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Filed by Biomatrix, Inc. (Commission File No. 001-14221)
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Companies: Genzyme Corporation (Commission File No. 000-14680) and
Genzyme Corporation's Surgical Products Division and Tissue Repair Division
GENZYME BIOSURGERY TO BE FORMED BY MERGER OF THREE COMPANIES
BIOMATRIX, GENZYME TISSUE REPAIR, AND GENZYME SURGICAL PRODUCTS CREATE POWERFUL
NEW ENTERPRISE IN BIO-ORTHOPEDIC AND CARDIOTHORACIC MARKETS
Cambridge, Mass. and Ridgefield, N.J., March 6, 2000 --Genzyme Corp. and
Biomatrix Inc. today announced their agreement to form Genzyme Biosurgery, a new
division of Genzyme that will combine three publicly traded entities to create
the foremost company in the field of biosurgery.
This transaction will unite three leaders in the rapidly emerging market for
sophisticated biomaterials and biotherapeutic products that are used in surgical
and medical procedures. Genzyme Biosurgery will bring substantial resources and
experience to bear on several markets, with particular focus on bio-orthopedics
and cardiothoracic surgery, two biosurgical areas with high growth potential.
Genzyme Biosurgery--which will have its own newly created stock--will be
composed of Biomatrix (NYSE: BXM), a worldwide leader in the development and
manufacture of viscoelastic biomaterials for use in orthopedic and other medical
applications; Genzyme Tissue Repair (Nasdaq: GZTR), a leading developer of
biological products for the treatment of orthopedic injuries and severe burns;
and Genzyme Surgical Products (Nasdaq: GZSP), which develops and markets medical
devices, biomaterials, and biotherapeutics for cardiothoracic and other surgical
markets, and is a leader in developing biomaterials to prevent post-surgical
adhesions.
Genzyme Biosurgery will accelerate Genzyme Corp.'s pioneering development of the
biosurgery market, which is being created by the increasing use of biomaterials
and biological products to enhance or replace conventional mechanical approaches
to surgery and other interventional and medical procedures.
Genzyme Biosurgery will begin with a portfolio of 22 major marketed products
and a strong pipeline of 10 significant products in various stages of
clinical development. Approximately 45 percent of Genzyme Biosurgery's
revenues will come from orthopedic products, namely Synvisc-Registered
Trademark-, a treatment for osteoarthritis of the knee, and
Carticel-Registered Trademark-, a treatment for damaged knee cartilage.
Another 40 percent of revenues will come from cardiothoracic surgery
products. Additional revenues will come from surgical devices and
biomaterials, including Seprafilm-TM- for the reduction of post-surgical
adhesions.
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Under the terms of the definitive merger agreement, Genzyme Biosurgery will be
formed by combining the two Genzyme divisions in tax-free stock-for-stock
exchanges to form one unit, and then acquiring Biomatrix in a tax-free exchange
of stock and cash. The combined market value of the three organizations at the
close of business on March 3 totaled $1.3 billion.
Biomatrix shareholders will have the option of receiving $37 in cash or one
share of the newly-created Genzyme Biosurgery stock for each Biomatrix share.
The election provision of the merger agreement specifies that the cash portion
of the transaction will be approximately $245 million.
Following completion of the merger, Biomatrix shareholders will hold
approximately 47 percent of Genzyme Biosurgery, Genzyme Tissue Repair
shareholders will hold approximately 27 percent, and Genzyme Surgical Products
shareholders will hold approximately 26 percent. Genzyme Tissue Repair
shareholders will receive 0.3352 shares and Genzyme Surgical Products
shareholders will receive 0.6060 shares of Genzyme Biosurgery stock for each
share of their stock.
Upon formation, Genzyme Biosurgery anticipates having pro forma annualized
revenues of more than $250 million. It will be profitable on a
cash-earnings-per-share basis, before amortization of goodwill, and will
generate cash flow from operations sufficient to support current operations and
to service any debt associated with the acquisition of Biomatrix.
Genzyme Biosurgery will have over 1300 employees; six dedicated manufacturing
facilities; powerful scientific, clinical, and regulatory capabilities; an
impressive intellectual property portfolio; several established sales
organizations in focused surgical markets; and valuable marketing and
distribution agreements with a number of large, multi-national health care
companies.
"We are building an exciting new enterprise with very strong financial,
commercial, scientific, and product development capabilities, which creates a
powerful platform for innovation," said Henri A. Termeer, chairman and chief
executive officer of Genzyme Corp. "Establishing this new organization
dramatically transforms our biosurgery franchise. It provides critical mass and
sharpens our strategic focus in several key markets."
Dr. Endre Balazs, M.D., Biomatrix' co-founder, chief executive officer, and
chief scientific officer, stated: "Joining forces with Genzyme is an excellent
strategic move for Biomatrix, as it provides us with the infrastructure and
resources to achieve even greater scientific and commercial successes, which we
believe will bring significant benefit to our shareholders, employees, and
customers. Our companies share a common strategic vision to lead through
innovation in the fastest growing segments of the biomaterials market for a
broad spectrum of surgical products. We believe our combined products on the
market and extensive pipeline of products will keep us at the forefront of these
therapeutic fields and will provide significant competitive advantages."
The transaction is expected to close by the end of June 2000, pending regulatory
and shareholder approvals. The boards of directors of Genzyme Corp. and
Biomatrix have unanimously approved the merger, which is subject to clearance
under the Hart-Scott-Rodino Anti-Trust Improvements
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Act. The transaction will require the approval of Biomatrix shareholders and all
Genzyme shareholders, including separate approvals of Genzyme Tissue Repair and
Genzyme Surgical Products shareholders, and it is subject to customary closing
conditions. Genzyme Biosurgery shares will trade on the Nasdaq National Market.
Dr. Balazs and the other officers of Biomatrix have agreed to vote their
Biomatrix shares, totaling approximately 34 percent of the outstanding shares,
in favor of the transactions. In addition, in connection with the agreement,
Biomatrix has granted Genzyme an option to purchase 4,600,000 shares under
certain circumstances.
Duke Collier, president of Genzyme Surgical Products, will become president of
Genzyme Biosurgery. "This transaction will accelerate the development of our
biosurgery strategy," said Mr. Collier. "Genzyme Biosurgery represents a
powerful combination of products, resources, capabilities, and research programs
that is unmatched in the industry. In particular, Genzyme Biosurgery combines
highly regarded biomedical and biotherapeutic product development skills with
well-respected and effective capabilities in marketing and selling these
products to surgeons. With a clear strategic focus, increasing product sales,
advanced technology platforms, and a strong financial foundation, Genzyme
Biosurgery is poised for significant growth."
Russ Herndon, president of Genzyme Tissue Repair, said: "Becoming part of
Genzyme Biosurgery enables us to contribute our advanced expertise in
bio-orthopedics to the creation of a biosurgery leader. Genzyme Biosurgery will
market the two defining products in the field of bio-orthopedics: Synvisc and
Carticel. This merger allows us to realize our own vision of becoming the key
player in bio-orthopedics much more rapidly."
Strategic Fit
The creation of Genzyme Biosurgery represents a powerful combination of
strengths. It brings together two companies--Biomatrix and Genzyme Surgical
Products--with nearly 40 years of combined leadership in the development and
commercialization of unique biomaterials based on hyaluronan (hyaluronic acid),
including Biomatrix' Synvisc for the treatment of osteoarthritis of the knee and
Genzyme's Seprafilm-TM- Bioresorbable Membrane, the only biomaterial approved
for use in reducing adhesions following abdominal and pelvic surgery. This
combined expertise in hyaluronan technology provides Genzyme Biosurgery with a
fertile platform for innovation, from which it expects to develop products for a
wide range of surgical and medical applications.
Genzyme Biosurgery also brings together two of the pioneers in
bio-orthopedics--Biomatrix and Genzyme Tissue Repair--with two of the defining
products in this market: Synvisc and Carticel. Synvisc is currently marketed in
over 35 countries through marketing and distribution agreements Biomatrix has
established with six major pharmaceutical companies, such as Wyeth-Ayerst
Laboratories, a division of American Home Products; Novartis; Bayer; Boehringer
Ingelheim; and F. Hoffman LaRoche; as well as through Biomatrix' wholly owned
subsidiaries. Carticel is marketed in the United States and Europe by Genzyme
Tissue Repair. This shared focus, experience, and positioning in the
bio-orthopedics market offers Genzyme Biosurgery tremendous global sales and
marketing leverage.
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Genzyme Biosurgery will form an organization uniquely experienced in selling
complex, innovative biotechnology products to surgeons. It combines the selling
strengths of a well-established medical device company with the scientific
resources of innovative biotechnology companies--bringing together aggressive
surgical sales forces with an experienced scientific and product development
organization.
Finally, the combination of these three companies will create a self-sustaining
enterprise with substantial financial resources to support future development
and growth.
This press release contains forward-looking statements, including statements
regarding the consummation of the transactions, the creation of a new publicly
traded stock, the impact of the transactions on Genzyme Corp.'s, Genzyme Tissue
Repair's, Genzyme Surgical Products' and Biomatrix's respective earnings and
financial positions, the future growth and success of Genzyme Biosurgery,
Genzyme Biosurgery's impact on Genzyme Corp.'s involvement in the bio-orthopedic
and cardiothoracic markets, the potential market introduction of new orthopedic
and cardiothoracic surgery products, surgical devices and biomaterials, expected
revenues based on new products, the sufficiency of the cash and other resources
of Genzyme Biosurgery, the tax-free nature of the transaction and the expected
allocation of Genzyme Biosurgery common stock. Actual results may differ
materially from those indicated depending on many factors including conditions
in the financial markets relevant to the proposed transaction, the likelihood of
regulatory and other approvals of the transactions, the operational integration
associated with the transaction and other risks generally associated with such
transactions, the accuracy of information about the biosurgery market, the
competitive environment for the biosurgery market, market acceptance of Genzyme
Biosurgery's products and services, delays in the production or development of
Genzyme Biosurgery's products, the enrollment rate for clinical trials, the
ability of Genzyme Biosurgery and/or its partners to manufacture sufficient
quantities of products for clinical trials, the ability to successfully complete
preclinical and clinical development of products, the actual safety and efficacy
of products, the timing and content of submissions to and decisions by the FDA
and other regulatory authorities, the continued funding of collaborations and
programs by Genzyme Corp., Genzyme Biosurgery and/or their partners and the
ability of Genzyme Biosurgery and/or its partners to successfully commercialize
products.
A conference call discussing the creation of Genzyme Biosurgery will be
broadcast live over the Internet at 12:00 p.m. EST today at www.genzyme.com,
www.biomatrix.com, and www.streetfusion.com.
Investors may listen to a replay of the conference call by calling 1-800-
633-8284 in the United States and 1-858-812-6440 outside the United States from
2:00 p.m. EST today through midnight EST March 13. Please refer to reservation
number 14574842.
Genzyme's releases are available on the World Wide Web at
http://www.genzyme.com. They are also available from Genzyme's fax-on-demand
service at 1-800-436-1443 within the United States or 1-201-521-1080 outside the
United States.
Biomatrix's releases are available on the World Wide Web at
http://www.biomatrix.com.
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INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT-PROSPECTUS RELATING TO THE
FOREGOING TRANSACTION TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. THE JOINT PROXY
STATEMENT-PROSPECTUS AND OTHER DOCUMENTS FILED BY GENZYME AND BIOMATRIX WITH THE
COMMISSION MAY BE OBTAINED WHEN THEY BECOME AVAILABLE FOR FREE AT THE
COMMISSION'S WEB SITE (www.sec.gov). THE JOINT PROXY STATEMENT-PROSPECTUS AND
THESE OTHER DOCUMENTS MAY ALSO BE OBTAINED FOR FREE FROM GENZYME OR BIOMATRIX,
AS THE CASE MAY BE. REQUESTS TO GENZYME MAY BE DIRECTED TO SALLY CURLEY OR YOU
CAN ACCESS DOCUMENTS ON THEIR WEBSITE (www.genzyme.com). REQUESTS TO BIOMATRIX
SHOULD BE DIRECTED TO ANNE MARIE FIELDS OR YOU CAN ACCESS DOCUMENTS ON ITS
WEBSITE (www.biomatrix.com).
