Genzyme Reports Financial Results for Fourth Quarter of 2009 and Full Year

Genzyme Corp. (NASDAQ: GENZ), a diversified, global biotechnology company, today announced fourth-quarter and full year 2009 financial results and provided 2010 guidance that reflects growth across its businesses and a focus on strengthening core areas of the company.

Fourth-quarter GAAP net income was $23.2 million, or $0.09 per diluted share, compared with $86.7 million, or $0.31 per diluted share, in the same period in 2008. Non-GAAP net income was $83.5 million, compared with $118.2 million in the fourth quarter of 2008. Non-GAAP earnings were $0.31 per diluted share, compared with $0.42 per diluted share in the prior fourth quarter. GAAP and non-GAAP figures include manufacturing write-offs and amortization, among other items. Non-GAAP net income excludes stock compensation expenses and costs associated with the acquisition of Bayer oncology products.

As previously announced, fourth-quarter revenue was $1.08 billion, compared with $1.17 billion in the same period in 2008. For the year, revenue was $4.52 billion compared with $4.61 billion in 2008. Excluding the Genetic Disease business, which was affected by the product supply interruption, fourth-quarter revenue grew 24 percent, compared with the same period in 2008, and full-year revenue grew 15 percent. This growth reflects progress across the corporation, including the successful launches of Synvisc-One^® (hylan G-F 20) and Mozobil^® (plerixafor injection), and the integration of the Bayer oncology products.

Individual product sales for the fourth quarter and the year were detailed in a January 12, 2010, press release coinciding with the company’s presentation at the JPMorgan Healthcare Conference.

"We are moving into a recovery period, regaining momentum and getting back to delivering sustainable growth this year,” said Henri A. Termeer, Genzyme’s chairman and chief executive officer. "As we work to smooth the resupply of Cerezyme and Fabrazyme, our diverse product portfolio is contributing meaningfully. At the same time, we are strengthening the company by making changes, bringing in new talent, and investing in existing businesses.”

2009 Results

GAAP net income in 2009 was $422.3 million, or $1.54 per diluted share, compared with $421.1 million, or $1.50 per diluted share, in 2008. Non-GAAP net income was $621.5 million, or $2.27 per diluted share, compared with $551.3 million, or $1.95 per diluted share, in 2008.

Genzyme generated approximately $1.2 billion in cash from operations in 2009, and utilized this cash to invest in its global infrastructure and repurchase shares. The company was able to continue to generate cash and maintain a solid balance sheet in 2009 despite the manufacturing challenges and resulting product supply interruption.

Genzyme recently adopted a new executive compensation program designed to better align the incentives of senior executives with shareholders’ interests. It includes cash flow return on invested capital among a set of corporate performance metrics to encourage the productive use of the cash the company is expected to generate over the coming years.

Financial Guidance for 2010

Genzyme expects that its non-GAAP earnings will accelerate as the year progresses. First-quarter earnings are expected to be flat with the fourth quarter of 2009 and fourth quarter 2010 earnings are expected to reach approximately $1.00 per diluted share.

Revenue and earnings are expected to accelerate in the second half of the year, depending on three factors: FDA approval of Lumizyme™ (alglucosidase alfa) by the June PDUFA date; the company’s ability to increase manufacturing productivity for Fabrazyme^® (agalsidase beta); and its ability to maintain a substantial portion of the market for Cerezyme^® (imiglucerase for injection).

In establishing its budget for 2010, Genzyme assumed a foreign exchange rate of $1.50 per Euro, the rate at the time the budget was finalized. At a theoretical rate of $1.40 per Euro, this represents an approximately $90 million risk on the revenue line, which is significantly mitigated on the profit after tax bottom line by the company’s geographic diversification. This impact, estimated at approximately $20 million, is reflected in the lower-end of the earnings guidance range.

This year Genzyme is focusing its investments in strengthening core areas and reducing risk. This includes investments to expand manufacturing capacity and create redundant capacity; improve information technology infrastructure; increase sales and marketing for key products to strengthen their market-leading positions; and advance promising, late-stage programs likely to result in the introduction of new products in the next few years.

Earnings

• Non-GAAP earnings in 2010 are expected to increase to $2.80 – $3.20 per diluted share. GAAP earnings are expected to reach $1.90 – $2.27 per diluted share. Projected GAAP and non-GAAP earnings include approximately $320 million in amortization, up from $266 million in 2009. Nearly all of the increase reflects payments due to Bayer for Fludara^® (fludarabine phosphate), Leukine^® (sargramostim), and Campath^® (alemtuzumab) and to Wyeth for Synvisc^® (hylan G-F 20) given the projected sales of these products.

Revenue

• Revenue is expected to reach $5.23 – $5.53 billion in 2010, compared with $4.52 billion in 2009. Revenue guidance for Genzyme’s business segments and key products is provided in the guidance table attached to this press release. Revenue growth will be driven by:
  • The strong demand for Cerezyme;
  • The continued global growth of Myozyme^® (alglucosidase alfa) and the anticipated U.S. launch of Lumizyme;
  • The ongoing U.S. launch of Synvisc-One, which is both gaining market share and expanding the market to include patients currently relying on traditional oral pain medications;
  • And the growth of the Hematologic Oncology business, reflecting the inclusion of Thymoglobulin^® (anti-thymocyte globulin, rabbit) in this segment, the integration of the Bayer oncology products, and the successful global launch of Mozobil.
• Fabrazyme revenue in 2010 is projected to be lower than 2009 given the low productivity of the manufacturing process since the re-start of production. Genzyme is implementing changes intended to increase productivity.

Gross Margin

• The non-GAAP gross margin for 2010 is expected to be approximately 71 – 73 percent of revenue, compared with 71 percent in 2009 due to manufacturing write-offs. The gross margin reflects continued investments in manufacturing and a shift in product mix.

Expenses

• Non-GAAP selling, general and administrative expenses are expected to be approximately $1.5 billion in 2010, compared with approximately $1.3 billion in 2009. SG&A spending this year includes: investments in the company’s genetic disease business intended to regain its competitive position and prepare for the U.S. introduction of Lumizyme; a broad-based marketing campaign designed to support the adoption of Synvisc-One; and the full-year expenses associated with the Bayer oncology products.
• Non-GAAP research and development spending is expected to be $945 – $960 million in 2010 compared with $804 million in 2009. Genzyme continues to make a significant investment in its pipeline to sustain its future growth, with a focus on key late-stage programs including alemtuzumab for multiple sclerosis and eliglustat tartrate for Gaucher disease.

Tax Rate

• Genzyme’s non-GAAP tax rate this year is expected to be 27 – 28 percent of profit before tax. The GAAP tax rate is expected to be 26 – 27 percent.

Capital Expenditures

• Capital expenditures are expected to total approximately $600 million this year, primarily for infrastructure improvements.
  
  Genzyme is making a significant investment in manufacturing capacity to support the growth of existing products and prepare for the launch of products in late-stage development. These include a new facility in Framingham, Mass., for Fabrazyme and Cerezyme; the expansion of the Geel, Belgium, facility to support the growth of Myozyme and Campath; and the expansion of the Waterford, Ireland, facility’s fill-finish capabilities.

Genetic Disease Business Updates

Genzyme has made progress over the past several months toward ensuring a sustainable supply of both Cerezyme and Fabrazyme, managing the urgent need to provide treatment with the need to improve manufacturing quality systems and perform preventative maintenance and upgrades at the Allston plant.

Cerezyme manufacturing is continuing with productivity levels above historical averages. Approximately 85 percent of U.S. patients have resumed therapy, and a similar percentage is estimated worldwide.

To more consistently manage the resupply of Cerezyme to patients in approximately 100 countries and reduce the interruptions in shipping that occur in the absence of inventory, Genzyme will work to immediately build a small inventory buffer. This buffer will allow a more predictable schedule for Cerezyme delivery through the remainder of 2010 and help avoid the challenges many physicians and patients have experienced in scheduling infusions. To build this inventory buffer, the company will ship 50 percent of demand for an eight-week period beginning the week of February 22, 2010. Genzyme is working closely with physicians and patient organizations to manage this temporary initiative.

The company is working to increase the productivity of the Fabrazyme manufacturing process, which has performed at the low end of the historical range since the re-start of production. The combination of reduced productivity, the additional time needed to reestablish fill-finish operations for Fabrazyme at the Allston facility, and the need to build a small inventory buffer has led Genzyme to extend the current 30 percent supply allocation through April and May.

Genzyme has developed a new working cell bank and production is underway at the 2000-liter scale. Pending regulatory approval, output from this process is expected starting in June. If this change is successful, Genzyme anticipates that sufficient supply will become available to enable higher dosing for patients on Fabrazyme. Genzyme will provide an update on this process by its Analyst Day in May.

A June 17 FDA PDUFA date has been confirmed for the marketing application for Lumizyme produced at the 4000 L scale. Genzyme in December reopened enrollment in the Alglucosidase Alfa Temporary Access Program (ATAP), a program which provides access to treatment for severely affected adults with Pompe disease prior to commercial approval of Lumizyme. The company is currently providing therapy free of charge to approximately 180 patients. The ATAP program will remain active until commercial approval of Lumizyme.

Making Changes to Support Growth

Genzyme continues to implement measures intended to fundamentally strengthen the company and support current and future growth:

• The company has hired two new senior leaders for its global product manufacturing and quality operations. Scott Canute, the former manufacturing head at Eli Lilly & Company and a respected leader in the field with more than 25 years of experience, will join Genzyme March 1 as President of Global Manufacturing and Corporate Operations. Ron Branning, who has more than 30 years of experience in biopharmaceutical manufacturing quality and regulatory compliance, including with Gilead and Genentech, recently joined as Senior Vice President of Global Product Quality.
• Genzyme last month adopted new long-term and short-term incentive compensation plans for senior executives intended to encourage decisions that will drive growth and shareholder value. The plans, which are effective beginning this year, include a broader set of corporate financial performance metrics that will be used to determine cash and equity bonus awards.
• The company also recently implemented changes at the board level to improve corporate governance, including strengthening the role of its lead independent director, Robert Carpenter, appointing new board member Robert Bertolini as Audit Committee Chair, and requiring that at least two-thirds of the board consist of independent members. Currently eight members of the nine-member board are independent.

Development Programs On-Track

Genzyme’s R&D pipeline includes several major late-stage programs:

• Genzyme last week announced two-year follow-up data from the phase 2 study of its investigational oral therapy for patients with Gaucher disease type 1, eliglustat tartrate (formerly Genz-112638). This therapy has the potential to transform the treatment experience for Gaucher patients by providing a daily oral capsule option instead of bi-weekly infusions lasting several hours or more. At the two-year timepoint, continued improvements were observed across all endpoints, including bone disease, compared with baseline. Genzyme has begun enrollment in two global, multi-center, phase 3 trials of eliglustat tartrate.
• Genzyme and Isis Pharmaceuticals Inc. last week reported positive results from the second phase 3 study of mipomersen, in heterozygous familial hypercholesterolemia (FH). The study met its primary endpoint with a 28 percent reduction in LDL-cholesterol. Strong phase 3 results in homozygous FH were presented at the American Heart Association meeting in November. The companies expect data from two additional phase 3 studies in mid-2010; one involves patients with severe hypercholesterolemia and the other includes hypercholesterolemic patients at high risk for coronary heart disease.
• Enrollment was completed ahead of schedule in 2009 in the two phase 3 studies of alemtuzumab in multiple sclerosis, which holds the potential to fundamentally change the standard-of-care for this disease, based on four-year data from the phase 2 study. This program is Genzyme’s largest development effort. Phase 3 results are expected next year.
• Genzyme is collaborating with PTC Therapeutics Inc. on ataluren, a novel oral therapy for the treatment of genetic disorders due to nonsense mutations. Results of a pivotal phase 2b trial of ataluren in Duchenne muscular dystrophy are anticipated during the first half of this year, a phase 3 trial in cystic fibrosis began enrolling patients last fall, and a phase 1 trial in hemophilia is underway.

About Genzyme

One of the world's leading biotechnology companies, Genzyme is dedicated to making a major positive impact on the lives of people with serious diseases. Since 1981, the company has grown from a small start-up to a diversified enterprise with more than 12,000 employees in locations spanning the globe and 2009 revenues of $4.5 billion.

With many established products and services helping patients in approximately 100 countries, Genzyme is a leader in the effort to develop and apply the most advanced technologies in the life sciences. The company's products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune disease, and diagnostic testing. Genzyme's commitment to innovation continues today with a substantial development program focused on these fields, as well as cardiovascular disease, neurodegenerative diseases, and other areas of unmet medical need.

Genzyme’s press releases and other company information are available at www.genzyme.com and by calling Genzyme’s investor information line at 1-800-905-4369 within the United States or 1-678-999-4572 outside the United States.

This press release contains forwarding-looking statements regarding Genzyme’s financial outlook and business plans including, without limitation: its financial guidance for 2010; its expectation that revenue and earnings will accelerate in the second half of 2010; its anticipated drivers of 2010 revenue growth; its expectation that it will be successful in creating a Cerezyme inventory buffer and that the buffer will allow for more predictable supply of product; its expectations regarding Fabrazyme supply and the new working cell bank; its expectation that eliglustat tartrate and alemtuzumab-MS have the potential to be transformative treatments; its plans to file for US and EU approval of mipomersen in the first half of 2011 and the possible scope of the indication sought; its expectation that phase 3 results for alemtuzumab in MS will be available in 2011 and will form the basis of a US marketing approval filing in 2012; and its expectation that results from a phase 2b study of ataluren in nm DMD will be available in the first half of 2010 and that the 2b trial will be pivotal. These statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among others: that Genzyme is unable to meet its 2010 financial guidance for any reason, including that the FDA does not approve Lumizyme on the expected timeframe or at all, that manufacturing productivity of Fabrazyme does not increase as anticipated, that the reliability of Cerezyme supply cannot be established as anticipated, that Fabrazyme and Cerezyme patients choose alternative treatments at a rate greater than expected, and that the costs to mitigate manufacturing issues are higher than forecasted; that production of Fabrazyme and Cerezyme does not continue as planned due to any reason, including bacterial or viral contamination, mechanical failures, cell growth at lower than expected levels, fill-finish inefficiencies, or regulatory issues; that Genzyme cannot obtain and maintain regulatory approvals for its products and manufacturing facilities, including its Allston manufacturing facility; that Genzyme is not able to successfully complete clinical development and obtain regulatory approvals of its product candidates within anticipated timeframes and for anticipated indications, including aliglustat tartrate, alemtuzumab-MS, mipomersen, and ataluren for any reason, including lower than anticipated trial enrollment rates, unfavorable trial results and safety profiles that reduce the potential target population; that Genzyme cannot effectively compete against alternative treatments and maintain or grow market share for its products; that the estimates of the size and characteristics of the markets to be addressed by Genzyme’s product candidates are not accurate; that reimbursement for products is unavailable or is available at lower levels than anticipated; and the risks and uncertainties described in Genzyme's SEC reports filed under the Securities Exchange Act of 1934, including the factors discussed under the caption "Risk Factors" in Genzyme's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of February 16, 2010 and Genzyme undertakes no obligation to update or revise them.

Genzyme^®, Cerezyme^®, Fabrazyme^®, Myozyme^®, Synvisc^®, Synvisc-One^®, Renvela^®, Renagel^®, Mozobil^® and Thymoglobulin^® are registered trademarks and Lumizyme™ is a trademark of Genzyme Corporation or its subsidiaries. Fludara^® and Leukine^® are registered trademarks licensed to Genzyme Corporation.

Conference Call Information

Genzyme will host a conference call today at 11 a.m. Eastern. To participate in the call, please dial 773-799-3828 and refer to pass code "Genzyme.” A replay of this call will be available by dialing 203-369-0261. This call will also be Webcast live on the investor events section of www.genzyme.com. Replays of the call and the Webcast will be available until midnight on February 24, 2010.

Upcoming Events

On April 21, 2010, Genzyme will report its financial results for the first quarter of 2010. There will be a conference call at 11:00 a.m. Eastern. To participate in the call, please dial 773-799-3828 and refer to pass code "Genzyme.” A replay of this call will be available by dialing 203-369-0536. This call will also be Webcast live on the investor events section of www.genzyme.com. Replays of the call and the Webcast will be available until midnight on April 28, 2010.

GENZYME CORPORATION (GENZ)
Consolidated Statements of Operations					Three Months Ended								Year Ended
(Unaudited, amounts in thousands, except per share amounts)					December 31,								December 31,
						2009				2008				2009				2008
Total revenues					$	1,080,630			$	1,173,560			$	4,515,525			$	4,605,039
Operating costs and expenses:
		Cost of products and services sold				380,334				290,711				1,386,076				1,148,562
		Selling, general and administrative				389,160				341,329				1,428,596				1,338,190
		Research and development				228,535				358,430				865,257				1,308,330
		Amortization of intangibles				73,482				59,884				266,305				226,442
		Charge for impaired assets				-				2,036				-				2,036
		Contingent consideration expense				28,297				-				65,584				-
			Total operating costs and expenses			1,099,808				1,052,390				4,011,818				4,023,560
Operating income (loss)						(19,178	)			121,170				503,707				581,479
Other income (expenses):
		Gain (loss) on investments in equity securities, net				1,276				861				(56	)			(3,340	)
		Gain on acquisition of business				-				-				24,159				-
		Other				700				(383	)			(1,719	)			557
		Investment income				3,604				11,245				17,642				51,260
		Interest expense				-				(822	)			-				(4,418	)
			Total other income (expenses)			5,580				10,901				40,026				44,059
Income (loss) before income taxes						(13,598	)			132,071				543,733				625,538
(Provision for) benefit from income taxes						36,843				(45,421	)			(121,433	)			(204,457	)
Net income					$	23,245			$	86,650			$	422,300			$	421,081
Net income per share:
			Basic		$	0.09			$	0.32			$	1.57			$	1.57
			Diluted (1)		$	0.09			$	0.31			$	1.54			$	1.50
Weighted average shares outstanding:
			Basic			265,596				270,658				268,841				268,490
			Diluted (1)			270,241				284,338				274,071				285,595
		All amounts herein are presented in accordance with GAAP and are provided for quantitative analysis only and should be read in conjunction with the text of the Earnings Release. Please refer to our Form 10-Q's and Form 10-K's for an in-depth discussion and analysis of our results of operations and financial position and for detailed information regarding specific material transactions in a particular period.
		In addition, we believe that certain Non-GAAP financial measures, when considered together with the GAAP figures, can enhance the overall understanding of the company's past financial performance and its prospects for the future. Please refer to our GAAP to Non-GAAP Reconciliations attached to the Earnings Releases for the above respective periods, which are filed as 8-K's with the Securities and Exchange Commission at www.sec.gov. The Non-GAAP financial measures are provided with the intent of providing investors with a more complete understanding of the trends underlying our operating results and financial position and are among the primary indicators management uses for planning and forecasting purposes and measuring the company's performance.
(1)		Prior to January 1, 2009, in accordance with EITF 04-8, the shares issuable upon conversion of our $690.0 million in principal of 1.25% convertible senior notes were included in diluted weighted average shares outstanding for purposes of computing diluted earnings per share, unless the effect was anti-dilutive. Accordingly, interest and debt fees related to these notes of $1.3 million and $6.9 million, net of tax, for the three months ended and the year ended December 31, 2008, respectively, have been added back to net income. Approximately 6.4 million shares and 8.9 million shares issuable upon conversion of these notes prior to redemption have been included in diluted weighted average shares outstanding for the three months ended and the year ended December 31, 2008, respectively. There are no similar adjustments to the computation of diluted earnings per share for the three months ended and year ended December 31, 2009, because the notes were redeemed, primarily for cash, on December 1, 2008.
GENZYME CORPORATION (GENZ)
Condensed Consolidated Balance Sheets													December 31,				December 31,
(Unaudited, amounts in thousands)														2009				2008
Cash and all marketable securities													$	1,049,700			$	973,691
Other current assets														1,934,223				1,886,522
Property, plant and equipment, net														2,809,349				2,306,567
Intangibles, net														3,716,625				3,055,772
Other noncurrent assets														550,827				448,724
		Total assets											$	10,060,724			$	8,671,276
Current liabilities													$	1,080,130			$	914,283
Noncurrent liabilities														1,296,942				451,000
Stockholders' equity														7,683,652				7,305,993
		Total liabilities and stockholders' equity											$	10,060,724			$	8,671,276

Genzyme Corporation (GENZ)
Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)
																							Q4-09
																							vs.
																							Q4-08
					Q3-08			Q4-08			Q1-09			Q2-09			Q3-09			Q4-09			% B/(W)		FY 2007			FY 2008			YTD 12/31/09
Total revenues:
	Genetic Diseases
		Cerezyme			$	309,280		$	306,034		$	295,970		$	298,087		$	93,599		$	105,368		(66%)		$	1,133,153		$	1,238,977		$	793,024
		Fabrazyme				125,619			125,558			122,201			134,302			115,161			58,026		(54%)			424,284			494,260			429,690
		Myozyme				76,663			74,967			67,392			79,273			85,980			91,900		23%			200,728			296,176			324,545
		Aldurazyme				38,236			37,579			36,837			39,190			40,331			38,707		3%			-			151,664			155,065
		Other Genetic Diseases				11,367			14,039			14,650			17,301			19,217			21,052		50%			8,314			45,615			72,220
			Total Genetic Diseases product and service revenue			561,165			558,177			537,050			568,153			354,288			315,053		(44%)			1,766,479			2,226,692			1,774,544
			R&D Revenue			-			-			-			-			-			-					1,059			-			-
	Total Genetic Diseases					561,165			558,177			537,050			568,153			354,288			315,053		(44%)			1,767,538			2,226,692			1,774,544
	Cardiometabolic and Renal
		Renagel and Renvela (including Sevelamer)				170,992			169,476			170,599			175,398			181,702			178,890		6%			602,670			677,729			706,589
		Hectorol				33,825			34,400			33,030			28,981			36,869			31,877		(7%)			115,708			128,153			130,757
			Subtotal			204,817			203,876			203,629			204,379			218,571			210,767		3%			718,378			805,882			837,346
		Thyrogen				38,153			37,062			38,826			42,860			41,691			47,267		28%			113,587			148,448			170,644
		Other Cardiometabolic and Renal				573			496			494			753			742			1,027		107%			103			1,653			3,016
			Total Cardiometabolic and Renal product and service revenue			243,543			241,434			242,949			247,992			261,004			259,061		7%			832,068			955,983			1,011,006
			R&D revenue			56			27			13			8			156			155		474%			1,200			200			332
	Total Cardiometabolic and Renal					243,599			241,461			242,962			248,000			261,160			259,216		7%			833,268			956,183			1,011,338
	Biosurgery
		Synvisc				67,513			68,512			63,171			82,417			87,526			95,419		39%			242,319			263,094			328,533
		Sepra products				33,001			35,278			34,304			36,038			37,831			40,365		14%			104,318			133,663			148,538
		Other Biosurgery				21,787			20,908			21,485			20,002			19,643			21,121		1%			74,673			91,698			82,251
			Total Biosurgery product and service revenue			122,301			124,698			118,960			138,457			145,000			156,905		26%			421,310			488,455			559,322
			R&D revenue			661			563			562			870			647			414		(26%)			5,337			2,645			2,493
	Total Biosurgery					122,962			125,261			119,522			139,327			145,647			157,319		26%			426,647			491,100			561,815
	Hematologic Oncology
			Total Hematologic Oncology product and service revenue			26,328			27,437			34,423			55,078			87,982			108,117		294%			69,927			102,899			285,600
			R&D revenue			7,726			15,104			8,775			5,918			7			134		(99%)			18,601			36,148			14,834
	Total Hematologic Oncology					34,054			42,541			43,198			60,996			87,989			108,251		154%			88,528			139,047			300,434
	Other
		Genetic/Diagnostics product and service revenue				121,163			124,840			129,194			132,955			133,748			142,340		14%			410,917			477,614			538,237
		Transplant product and service revenue				47,784			50,723			52,666			56,060			55,604			60,623		20%			174,826			192,200			224,953
		Other product and service revenue				28,598			30,252			23,501			22,423			18,496			37,101		23%			108,577			119,155			101,521
			Total Other product and service revenue			197,545			205,815			205,361			211,438			207,848			240,064		17%			694,320			788,969			864,711
			R&D revenue			959			305			778			596			582			727		138%			3,218			3,048			2,683
	Total Other					198,504			206,120			206,139			212,034			208,430			240,791		17%			697,538			792,017			867,394
Total revenues					$	1,160,284		$	1,173,560		$	1,148,871		$	1,228,510		$	1,057,514		$	1,080,630		(8%)		$	3,813,519		$	4,605,039		$	4,515,525
All amounts herein are presented in accordance with GAAP and are provided for quantitative analysis only and should be read in conjunction with the text of the Earnings Release and our audited financial statements filed with the Securities and Exchange Commission. Please refer to our Form 10-Q's and Form 10-K's for an in-depth discussion and analysis of our results of operations and financial position and for detailed information regarding specific material transactions in a particular period.

GENZYME CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Year Ended December 31, 2009
(Amounts in thousands, except percentage and per share data)
																																				OTHER DISCRETE ITEMS
																																				(included in GAAP and Non-GAAP results)
				GAAP As Reported				Bayer Acquisition Related (2)				FAS 123R Expense						NON-GAAP (1)																		Manufacturing Related				Technology Purchase				Q2 Inventory Fair Value Step-up (2)
Income Statement Classification:
Total revenues				$	4,515,525													$	4,515,525
Cost of products and services sold				$	(1,386,076	)		$	36,822			$	32,314					$	(1,316,940	)																$	76,398							$	6,639
Gross margin		69%		$	3,129,449			$	36,822			$	32,314			71%		$	3,198,585																	$	76,398							$	6,639
Selling, general and administrative				$	(1,428,596	)						$	110,410					$	(1,318,186	)
Research and development				$	(865,257	)						$	61,391					$	(803,866	)																				$	25,180
Amortization of intangibles				$	(266,305	)												$	(266,305	)
Contingent consideration expense				$	(65,584	)		$	65,584									$	-
Gains (losses) on investments in equity securities				$	(56	)												$	(56	)
Gain on acquisition of business				$	24,159			$	(24,159	)								$	-
Other				$	(1,719	)												$	(1,719	)																$	1,484
Investment income				$	17,642													$	17,642
Interest expense				$	-													$	-
Summary:
Income (loss) before income taxes				$	543,733			$	78,247			$	204,115					$	826,095																	$	77,882			$	25,180			$	6,639
(Provision for) benefit from income taxes		22%		$	(121,433	)		$	(29,739	)		$	(53,434	)		25%		$	(204,606	)																$	(17,956	)		$	(8,118	)		$	(1,302	)
Net income (loss)				$	422,300			$	48,508			$	150,681					$	621,489																	$	59,926			$	17,062			$	5,337
Net income (loss) per share:
Basic				$	1.57			$	0.18			$	0.56					$	2.31																	$	0.22			$	0.06			$	0.02
Diluted				$	1.54			$	0.18			$	0.55					$	2.27																	$	0.22			$	0.06			$	0.02
Weighted average shares outstanding:
Basic					268,841				268,841				268,841						268,841
Diluted					274,071				274,071				274,071						274,071
Notes:
(1) Represents the Non-GAAP results of operations for Genzyme Corporation for the year ended December 31, 2009. We believe that certain Non-GAAP financial measures, when considered together with the GAAP figures, can enhance the overall understanding of the company's past financial performance and its prospects for the future. The Non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the trends underlying our operating results and financial position and are among the primary indicators management uses for planning and forecasting purposes and measuring the company's performance. Such Non-GAAP financial measures should not be considered in isolation or used as a substitute for GAAP. Earnings per share are calculated as net income (loss) divided by weighted average shares outstanding. Therefore, earnings per share may not add across due to rounding.
(2) "Bayer Acquisition Related" includes the gain on acquisition, contingent consideration expense and, beginning with Q3 2009, the inventory fair value step-up associated with our acquisition from Bayer. The initial inventory fair value step-up in Q2 for the Bayer transaction was presented as "Other Discrete Items".

GENZYME CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Three Months Ended December 31, 2009
(Amounts in thousands, except percentage and per share data)
																																						OTHER DISCRETE ITEMS
																																						(included in GAAP and Non-GAAP results)
									Bayer
					GAAP				Acquisition				FAS 123R																									Manufacturing
					As Reported				Related (2)				Expense							NON-GAAP (1)																		Related
Income Statement Classification:
Total revenues					$	1,080,630														$	1,080,630
Cost of products and services sold					$	(380,334	)		$	19,082			$	9,935						$	(351,317	)																$	20,937
Gross margin		65	%		$	700,296			$	19,082			$	9,935			67	%		$	729,313																	$	20,937
Selling, general and administrative					$	(389,160	)						$	24,109						$	(365,051	)
Research and development					$	(228,535	)						$	14,017						$	(214,518	)
Amortization of intangibles					$	(73,482	)													$	(73,482	)
Contingent consideration expense					$	(28,297	)		$	28,297										$	-
Gains (losses) on investments in equity securities					$	1,276														$	1,276
Other					$	700														$	700
Investment income					$	3,604														$	3,604
Interest expense					$	-														$	-
Summary:
Income (loss) before income taxes					$	(13,598	)		$	47,379			$	48,061						$	81,842																	$	20,937
(Provision for) benefit from income taxes					$	36,843			$	(22,189	)		$	(13,002	)					$	1,652																	$	(5,694	)
Net income (loss)					$	23,245			$	25,190			$	35,059						$	83,494																	$	15,243
Net income (loss) per share:
Basic					$	0.09			$	0.09			$	0.13						$	0.31																	$	0.06
Diluted					$	0.09			$	0.09			$	0.13						$	0.31																	$	0.06
Weighted average shares outstanding:
Basic						265,596				265,596				265,596							265,596																		265,596
Diluted						270,241				270,241				270,241							270,241																		270,241
Notes:
(1) Represents the Non-GAAP results of operations for Genzyme Corporation for the three months ended December 31, 2009. We believe that certain Non-GAAP financial measures, when considered together with the GAAP figures, can enhance the overall understanding of the company's past financial performance and its prospects for the future. The Non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the trends underlying our operating results and financial position and are among the primary indicators management uses for planning and forecasting purposes and measuring the company's performance. Such Non-GAAP financial measures should not be considered in isolation or used as a substitute for GAAP. Earnings per share are calculated as net income (loss) divided by weighted average shares outstanding. Therefore, earnings per share may not add across due to rounding.
(2) "Bayer Acquisition Related" includes contingent consideration expense and, beginning with Q3 2009, the inventory fair value step-up associated with our acquisition from Bayer.

Genzyme 2010 Guidance
($ in millions, except percentages and per share amounts)
					2010 Guidance Ranges
		2009 Act			Low End			High end
Revenue:
Cerezyme		$793			$980		-	$1,037
Fabrazyme		$430			$360		-	$380
Myozyme		$325			$470		-	$500
Total Genetic Disease		$1,775			$2,080		-	$2,185
Synvisc/Synvisc One		$329			$430		-	$450
Total Biosurgery		$562			$690		-	$710
Renagel/Renvela		$707			$740		-	$770
Total Cardiometabolic and Renal		$1,011			$1,095		-	$1,135
Total Hematologic Oncology (Incl. Thymo)		$525			$775		-	$810
Genetics		$371			$405		-	$415
Total Other		$642			$680		-	$690
FX Impact		$0			($90	)
TOTAL REVENUE		$4,515			$5,230		-	$5,530
GROSS MARGIN (1)(2)		71	%		71	%	-	73	%
SG&A (1)(2)		$1,318			$1,510		-	$1,540
R&D (1)(2)		$804			$945		-	$960
Amortization		$266			$320		-	$320
Synvisc Amortization		$53			$78		-	$78
Bayer Transaction Amortization		$35			$60		-	$60
Tax Rate (1)(2)		25	%		27	%		28	%
GENZ NON-GAAP EPS (1)(2)		$2.27			$2.80		-	$3.20
WTD Average Diluted Shares O/S		274			272		-	274
Capital Expenditures								$600
Diluted EPS Impact of Acquisition and Stock-Based Compensation Expenses					$0.90		-	$0.93
This financial guidance, which is provided as part of a press release dated February 17, 2010, is subject to all of the qualifications and limitations described therein. Actual results may differ from these forward-looking statements due to the numerous factors described in the press release.
(1)2009 and 2010 Non-GAAP figures exclude the impact of acquisition related expenses and FAS123R, stock compensation expense.
(2)2009 Non-GAAP figures are reconciled on the 2009 "Genzyme Corporation Reconciliation of GAAP to Non-GAAP Earnings" schedule found on the guidance and reconciliation page within the investors section at www.genzyme.com

Genzyme 2010 Guidance
GAAP to Non-GAAP Reconciliations
($ in millions, except percentages and per share amounts)
Projected product gross margin GAAP to non-GAAP		2/17/2010
reconciliation:
GAAP projected product gross margin		70% - 72%
Bayer acquisition related - Inventory step up		1% - 1%
Non-GAAP projected product gross margin**		71% - 73%
Projected selling, general and administrative expenses GAAP to non-
GAAP reconciliation:
GAAP projected selling, general and administrative expenses		$1,610 - $1,650
Stock-based compensation expenses		$100 - $110
Non-GAAP projected selling, general and administrative expenses		$1,510 - $1,540
Projected research and development expenses GAAP to non-GAAP
reconciliation:
GAAP projected research and development expenses		$995 - $1,015
Stock-based compensation expenses		$50 - $55
Non-GAAP projected research and development expenses		$945 - $960
Projected diluted EPS impact of acquisition and stock-
based compensation expenses:
Bayer acquisition related - Inventory step up		$0.11 - $0.11
Bayer acquisition-related contingent consideration expense		$0.29 - $0.29
Stock-based compensation expenses		$0.50 - $0.53
Projected diluted EPS impact of acquisition and stock-based compensation expenses		$0.90 - $0.93
** Stock-based compensation expenses have a less than one percent impact on non-GAAP product gross margin.
This financial guidance, which is provided as part of a press release dated February 17, 2010, is subject to all of the qualifications and limitations described therein. Actual results may differ from these forward-looking statements due to the numerous factors described in the press release.