM- and QuickTack-TM- are trademarks of Genzyme.
Genzyme-Registered Trademark- is a service mark of Genzyme.
Renagel-Registered Trademark- is a registered trademark of GelTex
Pharmaceuticals, Inc. NeuroCell-TM--PD and NeuroCell-TM--HD are trademarks of
Diacrin, Inc. FocalSeal-Registered Trademark--L is a registered trademark of
Focal, Inc. Provisc-Registered Trademark- is a registered trademark of Alcon
Laboratories, Inc. Pulmozyme-Registered Trademark- is a registered trademark of
Genentech, Inc. AVONEX-Registered Trademark- is a registered trademark of
Biogen, Inc. Synvisc-REGISTERED TRADEMARK- is a registered trademark of
Biomatrix, Inc. Aldurazyme-TM- is a trademark of BioMarin/Genzyme LLC.
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TABLE OF CONTENTS
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PART I
ITEM 1. BUSINESS.................................................... 5
General..................................................... 5
Recent Development.......................................... 5
Genzyme General--Products and Development Programs.......... 6
Genzyme Molecular Oncology--Development Programs and
Services.................................................... 11
Genzyme Surgical Products--Products and Development
Programs.................................................... 14
Genzyme Tissue Repair--Products and Development Programs.... 17
Competition................................................. 18
Patents, License Agreements and Trademarks.................. 22
Government Regulation....................................... 23
Employees................................................... 26
Research and Development Costs.............................. 26
Sales by Geographic Area, Significant Customers and
Products.................................................... 26
ITEM 1A. EXECUTIVE OFFICERS.......................................... 27
ITEM 2. PROPERTIES.................................................. 28
ITEM 3. LEGAL PROCEEDINGS........................................... 30
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 30
PART II
MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS......................................... 31
ITEM 5.
ITEM 6. SELECTED FINANCIAL DATA..................................... 33
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................... 33
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK........................................................ 33
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................. 33
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.................................... 34
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......... 34
ITEM 11. EXECUTIVE COMPENSATION...................................... 34
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.................................................. 34
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 34
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K......................................................... 35
14(a)(1) Financial Statements............................... 35
14(a)(2) Financial Statement Schedules...................... 36
14(a)(3) Exhibits........................................... 37
14(b) Reports on Form 8-K................................... 37
14(c) Exhibits.............................................. 37
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PART I
ITEM 1. BUSINESS
GENERAL
We are a biotechnology company that develops innovative products and
services for major unmet medical needs. We were founded in 1981 and became a
Massachusetts corporation in 1991. We currently have four operating divisions.
We also have four series of common stock -- or "tracking" stock -- which are
designed to reflect the value and track the financial performance of our
divisions. Our four divisions and the series of stock designed to track them
are:
- Genzyme General, which develops and markets therapeutic products and
diagnostic products and services, with an emphasis on therapies for
genetic diseases. Genzyme General Stock, which is listed on the Nasdaq
National Market-TM- under the symbol "GENZ," is designed to reflect the
value and track the performance of Genzyme General.
- Genzyme Molecular Oncology, which is developing cancer products, with a
focus on cancer vaccines and angiogenesis inhibitors. It is shaping these
new therapies through the integration of its genomics, gene discovery,
cell therapy, gene therapy, small molecule drug discovery, and protein
therapeutic efforts. Molecular Oncology Stock, which is listed on Nasdaq
under the symbol "GZMO," is designed to reflect the value and track the
performance of Genzyme Molecular Oncology.
- Genzyme Surgical Products, which develops and markets a portfolio of
devices, biomaterials and biotherapeutics for the cardiothoracic and
general surgery markets. Surgical Products Stock, which is listed on
Nasdaq under the symbol "GZSP," is designed to reflect the value and track
the performance of Genzyme Surgical Products.
- Genzyme Tissue Repair, which develops and markets biological products for
orthopedic injuries, such as cartilage damage, and severe burns. Tissue
Repair Stock, which is listed on Nasdaq under the symbol "GZTR," is
designed to reflect the value and track the performance of Genzyme Tissue
Repair.
The divisions are not separate companies or legal entities. They are subsets
of Genzyme's operations among which we allocate all of our products, services,
programs, assets and liabilities for presentation purposes in our financial
statements. These separate, division-based financial statements do not represent
any physical segregation of assets or separate division accounts; they are an
accounting presentation only. Assets presented as allocated to a division remain
assets owned by the company and, therefore, remain subject to liabilities of
Genzyme as a whole, such as any company-wide claims of creditors, product
liability plaintiffs and stockholder litigation.
RECENT DEVELOPMENT
In March 2000, we entered into an agreement to acquire Biomatrix, Inc. Upon
the effectiveness of our Registration Statement on Form S-4 and completion of
the merger, we will form a new operating division called Genzyme Biosurgery and
create a new series of common stock designed to reflect its value and track its
performance. We refer to this stock as "Biosurgery Stock." In connection with
the merger, and upon Genzyme shareholder approval, the assets and liabilities
currently allocated to Genzyme Surgical Products and Genzyme Tissue Repair will
be reallocated to Genzyme Biosurgery and shares of Surgical Products Stock and
Tissue Repair Stock will be exchanged for Biosurgery Stock. We will account for
the acquisition of Biomatrix as a purchase.
Biomatrix stockholders will receive $37 in cash, one share of Biosurgery
Stock, or a combination of cash and stock for each share of Biomatrix Stock they
hold. The merger agreement provides that we will pay cash for only up to 28.38%
of the outstanding shares of Biomatrix common stock that receive merger
consideration, or up to approximately $245.0 million.
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Holders of Surgical Products Stock will receive 0.6060 share of Biosurgery
Stock in exchange for each share of Surgical Products Stock they hold and
holders of Tissue Repair Stock will receive 0.3352 share of Biosurgery Stock in
exchange for each share of Tissue Repair Stock they hold.
For more information about the merger and the merger consideration, we
encourage you to carefully read our Registration Statement on Form S-4 (File
No. 333-34972) filed with the SEC on April 18, 2000 and as amended from time to
time.
The acquisition is subject to:
- approval by Biomatrix's shareholders;
- approval by our shareholders, including separate approvals by the holders
of shares of Surgical Products Stock and Tissue Repair Stock; and
- other customary closing conditions.
GENZYME GENERAL--PRODUCTS AND DEVELOPMENT PROGRAMS
Genzyme General primarily consists of two business units, Therapeutics and
Diagnostics. The Therapeutics business unit focuses on developing and marketing
products for genetic diseases, including a family of diseases known as lysosomal
storage diseases, and specialty therapeutics. The Diagnostics business unit
develops, markets and distributes IN VITRO diagnostic products and genetic
testing services.
THERAPEUTICS
The Therapeutics business unit currently has three therapeutics products on
the market and several other products in varying stages of development. The
following chart contains information about many of these products and product
candidates.
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PRODUCT INDICATION STATUS COLLABORATOR OR LICENSOR
--------------------- --------------------- --------------------- ------------------------
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CEREDASE-REGISTERED TRADEMARK- Type I Gaucher Marketed since 1991 None
(ALGLUCERASE FOR disease and 1995,
INJECTION) AND respectively;
CEREZYME-REGISTERED TRADEMARK- available in 55
(IMIGLUCERASE FOR countries
INJECTION)
RENAGEL-REGISTERED TRADEMARK- Reduction of serum Marketed since 1998; GelTex Pharmaceuticals,
CAPSULES phosphorus in approved in the U.S. Inc.*
(SEVELAMER patients with in 1998, Israel in
HYDROCHLORIDE) end-stage renal 1999 and in Europe in
disease 2000
THYROGEN-REGISTERED TRADEMARK- Use in follow-up Marketed since 1998; None
HORMONE screening of patients approved in the U.S.
who have been treated in 1998 and Brazil in
for thyroid cancer 2000
FABRAZYME-TM- Fabry disease Pivotal trial None
(AFGALSIDASE BETA completed; BLA
FOR INJECTION) submission planned
for first half of
2000
TRANSGENIC Heparin resistance One Phase III trial Genzyme Transgenics
ANTITHROMBIN III successfully Corporation*
completed; a
confirmatory Phase
III trial ongoing
ALDURAZYME-TM- Mucopolysaccharidosis-I One Phase III trial BioMarin Pharmaceutical,
(ALRONIDASE FOR successfully Inc.*
INJECTION) completed; a
confirmatory Phase
III trial planned for
2000
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PRODUCT INDICATION STATUS COLLABORATOR OR LICENSOR
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RENAGEL-REGISTERED TRADEMARK- Dialysis Phase III trial GelTex Pharmaceuticals,
TABLETS ongoing Inc.*
RENAGEL-REGISTERED TRADEMARK- Hemodialysis (Europe) Phase III trial GelTex Pharmaceuticals,
CAPSULES ongoing Inc.*
AVONEX-REGISTERED TRADEMARK- Relapsing/remitting Pivotal trial planned Biogen, Inc.
(INTERFERON-BETA forms of multiple for first half of
1A) sclerosis in Japan 2000
NEUROCELL-TM--PD Parkinson's disease Phase II trial Diacrin, Inc.*
completed
NEUROCELL-TM--HD Huntington's disease Phase I trial Diacrin, Inc.*
completed
TRANSGENIC ALPHA- Pompe disease Phase II pilot trial Pharming Group N.V.*
GLUCOSIDASE in Europe ongoing
GENE THERAPY Gaucher disease Phase I trial ongoing University of Pittsburgh
DHA DERIVATIVE (GENZ Cystic fibrosis Clinical trial Beth Israel Deaconess
66055) planned for 2000 Medical Center
EPI-KAL2 Hereditary angioedema Clinical trial Dyax Corp.
planned for 2000
ACID SPHINGOMYELINASE Type B Niemann-Pick Clinical trial Mt. Sinai School of
disease planned for 2000 Medicine
PEPTIDE THERAPY Pemphigus vulgaris In development None (added program
through our acquisition
of Peptimmune, Inc. in
July 1999)
GENE THERAPY Cystic Fibrosis In development University of Michigan
and the Hospital for
Sick Children in
Toronto, Ontario
GENE THERAPY Lysosomal storage In development Genovo, Inc.
diseases
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* If you would like information about our strategic collaborations marked with
an asterisk, you should read Note I to our consolidated financial
statements, which we are incorporating into this discussion by reference.
Genzyme General also sells synthetic phospholipids, synthetic peptides and
amino acid derivatives, which are used in research as raw materials for
pharmaceutical manufacturers. It also produces and sells bulk hyaluronic acid
for a number of applications. Under an agreement with Alcon Laboratories, Inc.,
Genzyme General supplies pharmaceutical-grade hyaluronic acid powder to Alcon
for incorporation into Provisc-Registered Trademark-, an ophthalmic surgical aid
product. In addition, hyaluronic acid is sold to a number of customers for
various research and development applications.
We have provided more details on our therapeutic products and our late-stage
development programs below.
CEREZYME-REGISTERED TRADEMARK- (IMIGLUCERASE FOR
INJECTION)/CEREDASE-REGISTERED TRADEMARK- (ALGLUCERASE FOR
INJECTION). Treatment with Cerezyme-Registered Trademark- enzyme or
Ceredase-Registered Trademark- enzyme replacement therapy currently represents
the only safe and effective treatment available for Type I Gaucher disease, a
lysosomal storage disease. We entered the market in 1991 with
Ceredase-Registered Trademark- enzyme. Because production of
Ceredase-Registered Trademark- enzyme was subject to supply constraints, we
developed Cerezyme-Registered Trademark- enzyme, a recombinant form of human
alpha glucocerebrosidase, the enzyme that is deficient in Gaucher patients.
Recombinant technology uses specially engineered cells to produce enzymes, or
other substances, by inserting into cells of one organism the genetic material
of a different
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species. In the case of Cerezyme-Registered Trademark- enzyme, Chinese hamster
ovary cells are engineered to produce human alpha glucocerebrosidase. We stopped
producing Ceredase-Registered Trademark- enzyme, except for small quantities,
during 1998 after substantially all patients who previously used
Ceredase-Registered Trademark- enzyme were converted to
Cerezyme-Registered Trademark- enzyme.
Genzyme General is marketing these products directly to physicians,
hospitals and treatment centers worldwide through a highly trained sales force.
This marketing effort is directed at identifying and initiating treatment for
the estimated 5,000 Gaucher patients Genzyme General believes exist worldwide.
Genzyme General received marketing approval for Cerezyme-Registered Trademark-
enzyme in five countries as well as the 15 countries forming the European Union
and for Ceredase-Registered Trademark- enzyme in 13 countries. Our results of
operations are highly dependent on sales of these products. Sales of
Cerezyme-Registered Trademark- and Ceredase-Registered Trademark- enzymes
totaled approximately $479 million in 1999, which represented approximately 70%
of Genzyme's product revenue in that year. Sales of these products totaled
$411 million, or 67% of Genzyme's product revenue, in 1998 and $333 million, or
67% of Genzyme's product revenue, in 1997.
RENAGEL-REGISTERED TRADEMARK- (SEVELAMER
HYDROCHLORIDE). Renagel-Registered Trademark- capsules are used for the
reduction of serum phosphorus in patients with end-stage renal disease. There
are an estimated 280,000 end-stage renal failure patients in the United States,
approximately 95% of whom receive a phosphate control product. There are also an
estimated 170,000 end-stage renal failure patents in Europe. In connection with
our joint venture with GelTex Pharmaceuticals, Genzyme General is marketing
Renagel-Registered Trademark- capsules directly to nephrologists, renal
dieticians and payors through a dedicated sales force. It plans to launch
Renagel-Registered Trademark- capsules on a country-by-country basis in Europe
during 2000 following receipt of pricing and reimbursement approvals. Genzyme
General and GelTex Pharmaceuticals are also developing a new tablet form of the
RenaGel-Registered Trademark- product designed to have a higher potency and to
be smaller and more convenient than the capsule form.
THYROGEN-REGISTERED TRADEMARK- (THYROTROPIN ALFA FOR
INJECTION). Thyrogen-Registered Trademark- hormone was developed by Genzyme
General to allow patients to continue taking their thyroid hormone supplements
while they are being screened for metastases. This allows patients to avoid the
debilitating effects of hypothyroidism. In the United States, physicians order
approximately 135,000 thyroglobulin tests and 25,000 radioiodine imaging whole
body scans each year for thyroid cancer patients. Thyrogen-Registered Trademark-
hormone is being co-marketed in the United States under an agreement with Knoll
Pharmaceutical Company. Brazil has the highest incidence of thyroid cancer in
the developed world, outside of the United States. Physicians order
approximately 28,000 thyroglobulin tests and 12,000 radioiodine imaging whole
body scans each year in Brazil for thyroid cancer patients. Biobras S.A. will
exclusively distribute and market the product in Brazil.
FABRAZYME-TM- (ALGALSIDASE BETA FOR INJECTION). Fabrazyme-TM- enzyme is a
recombinant form of the human enzyme alpha-galactosidase. Genzyme General is
developing Fabrazyme-TM- enzyme as a treatment for Fabry disease. Fabry disease
is a lysosomal storage disease that is estimated to affect 1 in 40,000 males
worldwide, with an estimated 2,000 to 4,000 patients worldwide. Genzyme General
has completed a multi-center pivotal clinical trial of Fabrazyme-TM- enzyme and
intends to file for regulatory approval in the United States in the first half
of 2000.
ANTITHROMBIN III. Antithrombin III, also known as ATIII, is a protein
naturally produced by the body that, when bound to heparin, prevents blood
clotting. Genzyme General and Genzyme Transgenics are developing
transgenically-produced recombinant ATIII. Transgenic proteins are produced by
inserting human DNA into animal cells so that the target protein, or drug, is
secreted into the milk of female offspring during lactation. Genzyme General and
Genzyme Transgenics successfully completed a Phase III clinical trial of
transgenic ATIII to restore heparin sensitivity in heparin-resistant patients
undergoing elective heart surgery requiring cardiopulmonary bypass. An on going
confirmatory Phase III clinical trial is designed to compare transgenic ATIII to
plasma-derived ATIII and is scheduled to conclude in 2000. Genzyme currently
owns approximately 30% of the outstanding shares of Genzyme Transgenics common
stock.
ALDURAZYME-TM- (ALRONIDASE FOR INJECTION). Genzyme General's partner
BioMarin Pharmaceutical successfully completed a Phase III clinical trial of
Aldurazyme-TM- enzyme, a recombinant form of the human
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enzyme alpha-L-iduronidase. Aldurazyme-TM- enzyme is designed to treat a
lysosomal storage disease known as mucopolysaccharidosis I, or MPS-I. A
confirmatory Phase III clinical trial is scheduled for 2000. Approximately 2,000
to 3,000 people in the developed world have been diagnosed with MPS-I.
AVONEX-REGISTERED TRADEMARK- (INTERFERON-BETA 1A). In September 1998,
Genzyme entered into an agreement with Biogen Inc. under which Genzyme General
will commercialize and exclusively distribute AVONEX-Registered Trademark- in
Japan, following regulatory approval. AVONEX-Registered Trademark- is Biogen's
treatment for relapsing/remitting forms of multiple sclerosis. Genzyme General
is managing the clinical development program for AVONEX-Registered Trademark- in
Japan and is working to obtain registration and reimbursement approvals for the
product. Genzyme General estimates that there are at least 5,000 multiple
sclerosis patients in Japan.
Genzyme General has several other research and development programs in
process. It is dedicated to capitalizing on its expertise in proteins, gene and
cell therapy, and small molecules to grow its pipeline. It recently formed an
Emerging Technology Group to focus on using this expertise to accelerate
internal development programs, form additional strategic collaborations and
pursue out-licensing opportunities.
DIAGNOSTICS
DIAGNOSTIC PRODUCTS
Genzyme General develops, markets and distributes IN VITRO products, with an
emphasis on point-of-care, clinical chemistry and rapid test products. Genzyme
General sold its bioreagents and ELISA immunochemistry product lines to an
operating unit of Sybron Laboratory Products Corp. in July 1999 and the primary
assets of its research products business to Techne Corporation in July 1998.
These sales reflect the sharpened focus of the diagnostic products business.
Genzyme General sells its diagnostic products through its technical sales
representatives in the United States and Europe and through distributors in
Japan.
CARDIOVASCULAR PRODUCTS. Genzyme General sells devices and reagents for the
measurement of low-density lipoprotein, or LDL, and high-density lipoprotein, or
HDL, cholesterol levels. Genzyme General's N-geneous-REGISTERED TRADEMARK- LDL
and Liquid N-geneous-REGISTERED TRADEMARK- HDL tests accurately measure
cholesterol levels directly without the labor intensive pretreatment steps that
were previously needed and are easily adaptable to automated chemistry
analyzers. Both tests are being distributed in the United States by Genzyme
General under an agreement with the manufacturer of the tests, Daiichi Pure
Chemicals Co., Ltd., of Tokyo. In addition to the United States. Genzyme General
is also the exclusive marketing partner for the N-geneous-REGISTERED TRADEMARK-
LDL and Liquid N-geneous-REGISTERED TRADEMARK- HDL tests in Europe and the rest
of the world, with the exception of Asia, where Genzyme General holds
co-exclusive distribution rights.
GLYPRO-TM- ASSAY. Genzyme General's GlyPro-TM- test is an improved tool for
monitoring diabetes. The GlyPro-TM- test measures blood sugar levels over
several weeks, which is a valuable resource for reducing diabetes-related
complications.
DIAGNOSTIC INTERMEDIATES. Genzyme General produces and sells intermediates
such as diagnostic enzymes, substrates and reagents for use in diagnostic kits
used for blood analysis in clinical chemistry laboratories. One area of emphasis
is pancreatic function, where Genzyme General provides enzymes, substrates, bulk
reagents and patented methodologies for amylase and lipase determination to
diagnostic kit manufacturers. Genzyme General is also a primary supplier of
cholesterol enzymes used in testing for coronary heart disease.
RAPID TESTS. Genzyme General's product portfolio includes its patented
Contrast-TM- rapid tests for pregnancy, Strep A and infectious mononucleosis
determination. It also introduced the first combination rapid test for the two
most common causes of parasitic intestinal disease.
DEVELOPMENT PROGRAMS. In October 1999, Genzyme General and Skye
PharmaTech Inc. formed a collaboration to develop and market a point-of-care
stroke diagnostic product. Skye is developing the product, and Genzyme General
will exclusively manufacture and market the product worldwide following
approval. Stroke is the third leading cause of death in the United States,
affecting approximately 700,000
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people annually, with a similar incidence in Europe. Approximately 150,000
Americans die as a result of stroke each year.
Genzyme General is conducting research programs for point-of-care products
for diabetes and infectious diseases. Other development programs include
homocysteine and Lpa-cholesterol tests to determine cardiovascular disease risk
and a liquid lipase test for pancreatitis.
GENETIC DIAGNOSTIC SERVICES
Genzyme General applies advanced biotechnology to develop and provide high
quality, sophisticated genetic diagnostic services in the United States and
internationally through a national network of laboratories and a direct sales
force as well as through joint ventures in Germany and Japan. Genzyme General
offers three types of genetic diagnostic services:
- Biochemical testing services, which consist primarily of a widely used
screening test known as AFP3 to determine if further prenatal genetic
testing is appropriate;
- Classical and molecular cytogenetic testing services, which involve the
analysis of fetal cells obtained through amniocentesis or a process known
as chorionic villi sampling to evaluate chromosomal abnormalities; and
- DNA testing, which is performed to determine the likelihood that the
patient has, or is a carrier for, a specific genetic disorder, such as
cystic fibrosis and Gaucher disease.
Genzyme General employs over 90 board certified genetics professionals who
interpret results and provide genetic counseling and support services to medical
practitioners and their patients.
We have described some of Genzyme General's genetic diagnostic tests and
programs below.
AFP4-TM- TEST. Genzyme General added this advanced screening test to its
comprehensive prenatal genetic services program during the fourth quarter of
1999. This test is more accurate than the AFP3 test in detecting mutations
associated with Down syndrome and is expected to replace triple marker screening
over time.
INSIGHT-REGISTERED TRADEMARK- TEST. Genzyme General's
InSight-REGISTERED TRADEMARK- test is a molecular cytogenetic test that permits
identification of the most frequently occurring chromosomal abnormalities within
48 hours, which is significantly faster than the one to three weeks required to
perform classical cytogenetic testing (karyotyping). The
InSight-REGISTERED TRADEMARK- analysis is provided in conjunction with a
complete karyotype.
MASDA-REGISTERED TRADEMARK- TECHNOLOGY. Genzyme General's patented
multiplex allele-specific diagnostic assay, which is known as the
MASDA-REGISTERED TRADEMARK- technology, is used for simultaneous analysis of up
to 500 DNA for over 100 genetic mutations in a single test. The
MASDA-REGISTERED TRADEMARK- technology not only provides high-throughput
analysis of different patient samples for different genetic diseases, but also
identifies multiple mutations in a single patient's DNA sample. Genzyme General
is pursuing a number of commercialization strategies for the
MASDA-REGISTERED TRADEMARK- technology. In addition, the
MASDA-REGISTERED TRADEMARK- technology is being used to provide genetic
profiling services for clinical trials being conducted by pharmaceutical
companies.
HEREDITARY NONPOLYPOSIS COLON CANCER. Genzyme General introduced a test
that screens for mutations associated with the most common form of hereditary
colon cancer, hereditary nonpolyposis colon cancer, which is also known as HNPCC
or Lynch Syndrome. HNPCC accounts for between approximately 3 and 6% of all
colorectal cancers in the United States, or an estimated 4,000 to 8,000 cases
every year. Genzyme General introduced this test in July 1999.
ADENOMATOUS POLYPOSIS COLI. Genzyme General's APC I1307K test, also
introduced in 1999, screens for a gene mutation associated with an increased
risk of colorectal cancer in Ashkenazi Jewish families. The specific gene
mutation occurs more frequently in this population and has been found in
approximately 28 percent of Ashkenazi Jewish individuals who have both a
personal history and family history of colon cancer.
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CF86 TEST. Introduced in 1999, Genzyme General's CF86 test screens for 86
genetic mutations associated with cystic fibrosis.
DEVELOPMENT PROGRAMS. Genzyme General is developing additional platforms
for complex mutational analysis and conducts major research and development
programs in such areas as genomics and rare cell separation and analysis
methods. Genzyme General is also developing a multiple disease carrier test
using the MASDA-Registered Trademark- technology and integrated scanning
sequencing approaches for rapid detection of both previously characterized and
unknown gene mutations.
GENZYME MOLECULAR ONCOLOGY--DEVELOPMENT PROGRAMS AND SERVICES
Genzyme Molecular Oncology is developing a new generation of cancer
therapeutics based upon the growing understanding of the molecular basis of
cancer. Genzyme Molecular Oncology believes that these therapeutics have the
potential to treat multiple types of cancer, minimize toxicity and side effects,
and complement both existing and novel therapies. It uses its functional
genomics tools and draws upon capabilities in gene therapy, cell therapy,
protein therapy and small molecule drugs to select and pursue the most
appropriate of these approaches for each cancer target. Genzyme Molecular
Oncology complements its internal resources through collaborations with some of
the world's preeminent researchers in cancer research.
DEVELOPMENT PROGRAMS
Genzyme Molecular Oncology is developing products in the following three
therapeutic classes:
- vaccines that treat cancer by stimulating the body's immune system to
fight tumor cells;
- angiogenesis inhibitors that treat cancer by preventing the formation and
development of blood vessels that tumors require for growth; and
- pathway regulators that treat cancer by regulating one or more of the
metabolic processes in cancer cells necessary for tumor cells to grow and
survive.
The following chart describes the development status of Genzyme Molecular
Oncology's development programs:
<TABLE>
<CAPTION>
PRODUCT/PROGRAM TYPES OF CANCER STATUS
--------------- --------------- ------------------------
<S> <C> <C>
CANCER VACCINES
Dendritic/tumor cell fusion Breast Phase I/II trial ongoing
Melanoma IND filed
Kidney Preclinical
Melan-A/MART-1 and gp100 antigens Melanoma Phase I/II trial ongoing
NY-ESO-1 antigen Multiple Preclinical
ANGIOGENESIS INHIBITORS
aaATIII Multiple Preclinical
Small molecules Multiple Research
Gene therapy Multiple Research
CANCER PATHWAY REGULATORS
Small molecules Multiple Research
</TABLE>
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Genzyme Molecular Oncology owns all commercial rights to each of these programs
other than aaATIII, which it is co-developing with ATIII LLC, the joint venture
between Genzyme General and Genzyme Transgenics.
CANCER VACCINES
Genzyme Molecular Oncology believes that the most successful cancer vaccines
will be those that activate a cellular immune response directed at the tumor.
Its program features two types of vaccines for generating a tumor-specific
cellular immune response:
- where the specific tumor antigens are not known, Genzyme Molecular
Oncology uses a technique that fuses the patient's own tumor cells with
dendritic cells, creating a cell therapy product; and
- where specific tumor antigens have been identified as targets of the
cellular immune response, Genzyme Molecular Oncology uses gene-based or
peptide-based tumor vaccines.
Antigens are molecular markers in tumor cells that enable the body's immune
system to recognize and respond to these cells as being foreign. Dendritic cells
are specialized immune system cells that capture antigens and present them to T
cells that selectively recognize them. T cells are the immune system's cellular
response to disease.
Genzyme Molecular Oncology believes that both of the vaccine types described
above will provide clinical benefit and have commercial potential. Development
of antigen-specific vaccines, however, is currently limited by the lack of known
tumor-specific antigens. Therefore, cell fusion may be more broadly applicable
in the near term. Over time, as Genzyme Molecular Oncology identifies more
tumor-specific antigens, it anticipates having the ability to provide
off-the-shelf vaccines that are customized based on the set of specific antigens
present in the patient's tumor.
BREAST CANCER FUSION VACCINE. Working with the Dana-Farber Cancer Institute
and the Beth Israel Deaconess Medical Center in Boston, Genzyme Molecular
Oncology initiated a Phase I/II clinical trial for the treatment of metastatic
breast cancer in September 1999. The vaccine used in this trial is produced
using a chemical fusion process to combine the patient's own cancer cells and
dendritic cells derived from the patient. The end points for this trial are
safety, immunologic response and clinical response.
KIDNEY CANCER AND MELANOMA FUSION VACCINES. An academic group in Germany
has recently published clinical data for the treatment of kidney cancer with a
vaccine produced using electrofusion to combine a patient's cancer cells with
dendritic cells derived from another source. The clinical response rate reported
in that study was significantly higher than has been achieved with standard
therapy in that patient population.
Because of the positive results reported in the German study, Genzyme
Molecular Oncology plans to commence four additional Phase I clinical trials for
cell fusion vaccines in 2000. These trials will be in kidney cancer and in
melanoma. For each type of cancer, Genzyme Molecular Oncology intends to conduct
two trials, one using vaccine produced in the manner used in its breast cancer
trial and one using vaccine produced in the manner used in the German study.
These trials should provide Genzyme Molecular Oncology insight into the safety
and efficacy of cell fusion vaccines in a variety of cancer indications, as well
as a comparison of these two processes for producing cell fusion vaccines.
MELAN-A/MART-1 AND GP100 ANTIGEN-SPECIFIC VACCINES. In collaboration with
Dr. Steven Rosenberg at the National Cancer Institute, Genzyme Molecular
Oncology has conducted two Phase I clinical trials. In these trials, adenoviral
gene delivery vectors carrying either the Melan-A/MART-1 or gp100 gene were
evaluated for safety, immunologic reactivity and potential therapeutic effect
when administered IN VIVO alone or in conjunction with recombinant
interleukin-2. The results from these clinical studies indicated that the
adenoviral vectors were safe and well tolerated, and that a small but notable
number of both the 36 patients immunized with Melan-A/MART-1 and the 18 patients
treated with gp100 showed clinically significant tumor regression. These
responses were seen in very late stage (stage IV) metastatic disease
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patients, who are a heavily pre-treated patient population not expected to mount
a robust immune response and who, as a group, have a very short life expectancy.
In April 1999, Genzyme Molecular Oncology initiated a Phase I/II trial in
melanoma patients at Massachusetts General Hospital. This trial involves
extracting dendritic cells from the patient and combining these cells with a
vaccine containing Melan-A/MART-1 and gp100 EX VIVO. The treated cells are then
injected into the patient. In this trial, Genzyme Molecular Oncology will assess
safety, immunologic response and clinical response. Throughout the trial Genzyme
Molecular Oncology will be performing a comprehensive analysis of the patient's
immune response to the vaccine to help it to understand better why some patients
respond well to the therapy while others do not.
Genzyme Molecular Oncology is also conducting pre-clinical studies to
support a Phase I/II IN VIVO melanoma trial expected to begin early in the
second half of 2000. For this study, Genzyme Molecular Oncology plans to utilize
both the Melan-A/MART-1 and gp100 tumor antigens. In this trial, Genzyme
Molecular Oncology intends to monitor patient immune responses in order to
further elucidate the immunology of cancer to enhance its antigen-specific
vaccine development efforts.
NY-ESO-1 ANTIGEN-SPECIFIC VACCINES. NY-ESO-1 is an antigen expressed in a
subset of a number of different tumor types, including breast cancer, melanoma
and lung cancer. Genzyme Molecular Oncology is conducting pre-clinical
development to support a Phase I/II clinical trial for NY-ESO-1-positive tumors
to be performed in collaboration with the Ludwig Institute. In this trial,
Genzyme Molecular Oncology plans to enroll patients with tumors that express
NY-ESO-1 regardless of the location of the tumor. In this way, the trial will
offer an opportunity to shift the paradigm for treating cancer from one based on
the anatomical location of the tumor to one based on the antigenic profile of
the tumor.
ANGIOGENISIS INHIBITORS
Genzyme Molecular Oncology is pursuing proteins, small molecules and gene
therapies for use as angiogenesis inhibitors. Angiogenesis is the growth of new
blood vessels. A modified form of ATIII that is known as aaATIII is Genzyme
Molecular Oncology's lead development candidate in its angiogenesis inhibition
program. While ATIII does not inhibit angiogenesis, preclinical studies have
shown that when it is modified to aaATIII, the modified compound acts as a
potent angiogenesis inhibitor.
CANCER PATHWAY REGULATORS
Cancer pathway regulators treat cancer by regulating one or more metabolic
processes required for growth and survival of cancer cells. Genzyme Molecular
Oncology has early stage programs focusing on small molecule drugs. Genzyme
Molecular Oncology's small molecule drug discovery effort relies upon its access
to extensive libraries of compounds and multiple high-throughput assays. The
number of small molecules in Genzyme's libraries of chemical compounds now
exceeds two million compounds. Genzyme Molecular Oncology also has access to
compound libraries of other companies.
SAGE-TM- TECHNOLOGY PLATFORM
Genzyme Molecular Oncology's SAGE-TM- technology is a patented
high-throughput, high efficiency method of simultaneously detecting and
measuring the expression level of virtually all genes expressed in a cell at a
given time. The SAGE-TM- technology detects and quantifies expression of novel
as well as known genes and, because of its high efficiency and sensitivity,
SAGE-TM- technology can detect genes expressed at low levels. Some of the uses
of SAGE-TM- technology are comparison of disease tissue with healthy tissue,
comparison of genes expressed at different stages of disease, elucidation of
disease pathways and measurement of response to and toxicity of drug candidates.
Genzyme Molecular Oncology continues to enhance the power of its SAGE-TM-
technology through software and bioinformatics development, technology
improvements, database expansion and the integration of the SAGE-TM- technology
with other genomics tools, such as microarrays.
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Genzyme Molecular Oncology has used its SAGE-TM- technology to analyze the
most prevalent types of cancer and corresponding normal tissue and also has
access to SAGE-TM- data generated in the laboratories of Drs. Bert Vogelstein
and Kenneth Kinzler at The Johns Hopkins University. Genzyme Molecular Oncology
has accumulated from its proprietary analyses, its collaborators and the Cancer
Genome Anatomy Project at the NCI a database of over 3.5 million SAGE-TM- gene
sequence identification tags, representing over 125,000 unique genes.
Genzyme Molecular Oncology is also using its SAGE-TM- technology extensively
in its drug discovery and development efforts to identify genes that are
functionally relevant. In cancer vaccines, Genzyme Molecular Oncology combines
the SAGE-TM- technology with other proprietary tools to identify tumor-specific
antigens. In angiogenesis inhibition, Genzyme Molecular Oncology is using the
SAGE-TM- technology to dissect the genetic pathways for angiogenesis and to
explore and understand the mechanism of action of drug candidates discovered in
functional assays. In cancer pathway regulation, Genzyme Molecular Oncology is
using the SAGE-TM- technology to identify targets to use in high-throughput
screens.
In addition to using the SAGE-TM- technology in its drug discovery and
development programs, Genzyme Molecular Oncology is using the SAGE-TM-technology
and its proprietary SAGE-TM- database to generate revenues through licenses and
service agreements and database collaborations.
ANTIGEN DISCOVERY PLATFORM
Genzyme Molecular Oncology is seeking to stimulate a cellular immune
response against tumors by using vaccines to present tumor-specific antigens to
the immune system. Genzyme Molecular Oncology has built a proprietary,
state-of-the-art antigen discovery platform that combines identification and
validation in one step. Genzyme Molecular Oncology is using this platform to
rapidly and efficiently identify and validate target antigens for incorporation
into novel antigen-specific cancer vaccines. Genzyme Molecular Oncology plans to
analyze the cancer cells extracted from the patients in its on-going cell fusion
vaccine clinical trials using its antigen discovery technologies in order to
identify the antigens associated with anti-tumor and expand the development of
its antigen-specific vaccines.
GENZYME SURGICAL PRODUCTS--PRODUCTS AND DEVELOPMENT PROGRAMS
In addition to providing traditional devices and closures for the
cardiothoracic, general and plastic surgery markets, Genzyme Surgical Products
develops and markets products for minimally invasive cardiovascular surgery,
biomaterials and biotherapeutics. Genzyme Surgical Products' sales force markets
products directly to surgeons and hospital administrators throughout the United
States and Europe. It also uses a network of distributors in Europe, Asia and
Latin America.
Genzyme Surgical Products' biomaterials program includes products based on
hyaluronic acid that are intended to reduce the incidence and extent of
adhesions (scar tissue) that form after surgery. Hyaluronic acid is a substance
that is naturally created by the body to lubricate and protect tissue. These
products are known as the Sepra family of products and are being developed on
behalf of Genzyme Development Partners, L.P. Genzyme Surgical Products has the
exclusive right to sell the Sepra family of products in the United States and
Canada on behalf of our joint venture with Genzyme Development Partners and the
exclusive right to sell these products outside the United States and Canada for
its own benefit. Genzyme Surgical Products sells the Sepra family of products in
Luxembourg, Germany, Austria, Switzerland and Japan through distributors. If you
would like more information about our relationship with Genzyme Development
Partners and the joint venture, you should read Note M. to our consolidated
financial statements, which we are incorporating into this discussion by
reference.
CARDIOTHORACIC SURGERY
TRADITIONAL INSTRUMENTS AND DEVICES. Genzyme Surgical Products'
cardiothoracic surgery business consists of a comprehensive portfolio of
products, including fluid management and chest drainage systems,
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sutures and cardiovascular instruments. Its line of fluid management systems
consists primarily of self-contained, disposable chest drainage devices used to
drain blood from the chest cavity following open-heart surgery, other surgical
procedures and trauma. Genzyme Surgical Products also sells autotransfusion
devices that allow the collection of blood shed by the patient and its
reinfusion postoperatively, which eliminates the risks associated with blood
transfusions. Genzyme Surgical Products' self-contained, disposable
Pleur-evac-Registered Trademark- chest drainage unit was introduced in 1967 and
is the market leader in chest drainage devices. Genzyme Surgical Products also
sells a line of dry suction-controlled chest drainage and autotransfusion
devices under the Sahara-TM- and Thora-Klex-Registered Trademark- brand names.
It markets sutures, including the Tevdek-Registered Trademark- and
Polydek-Registered Trademark- valve sutures and Deklene-Registered Trademark-
bypass sutures. Genzyme Surgical Products also sells aortic punches, which are
used during coronary artery bypass surgery to make clean, round openings in the
aorta prior to grafting. Finally, its Diamond-Line-Registered Trademark-
portfolio of hand-held, reusable instruments includes needleholders, scissors,
forceps, graspers, dissectors and retractors.
MINIMALLY INVASIVE CARDIOVASCULAR SURGERY SYSTEMS. Genzyme Surgical
Products markets products for minimally invasive cardiovascular surgery, with a
focus on beating-heart surgery. In beating-heart surgery, procedures are
performed on the heart without stopping the heart and without the use of a
heart/lung machine to circulate blood and supply oxygen. This allows surgeons to
avoid the complications often associated with the use of heart/lung machines.
Genzyme Surgical Products' newest product in this line is known as the Genzyme
OPCAB Elite-TM- beating-heart platform. The Genzyme OPCAB Elite-TM- system is
designed to allow surgeons to conduct multi-vessel coronary artery bypass
surgery while the heart continues to beat. It combines reusable retractors with
disposable devices such as stabilizers, sutures and punches. A central component
of the system is the Cohn Cardiac Stabilizer-TM- device, which allows surgeons
to isolate and stabilize a small section of the heart to have clear access to
the blood vessels.
In addition, Genzyme Surgical Products has introduced minimally invasive
saphenous vein harvest and valve replacement instruments. For example, its
SaphLITE-Registered Trademark- II system is used to remove the saphenous vein
from the leg for use as a graft in coronary artery bypass procedures.
BIOMATERIALS. Genzyme Surgical Products has obtained the exclusive right to
distribute FocalSeal-Registered Trademark--L in North America for pulmonary,
cardiovascular and gastrointestinal procedures following regulatory approval of
the product. FocalSeal-Registered Trademark--L is a biomaterial developed by
Focal, Inc. for the prevention of air and fluid leaks following surgery.
FocalSeal-Registered Trademark--L recently received approval in Canada, and
Genzyme Surgical Products expects it to be approved in the United States in
2000. Approximately 70,000 lung surgeries are performed in the United States
annually, with almost all patients at risk for debilitating air leaks.
Genzyme Surgical Products recently obtained approval in the European Union
for its CV Seprafilm-TM- cardiovascular adhesion barrier, which is designed to
reduce the formation of adhesions following open-heart surgery. In addition, it
has completed the safety phase of a clinical trial for this product in the
United States in infants undergoing multi-stage procedures for the repair of
congenital heart defects.
BIOTHERAPEUTICS. Genzyme Surgical Products also has several biotherapeutic
products in various stages of research and development. It is developing HIF-1
alpha, which is a naturally occurring compound that has been shown to trigger
the expression of many proteins associated with angiogenesis. Genzyme Surgical
Products is conducting a Phase I clinical trial of HIF-1 alpha in patients with
peripheral vascular disease, a condition caused by blocked arteries in the
limbs. Following review of a protocol by the Recombinant DNA Advisory Committee
of the National Institutes of Health, Genzyme Surgical Products also plans to
begin a second Phase I clinical trial of the product in patients with coronary
artery disease undergoing bypass surgery who have an area of the heart that is
not suitable for surgical revascularization.
Genzyme Surgical Products is conducting research on other gene therapy
approaches to congestive heart failure and restenosis. In addition, through a
collaboration with a research group at the Toronto
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Hospital in Canada, Genzyme Surgical Products is also conducting research on
cell therapy approaches to congestive heart failure.
GENERAL SURGERY
Genzyme Surgical Products has established a growing presence in the general
surgery market through its biomaterials and endoscopic instruments.
BIOMATERIALS. Genzyme Surgical Products has an extensive line of
biomaterial products on the market and in development for the general surgery
market, including many products included in the Sepra family of products.
<TABLE>
<CAPTION>
PRODUCT INDICATION STATUS
------- ----------------------------- -----------------------------
<S> <C> <C>
SEPRA FILM-REGISTERED Abdominal/pelvic surgery Marketed in the U.S. since
TRADEMARK- BIORESORBABLE 1996; approved in the U.S.
MEMBRANE and Europe in 1996, in Canada
and Israel in 1997, in Japan
in 1998 and in several other
countries
SEPRA Small bowel obstructions Phase IV clinical trial
FILM-REGISTERED TRADEMARK- ongoing
BIORESORBABLE MEMBRANE
SEPRA Abdominal/pelvic surgery Marketed in Europe since 1999
FILM-REGISTERED TRADEMARK-
II ADHESION BARRIER
SEPRACOAT-TM- COATING Open surgery Marketed in Europe since 1996
SOLUTION
SEPRAMESH-TM- PRODUCT Hernia repair Received 510(k) clearance in
2000
SEPRAPAK-TM- PRODUCT Sinus packing Listed with the FDA
SEPRAGEL-REGISTERED TRADEMARK- Open and laproscopic surgery In development
BIORESORBABLE GEL
</TABLE>
Genzyme Surgical Products' lead product in the general surgery market is
Sepra Film-Registered Trademark- bioresorbable membrane. It is currently
conducting a Phase IV clinical trial to test the ability of the Sepra
Film-Registered Trademark- product to reduce the incidence of bowel
obstructions. Genzyme Surgical Products is also marketing Sepra
Film-Registered Trademark- II adhesion barrier, a second generation Sepra
Film-Registered Trademark- product designed to have increased plasticity, as an
adhesion prevention product for open and laparoscopic surgery in Europe. In
addition, Genzyme Surgical Products has developed the Sepramesh-TM- product, a
prosthetic surgical mesh product for use in hernia repairs.
Other Sepra products are in earlier stages of development. Genzyme Surgical
Products is developing Sepragel-Registered Trademark- bioresorbable gel for use
during laparoscopic surgery as well as in open surgery as a complement to the
Sepra Film-Registered Trademark- product. Genzyme Surgical Products is also
currently developing anti-adhesion products for other surgical applications.
ENDOSCOPIC INSTRUMENTS. Genzyme Surgical Products carries an extensive line
of high-quality endoscopic instruments for general and gynecological surgery.
Its Diamond-Line-Registered Trademark- technology extends to a full portfolio of
retractors, forceps, scissors, needle-holders, graspers and clamps. The leading
products in the portfolio are its Diamond-Flex-Registered Trademark- and
Diamond-Touch-Registered Trademark- instruments.
Diamond-Flex-Registered Trademark- retractors and forceps are the only reusable
instruments on the market with articulating heads that allow gentle
repositioning of organs and tissue at varying angles. The
Diamond-Touch-Registered Trademark- instruments provide ergonomically designed
contoured handles for superior positioning, comfort and control. Genzyme
Surgical Products' Switch-Blade-TM- tips are the second major component of its
endoscopic surgery portfolio. Switch-Blade-TM- tips are disposable scissor tips
that are attached to reusable shafts.
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OTHER PRODUCTS
Genzyme Surgical Products also manufactures products for the plastic surgery
market. This distinct product line consists of hand-held instruments, endoscopic
plastic surgery equipment, sutures and surgical compression garments.
GENZYME TISSUE REPAIR--PRODUCTS AND DEVELOPMENT PROGRAMS
Genzyme Tissue Repair is a leading developer of biological products for the
fields of orthopedics and burn care. Over the course of the last year, Genzyme
Tissue Repair has taken several steps to streamline its operations and focus its
business strategy, including transferring the NeuroCell-TM- program to Genzyme
General. Genzyme Tissue Repair is dedicated to expanding and improving its
Carticel-Registered Trademark- product and accelerating its bio-orthopedic
development programs.
CARTICEL-REGISTERED TRADEMARK- AUTOLOGOUS CULTURED CHONDROCYTES. Genzyme
Tissue Repair's lead product, Carticel-REGISTERED TRADEMARK- chondrocytes, is
used to treat damaged articular knee cartilage. Genzyme Tissue Repair employs a
proprietary process to grow autologous--a patient's own--cartilage cells for use
in repairing damaged knee cartilage.
The FDA has required Genzyme Tissue Repair to conduct two confirmatory
post-marketing studies of Carticel-REGISTERED TRADEMARK- chondrocytes. The FDA
approved new clinical designs for these trials in February 2000. The first study
measures outcomes of patients in Genzyme Tissue Repair's registry who did not
respond to other treatment before being implanted with
Carticel-Registered Trademark- chondrocytes. It will compare outcomes before and
after implantation. Genzyme Tissue Repair expects to complete this study in
2000. The second study is designed to compare the long-term clinical effect of
treatment with Carticel-REGISTERED TRADEMARK- chondrocytes to other treatments.
Genzyme Tissue Repair believes that for Carticel-REGISTERED TRADEMARK-
chondrocytes to be commercially successful, it must be routinely used by a large
number of orthopedic surgeons. It markets Carticel-REGISTERED TRADEMARK-
chondrocytes to orthopedic surgeons in the United States and Europe directly and
through distributors. Genzyme Tissue Repair also trains orthopedic surgeons,
collects and analyzes outcomes data through a registry, and assists physicians
and patients in obtaining reimbursements from third-party payers. The commercial
success of Carticel-REGISTERED TRADEMARK- chondrocytes will also depend on its
ability to increase the approval rate for reimbursement of the product from
third-party payers. For this reason, approximately one-third of its 59-person
U.S. sales and reimbursement staff is involved directly in claims processing and
educating insurers about the appropriate uses of the
Carticel-REGISTERED TRADEMARK- chondrocytes. Genzyme Tissue Repair expects that
Carticel-REGISTERED TRADEMARK- sales may be lower in the summer months as fewer
operative procedures are typically performed during those months.
EPICEL-TM- SKIN GRAFTS. Genzyme Tissue Repair's Epicel-TM- skin grafts are
cultured autologous skin cells used for permanent skin replacement for patients
with severe burns. Epicel-TM- skin grafts were first introduced in 1987. These
epidermal grafts are grown from a patient's own skin cells and, therefore, are
not rejected by the patient's immune system. Most burn wounds involving less
than 60% body surface area are covered with conventional skin grafts within the
three to four weeks it currently takes to grow skin grafts produced using the
Epicel-TM- service. Therefore, Genzyme Tissue Repair believes that the primary
candidates for Epicel-TM- skin grafts are the approximately 800 patients each
year in the U.S. who survive burn injuries covering more than 60% of their body
surface area. Genzyme Tissue Repair markets Epicel-TM- skin grafts to burn
centers in the U.S. and parts of Europe through its own direct sales force and
in Japan through a distributor. Sales of Epicel-TM- skin grafts fluctuate from
quarter to quarter depending on the number of unpredictable factors, including
the number and survival rate of severe burn patients who are treated with
Epicel-TM- skin grafts.
CARTICEL-REGISTERED TRADEMARK- II. Carticel-REGISTERED TRADEMARK- II is a
next-generation product based on the development of a pre-formed autologous
cartilage tissue implant. The implant is intended to allow the procedure to be
performed arthroscopically. If it is successfully developed,
Carticel-REGISTERED TRADEMARK- II could significantly decrease rehabilitation
time
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for patients and allow surgeons to treat larger cartilage defects. Genzyme
Tissue Repair plans to complete preclinical studies of
Carticel-REGISTERED TRADEMARK- II in 2000.
QUICKTACK-TM- PERIOSTEAL FIXATION SYSTEM. QuickTack-TM- is a small device
designed to be used instead of sutures during the Carticel-REGISTERED TRADEMARK-
implant procedure. It is expected to simplify the procedure and significantly
decrease the time needed for surgery. Genzyme Tissue Repair plans to submit a
510(k) application for the Quick Tack-TM- periosteal fixation system to the FDA
in the first half of 2000.
OSTEOARTHRITIS. Genzyme Tissue Repair has is conducting pre-clinical
studies of an innovative small molecule therapy for the treatment of
osteoarthritis.
PHOTOACTIVE TISSUE WELDING TECHNOLOGY. Genzyme Tissue Repair is conducting
proof of concept studies of a photoactive tissue welding technology it licensed
from PhotoBioMed Corp. It intends to seek a partner to develop and commercialize
this technology.
OTHER DEVELOPMENT PROGRAMS. Genzyme Tissue Repair has a number of ongoing
development programs supporting Carticel-REGISTERED TRADEMARK- chondrocytes.
Genzyme Tissue Repair is conducting basic research and development into the
biology of cartilage and the cartilage repair process. The objective of this
research is to identify biologic materials that promote more rapid regeneration
of articular cartilage, to develop new methods for the repair of arthritic
joints and large surface area cartilage defects and to enable the implantation
procedure to be performed less invasively. Genzyme Tissue Repair is also
committing resources to meet requirements specified by the FDA for validation of
certain product manufacturing parameters.
COMPETITION
We are engaged in a segment of the human health care products industry that
is extremely competitive. Our competitors in the United States and elsewhere are
numerous and include major pharmaceutical, surgical device and biotechnology
companies. Some of these competitors may have more extensive research and
development, regulatory, manufacturing and production capabilities. Some
competitors may have greater financial resources. These companies may succeed in
developing products that are more effective than any that we have or may develop
and may also prove to be more successful than we are in producing and marketing
products and services. In addition, technological advances or different
approaches developed by one or more of our competitors may render our products
obsolete, less effective or uneconomical.
Each of our products and services faces different competitive challenges:
CEREZYME-REGISTERED TRADEMARK- ENZYME AND CEREDASE-REGISTERED TRADEMARK-
ENZYME. Although Genzyme General is not aware of any current effective
alternative to its products for the treatment of Gaucher disease, competition
potentially could come from other protein replacement therapies, small molecules
or gene therapy. Genzyme General is aware of other companies attempting to
develop alternative treatments for Gaucher disease. However, Genzyme General
believes that its proprietary production techniques and, to a certain extent,
the orphan drug status of its products, which provides market exclusivity in the
United States until May 2001, give it a number of advantages over potential
competitors using protein replacement therapy for the treatment of Gaucher
disease. Gene therapy techniques are still in experimental stages. Genzyme
General believes that the principal factors that will affect competition for
Cerezyme-Registered Trademark- enzyme and Ceredase-Registered Trademark- enzyme
will be clinical effectiveness and absence of adverse side effects.
RENAGEL-REGISTERED TRADEMARK- CAPSULES. Phosphate binders are currently the
only available treatment for hyperphosphatemia. There are several phosphate
binders available or under development. A prescription calcium acetate
preparation is currently the only other product approved in the United States
for the control of elevated phosphorus levels in patients with chronic kidney
failure. Other products used as phosphate binders include over-the-counter
calcium- and aluminum-based antacids and dietary calcium
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supplements. Calcium acetate and calcium carbonate, the most commonly used
agents, must be taken at sufficient doses to achieve adequate reductions in
phosphate absorption, which can lead to constipation and patient noncompliance.
In addition, calcium therapy requires frequent monitoring because its use can
cause hypercalcemia. Aluminum hydroxide is more effective at lower doses than
calcium acetate or calcium carbonate, but it is infrequently used because
aluminum absorbed from the intestinal tract accumulates in the tissues of
patients with chronic kidney failure, causing aluminum-related osteomalacia,
anemia and dialysis dementia.
ANTITHROMBIN III. Individuals who have a deficiency of ATIII are treated
currently with plasma-derived ATIII. Genzyme General and Genzyme Transgenics
believe transgenic ATIII may represent a more attractive therapeutic than the
current plasma-derived product in light of:
- the risks of viral transmission from pooled plasma products in general;
- the limited volume of ATIII available from plasma; and
- the impracticality of producing sufficient quantities of ATIII in cell
culture systems.
NEUROCELL-TM- -PD AND NEUROCELL-TM- -HD. While there currently are no
effective long-term therapies for advanced Parkinson's disease and no effective
treatments for Huntington's disease, Genzyme General is aware of other companies
and institutions pursuing research and development of alternative treatments for
the diseases. Experimental therapies under development for Parkinson's disease
include surgical destruction of certain portions of the brain (pallidotomy),
gene therapy, cell therapy, the use of growth factors and neuroprotectant
therapy.
CYSTIC FIBROSIS. There are a number of academic and commercial
organizations engaged in developing therapies to treat either the symptoms of
cystic fibrosis or the cause of the disease. Several groups are developing gene
therapy approaches to the disease and also have received approval from the FDA
and the Recombinant DNA Advisory Committee to initiate limited human studies of
cystic fibrosis gene therapy. In addition, other organizations are investigating
pharmacological and biological agents that would treat cystic fibrosis. One such
product, Pulmozyme-Registered Trademark-, which was developed by
Genentech, Inc., is currently on the market. These groups may succeed in
developing gene therapy products before Genzyme General, in obtaining patent
protection blocking Genzyme General from commercializing its cystic fibrosis
products or in developing other drug therapies that relieve the symptoms of
cystic fibrosis.
DIAGNOSTIC PRODUCTS. Genzyme General acts as a primary supplier of enzymes
and substrates, and generally does not compete with its customers in the sale of
complete diagnostic kits. The market in the diagnostic products industry is
mature and competition is based on price, reliability of supply and the purity
and specific activity of products.
GENETIC DIAGNOSTIC SERVICES. The U.S. market for human genetic testing is
divided among approximately 500 laboratories. Of this total group, less than 20
laboratories market their services nationally. Genzyme General believes that the
industry as a whole is still quite fragmented, with the top 20 laboratories
accounting for approximately 50% of market revenues, and with no individual
company accounting for more than 18% of the total other than Genzyme, which
accounts for approximately 22% of the total. Genzyme General believes, however,
that the industry will experience increasing consolidation as smaller
laboratories face the challenges of more complex and stringent regulation.
Competitive factors in the genetic diagnostics services business generally
include reputation of the laboratory, range of services offered, pricing,
convenience of sample collection and pick-up, quality of analysis and reporting
and timeliness of delivery of completed reports. Genzyme General believes that
its research and development program, which has enabled it to develop and
introduce testing services based on new technology, and its active sales and
marketing force have played significant roles in the growth of its genetic
diagnostics services business.
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CANCER. Competition in the field of cancer therapeutics is intense. Genzyme
Molecular Oncology faces, and will continue to face, significant competition
from organizations such as large pharmaceutical and biotechnology companies,
universities, government agencies and other research institutions.
Competition can arise from the use of the same or similar technologies as
those currently used or contemplated to be used by Genzyme Molecular Oncology,
as well as from existing therapies. Any or all of these may be more effective or
less expensive than those developed by Genzyme Molecular Oncology. For instance,
other companies provide genomics services that are competitive with the SAGE-TM-
technology.
Genzyme Molecular Oncology relies on its collaborators for support in some
of its cancer research and development programs and intends to rely on these
partners for preclinical evaluation and clinical development of its potential
products and services. In addition, certain of its partners are conducting
multiple product development programs in the same fields as those in which they
are collaborating with Genzyme Molecular Oncology. Genzyme Molecular Oncology's
product candidates, therefore, may be subject to competition with potential
products under development by one or more of its partners.
CHEST DRAINAGE AND FLUID MANAGEMENT SYSTEMS, INSTRUMENTS AND SUTURES. The
principal methods by which Genzyme Surgical Products competes in the
cardiothoracic and general surgery markets are:
- continued innovative product development;
- the performance and breadth of its product lines;
- brand name recognition;
- sales force training; and
- educational services, including sponsorship of training programs in
advanced surgical techniques.
Its chief competitors in the chest drainage and fluid management market are
Atrium Medical Corporation and Sherwood-Davis & Geck, a division of Tyco
International, Ltd. Genzyme Surgical Products primarily competes with Karl Storz
Endoscopy America, Inc., Scanlan International, Inc., Pilling Weck Surgical
Instruments and the Codman division of Johnson & Johnson Ltd. in the reusable
instruments market. U.S. Surgical Corporation, a division of Tyco, and the
Ethicon division of Johnson & Johnson are Genzyme Surgical Products' primary
competitors in the cardiovascular sutures market.
MINIMALLY INVASIVE CARDIOVASCULAR SURGERY. Genzyme Surgical Products faces
competitors in the minimally invasive cardiovascular surgery field.
CardioThoracic Systems, Inc., which was recently acquired by Guidant
Corporation, was founded solely to pursue minimally invasive cardiovascular
surgery and was among the first companies to draw national attention to the
technology. CardioThoracic Systems is also the leader in both the minimally
invasive direct coronary artery bypass and off-pump coronary artery bypass
markets. Several major surgical products companies have also entered the
minimally invasive cardiovascular surgery market, including Medtronic, Inc.,
U.S. Surgical and Ethicon.
THERAPIES FOR ISCHEMIC HEART DISEASE. There is considerable competition in
the development of protein and gene therapies to induce angiogenesis for the
treatment of ischemic heart disease. Several companies have initiated clinical
trials of gene and protein therapies for ischemic heart disease, and other
companies have products that are still in preclinical development.
Genzyme Surgical Products is aware of ongoing research on cell-based
approaches to restoring cardiac function to infarcted tissue. Academic
institutions and private companies are also conducting research to develop
mechanical devices to reduce ventricular size or to minimize ventricular
dilation.
THERAPIES FOR PERIPHERAL VASCULAR DISEASE. There is considerable
competition in the development of protein and gene therapies to induce
angiogenesis for the treatment of peripheral vascular disease.
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ADHESION BARRIERS. Genzyme Surgical Products believes that its expertise in
developing proprietary fermentation processes and its access to proprietary
strains of micro-organisms used in its hyaluronic acid production process will
give it a competitive advantage in the marketing of the Sepra family of
products. Its anti-adhesion products may face significant competition, however,
from other products based on hyaluronic acid as well as from other products and
changes in surgical techniques that may obviate the use of hyaluronic acid.
Genzyme Surgical Products believes that the principal factor that will affect
competition in this area is acceptance of the product by surgeons, which
depends, in large part, upon product performance, safety and price.
Sepra Film-Registered Trademark- bioresorbable membrane does not have
significant direct competition in the colorectal surgery market. Ethicon markets
Interceed-Registered Trademark-, an anti-adhesion barrier that may have
properties similar to the Sepra Film-Registered Trademark- product, but is
indicated only for selected gynecological indications.
Interceed-Registered Trademark- has been shown to lose its anti-adhesion
properties in the presence of blood. Lifecore Biomedical, Inc. and Ethicon's
Intergel-TM- product, a gel-based anti-adhesion product, is marketed in Europe.
Gliatech, Inc. currently markets Adcon-L for the prevention of adhesions
following lumbar surgery. In addition, it has initiated clinical trials of
Adcon-A and Adcon-P, which are designed to limit adhesions after abdominal and
pelvic surgery. Life Medical Sciences, Inc. is developing REPEL for
gynecological surgery and REPEL-CV for cardiovascular surgery. These adhesion
barrier membranes are in early clinical trials.
PLASTIC SURGERY AND ENDOSCOPIC SURGERY INSTRUMENTS. Genzyme Surgical
Products' main competitors for the market in plastic surgery instruments are
Karl Storz, Padgett Instruments, Inc., the V. Mueller division of Allegiance
Corporation and Walter Lorenz Surgical, Inc. In the endoscopic plastic surgery
market, its competitors include Circon Corporation, OLYMPUS Winter & Ibe GmbH,
Stryker Corporation, and Karl Storz.
CARTICEL-REGISTERED TRADEMARK- CHONDROCYTES. Genzyme Tissue Repair is aware
of two other companies, Verigen, Inc. and Codon, which are both culturing
autologous chondrocytes for cartilage repair in Europe. In addition, Genzyme
Tissue Repair knows of three other companies, Advanced Tissue Sciences, Inc. in
conjunction with Smith & Nephew PLC, Integra LifeSciences Corp. and LifeCell
Corp., which are engaged in research on cultured cartilage products. In
addition, a surgical technique known as osteochondral grafting may be
competitive to Carticel-REGISTERED TRADEMARK- chondrocytes. This procedure,
which can be performed arthroscopically, involves transferring plugs of low
weight bearing cartilage and bone to the area of a defect. Smith & Nephew,
Arthrex, Inc. and Innovasive Devices, Inc. are known to have programs relating
to this procedure.
EPICEL-TM- SKIN GRAFTS. Genzyme Tissue Repair is the only commercial
provider of cultured skin grafts that have been shown to provide permanent skin
replacement for burn patients in the U.S. However, Genzyme Tissue Repair may
face competition from companies using other approaches to culture skin tissue.
Integra is marketing a collagen-based dermal replacement product for severely
burned patients. This product will still require a skin graft from the patient
or Epicel-TM- skin grafts to close a full-thickness wound, however, and
therefore will not compete directly with Epicel-TM- skin grafts. Advanced Tissue
Sciences, Inc. has received approval for a temporary wound covering for burns.
Organogenesis, Inc. has submitted a Pre-Market Approval application for a
product to be used for the closure of venous stasis ulcers. LifeCell Corp.
currently has freeze-dried enzymatically processed human cadaver dermis on the
market.
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PATENTS, LICENSE AGREEMENTS AND TRADEMARKS
In general, we pursue a policy of obtaining patent protection both in the
United States and in selected foreign countries for subject matter we consider
patentable and important to our business. In addition, a portion of our
proprietary position is based upon patents that we have licensed from others
either through collaboration or traditional license agreements, including
patents relating to:
- Renagel-Registered Trademark- capsules;
- Transgenic ATIII;
- Aldurazyme-TM- enzyme;
- AVONEX-Registered Trademark- (Interferon-beta 1a);
- NeuroCell-TM--PD and NeuroCell-TM--HD;
- Alpha-glucosidase;
- DHA derivative;
- Acid sphingomyelinase;
- EPI-KAL2;
- the HNPCC and APC I1307K tests;
- TGF-(2);
- SAGE-TM- technology;
- cell fusion technology;
- viral and non-viral gene therapy technology;
- drug delivery technology;
- various cancer related genes such as p53;
- HIF-1 alpha;
- Cohn Cardiac Stabilizer-TM- device;
- Epicel-TM- skin grafts; and
- photoactive tissue welding technology.
These collaboration and license agreements generally require us to share
profits with our collaborative partners or pay royalties to our licensors upon
commercialization of products covered by the licensed technology. Generally,
patents issued in the United States are effective for the longer of 17 years
from date of issue or 20 years from the effective filing date of the
corresponding patent application if filed prior to June 8, 1995; and 20 years
from the filing date for applications filed after June 8, 1995. In some cases,
the patent term can be extended to recapture a portion of the term lost during
FDA regulatory review. The duration of foreign patents varies in accordance with
applicable local law.
We also rely on trade secrets, proprietary know-how and continuing
technological innovation to develop and maintain a competitive position in our
product areas. We require our employees, consultants and corporate partners who
have access to our proprietary information to sign confidentiality agreements.
Our patent position and proprietary technology are subject to certain risks
and uncertainties. We have included information about these risks and
uncertainties in Exhibit 99.2, "Factors Affecting Future Operating Results," to
this Form 10-K. We encourage you to read those descriptions, which we are
incorporating into this discussion by reference.
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Our products and services are sold around the world under brand-name
trademarks and service marks. Trademark protection continues in some countries
as long as the mark is used; in other countries, as long as its registered.
Registrations generally are for fixed, but renewable, terms. We consider our
registered trademarks Genzyme-Registered Trademark-,
Cerezyme-Registered Trademark-, Ceredase-Registered Trademark-,
Thyrogen-Registered Trademark-, N-geneous-REGISTERED TRADEMARK- LDL,
N-geneous-REGISTERED TRADEMARK- HDL, Contrast-REGISTERED TRADEMARK-,
InSight-Registered Trademark-, MASDA-Registered Trademark-, Sepra
Film-Registered Trademark-, Pleur-evac-Registered Trademark-,
Thora-Klex-Registered Trademark-, Tevdek-Registered Trademark-,
Polydek-Registered Trademark-, Deklene-REGISTERED TRADEMARK-, Cohn Cardiac
Immobilizer-REGISTERED TRADEMARK-, SaphLITE-REGISTERED TRADEMARK-,
Sepragel-REGISTERED TRADEMARK-, Diamond-Line-REGISTERED TRADEMARK-,
Diamond-Flex-REGISTERED TRADEMARK-, Diamond-Touch-REGISTERED TRADEMARK-, and
Carticel-REGISTERED TRADEMARK-, together with our trademarks Fabrazyme-TM-,
Afp4-TM-, GlyPro-TM-, SAGE-TM-, EndoCABG-TM-, Sahara-TM-, Genzyme OPCAB
Elite-TM-, Cohn Cardiac Stabilizer-TM-, Switch-Blade-TM-, Seprafilm-TM-,
Sepracoat-TM-, Sepramesh-TM-, SepraPak-TM-, CV Seprafilm-TM-, Epicel-TM- and
QuickTack-TM-, in the aggregate, to be of material importance to our business.
GOVERNMENT REGULATION
Regulation by governmental authorities in the United States and other
countries is a significant factor in the development, manufacture and
commercialization of our products and services.
FDA REGULATION
We expect that all of our products and services will require approval of the
FDA and corresponding agencies in other countries before they can be marketed.
In the United States, the FDA classifies products as either "devices," "drugs"
or "biologics." Products that do not achieve their principal intended purpose
through chemical action within or on the body and which are not dependent upon
being metabolized by the patient's body in order to be effective are classified
by the FDA as "devices" while other products are classified as "drugs" or
"biologics."
The activities required before drugs or biologics may be marketed in the
United States include:
- pre-clinical laboratory tests, IN VITRO and IN VIVO pre-clinical studies
and formulation and stability studies;
- the submission to the FDA and approval of an application for human
clinical testing, which is known as an Investigational New Drug
application;
- adequate and well controlled human clinical trials to prove the safety and
effectiveness of the drug or biologic;
- the submission of a New Drug Application for a drug or a Product License
Application for a biologic or a Biologic License Application for biologics
identified by the FDA as "Specified Biologics;" and
- the approval by the FDA of the New Drug Application, Product License
Application or Biologic License Application.
In addition to product approval, the manufacturer of the product may have to
obtain an establishment license (for a biologic that is not considered well
characterized) or a pre-approval Good Manufacturing Practices inspection (for a
drug or well-characterized biologic) from the FDA. Since any license granted by
the FDA is both site and process specific, any material change by a company in
the manufacturing process, equipment or location necessitates additional FDA
review and approval.
Products that are classified as devices also require FDA approval prior to
marketing. Devices are classified as Class I, II or III, depending upon the
information available to assure their safety and effectiveness. In general,
Class I and Class II devices are devices whose safety and effectiveness can
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reasonably be assured through general or specific controls, respectively.
Class III devices are life sustaining, life supporting or implantable devices or
new devices which have been found not to be substantially equivalent to legally
marketed devices. The steps required for approval of a Class III device include:
- pre-clinical laboratory tests and IN VITRO and IN VIVO pre-clinical
studies;
- the submission to the FDA and approval of an Investigational Device
Exemption application to allow initiation of clinical testing;
- human clinical studies to prove safety and effectiveness of the device;
- the submission of a Pre-Marketing Application; and
- the approval by the FDA of the Pre-Marketing Application.
Typically, clinical testing of devices involves initial testing to evaluate
safety and feasibility and expanded trials to collect sufficient data to prove
safety and effectiveness. In addition, the procedures and the facilities used to
manufacture the device are subject to review and approval by the FDA.
A device (other than a Class III device) which is proven to be substantially
equivalent to a device marketed prior to May 28, 1976, when government
regulations for devices were first introduced, can be marketed after approval of
a 510(k) application rather than the filing of an Investigational Device
Exemption application and a Pre-Marketing Application. The 510(k) application
must contain a description of the device, its methods of manufacture and quality
control procedures and the results of testing to demonstrate that the device is
substantially equivalent to the device already marketed.
In May 1996, the FDA published a new guidance document that provided for the
regulation of products such as Carticel-Registered Trademark- chondrocytes that
use manipulated autologous structural cells. Under these regulations, companies
that currently are not marketing autologous cultured chondrocytes would likely
be required to provide a prospective randomized blinded control study comparing
the treatment to alternative treatments. Genzyme Tissue Repair estimates that it
could take eight years for any competitor to complete a study of this nature
that would demonstrate the clinical efficacy of its proposed treatment. In
August 1997, the FDA granted Genzyme Tissue Repair a Biologic License
Application under these regulations for Carticel-Registered Trademark-
chondrocytes. Genzyme Tissue Repair has initiated discussions with the FDA
regarding an application for Epicel-TM- skin grafts, which has been on the
market as an unregulated medical device. Genzyme Tissue Repair expects that the
FDA will permit Epicel-TM- skin grafts to remain on the market until its
regulatory status is resolved.
The time and expense required to perform the clinical testing necessary to
obtain FDA approval can far exceed the time and expense of the research and
development initially required to create the product. Even after initial FDA
approval has been obtained, we could be required to conduct further studies to
provide additional data on safety or to gain approval for the use of a product
as a treatment for additional clinical indications. In addition, use of these
products during testing and after marketing approval has been obtained could
reveal side effects which, if serious, could delay, impede or prevent marketing
approval, limit uses, force a recall of the product or expose us to product
liability claims.
REGULATION OUTSIDE OF THE UNITED STATES
For marketing outside the United States, we are subject to foreign
regulatory requirements governing human clinical testing and marketing approval
for our products. These requirements vary by jurisdiction, differ from those in
the United States and may require us to perform additional pre-clinical or
clinical testing whether or not FDA approval has been obtained. The amount of
time required to obtain necessary approvals may be longer or shorter than that
required for FDA approval. In many foreign countries, pricing and reimbursement
approvals are also required.
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Our initial focus for obtaining marketing approval outside the United States
is typically Europe. European Union Regulations and Directives generally
classify healthcare products either as medicinal products or devices. For
medicinal products, marketing approval may be sought using either the
centralized procedure of the Committee for Proprietary Medicinal Products or the
decentralized, mutual recognition process. The centralized procedure results in
a recommendation in all member states, while the European Union multi-state
process involves country by country approval. European Union regulations for
products classified as devices have been implemented for some devices. Devices
such as the Sepra family of products must receive market approval through a
centralized procedure, where the device receives a CE Mark allowing distribution
to all member states of the European Union. For those devices where European
Union regulations have not been implemented, marketing approval must be obtained
on a country by country basis. The CE Mark certification requires us to receive
International Standards Organization certification for each facility involved in
the manufacture or distribution of the device. This certification comes only
after the development of an all inclusive quality system, which is reviewed for
compliance to International Quality Standards by a licensed "Notified Body"
working within the European Union. After certification is received a product
dossier is reviewed which attests to the product's compliance with European
Union directive 93/42/EEC for medical devices. Only after this point is a CE
Mark granted.
Autologous products are specifically exempt from the European Device
Directive and Pharmaceutical Directive promulgated by the European Union.
Therefore, each European country is free to impose its own regulations on the
marketing of these products. To date, Genzyme Tissue Repair has not encountered
any local registration requirement for market introduction of
Carticel-REGISTERED TRADEMARK- chondrocytes. During September 1997, the Spanish
national health system approved Carticel-REGISTERED TRADEMARK- chondrocytes for
use by public hospitals, representing the first broad approval of the product by
a reimbursement authority in Europe. Genzyme Tissue Repair is assessing the
regulatory requirements for commercialization of Carticel-REGISTERED TRADEMARK-
chondrocytes in Japan.
OTHER GOVERNMENT REGULATION
GOOD MANUFACTURING PRACTICES. All facilities and manufacturing techniques
used for the manufacture of products for clinical use or for sale must comply
with applicable "Good Manufacturing Practices," the FDA regulations governing
the production of pharmaceutical products.
ORPHAN DRUG ACT. The Orphan Drug Act provides incentives to manufacturers
to develop and market drugs for rare diseases and conditions affecting fewer
than 200,000 persons in the United States at the time of application for orphan
drug designation. The first developer to receive FDA marketing approval for an
orphan drug is entitled to a seven-year exclusive marketing period in the United
States for that product. However, a drug that the FDA considers to be clinically
superior to or different from another approved orphan drug, even though for the
same indication, is not barred from sale in the United States during the
seven-year exclusive marketing period. Similar legislation was adopted in the
European Union in the beginning of 2000, but the market exclusivity granted in
Europe is for ten years.
Legislation periodically has been introduced in recent years to change the
U.S. Orphan Drug Act to shorten the period of automatic market exclusivity and
to allow marketing rights to simultaneous developers of a drug. We cannot be
sure of whether the Orphan Drug act will be amended or, if amended, what effect
the changes would have on us.
REGULATION OF DIAGNOSTIC SERVICES. The Clinical Laboratories Improvement
Act provides for the regulation of clinical laboratories by the U.S. Department
of Health and Human Services. Regulations promulgated under the act affect our
genetics laboratories.
REGULATION OF GENE THERAPY PRODUCTS. In addition to FDA requirements, the
National Institutes of Health has established guidelines providing that
transfers of recombinant DNA into human subjects at
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NIH laboratories or with NIH funds must be approved by the NIH Director. The NIH
has established the Recombinant DNA Advisory Committee to review gene therapy
protocols. We expect that all of our gene therapy protocols will be subject to
review by the Recombinant DNA Advisory Committee. In the U.K., our gene therapy
protocols will be subject to review by the Gene Therapy Advisory Committee.
The recent death of a patient undergoing gene therapy using an adenoviral
vector to deliver the therapeutic gene has been widely publicized. As a result
of the death, the U.S. Senate has commenced hearings to determine whether
additional legislation is required to protect volunteers and patients who
participate in gene therapy clinical trials. Additionally, the Recombinant DNA
Advisory Committee has discussed extensively the use of adenoviral vectors in
gene therapy clinical trials and intends to issue a report in March 2000 on the
adverse events reported by investigators using adenoviral vectors. Increased
scrutiny could delay or increase the costs of our gene therapy product
development efforts or clinical trials.
TISSUE AND ORGAN BANK LAWS. A federal criminal statute that prohibits the
transfer of any human organ for valuable consideration for use in human
transplantation, but which permits recovery of reasonable costs associated with
transplant activities. This statute has not been applied to
Carticel-REGISTERED TRADEMARK- chondrocytes or Epicel-TM- skin grafts. 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. These state laws could be interpreted to apply to
Genzyme Tissue Repair'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 human tissue sales. The application of these or other
regulations to Genzyme Tissue Repair could result in significant expense to
Genzyme Tissue Repair, limit reimbursement for Genzyme Tissue Repair's services
and otherwise materially adversely affect Genzyme Tissue Repair's results of
operations.
OTHER LAWS AND REGULATIONS. Our operations are or may be subject to various
federal, state and local laws, regulations and recommendations relating to safe
working conditions, laboratory and manufacturing practices and the purchase,
storage, movement, use and disposal of hazardous or potentially hazardous
substances used in connection with our research work and manufacturing
operations, including radioactive compounds and infectious disease agents.
Although we believe that our safety procedures comply with the standards
prescribed by federal, state and local regulations, the risk of contamination,
injury or other accidental harm cannot be eliminated completely. In the event of
an accident, we could be held liable for any damages that result and any
liabilities could exceed our resources.
EMPLOYEES
As of December 31, 1999, we had approximately 3,800 employees, including all
of our consolidated subsidiaries and excluding Genzyme Transgenics Corporation.
None of our employees are covered by collective bargaining agreements. We
consider our employee relations to be excellent.
RESEARCH AND DEVELOPMENT COSTS
We have provided the information required by Item 101(c)(1)(xi) of
Regulation S-K in Part II, Item 8, "Consolidated Financial Statements and
Supplementary Schedules" and specifically in the Genzyme Corporation and
Subsidiaries Consolidated Statements of Operations and in Note M., "Research and
Development Agreements" to our consolidated financial statements set forth in
Exhibit 13.1 to this Form 10-K. We are incorporating that information into this
section by reference.
SALES BY GEOGRAPHIC AREA, SIGNIFICANT CUSTOMERS AND PRODUCTS
We have provided the information required by Items 101(c)(1)(i) and
(vii) and 101(d) of Regulation S-K under the heading "Management's Discussion
and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and
Results of Operations" and in Note Q., "Segment Information" to
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our consolidated financial statements, which are set forth in Exhibit 13.1 to
this Form 10-K. We are incorporating that information into this section by
reference.
ITEM 1A. EXECUTIVE OFFICERS
Our executive officers at March 31, 2000 were as follows:
<TABLE>
<CAPTION>
NAME AGE TITLE
---- -------- -----
<S> <C> <C>
Henri A. Termeer........................................ 54 Chairman of the Board,
President and Chief
Executive Officer
Russell J. Campanello................................... 44 Senior Vice President, Human
Resources
Earl M. Collier, Jr..................................... 52 Executive Vice President;
President, Genzyme Surgical
Products
David D. Fleming........................................ 51 Group Senior Vice President,
Diagnostic Products
Richard A. Moscicki, M.D................................ 48 Chief Medical Officer;
Senior Vice President,
Clinical, Medical and
Regulatory Affairs
Alan E. Smith, Ph.D..................................... 54 Chief Scientific Officer;
Senior Vice President,
Research
G. Jan van Heek......................................... 50 Executive Vice President,
Therapeutics and Genetics
Peter Wirth............................................. 49 Chief Legal Officer;
Executive Vice President;
Clerk
Michael S. Wyzga........................................ 45 Chief Financial and
Accounting Officer; Senior
Vice President, Finance
</TABLE>
MR. TERMEER has served as our President and a Director since October 1983,
as Chief Executive Officer since December 1985 and as Chairman of the Board
since May 1988. For ten years prior to joining us, Mr. Termeer worked for Baxter
Travenol Laboratories, Inc., a manufacturer of human health care products. Mr.
Termeer is a director of ABIOMED, Inc., AutoImmune Inc., Diacrin, Inc., GelTex
Pharmaceuticals, Inc. and Genzyme Transgenics Corporation, and a trustee of
Hambrecht & Quist Healthcare Investors and Hambrecht & Quist Life Sciences
Investors.
MR. CAMPANELLO joined us in February 1998 as Senior Vice President, Human
Resources. Prior to joining us, from March 1996 to February 1998, Mr. Campanello
served as Vice President of Nets Incorporated, an internet-based marketing
company, and from June 1987 to February 1996 he served as Vice President, Human
Resources of Lotus Development Corp., a computer software company. Mr.
Campanello is a director of Webhire, Inc., an application services provider in
the internet recruiting marketplace. Nets, Incorporated filed for Chapter 11
bankruptcy protection in May 1997.
MR. COLLIER joined us in January 1997 as Senior Vice President, Health
Systems, served as Executive Vice President, Surgical Products and Health
Systems from July 1997 until June 1999, and was named President of Genzyme
Surgical Products when it was formed in June 1999. Mr. Collier is also
responsible for Genzyme Tissue Repair. Prior to joining us, Mr. Collier was
President of Vitas HealthCare Corporation (formerly Hospice Care Incorporated),
a provider of health care services, from October 1991 until August 1995. Prior
to that, Mr. Collier was a partner in the Washington, D.C. law firm of Hogan &
Hartson, which he joined in 1981.
27
<PAGE>
MR. FLEMING joined us in April 1984 and has served as Group Senior Vice
President, Diagnostic Products since September 1996. From September 1996 until
January 2000 he also served as Group Senior Vice President, Diagnostic Products
and Genetics. Prior to that date, he served as President of our diagnostics
business unit since January 1989 and has been a Senior Vice President since
August 1989. For 11 years prior to joining us, he worked for Baxter Travenol
Laboratories, Inc.
DR. MOSCICKI joined us in March 1992 as Medical Director, became Vice
President, Medical Affairs in early 1993 and was named Vice President, Clinical,
Medical and Regulatory Affairs in December 1993. In September 1996 he became
Senior Vice President, Clinical, Medical and Regulatory Affairs and Chief
Medical Officer. Since 1979, he has also been a physician staff member at the
Massachusetts General Hospital and a faculty member at the Harvard Medical
School.
DR. SMITH joined us in August 1989 as Senior Vice President, Research and
became Chief Scientific Officer in September 1996. Prior to joining us, he
served as Vice President-Scientific Director of Integrated Genetics, Inc. from
November 1984 until its acquisition by us in August 1989. From October 1980 to
October 1984, Dr. Smith was head of the Biochemistry Division of the National
Institute for Medical Research, Mill Hill, London, England, and from 1972 to
October 1980 he was a member of the scientific staff at the Imperial Cancer
Research Fund in London, England. Dr. Smith also serves as a director of Genzyme
Transgenics Corporation.
MR. VAN HEEK joined us in September 1991 as General Manager of our
wholly-owned subsidiary, Genzyme, B.V., and became a corporate Vice President
and President of our therapeutics business unit in December 1993. From September
1996 through July 1997, he served as Group Senior Vice President. Therapeutics
and from July 1997 through December 1999 served as Executive Vice President,
Therapeutics and Tissue Repair. Since January 2000 he has served as Executive
Vice President, Therapeutics and Genetics, with responsibility for our
therapeutics and genetics business units and international operations. Prior to
joining us, Mr. van Heek was Vice President/General Manager of the Fenwal
Division of Baxter Healthcare Corporation.
MR. WIRTH joined us in January 1996 and has served as Executive Vice
President and Chief Legal Officer since September 1996. Mr. Wirth has
responsibility for Genzyme's corporate development and legal activities, Genzyme
Molecular Oncology and our emerging technologies business unit. From January
1996 to September 1996, Mr. Wirth served as Senior Vice President and General
Counsel. Mr. Wirth was a partner of Palmer & Dodge LLP, a Boston, Massachusetts
law firm, from 1982 through September 1996. Mr. Wirth remains of counsel to
Palmer & Dodge LLP.
MR. WYZGA joined us in February 1998 as Vice President and Corporate
Controller, served as Senior Vice President, Corporate Controller and Chief
Accounting Officer since January 1999, and as Senior Vice President, Finance and
Chief Financial Officer since July 1999. Prior to joining us, from February 1997
to February 1998, Mr. Wyzga served as Chief Financial Officer of Sovereign Hill
Software, Inc., a software company. From November 1995 to February 1997, he
served as Vice President of Finance and Chief Financial Officer of CACHELINK
Corporation, a client/server software company. From October 1994 to November
1995 Mr. Wyzga served as Vice President of Finance for Lotus Development
Corporation and he also served from August 1993 to October 1994 as Director of
Plans and Controls and from April 1991 to August 1993 as Manager of Plans and
Controls for Lotus.
ITEM 2. PROPERTIES
Our operations are conducted in manufacturing, warehousing, pilot plant,
clinical laboratories, and research and office facilities that are located
principally in:
- the United States;
- the United Kingdom;
28
<PAGE>
- the Netherlands;
- Switzerland; and
- Germany.
We lease all of our properties except for certain properties in:
- Haverhill, England;
- West Malling, England;
- Coventry, Connecticut;
- Fall River, Massachusetts;
- Framingham, Massachusetts;
- Allston, Massachusetts; and
- Santa Fe, New Mexico.
Our principal properties are:
- for Genzyme General, our manufacturing facilities for the large scale
production of our therapeutic proteins, diagnostic products and its
genetic diagnostic facilities;
- for Genzyme Surgical Products, our manufacturing facilities for the large
scale production of surgical instruments and biomaterials; and
- for Genzyme Tissue Repair, our cell processing facilities for
Carticel-Registered Trademark- chondrocytes and Epicel-TM- skin grafts.
Our selling and marketing activities are concentrated at facilities we have
leased in Cambridge, Massachusetts and the Netherlands. We conduct our research
and development activities primarily at our laboratory facilities in the United
States.
Leases for our facilities contain typical commercial lease provisions
including renewal options, rent escalators and tenant responsibility for
operating expenses. We believe that we have or are in the process of developing
adequate manufacturing capacity to support our requirements for the next several
years.
GENZYME GENERAL
THERAPEUTICS
In October 1996, we received FDA approval to manufacture
Cerezyme-Registered Trademark- enzyme at our multi-product manufacturing
facility at Allston Landing in Boston, Massachusetts. The facility, which we own
and which contains extensive sterile filling capacity, is built on land that we
hold under a 60-year lease.
We have entered into a contract manufacturing agreement with RenaGel LLC,
the entity formed in connection with our joint venture with GelTex
Pharmaceuticals under which, upon receipt of necessary regulatory approvals, we
will manufacture a portion of the joint venture's minimum supply requirements
for Renagel-Registered Trademark- Capsules in our facilities in Haverhill,
England.
We manufacture Thyrogen-Registered Trademark- hormone under Good
Manufacturing Practices conditions in our small-scale manufacturing facility in
Framingham, Massachusetts.
We use a multi-use pharmaceutical facility in Liestal, Switzerland to
produce peptides.
29
<PAGE>
DIAGNOSTICS
Genzyme General's diagnostic test kits and reagents are produced in
manufacturing facilities in San Carlos, California, Cambridge, Massachusetts and
Russelsheim, Germany.
We produce diagnostic enzymes and other fermentation products in a
multi-purpose fermentation facility in Maidstone, England and a protein
purification plant in West Malling, England. In 1997, we completed construction
of a new fermentation facility and warehousing facility in West Malling,
England.
Our genetic testing business primarily conducts operations in clinical
laboratory and administrative the facilities we own in Framingham, Massachusetts
and Santa Fe, New Mexico.
GENZYME MOLECULAR ONCOLOGY
Genzyme Molecular Oncology provides SAGE-TM- services from facilities we own
in Framingham, Massachusetts.
GENZYME SURGICAL PRODUCTS
We have manufacturing capacity at two facilities in the United Kingdom to
produce commercial quantities of hyaluronic acid powder for the Sepra family of
products. Sepra Film-Registered Trademark- bioresorbable membrane is produced at
commercial scale from the hyaluronic acid powder in our manufacturing facility
in Framingham, Massachusetts.
In July 1996, we acquired or assumed the leases for certain office,
laboratory and manufacturing facilities in Fall River, Massachusetts, Coventry,
Connecticut, Tucker, Georgia and Russelsheim, Germany for use in manufacturing
and warehousing our surgical products.
GENZYME TISSUE REPAIR
Production for Carticel-Registered Trademark- chondrocytes and Epicel-TM-
skin grafts occurs primarily in our cell processing facilities in Cambridge,
Massachusetts. The facility has the capacity to provide
Carticel-Registered Trademark- chondrocytes to approximately 5,000 patients per
year. In 1996, Genzyme Tissue Repair established a surgeon training center at
our facility in the Netherlands in conjunction with the
Carticel-Registered Trademark- program.
ITEM 3. LEGAL PROCEEDINGS
As of March 31, 2000, there are no pending legal proceedings deemed material
by us to which we are, or any of our subsidiaries is, a party, or to which any
of the property of our company or of our subsidiaries is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
We did not submit any matters to a vote of our security holders during the
fourth quarter of the fiscal year ended December 31, 1999.
30
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
We have four series of common stock:
- Genzyme General Division Common Stock;
- Genzyme Molecular Oncology Division Common Stock;
- Genzyme Surgical Products Division Common Stock; and
- Genzyme Tissue Repair Division Common Stock.
These securities are designed to reflect the value and track the performance
of the company's four operating divisions: Genzyme General, Genzyme Molecular
Oncology, Genzyme Surgical Products and Genzyme Tissue Repair. All four series
of stock are traded on the over-the-counter market and prices are quoted on The
Nasdaq National Market-TM- system under the symbols GENZ, GZMO, GZSP and GZTR.
On November 16, 1998, we distributed to the holders of record of Genzyme
General Stock on November 2, 1998, 0.10805 shares of Molecular Oncology Stock
for each share of Genzyme General Stock held. Molecular Oncology Stock began
trading on Nasdaq November 16, 1998. On June 28, 1999, we distributed to the
holders of record of Genzyme General Stock on June 14, 1999, 0.17901 shares of
Surgical Products Stock for each share of Genzyme General Stock held. The
Surgical Products Stock began trading on Nasdaq June 28, 1999.
As of March 21, 2000, there were 2,307 stockholders of record of Genzyme
General Stock, 2,198 stockholders of record of Molecular Oncology Stock, 2,086
stockholders of record of Surgical Products Stock and 5,423 stockholders of
record of Tissue Repair Stock.
31
<PAGE>
The following table sets forth, for the periods indicated, the high and low
sale price for each series of our stock as reported by Nasdaq.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
GENZYME GENERAL STOCK
1999:
First Quarter........................................ $55 3/4 $41 5/8
Second Quarter....................................... 53 5/8 36 3/8
Third Quarter........................................ 63 1/8 44 3/4
Fourth Quarter....................................... 48 3/8 30 3/4
1998:
First Quarter........................................ $34 $25 3/8
Second Quarter....................................... 33 23 1/2
Third Quarter........................................ 36 1/4 23 3/4
Fourth Quarter....................................... 50 29 11/16
MOLECULAR ONCOLOGY STOCK
1999:
First Quarter........................................ $ 5 1/2 $ 2 5/16
Second Quarter....................................... 3 31/32 2 5/8
Third Quarter........................................ 10 5/8 2 5/8
Fourth Quarter....................................... 7 3/8 4 3/16
1998:
Fourth Quarter....................................... $15 $ 2
SURGICAL PRODUCTS STOCK
1999:
Second Quarter....................................... $ 8 $ 4
Third Quarter........................................ 7 5/8 3 5/16
Fourth Quarter....................................... 6 7/16 4 5/8
TISSUE REPAIR STOCK
1999:
First Quarter........................................ $ 4 1/8 $ 2 7/32
Second Quarter....................................... 2 5/8 1 15/16
Third Quarter........................................ 2 1/4 1 9/16
Fourth Quarter....................................... 3 9/16 1 5/16
1998:
First Quarter........................................ $ 9 1/4 $ 6 1/2
Second Quarter....................................... 9 3/16 5
Third Quarter........................................ 7 1/8 2 3/8
Fourth Quarter....................................... 3 3/4 2 1/32
</TABLE>
We have never paid any cash dividends on any series of our common stock and
we do not anticipate paying cash dividends in the foreseeable future.
In August 1999, the Canadian Medical Discoveries Fund exercised its option
to require us and StressGen to repurchase the fund's interest in
StressGen/Genzyme LLC. We repurchased one-half of the fund's interest in the
joint venture on October 12, 1999 for $3,934,651 by issuing to the fund 617,200
shares of Molecular Oncology Stock.
The Canadian Medical Discoveries Fund is a venture capital fund based in
Ontario, Canada. We issued the 617,200 shares of Molecular Oncology Stock to the
fund in reliance on Section 4(2) and Regulation S under the Securities Act of
1933, as amended.
32
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
We incorporate our Selected Financial Data into this section by reference
from:
- Exhibit 13.1 hereto under the heading "Genzyme Corporation--Selected
Financial Data;"
- Exhibit 13.2 hereto under the heading "Genzyme General--Selected Financial
Data;"
- Exhibit 13.3 hereto under the heading "Genzyme Molecular
Oncology--Selected Financial Data;"
- Exhibit 13.4 hereto under the heading "Genzyme Surgical Products--Selected
Financial Data;" and
- Exhibit 13.5 hereto under the heading "Genzyme Tissue Repair--Selected
Financial Data."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
We incorporate our Management's Discussion and Analysis of Financial
Condition and Results of Operations into this section by reference from:
- Exhibit 13.1 hereto under the heading "Management's Discussion and
Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and
Results of Operations;"
- Exhibit 13.2 hereto under the heading "Management's Discussion and
Analysis of Genzyme General's Financial Condition and Results of
Operations;"
- Exhibit 13.3 hereto under the heading "Management's Discussion and
Analysis of Genzyme Molecular Oncology's Financial Condition and Results
of Operations;"
- Exhibit 13.4 hereto under the heading "Management's Discussion and
Analysis of Genzyme Surgical Products' Financial Condition and Results of
Operations;" and
- Exhibit 13.5 hereto under the heading "Management's Discussion and
Analysis of Genzyme Tissue Repair's Financial Condition and Results of
Operations."
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We incorporate our Quantitative and Qualitative Disclosures About Market
Risk by reference into this section from the section entitled "Management's
Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial
Condition and Results of Operation--New Accounting Pronouncements, Euro, Year
2000 and Market Risk" in Exhibit 13.1 hereto.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
We incorporate the financial statements filed as part of this Annual Report
on Form 10-K into this section by reference from:
- Exhibit 13.1 hereto under the heading "Genzyme Corporation and
Subsidiaries' Consolidated Financial Statements" and the notes thereto;
- Exhibit 13.2 hereto under the heading "Genzyme General Combined Financial
Statements" and the notes thereto;
- Exhibit 13.3 hereto under the heading "Genzyme Molecular Oncology Combined
Financial Statements" and the notes thereto;
- Exhibit 13.4 hereto under the heading "Genzyme Surgical Products Combined
Financial Statements" and the notes thereto; and
33
<PAGE>
- Exhibit 13.5 hereto under the heading "Genzyme Tissue Repair Selected
Financial Data" and the notes thereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
During the period from January 1, 1999 to the filing date of this
Form 10-K, no independent accountant who was previously engaged as the principal
accountant to audit our financial statements has resigned, indicated that it has
declined to stand for re-election after the completion of the current audit or
been dismissed.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
We incorporate information regarding our directors and executive officers
into this section by reference from the section entitled "Executive Officers of
the Registrant" in Part I, Item 1A of this Form 10-K and the sections entitled
"Election of Directors" and "Section 16(a) Beneficial Ownership Reporting
Compliance" in the proxy statement for our 2000 annual meeting of stockholders.
ITEM 11. EXECUTIVE COMPENSATION
We incorporate information regarding the compensation of our directors and
executive officers into this section by reference from the sections entitled
"Election of Directors--Director Compensation" and "Executive Compensation" in
the proxy statement for our 2000 annual meeting of stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
We incorporate information regarding the ownership of our securities by our
directors, executive officers and 5% stockholders into this section by reference
from the section entitled "Share Ownership" in the proxy statement for our 2000
annual meeting of stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We incorporate information regarding transactions with related parties into
this section by reference from the section entitled "Certain Transactions" in
the proxy statement for our 2000 annual meeting of stockholders.
34
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A)(1). FINANCIAL STATEMENTS
We are incorporating the following financial statements (and related notes)
of Genzyme Corporation and Subsidiaries into this section by reference from
Exhibit 13.1 hereto:
<TABLE>
<CAPTION>
PAGE*
--------
<S> <C>
GENZYME CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations--For the Years
Ended
December 31, 1999, 1998 and 1997.................... GCS-30
Consolidated Balance Sheets--December 31, 1999 and
1998................................................. GCS-32
Consolidated Statements of Cash Flows--For the Years
Ended
December 31, 1999, 1998 and 1997.................... GCS-33
Consolidated Statements of Stockholders' Equity for the
Years
Ended December 31, 1999, 1998 and 1997.............. GCS-35
Notes to Consolidated Financial Statements.............. GCS-38
Report of Independent Accountants....................... GCS-93
------------------------
* References are to page numbers in Exhibit 13.1.
We are incorporating the following financial statements (and
related notes) of Genzyme General into this section by reference from
Exhibit 13.2 hereto:
<CAPTION>
PAGE*
--------
GENZYME GENERAL
<S> <C>
Combined Statements of Operations--For the Years Ended
December 31, 1999, 1998 and 1997.................... GG-18
Combined Balance Sheets--December 31, 1999 and 1998..... GG-19
Combined Statements of Cash Flows--For the Years Ended
December 31, 1999, 1998 and 1997.................... GG-20
Notes to Combined Financial Statements.................. GG-22
Report of Independent Accountants....................... GG-44
</TABLE>
------------------------
* References are to page numbers in Exhibit 13.2.
We are incorporating the following financial statements (and related notes)
of Genzyme Molecular Oncology into this section by reference from Exhibit 13.3
hereto:
<TABLE>
<CAPTION>
PAGE*
--------
<S> <C>
GENZYME MOLECULAR ONCOLOGY
Combined Statements of Operations--For the Years Ended
December 31, 1999, 1998 and 1997.................... GMO-13
Combined Balance Sheets--December 31, 1999 and 1998..... GMO-14
Combined Statements of Cash Flows--For the Years Ended
December 31, 1999, 1998 and 1997.................... GMO-15
Notes to Combined Financial Statements.................. GMO-16
Report of Independent Accountants....................... GMO-30
</TABLE>
------------------------
* References are to page numbers in Exhibit 13.3.
35
<PAGE>
We are incorporating the following financial statements (and related notes)
of Genzyme Surgical Products into this section by reference from Exhibit 13.4
hereto:
<TABLE>
<CAPTION>
PAGE*
--------
<S> <C>
GENZYME SURGICAL PRODUCTS
Combined Statements of Operations--For the Years Ended
December 31, 1999, 1998 and 1997.................... GSP-16
Combined Balance Sheets--December 31, 1999 and 1998..... GSP-17
Combined Statements of Cash Flows--For the Years Ended
December 31, 1999, 1998 and 1997.................... GSP-18
Notes to Combined Financial Statements.................. GSP-19
Report of Independent Accountants....................... GSP-34
</TABLE>
------------------------
* References are to page numbers in Exhibit 13.4 hereto.
We are incorporating the following financial statements (and related notes)
of Genzyme Tissue Repair into this section by reference from Exhibit 13.5
hereto:
<TABLE>
<CAPTION>
PAGE*
--------
<S> <C>
GENZYME TISSUE REPAIR
Combined Statements of Operations--For the Years Ended
December 31, 1999, 1998 and 1997.................... GTR-13
Combined Balance Sheets--December 31, 1999 and 1998..... GTR-14
Combined Statements of Cash Flows--For the Years Ended
December 31, 1999, 1998 and 1997.................... GTR-15
Notes to Combined Financial Statements.................. GTR-16
Report of Independent Accountants....................... GTR-29
</TABLE>
------------------------
* References are to page numbers in Exhibit 13.5 hereto.
(A)(2). FINANCIAL STATEMENT SCHEDULES
The schedules listed below for Genzyme General, Genzyme Surgical Products,
Genzyme Tissue Repair and Genzyme Corporation and Subsidiaries are filed as part
of this Form 10-K:
<TABLE>
<CAPTION>
PAGE*
---------
<S> <C>
GENZYME CORPORATION AND SUBSIDIARIES
Schedule II--Valuation and Qualifying Accounts.......... GCS-94
GENZYME GENERAL
Schedule II--Valuation and Qualifying Accounts.......... GG-45
GENZYME SURGICAL PRODUCTS
Schedule II--Valuation and Qualifying Accounts.......... GSP-35
GENZYME TISSUE REPAIR
Schedule II--Valuation and Qualifying Accounts.......... GTR-30
</TABLE>
All other schedules are omitted as the information required is inapplicable
or the information is presented in (i) the Genzyme General Combined Financial
Statements or notes thereto, (ii) the Genzyme Surgical Products Combined
Financial Statements or notes thereto or (iii) the Genzyme Tissue Repair
Combined Financial Statements or notes thereto or (iv) the Genzyme Corporation
and Subsidiaries Consolidated Financials or notes thereto.
36
<PAGE>
(A)(3). EXHIBITS
The exhibits are listed below under Part IV, Item 14(c) of this Form 10-K.
(B). REPORTS ON FORM 8-K
On October 21, 1999, we filed a Current Report on Form 8-K to announce that
we entered into an Agreement and Plan of Merger which provided for the merger of
Cell Genesys, Inc. with and into a subsidiary of Genzyme.
(C). EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
*3.1-- Restated Articles of Organization of Genzyme, as amended.
Filed as Exhibit 1 to Genzyme's Registration Statement on
Form 8-A dated June 18, 1997.
*3.2-- By-laws of Genzyme as amended. Filed as Exhibit 3.2 to
Genzyme's Form 10-Q for the quarter ended September 30,
1999.
*4.1-- Series Designation for Genzyme Molecular Oncology Division
Common Stock, $.01 par value. Filed as Exhibit 2 to
Genzyme's Registration Statement on Form 8-A dated June 18,
1997.
*4.2-- Series Designation for Genzyme Series A, Series B, Series C
and Series D Junior Participating Preferred Stock, $.01 par
value. Filed as Exhibit 2 to Amendment No. 1 to Genzyme's
Registration Statement on Form 8-A dated June 11, 1999.
*4.3-- Amended and Restated Renewed Rights Agreement dated as of
June 10, 1999 between Genzyme and American Stock Transfer &
Trust Company. Filed as Exhibit 4 to Amendment No. 1 to our
Registration Statement on Form 8-A dated June 11, 1999.
Genzyme's Current Report on Form 8-K dated March 17, 1999.
*4.4-- Warrant issued to Richard Warren, Ph.D. Filed as Exhibit 4
to the Form 8-K of IG Laboratories, Inc. dated October 11,
1990 (File No. 0-18439).
*4.5-- Series Designation for Genzyme Surgical Products Division
common stock, $.01 par value. Filed as Exhibit 2 to
Genzyme's Registration Statement on Form 8-A dated June 11,
1999.
*4.6-- Form of Genzyme General Division Convertible Debenture.
Filed as Exhibit 10.7 to Genzyme's Form 10-Q for the quarter
ended September 30, 1997.
*4.7-- Registration Rights Agreement dated as of August 29, 1997 by
and among Genzyme and the entities listed on the signature
pages thereto. Filed as Exhibit 10.8 to Genzyme's Form 10-Q
for the quarter ended September 30, 1997.
*4.8-- Warrant Agreement between Genzyme and Comdisco, Inc. Filed
as Exhibit 10.22 to a Form 10 of PharmaGenics, Inc. (File
No. 0-20138).
*4.9-- Indenture, dated as of May 22, 1998, between Genzyme and
State Street Bank and Trust Company, as Trustee, including
the form of Note. Filed as Exhibit 4.3 to Genzyme's
Registration Statement on Form S-3 (File No. 333-59513).
*4.10-- Registration Rights Agreement, dated as of May 19, 1998,
among Genzyme, Credit Suisse First Boston Corporation,
Goldman, Sachs & Co. and Cowen & Company. Filed as Exhibit
4.4 to Genzyme's Registration Statement on Form S-3 (File
No. 333-59513).
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
*4.11-- Purchase Agreement, dated as of May 19, 1998, among Genzyme,
Credit Suisse First Boston Corporation, Goldman, Sachs & Co.
and Cowen & Company. Filed as Exhibit 4.5 to Genzyme's
Registration Statement on Form S-3 (File No. 333-59513).
*10.1-- Leases by Whatman Reeve Angel Limited to Whatman
Biochemicals Limited dated May 1, 1981. Filed as Exhibit
10.12 to Genzyme's Registration Statement on Form S-1 (File
No. 33-4904).
*10.2-- Lease dated as of September 15, 1989 for 95-111 Binney
Street, Cambridge, Massachusetts between Genzyme and the
Trustees of the Cambridge East Trust. Filed as Exhibit 10.2
to Genzyme's Form 10-K for 1992. First amendment of lease
dated February 28, 1994. Filed as Exhibit 10.2 to Genzyme's
Form 10-K for 1993.
*10.3-- Lease dated December 20, 1988 for Building 1400, One Kendall
Square, Cambridge, Massachusetts between Genzyme and the
Trustees of Old Binney Realty Trust, as amended by letters
dated December 20, 1988, January 19, 1989 and January 31,
1989. Filed as Exhibit 10.18 to Genzyme's Form 10-K for
1988. Addendum dated September 20, 1991 to Lease for
Building 1400, One Kendall Square, Cambridge, Massachusetts.
Filed as Exhibit 19.1 to Genzyme's Form 10-Q for the quarter
ended September 30, 1991. Addenda dated August 2, 1990 and
April 6, 1993 to Lease for Building 1400, One Kendall
Square, Cambridge, Massachusetts. Filed as Exhibit 10.3 to
Genzyme's Form 10-K for 1993.
*10.4-- Lease dated December 20, 1988 for Building 700, One Kendall
Square, Cambridge, Massachusetts between Genzyme and
Trustees of Old Kendall Realty Trust, as amended by letters
dated December 20, 1988 and January 31, 1989. Filed as
Exhibit 10.19 to Genzyme's Form 10-K for 1988.
*10.5-- Lease dated September 30, 1985 for 51 New York Avenue,
Framingham, Massachusetts. Filed as Exhibit 10.8 to
Genzyme's Form 10-K for 1990. Amendment No. 1, dated October
11, 1990, and Amendment No. 2, dated May 12, 1993, to lease
for 51 New York Avenue, Framingham, Massachusetts. Filed as
Exhibit 10.5 to Genzyme's Form 10-K for 1993.
*10.6-- Lease dated April 30, 1990 for 64 Sidney Street, Cambridge,
Massachusetts between BioSurface Technology, Inc. and Forest
City 64 Sidney Street, Inc. Filed as Exhibit 10.22 to
BioSurface's Registration Statement on Form S-1 (File No.
33-55874).
*10.7-- Sublease Lease dated May 22, 1992 for three buildings at
74-84 New York Avenue, Framingham, Massachusetts between
Genzyme and Prime Computer, Inc. Filed as Exhibit 10.7 to
Genzyme's Form 10-K for 1993.
*10.8-- Lease dated May 22, 1992 for three buildings at 74-84 New
York Avenue, Framingham, Massachusetts between Genzyme and
Mark L. Fins, David J. Winstanley and Bruce A. Gurall,
tenants in common. Filed as Exhibit 10.8 to Genzyme's Form
10-K for 1993.
*10.9-- Lease dated June 1, 1992 for land at Allston Landing,
Allston, Massachusetts between Allston Landing Limited
Partnership and the Massachusetts Turnpike Authority. Filed
as Exhibit 10.9 to Genzyme's Form 10-K for 1993.
*10.10-- Underlease for Block 13 building at Kings Hill Business Park
West Malling Kent among Rouse and Associates Block 13
Limited, Genzyme (UK) Limited and Genzyme. Filed as Exhibit
10.11 to Genzyme's Registration Statement on Form 8-B dated
December 31, 1991, filed on March 2, 1992.
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
*10.11-- Lease dated November 12, 1998 for Metrowest Place, 15
Pleasant Street Connector, Framingham, Massachusetts,
between Consolidated Group Service Company Limited
Partnership and Genzyme. Previously filed.
*10.12-- Agreement of Limited Partnership dated as of September 13,
1989 between Genzyme Development Corporation II, as General
Partner, and each of the Limited Partners named therein.
Filed as Exhibit 10(aa) to Genzyme's Registration Statement
on Form S-4 (File No. 33-32343).
*10.13-- Cross License Agreement dated as of September 13, 1989
between Genzyme and Genzyme Development Partners, L.P. Filed
as Exhibit 10(bb) to Genzyme's Registration Statement on
Form S-4 (File No. 33-32343).
*10.14-- Development Agreement dated as of September 13, 1989 between
Genzyme and Genzyme Development Partners. Filed as Exhibit
10(cc) to Genzyme's Registration Statement on Form S-4 (File
No. 33-32343).
*10.15-- Amendment No. 1 dated January 4, 1994 to Development
Agreement dated as of September 13, 1989 between Genzyme and
Genzyme Development Partners. Filed as Exhibit 10.14 to
Genzyme's Form 10-K for 1993.
*10.16-- Partnership Purchase Option Agreement dated as of September
13, 1989 between Genzyme, Genzyme Development Corporation
II, Genzyme Development Partners, each Class A Limited
Partner and the Class B Limited Partner. Filed as Exhibit
10(dd) to Genzyme's Registration Statement on Form S-4 (File
No. 33-32343).
*10.17-- Partnership Purchase Agreement, undated and unexecuted,
between Genzyme Corporation, Genzyme Development Corporation
II, Genzyme Development Partners, each Class A Limited
Partner and the Class B Limited Partner, as the case may be.
Filed as Exhibit 10(ee) to Genzyme's Registration Statement
on Form S-4 (File No. 33-32343).
*10.18-- Amended and Restated Joint Venture Agreement between Genzyme
and Genzyme Development Partners. Filed as Exhibit 10.1 to
Genzyme Development Partners' Form 10-Q for the quarter
ended March 31, 1997 (File No. 0-18554).
*10.19-- Tax Indemnification Agreement between Genzyme and General
Development Partners. Filed as Exhibit 10.2 to Genzyme
Development Partners' Form 10-Q for the quarter ended March
31, 1997 (File No. 0-18554).
*10.20-- Marketing and Distribution Agreement between Genzyme and
Genzyme Ventures II. Filed as Exhibit 10.3 to Genzyme
Development Partners' Form 10-Q for the quarter ended March
31, 1997 (File No. 0-18554).
*10.21-- Technology License and Supply Agreement dated as of
September 8, 1989 between Imedex and Genzyme. Filed as
Exhibit 10.30 to Genzyme's Form 10-K for 1990.**
*10.22-- 1998 Director Stock Option Plan, as amended. Filed as
Exhibit 10.22 to Genzyme's Form 10-K for 1998.
*10.23-- 1990 Equity Incentive Plan, as amended. Filed as Exhibit
99.1 to Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33249).
*10.24-- 1999 Employee Stock Purchase Plan. Previously filed.
*10.25-- 1996 Directors' Deferred Compensation Plan. Filed as Exhibit
99.1 to Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33251).
</TABLE>
39
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<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
*10.26-- Executive Employment Agreement dated as of January 1, 1990
between Genzyme and Henri A. Termeer. Filed as Exhibit 10.32
to Genzyme's Form 10-K for 1990.
*10.27-- Form of Severance Agreement between Genzyme and certain
senior executives, together with schedule identifying the
provisions applicable to each executive. Filed as Exhibit
10.33 to Genzyme's Form 10-K for 1990. Current schedule
identifying the executives filed as Exhibit 10.27 to
Genzyme's Form 10-K for 1998.
*10.28-- Form of Indemnification Agreement between Genzyme and
certain senior executives, together with schedule
identifying the provisions applicable to each executive.
Filed as Exhibit 10.34 to Genzyme's Form 10-K for 1990.
Current schedule identifying the executives filed as
Exhibit 10.28 to Genzyme's Form 10-K for 1998.
*10.29-- Executive Employment Agreement dated as of January 1, 1996
between Genzyme and Peter Wirth. Filed as Exhibit 10.1 to
Genzyme's Form 10-Q for the quarter ended March 31, 1996.
*10.30-- Consulting Agreement dated December 14, 1998 between Genzyme
and Charles L. Cooney, Ph.D. Filed as Exhibit 10.30 to
Genzyme's Form 10-K for 1998.
*10.31-- Consulting Agreement dated December 31, 1998 between Genzyme
and Robert J. Carpenter. Filed as Exhibit 10.31 to Genzyme's
Form 10-K for 1998.
*10.32-- Consulting Agreement dated July 1, 1998 between Genzyme and
Henry E. Blair. Filed as Exhibit 10.32 to Genzyme's Form
10-K for 1998.
*10.33-- Technology Transfer Agreement between Genzyme and Genzyme
Transgenics Corporation dated as of May 1, 1993. Filed as
Exhibit 2.1 to the Registration Statement on Form S-1 of
Genzyme Transgenics Corporation (File No. 33-62872).
*10.34-- Research and Development Agreement between Genzyme and
Genzyme Transgenics Corporation dated as of May 1, 1993.
Filed as Exhibit 10.1 to the Registration Statement on Form
S-1 of Genzyme Transgenics Corporation (File No. 33-62872).
*10.35-- Services Agreement between Genzyme and Genzyme Transgenics
Corporation dated as of May 1, 1993. Filed as Exhibit 10.2
to the Registration Statement on Form S-1 of Genzyme
Transgenics Corporation (File No. 33-62872).
*10.36-- Series A Convertible Preferred Stock Purchase Agreement
between Genzyme and Genzyme Transgenics Corporation dated as
of May 1, 1993. Filed as Exhibit 10.5 to the Registration
Statement on Form S-1 of Genzyme Transgenics Corporation
(File No. 33-62872).
*10.37-- Second Amended and Restated Convertible Debt Agreement dated
as of December 28, 1998 by and between Genzyme and Genzyme
Transgenics Corporation. Filed as Exhibit 10.37 to Genzyme's
Form 10-K for 1998.
*10.38-- Amended and Restated Operating Agreement of ATIII LLC dated
as of January 1, 1998 by and among Genzyme and Genzyme
Transgenics Corporation. Filed as Exhibit 10.52.1 to Genzyme
Transgenics Corporation's Form 10-K for 1997 (File No.
0-21794).**
*10.39-- Purchase Agreement dated as of January 1, 1998 by and
between Genzyme and Genzyme Transgenics Corporation. Filed
as Exhibit 10.52.2 to Genzyme Transgenics Corporation's Form
10-K for 1997 (File No. 0-21794).**
</TABLE>
40
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<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
*10.40-- Collaboration Agreement dated as of January 1, 1997 by and
among Genzyme, Genzyme Transgenics Corporation and ATIII
LLC. Filed as Exhibit 10.52.3 to Genzyme Transgenics
Corporation's Form 10-K for 1997 (File No. 0-21794).**
*10.41-- Credit Agreement dated November 12, 1999 among Genzyme and
those of its subsidiaries party thereto, Fleet National
Bank, as Administrative Agent, and ABN AMRO Bank N.V. as
Syndication Agent and Mellon Bank, N.A. as Documentation
Agent.
*10.42-- Collaboration Agreement dated as of June 17, 1997 by and
among Genzyme, GelTex Pharmaceuticals, Inc. and RenaGel LLC.
Filed as Exhibit 10.18 to GelTex Pharmaceuticals, Inc. Form
10-Q for the quarter ended June 30, 1997 (File No.
0-26872).**
*10.43-- Purchase Agreement dated as of June 17, 1997 by and between
Genzyme and GelTex Pharmaceuticals, Inc.. Filed as Exhibit
10.19 to GelTex Pharmaceuticals, Inc.'s Form 10-Q for the
quarter ended June 30, 1997 (File No. 0-26872).**
*10.44-- Operating Agreement of RenaGel LLC dated as of June 17, 1997
by and among Genzyme, GelTex Pharmaceuticals, Inc. and
RenaGel, Inc. Filed as Exhibit 10.20 to GelTex
Pharmaceuticals, Inc.'s Form 10-Q for the quarter ended June
30, 1997 (File No. 0-26872).
*10.45-- Purchase Agreement dated as of August 29, 1997 by and among
Genzyme Corporation and the entities listed on the signature
pages thereto. Filed as Exhibit 10.5 to Genzyme's Form 10-Q
for the quarter ended September 30, 1997.
*10.46-- Collaboration Agreement dated September 4, 1998 among
Genzyme, BioMarin Pharmaceutical, Inc. and BioMarin/Genzyme
LLC. Previously filed as Exhibit 10.24 to BioMarin
Pharmaceutical, Inc.'s Registration Statement on Form S-1
(File No. 333-77701).**
*10.47-- Purchase Agreement dated September 4, 1998 between Genzyme
and BioMarin Pharmaceutical, Inc. Previously filed as
Exhibit 10.25 to BioMarin Pharmaceutical, Inc.'s
Registration Statement on Form S-1 (File No. 333-77701) and
incorporated herein by reference.
*10.48-- Operating Agreement of BioMarin/Genzyme LLC. Previously
filed as Exhibit 10.30 to BioMarin Pharmaceutical, Inc.'s
Registration Statement on Form S-1 (File No. 333-77701) and
incorporated herein by reference.
*10.49-- Agreement and Plan of Merger dated as of March 6, 2000 by
and among Genzyme, Seagull Merger Corporation and Biomatrix,
Inc. Filed as Exhibit 99.1 to Genzyme's Form 8-K filed on
March 15, 2000.
13.1-- The 1999 Financial Statements of Genzyme Corporation and
Subsidiaries. Filed herewith.
13.2-- The 1999 Financial Statements of Genzyme General Division.
Filed herewith.
13.3-- The 1999 Financial Statements of Genzyme Molecular Oncology
Division. Filed herewith.
13.4-- The 1999 Financial Statements of Genzyme Surgical Products
Division. Filed herewith.
13.5-- The 1999 Financial Statements of Genzyme Tissue Repair
Division. Filed herewith.
*21-- Subsidiaries of the Registrant. Previously filed.
23.1-- Consent of PricewaterhouseCoopers LLP. Filed herewith.
</TABLE>
41
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<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
*23.2-- Consent of PricewatehouseCoopers LLP relating to the Annual
Report of Genzyme Corporation Retirement Savings Plan on
Form 10-K. Previously filed.
23.3-- Consent of PricewaterhouseCoopers LLP relating to Genzyme
Corporation Form 10-K. (To be filed).
27-- Financial Data Schedule for Genzyme Corporation. Filed
herewith.
*99.1-- Management and Accounting Policies Governing the
Relationship of Genzyme Divisions. Filed as Exhibit 99.1 to
Genzyme's Registration Statement on Form S-3 dated March 3,
2000 (File No. 333-31548).
*99.2-- Factors Affecting Future Operating Results. Previously
filed.
</TABLE>
------------------------
* Indicates exhibit previously filed with the Securities and Exchange
Commission and incorporated herein by reference. Exhibits filed with Forms
10-K, 10-Q, 8-K, 8-A, 8-B or Schedule 14A of Genzyme Corporation were filed
under Commission File No. 0-14680.
** Confidential treatment has been granted for the deleted portions of Exhibits
10.21, 10.38-10.40, 10.42 and 10.43 and 10.46
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Exhibits 10.22 through 10.32 above are management contracts or compensatory
plans or arrangements in which the executive officers or directors of Genzyme
participate.
42
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C> <C>
GENZYME CORPORATION
Dated: , 2000 By: /s/ MICHAEL S. WYZGA
-----------------------------------------
Michael S. Wyzga
Senior Vice President and
Chief Financial Officer
</TABLE>
43
