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Filed by Genzyme Corporation
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 Company: Biomatrix, Inc.
Registration File No.: 333-34972
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Investors are urged to read the joint proxy statement/prospectus relating to
transaction described below because it contains important information. The joint
proxy statement/prospectus was filed with the Securities and Exchange Commission
and may be obtained free of charge, along with other documents filed by Genzyme
and Biomatrix with the commission, both at the commission's Web site
(www.sec.gov) and from Genzyme or Biomatrix. Requests to Genzyme may be directed
to Sally Curley, or you can access documents on the company's Web site. Requests
to Biomatrix should be directed to Anne Marie Fields, or you can access
documents on the company's Web site.
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PRESS RELEASE
GENZYME SURGICAL PRODUCTS REPORTS SECOND-QUARTER FINANCIAL RESULTS
DATE: JULY 20, 2000
CAMBRIDGE, Mass.--Genzyme Surgical Products (Nasdaq: GZSP) announced July 20
that revenues for the second quarter of 2000 were $30.0 million, compared with
revenues of $26.7 million for the same quarter in 1999, an increase of 12
percent.
Revenue increases were driven by strong sales across all product lines,
particularly instrumentation for beating-heart cardiac surgery and the
Sepra-Registered Trademark- line of products. Revenues were affected by the
impact of the strong dollar overseas.
The gross margin was 45 percent, up 10 percentage points from the second quarter
in 1999, reflecting increased sales volumes, greater sales of higher margin
products, and continued improvements in operational efficiencies.
Net loss was $10.4 million, or $.70 per share, down from a net loss of $17.7
million, or $1.19 per share, for the second quarter of 1999.
"We had a solid quarter, with revenue growth across the board, strong sales
growth in key product areas, and healthy improvements in our gross margin," said
Duke Collier, president of Genzyme Surgical Products. "We have the business
moving in a very positive direction, one year after our launch as a separate
Genzyme division. The next six months will be an important period for us, as we
expect to introduce a
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number of new products, initiate several gene therapy clinical trials, and--most
importantly--create Genzyme Biosurgery, which will be one of the largest and
most dynamic businesses bringing biotechnology to surgery."
At the close of the second quarter, Genzyme Surgical Products had approximately
$96 million in cash and marketable securities.
CARDIOTHORACIC SURGERY
In the second quarter of 2000, revenues from products for cardiothoracic surgery
were $19.8 million, up 10 percent compared to revenues of $18.0 million in the
second quarter of 1999.
Within the cardiothoracic line, overall sales of minimally invasive devices grew
189 percent this quarter compared to the second quarter of last year,
highlighting the rapid market penetration of Genzyme's instrumentation for
beating-heart cardiac surgery and minimally invasive vein harvesting.
Genzyme Surgical Products continues to pursue enhancements to these product
lines. During the third quarter, it plans to launch the Immobilizer-Registered
Trademark- system, its third-generation platform for beating-heart surgery. The
Immobilizer, which is designed to be easier to use and set up more quickly than
Genzyme's second-generation OPCAB platform, offers surgeons superior stability
and a clear operating field, facilitating accurate suturing of delicate coronary
vessels. Genzyme also expects to launch its latest generation
SaphLITE-Registered Trademark- system for minimally invasive vein harvesting.
The new system is designed to be easier to use than previous generations of the
product, preserve vein quality, and provide direct visualization for hands-free
retraction.
For lung surgery, Genzyme Surgical Products and Focal Inc. are now launching
FocalSeal-Registered Trademark-L surgical sealant, which received FDA approval
during the second quarter. The product is intended for use in sealing air leaks
that occur as a result of lung surgery procedures. Genzyme Surgical Products
holds exclusive North American marketing and distribution rights for FocalSeal
products for a variety of surgical applications.
GENERAL SURGERY
Revenues from products for general surgery increased 18 percent for the second
quarter to $7.4 million, compared with $6.2 million for the same quarter in
1999. Sepra product sales increased 22 percent in the second quarter to $4.3
million, compared with $3.5 million in the same period of 1999.
In June, Genzyme Surgical Products launched Sepramesh-Registered Trademark-
Biosurgical Composite, a prosthetic surgical mesh designed to be sutured in
place along the abdominal wall to support and strengthen hernia repairs. The
product offers significant advantages over traditional mesh products because it
contains a bioresorbable barrier that separates the mesh from underlying organ
and tissue surfaces to reduce tissue attachment to the mesh. Sepramesh was also
recently approved for use in Europe and Canada.
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OTHER REVENUES
Revenues for the second quarter of 2000 also include $2.8 million from sales of
instruments for plastic surgery and products sold to original equipment
manufacturers, primarily sutures. These products generated $2.4 million in sales
in the second quarter of 1999.
PIPELINE UPDATE
Genzyme Surgical Products continues to enroll patients in a blinded Phase 1
clinical trial of HIF-1, its proprietary gene therapy product designed to
promote the growth of new blood vessels around blocked arteries. The product is
being evaluated as a treatment for patients with peripheral vascular disease.
Genzyme Surgical Products is also making good progress toward initiating a
second Phase 1 clinical trial of HIF-1 to evaluate its use as a treatment for
patients with coronary artery disease undergoing bypass surgery who have an area
of the heart that is not suitable for surgical revascularization. The IND for
this trial has been cleared by the FDA, and patient enrollment is expected to
begin following a review of the trial's protocol by the Recombinant DNA Advisory
Committee of the National Institutes of Health. This review is expected to occur
during the second half of this year. Additional clinical trials of HIF-1 are
expected to begin outside the United States within the next few quarters.
GENZYME BIOSURGERY UPDATE
Progress continues toward the planned formation of Genzyme Biosurgery, a new
Genzyme Corp. division with its own newly created stock. Genzyme Biosurgery will
be formed by combining Genzyme Surgical Products and Genzyme Tissue Repair
(Nasdaq: GZTR) and acquiring Biomatrix Inc. (NYSE: BXM)--a pioneering and
profitable developer of sophisticated biomaterials--to create one of the leading
businesses in the market for biotechnology products that improve or replace
conventional surgical procedures.
Upon formation, Genzyme Biosurgery will have a portfolio of innovative,
market-leading products; a broad product-development pipeline; a premier
manufacturing, marketing, regulatory, and scientific infrastructure; and
substantial financial resources.
The transaction has received clearance from the Federal Trade Commission, and
the joint proxy statement/prospectus is being reviewed by the Securities and
Exchange Commission. Once effective, proxy materials will be mailed to
shareholders and Genzyme and Biomatrix will each hold a special shareholder
meeting to obtain required approvals. The meetings are expected to occur during
the third quarter. Genzyme Surgical Products shareholders will be asked to vote
to approve several proposals related to the formation of Genzyme Biosurgery.
"We strongly believe that Genzyme Biosurgery--combining important products and
innovative product development capabilities from biotechnology with a strong
sales force presence in the operating room--will be a formidable entity," said
Duke Collier. "For Genzyme Surgical
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Products shareholders, this transaction will dramatically enhance and expand the
biosurgery strategy we defined as our mission one year ago and accelerate its
implementation. As we move forward with this process, we continue to reconfirm
and broaden our vision of the possibilities and promise offered by this
combination of products, technologies, and expertise. We strongly believe that
we are in the right place at the right time with the right resources to define
and lead a rapidly emerging market. We are firmly committed to completing this
transaction, and are working hard to make it happen."
Genzyme Surgical Products develops and markets a portfolio of instruments,
devices, biomaterials, and biotherapeutics primarily for the cardiovascular and
general surgery markets. It is pioneering the field of biosurgery, which is
being created by the increasing convergence of mechanical and biological
approaches to surgery and other interventional procedures. A division of the
biotechnology company Genzyme Corporation, Genzyme Surgical Products has its own
common stock intended to reflect its value and track its economic performance.
This press release contains forward-looking statements, including statements
concerning the introduction and success of new products (including the launch of
the Immobilizer-Registered Trademark- system for beating-heart surgery, the
SaphLITE-Registered Trademark- system for minimally invasive vein harvesting and
FocalSeal?-L surgical sealant for lung surgery), the initiation of gene therapy
clinical trials (including a clinical trial for HIF-1), the mailing of a joint
proxy statement/ prospectus and the holding of a special stockholders meeting in
connection with the formation of Genzyme Biosurgery, the completion of the
formation of Genzyme Biosurgery, the creation of a new publicly traded stock for
Genzyme Biosurgery, the future growth and success of Genzyme Biosurgery, Genzyme
Biosurgery's impact on Genzyme Corp.'s involvement in the bio-orthopedic and
cardiothoracic markets, expected revenues based on new products and the
sufficiency of the cash and other resources of Genzyme Biosurgery. Actual
results may differ materially depending on many factors including the accuracy
of information about the biosurgery market, the competitive environment for the
biosurgery market, market acceptance of Genzyme Surgical Product's products and
services, the competitive environment for Genzyme Surgical Product's products,
actual results of operations, the enrollment rate 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,
conditions in the financial markets relevant to the proposed creation of Genzyme
Biosurgery, the likelihood of regulatory and other approvals of the transaction,
the operational integration associated with the formation of Genzyme Biosurgery
and other risks generally associated with a transaction of this type. GZSP stock
is a class of common stock of Genzyme Corporation, therefore, GZSP shareholders
are subject to the risks and uncertainties described in reports filed by Genzyme
with the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, including without limitation Exhibit 99.2 to Genzyme's 1999
Annual Report on Form 10-K, as amended.
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Genzyme Surgical Products' earnings conference call will be broadcast live at
4:45 p.m. EDT July 20 on Genzyme's Web site at
http://www.genzyme.com/ir/events.htm. A replay of the call will be available
until midnight July 27.
Investors may also listen to a replay of the conference call by dialing
1-800-633-8284 in the United States and 1-858-812-6440 outside the United States
from 7:00 p.m. EDT today through midnight EDT on July 27. Please refer to
reservation number 15488546.
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GENZYME SURGICAL PRODUCTS
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COMBINED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SIX MONTHS ENDED
(AMOUNTS IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) JUNE 30, JUNE 30,
2000 1999 2000 1999
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Total revenues $ 29,969 $ 26,681 $ 59,051 $ 54,034
Operating costs and expenses:
Cost of products sold 16,592 17,439 32,631 33,283
Selling, general and administrative 17,042 16,492 33,442 31,779
Research and development 7,001 8,983 13,972 14,585
Amortization of intangibles 1,427 1,444 2,853 2,861
Total operating costs and expenses 42,062 44,358 82,898 82,508
Operating loss (12,093) (17,677) (23,847) (28,474)
Other income (expenses):
Interest income 1,708 56 3,390 63
Other 20 (3) 48 43
Interest expense (2) (34) (1) (35)
Total other income (expenses) 1,726 19 3,437 71
Net loss $(10,367) $(17,658) $(20,410) $(28,403)
Per GZSP common share (basic and diluted) $ (0.70) $ (1.37)
Weighted average shares outstanding 14,905 14,880
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CONDENSED COMBINED BALANCE SHEETS JUNE 30, DECEMBER 31,
(IN THOUSANDS) 2000 1999
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Cash and all marketable securities $ 95,890 $ 126,125
Other current assets 61,223 51,192
Property, plant and equipment, net 17,795 17,621
Intangibles, net 169,900 172,833
Other assets 8,052 3,153
Total assets $ 352,860 $ 370,924
Current liabilities $ 22,478 $ 17,006
Noncurrent liabilities - -
Division equity 330,382 353,918
Total liabilities and division equity $ 352,860 $ 370,924
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Please call Genzyme's corporate communications department at 1-617-252-7570 for
additional information.
