CAMBRIDGE, Mass.--(BUSINESS WIRE)--Genzyme
Corp. (NASDAQ: GENZ) today reported that preliminary fourth-quarter
revenue grew 23 percent to $1.15 billion from $938 million in the fourth
quarter of 2009. For the year, revenue was $4.1 billion compared with
$4.0 billion in 2009. Fourth-quarter revenue from the Personalized
Genetic Health business grew 46 percent compared with the same period in
2009, and 26 percent from the third quarter of 2010. This growth
reflects increasing supplies of Cerezyme® (imiglucerase for
injection) and Fabrazyme® (agalsidase beta), and the U.S.
launch of Lumizyme® (alglucosidase alfa).
“We achieved record revenue in the fourth quarter and approximately
doubled our earnings from the third quarter, returning to pre-disruption
levels experienced in the first half of 2009”
Genzyme reported these and other preliminary, unaudited revenue figures
in conjunction with a presentation by Chairman and Chief Executive
Officer Henri A. Termeer at the J.P. Morgan 29th Annual
Healthcare Conference in San Francisco. The company will provide full
2010 financial results and 2011 guidance on February 16.
Genzyme’s fourth-quarter non-GAAP diluted earnings per share (EPS) is
expected to be $0.80 - $0.85, approximately double the third quarter
non-GAAP diluted EPS of $0.42. Fourth-quarter non-GAAP diluted EPS
guidance was $0.90 - $0.95. Cerezyme revenue for the quarter was lower
than anticipated and gross margins were reduced due to costs associated
with manufacturing operation improvements. Cerezyme revenue was impacted
by the delay of orders in Brazil; a late lot release that was
exacerbated by shipping delays due to December weather issues in Europe;
and the loss of a specific lot for Japan. Manufacturing operation costs
were impacted by consent decree compliance measures, and expenses
associated with the simultaneous start-up of three operations: the new
Framingham plant, the fill/finish expansion in Waterford, and the
transfer of fill/finish work to a third-party manufacturer.
Based on this run rate, Genzyme now expects non-GAAP diluted EPS of
$4.10 - $4.35 in 2011 and approximately $5 billion in revenue, compared
with previous guidance of $4.30 - $4.60 and $5.1 billion, respectively.
EPS in the first quarter of 2011 is expected to be similar to the fourth
quarter of 2010. For the three-year period from 2008 to 2011, the
company expects the compound annual growth rate of its non-GAAP EPS to
be approximately 30 percent.
“We achieved record revenue in the fourth quarter and approximately
doubled our earnings from the third quarter, returning to pre-disruption
levels experienced in the first half of 2009,” said Mr. Termeer. “We
expect to maintain this earnings level in the first quarter and grow
from there beginning in the second quarter, as we continue to execute on
the opportunities provided by our core businesses and reduce our
operating expenses.”
Genzyme expects to achieve several important manufacturing and
product-related milestones during 2011, including: ceasing the remaining
fill/finish activities at the Allston facility for all products during
the first half of the year; announcing top-line data from the first
phase 3 trial of alemtuzumab for multiple sclerosis mid-year and from
the second trial in the second half of the year; and fully supplying
existing patient demand for Fabrazyme and receiving approval for the
treatment’s production at the new Framingham plant, both expected during
the second half of 2011.
During his presentation, Mr. Termeer highlighted these milestones and
three key near-term value drivers: supply recovery, business growth and
the company’s late-stage pipeline.
Supply Recovery of Cerezyme and Fabrazyme
The recovery of Cerezyme supply is on track, with currently treated
patients back to full supply and bioreactor performance at the higher
end of historical experience. Fabrazyme supply is improving and
allocations increased 82 percent from the third quarter to the fourth.
Genzyme is ahead of schedule in its plans to expand its biologics and
fill/finish manufacturing capacity. Fabrazyme engineering runs at the
company’s new Framingham manufacturing facility are nearly completed,
and process validation (PV) runs are expected to begin this month. The
material created through these PV runs will become commercial product
inventory upon regulatory approval of Fabrazyme production at this
facility. This approval is expected during the second half of this year
and will enable the company to provide full, sustainable product supply.
During the fourth quarter, Genzyme ceased fill/finish operations at its
Allston facility for products sold in the United States, and the company
plans to transfer the remaining fill/finish operations out of the
facility during the first half of this year. An expansion of fill/finish
operations at the company’s Waterford, Ireland, site resulting in a
four-fold capacity increase is expected to be approved in late 2011.
Business and Revenue Growth
Record revenue in the fourth quarter shows strength across all of
Genzyme’s major product lines. In 2011, the company expects double-digit
revenue growth, driven by its Pompe disease treatments Myozyme®
(alglucosidase alfa) and Lumizyme; its viscosupplement treatments Synvisc®
(hylan G-F 20) and Synvisc-One® (hylan G-F 20); and its
Hematology and Oncology business.
The company’s Pompe disease treatments represent an opportunity that is
comparable to that of Cerezyme for Gaucher disease. The company
estimates that there are about 10,000 Pompe patients worldwide;
approximately 1,400 Pompe patients are currently treated with either
Myozyme or Lumizyme, which are the only treatments approved for the
disease.
Fourth-quarter revenue of Myozyme/Lumizyme grew 39 percent to $128
million compared with $92 million in the same period in 2009. Full-year
sales increased 27 percent to $412 million compared with $325 million in
2009. Increases in both fourth-quarter and full-year revenue reflect, in
part, sales of Lumizyme following FDA approval in May 2010. U.S. sales
of Myozyme/Lumizyme in the fourth quarter were $30 million. Myozyme is
currently available in 48 markets worldwide and Genzyme expects to
increase this to 60 markets by the end of this year.
Fourth-quarter sales of Cerezyme were $224 million compared with $105
million in the same period in 2009, and full-year sales were $722
million compared with $793 million in 2009. Sales of Fabrazyme in the
fourth quarter were $62 million compared with $58 million in the fourth
quarter of 2009; full-year sales were $188 million compared with $430
million in 2009.
Synvisc-One, which was launched in the first quarter of 2009, is the
only single-injection viscosupplement approved for the treatment of
osteoarthritis (OA) knee pain in the United States, a market that is
large, growing and under-penetrated. Of the estimated 9 million eligible
OA patients in the United States, only about 14 percent are currently
treated with viscosupplements.
Fourth-quarter sales of Synvisc and Synvisc-One grew 10 percent to $105
million compared with $95 million in the fourth quarter of 2009, and
full-year sales increased 19 percent to $392 million compared with $329
million in 2009. Genzyme in September received approval of Synvisc in
Japan, the largest market in the world for viscosupplements.
Genzyme’s Hematology and Oncology business has grown significantly over
the last five years, from revenue of $213 million in 2006 to $679
million in 2010. This is primarily the result of the approval and strong
launch of Mozobil® (plerixafor injection); and the steady
growth of Clolar® (clofarabine) and Thymoglobulin®
(anti-thymocyte globulin (rabbit)).
The company’s Renal and Endocrinology business performed extremely well
in the fourth quarter, delivering 13 percent growth with revenue of $291
million compared with $258 million in the fourth quarter of 2009. This
was driven by the new tender in Brazil, the launch of Renvela®
(sevelamer carbonate) in major EU markets including France and Italy,
and strong Renvela performance in the United States, where it remains
the market leading phosphate binder.
Below is a summary of Genzyme’s business segment revenues for the
quarter and the year:
|
|
|
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|
|
|
|
|
|
|
|
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|
|
|
|
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In millions; figures are unaudited
|
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Q4 2010 E
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Q4 2009
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%
|
|
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|
FY 2010 E
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FY 2009
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%
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|
Personalized Genetic Health
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$508
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$348
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46
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$1,656
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|
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$1,850
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|
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(10
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)
|
Renal & Endocrinology
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|
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291
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|
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258
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13
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1,072
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1,008
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|
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6
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|
Biosurgery
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|
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157
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|
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143
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|
|
10
|
|
|
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583
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516
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13
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|
Hematology & Oncology
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179
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169
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6
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679
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513
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32
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Other
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6
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6
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0
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16
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44
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(64
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)
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Revenue Subtotal*
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$1,141
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$924
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23
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$4,006
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$3,931
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2
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Pending Disc. Ops.
Cell Therapy
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13
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14
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(7
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)
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45
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46
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(2
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)
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Total Revenue
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$1,154
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$938
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23
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%
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$4,051
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$3,977
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2
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%
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*Revenue subtotal excludes pending discontinued operations of Genzyme’s
cell therapy business, which the company plans to divest during the
first half of this year.
During today’s presentation, Mr. Termeer also summarized the progress
the company is making on its value creation plan. As part of an overall
effort to sharpen the company’s focus on its key businesses, Genzyme in
December completed the $925 million sale of its genetic testing business
to Laboratory Corporation of America and this quarter expects to
complete the $265 million sale of its diagnostics business to Sekisui
Chemical Co. and enter into an agreement for the sale of its
pharmaceuticals business.
The company plans to divest or partner additional non-core businesses
during the first half of this year, including divesting its cell therapy
and regenerative medicine business, which is part of the Biosurgery
segment and includes the product lines Carticel® (autologous
cultured chondrocytes), and MACI® (Matrix-induced Autologous
Chondrocyte Implant) for cartilage regeneration, and Epicel®
(cultured epidermal autographs) for severe burns.
As part of the company’s initiative to improve its operating margins,
Genzyme last year implemented a program focused on identifying
sustainable cost savings opportunities across the organization. This
resulted in $26 million in savings during the fourth quarter and is
expected to create $275 million in savings in 2011. A total of $385
million in sustainable savings is anticipated by 2012. To increase
shareholder value, Genzyme last year completed the first half of a $2
billion share repurchase plan and intends to complete the second half of
the plan by May.
Late-Stage Pipeline
Within Genzyme’s late-stage product pipeline, three product approvals
are expected by the end of 2013: alemtuzumab for multiple sclerosis,
mipomersen for familial hypercholesterolemia, and eliglustat tartrate
for Type 1 Gaucher disease.
Based on promising phase 2 data, alemtuzumab has the potential to become
a new standard of care for multiple sclerosis treatment, a market that
is expected to reach $14 billion by 2012. Two phase 3 trials are fully
enrolled; results of the trial in treatment-naïve patients are expected
mid-year, and results of the trial in treatment-experienced patients are
expected during the second half of this year. Genzyme anticipates U.S.
approval of the treatment in 2012.
Genzyme is partnering with Isis Pharmaceuticals Inc. on the development
of mipomersen for patients with familial hypercholesterolemia who are
unable to achieve healthy LDL-cholesterol levels with current
treatments. The companies have completed four phase 3 trials of the
novel treatment, all of which met their primary endpoints.
Genzyme recently had a productive pre-NDA meeting with the FDA regarding
mipomersen. Based on FDA’s feedback, the company believes it has
sufficient data to file for the homozygous familial hypercholesterolemia
(HoFH) indication. Due to the size of the severe heterozygous (He) FH
population, the FDA provided guidance for additional 12 month exposure
data before filing for that indication. Genzyme will work with FDA to
further define the additional study required. FDA acknowledged that an
outcome study may not be feasible in severe HeFH patients due to the
size of the population. As the FDA feedback is incorporated, Genzyme
will determine the timing for the U.S. HoFH filing, which may shift to
the second half of this year. The EU filing for the HoFH indication is
planned for the first half of this year; this filing may also include
severe HeFH.
Eliglustat tartrate has the potential to transform the treatment
experience for patients with Type 1 Gaucher disease by providing an oral
capsule option instead of bi-weekly infusions. Two-year data from the
phase 2 trial suggest that the treatment provides comparable efficacy to
Cerezyme. Phase 3 trials are underway globally, and approval is
anticipated by the end of 2013.
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 approximately 10,000 employees in locations
spanning the globe.
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 results and outlook and business plans and
strategies including, without limitation: expectations regarding recent
financial results and near-term growth, including, fourth-quarter 2010
non-GAAP EPS, 2011 revenue and non-GAAP EPS and cash flow from
operations; the expected completion and timing of ceasing fill/finish
operations at the Allston facility; the anticipated receipt and timing
of alemtuzumab clinical trial data results; expectations regarding
Fabrazyme supply and meeting patient demand; expectations regarding the
timing of validation of runs at, and receipt and timing of regulatory
approval of, the new Framingham facility; the expected receipt and
timing of regulatory approval of the expanded fill/finish operations at
the Waterford facility; expectations regarding Myozyme/Lumizyme market
opportunities and future growth; the expected completion and timing of
selling its diagnostics business; expectations regarding entering an
agreement to sell its pharmaceuticals business; plans to divest
additional businesses, including its cell therapy business, and the
timing of such planned divestitures; the expected amount and
sustainability of savings resulting from cost-saving efforts and
opportunities; the intention to complete the second half of its share
repurchase plan; the expected receipt and timing of regulatory approvals
for alemtuzumab, mipomersen and eliglustat tartrate; the expected size
of the MS market; expectations regarding submissions, including scope
and timing, of regulatory filings for mipomersen; These statements are
subject to risks and uncertainties that may cause actual results to
differ materially. These risks and uncertainties include, among others:
that production and shipment of Fabrazyme and Cerezyme does not continue
as planned due to any reason, including contamination, equipment
malfunctions, cell growth at lower than expected levels, fill-finish
inefficiencies, power outages, human error or regulatory issues; that
Genzyme is unable to meet its financial guidance for any reason,
including due to lower than expected revenues attributable to further
manufacturing issues, lower than expected product demand due to
competition or higher than expected operating expenses; that Genzyme
cannot obtain on expected timetables or maintain regulatory approvals
for its products and manufacturing facilities, including the Allston
manufacturing facility, the new Framingham facility, and the expanded
fill/finish operations in Waterford; that Genzyme is unable to
successfully transition fill/finish operations out of the Allston
facility on planned timelines; 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 alemtuzumab-MS, mipomersen and eliglustat
tartrate for any reason, including trial results that are not as
favorable as expected and safety profiles that reduce the potential
target patient population; that Genzyme is unable to complete the sale
of its diagnostics business or sell other businesses as planned or on
anticipated timeframes; that Genzyme will not be able to implement its
plan to increase shareholder in a manner consistent with expectations,
including an inability to reduce operating expenses or sustain any
achieved cost savings as expected; that Genzyme is unable to accurately
assess, estimate or project patient populations and product demand; that
changes to or developments in general market conditions or Genzyme’s
stock price make the repurchase of additional shares unattractive or
inadvisable; 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 Management’s
Discussion and Analysis of Financial Condition and Results of Operations
in Genzyme's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2010. Genzyme cautions investors not to place substantial
reliance on the forward-looking statements contained in this press
release. These statements speak only as of the date of this press
release and Genzyme undertakes no obligation to update or revise them.
Genzyme®, Cerezyme®, Fabrazyme®, Myozyme®,
Lumizyme®, Synvisc®, Synvisc-One®,
Renvela®, Mozobil®, Clolar®, Campath®,
Thymoglobulin®, Carticel®, Epicel® and
MACI® are registered trademarks of Genzyme Corporation or its
subsidiaries. All rights reserved.
Important Information
Genzyme has filed with the Securities and Exchange Commission a
Solicitation/Recommendation Statement on Schedule 14D-9 relating to the
tender offer by Sanofi-Aventis. Genzyme shareholders are advised to read
the company's Solicitation/Recommendation Statement on Schedule 14D-9
because it contains important information. Shareholders may obtain a
free copy of the Solicitation/Recommendation Statement on Schedule
14D-9, as well as any other documents filed by Genzyme in connection
with the tender offer, free of charge at the SEC's website at http://www.sec.gov.
In addition, investors can obtain free copies of these documents from
Genzyme by directing a request to Genzyme at 500 Kendall Street,
Cambridge, MA 02142, Attention: Shareholder Relations Department, or by
calling 617-252-7500 and asking for the Shareholder Relations Department.
Webcast Information
Mr. Termeer’s presentation will be Webcast live at 9:00 a.m. Pacific /
12:00 p.m. Eastern on the investor section of www.genzyme.com.
A replay will be available following the presentation.
Upcoming Events
On February 16, 2011, Genzyme will report its full financial results for
the fourth quarter of 2010 and provide more detailed financial guidance
for 2011. 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
203-369-3598. This call will also be Webcast live on the investor
section of www.genzyme.com.