Genzyme Reports Financial Results for Fourth Quarter of 2010 and Full Year

Recovery Continues with Growth Across All Businesses

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Genzyme Corp. (NASDAQ: GENZ) today reported fourth-quarter 2010 results that reflect increasing supplies of Cerezyme^® (imiglucerase for injection) and Fabrazyme^® (agalsidase beta), revenue growth across all major product lines, and reductions in operating expenses. Earlier today Genzyme and sanofi-aventis announced that they have reached a definitive agreement under which sanofi-aventis will acquire Genzyme for $74 per share plus a contingent value right. This news is covered in a separate press release.

“By executing on the opportunities provided by our core businesses and reducing our operating expenses, we were able to nearly double our earnings from the third quarter to the fourth.”

Fourth-quarter GAAP net income was $471.9 million, or $1.76 per diluted share, compared with $23.2 million, or $0.09 per diluted share, in the same period in 2009. Non-GAAP net income was $221.1 million, or $0.82 per diluted share, compared with $78.1 million, or $0.29 per diluted share, in the fourth quarter of 2009. Non-GAAP 2010 income excludes items associated with business divestitures, Bayer oncology product acquisition expenses, and stock compensation expenses.

Full-year 2010 GAAP net income was $422.1 million, or $1.57 per diluted share, compared with $422.3 million, or $1.54 per diluted share, in 2009. Non-GAAP net income was $478.5 million, or $1.78 per diluted share, compared with $611.5 million, or $2.23 per diluted share, in 2009. Genzyme exited 2010 with $1.9 billion in cash and equivalents.

Fourth-quarter GAAP revenue grew 23 percent to $1.15 billion from $938.3 million in the fourth quarter of 2009; non-GAAP revenue was $1.13 billion. For the year, GAAP revenue was $4.05 billion compared with $3.98 billion in 2009; non-GAAP revenue was $4.03 billion. Non-GAAP revenue figures exclude the pharmaceuticals and cell therapy businesses, which Genzyme intends to divest.

“Strong growth in the fourth quarter demonstrates that our recovery is fully underway,” said Henri A. Termeer, Genzyme’s chairman and CEO. “By executing on the opportunities provided by our core businesses and reducing our operating expenses, we were able to nearly double our earnings from the third quarter to the fourth.”

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 and transferring those operations to a contract manufacturer 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;
• Fully supplying existing patient demand for Fabrazyme and receiving approval for its production at the new Framingham plant, both expected during the second half of 2011; and
• Maintaining the existing full supply of Cerezyme.

The company is continuing to make progress in implementing its plan to increase shareholder value, which includes the divestitures of non-core businesses. In the fourth quarter, Genzyme completed the sale of its Genetics business, and the company this quarter completed the sale of its Diagnostics business and entered into an agreement to sell its Pharmaceuticals business.

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.

Along with the expected 2011 milestones, Genzyme expects that supply recovery, business growth and the company’s late-stage pipeline will serve as growth drivers this year.

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 process validation runs at the company’s new Framingham manufacturing facility have begun, and the material created through these 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 to a contract manufacturer during the first half of this year. An expansion of fill/finish operations at the Waterford site creating a four-fold capacity increase is expected to be approved in late 2011.

Business Unit Revenue Growth

Record revenue in the fourth quarter shows strength across each of Genzyme’s businesses. In 2011, the company expects double-digit revenue growth, driven primarily by Cerezyme and Fabrazyme. In addition, Genzyme expects strong growth from its Pompe disease treatments Myozyme^® (alglucosidase alfa) and Lumizyme^® (alglucosidase alfa); its viscosupplement treatments Synvisc^® (hylan G-F 20) and Synvisc-One^® (hylan G-F 20); and its Hematology and Oncology business.

Personalized Genetic Health

Fourth-quarter revenue from the Personalized Genetic Health business grew 45 percent to $505.6 million from $348.0 million in same period in 2009, and 25 percent from $404.2 million in the third quarter of 2010. This growth reflects increasing supplies of Cerezyme and Fabrazyme, and the U.S. launch of Lumizyme.

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 $127.5 million compared with $91.9 million in the same period in 2009. Full-year sales increased 27 percent to $411.8 million compared with $324.5 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 $30.3 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 $222.0 million compared with $105.4 million in the same period in 2009, and full-year sales were $719.6 million compared with $793.0 million in 2009. Genzyme recently won a six-month tender for Cerezyme in Brazil that covers the first half of 2011. Sales of Fabrazyme in the fourth quarter were $61.6 million compared with $58.0 million in the fourth quarter of 2009; full-year sales were $188.2 million compared with $429.7 million in 2009.

Biosurgery

GAAP revenue from Genzyme’s Biosurgery business grew to $628.8 million in 2010 from $561.8 million in 2009, driven by its viscosupplement treatments Synvisc and Synvisc-One. Non-GAAP 2010 revenue was $615.8 million. GAAP fourth-quarter 2010 revenue was $170.7 million compared with $157.3 million in the same period in 2009; non-GAAP revenue was $157.7 million. Non-GAAP revenue figures exclude the cell therapy business, which Genzyme intends to divest.

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. The percentage of the approximately 9 million eligible OA patients in the United States who are currently treated with viscosupplements grew last year from 14 to 16 percent.

Fourth-quarter sales of Synvisc and Synvisc-One grew 11 percent to $105.9 million compared with $95.4 million in the fourth quarter of 2009, and full-year sales increased 19 percent to $393.1 million compared with $328.5 million in 2009. Genzyme in the fourth quarter received approval of Synvisc in Japan, the largest market in the world for viscosupplements.

Hematology and Oncology

Full-year revenue from Genzyme’s Hematology and Oncology business grew 32 percent to $678.8 million in 2010 from $512.9 in 2009, primarily driven by the ongoing launch of Mozobil^® (plerixafor injection), the significant growth of Clolar^® (clofarabine) in the U.S. and Europe and a full year of sales for the products acquired from Bayer. Fourth quarter revenue was $178.7 million compared with $168.8 million in the same period in 2009.

In 2011, Genzyme expects growth in this business to be driven primarily by Mozobil, Thymoglobulin^® (anti-thymocyte globulin (rabbit)) and Clolar through increased penetration in key segments of the U.S. and mature European markets, and expansion in emerging markets such as China. During the second half of this year, the company expects data from a clinical trial of Clolar in adult patients with acute myelogenous leukemia, which if positive could potentially support regulatory filings for an expanded indication for the product.

Renal and Endocrinology

The company’s Renal and Endocrinology business performed extremely well in the fourth quarter, delivering 12 percent growth with revenue of $288.9 million compared with $258.2 million in the fourth quarter of 2009. This was driven by strong Renvela^® (sevelamer carbonate) performance in the United States, where it remains the market leading phosphate binder; the launch of Renvela in major EU markets including France and Italy; and the new tender in Brazil. Full-year 2010 revenue from the business was $1.07 billion, compared with $1.01 billion in 2009.

Genzyme recently completed a pivotal study of Renvela in Chinese patients with chronic kidney disease (CKD) on dialysis. The study met its primary endpoint, and the company anticipates filing for approval of Renvela’s use in treating hyperphosphatemic dialysis patients in China during the first half of 2011. The company expects sustainable growth of Renvela in 2011 as it continues to launch the product in Europe, where the company has marketing approval for the product’s use in hyperphosphatemic CKD patients who are on dialysis, and in those who are not on dialysis.

Promising Late-Stage Pipeline

Within Genzyme’s late-stage product pipeline, three approvals are expected by the end of 2013: alemtuzumab for multiple sclerosis, mipomersen for familial hypercholesterolemia, and eliglustat tartrate for Gaucher disease type 1.

• 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 $13 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 the second half of 2012.
• Genzyme is partnering with Isis Pharmaceuticals Inc. on the development of mipomersen for familial hypercholesterolemia (FH) patients 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 plans to file for EU approval of the treatment for patients with homozygous FH (HoFH) in the first half of this year. This filing may also include severe heterozygous FH (HeFH). Following recent FDA feedback, Genzyme is determining the timing of the U.S. HoFH filing, which may shift to the second half of this year.
• Three-year follow-up data from the phase 2 study of eliglustat tartrate, Genzyme’s investigational oral therapy for patients with Gaucher disease type 1, will be presented this week at the Lysosomal Disease Network WORLD Symposium. At the three-year timepoint, sustained or further improvements were observed across all endpoints, including bone disease, compared with baseline. Eliglustat tartrate, which is currently in phase 3 trials, has the potential to transform the treatment experience for patients with Gaucher disease by providing an oral capsule option instead of bi-weekly infusions.

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. 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 revenue growth; the expected completion and timing of ceasing fill/finish operations at the Allston facility and the transfer of those operations; the anticipated receipt and timing of alemtuzumab clinical trial data results; expectations regarding Fabrazyme supply and meeting patient demand; expectations regarding the timing and results of validation runs at, and receipt and timing of regulatory approval of, the new Framingham facility; expectations regarding the supply of Cerezyme; the expected receipt and timing of regulatory approval of the expanded fill/finish operations at the Waterford facility; expectations regarding Myozyme/Lumizyme commercial opportunities and future growth; plans to divest additional businesses, including the cell therapy business, and the timing of such divestitures; the expected amount of savings resulting from cost-saving efforts and opportunities; the expected receipt, timing and results of clinical trial data for Clolar; the anticipated timing of filing for regulatory approval for Renvela in China; the expected receipt and timing of regulatory approvals for alemtuzumab, mipomersen and eliglustat tartrate; the expected size of the MS market and 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’s business is negatively impacted by adverse events or circumstances, including 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 pipeline products 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 pharmaceuticals 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 forecast patient populations and product demand; 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^® and Thymoglobulin^® 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.

GENZYME CORPORATION (GENZ)
Consolidated Statements of Operations					Three Months Ended												Year Ended
(Unaudited, amounts in thousands, except per share amounts)					December 31,												December 31,
					2010						2009 (1)						2010						2009 (1)
Total revenues					$	1,151,853					$	938,290					$	4,048,708					$	3,977,288
Operating costs and expenses:
Cost of products and services sold						335,067						296,136						1,191,540						1,070,347
Selling, general and administrative						350,002						340,374						1,553,921						1,244,398
Research and development						202,097						224,918						847,284						833,853
Amortization of intangibles						67,927						70,237						262,254						253,507
Restructuring charges						28,260						-						28,260						-
Contingent consideration expense						33,310						-						102,746						-
Charge for impaired assets						26,873						28,297						26,873						65,584
Total operating costs and expenses						1,043,536						959,962						4,012,878						3,467,689
Operating income (loss)						108,317						(21,672	)					35,830						509,599
Other income (expenses):
Equity in loss of equity method investments						(795	)					-						(3,004	)					-
Gains (losses) on investments in equity securities, net						(3,583	)					1,276						(30,334	)					(57	)
Gain on acquisition of business						-						-						-						24,159
Other						1,109						700						465						(1,646	)
Investment income						2,595						3,605						11,382						17,642
Interest expense						(3,668	)					-						(7,026	)					-
Total other income (expenses)						(4,342	)					5,581						(28,517	)					40,098
Income (loss) from continuing operations before taxes						103,975						(16,091	)					7,313						549,697
(Provision for) benefit from income taxes						(32,968	)					37,608						24,750						(122,766	)
Income (loss) from continuing operations, net of tax						71,007						21,517						32,063						426,931
Income (loss) from discontinued operations, net of tax						400,904						1,728						390,081						(4,631	)
Net income (loss)					$	471,911					$	23,245					$	422,144					$	422,300
Net income (loss) per share-basic:
Income (loss) from continuing operations, net of tax					$	0.27					$	0.08					$	0.12					$	1.59
Income (loss) from discontinued operations, net of tax					$	1.55					$	0.01					$	1.49					$	(0.02	)
Net income (loss)					$	1.82					$	0.09					$	1.61					$	1.57
Net income (loss) per share-diluted:
Income (loss) from continuing operations, net of tax					$	0.27					$	0.08					$	0.12					$	1.56
Income (loss) from discontinued operations, net of tax					$	1.49					$	0.01					$	1.45					$	(0.02	)
Net income (loss)					$	1.76					$	0.09					$	1.57					$	1.54
Weighted average shares outstanding:
Basic						259,245						265,596						261,531						268,841
Diluted						268,513						270,241						268,601						274,071
GENZYME CORPORATION (GENZ)
Condensed Consolidated Balance Sheets																	December 31,						December 31,
(Unaudited, amounts in thousands)																	2010						2009
Cash and all marketable securities																	$	1,950,022					$	1,049,700
Assets held for sale-current																		77,690						-
Other current assets																		2,235,383						1,896,927
Property, plant and equipment, net																		2,925,585						2,809,349
Intangibles, net																		3,181,797						3,716,625
Assets held for sale-noncurrent																		91,836						-
Other noncurrent assets																		678,762						588,123
Total assets																	$	11,141,075					$	10,060,724
Liabilities associated with assets held for sale-current																	$	21,368					$	-
Other current liabilities																		1,444,555						1,080,130
Noncurrent liabilities																		2,033,305						1,296,942
Stockholders' equity																		7,641,847						7,683,652
Total liabilities and stockholders' equity																	$	11,141,075					$	10,060,724

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 on Form 8-K 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) 2009 consolidated statements of operations have been revised to reflect discontinued operations. Discontinued operations represents the operations of Genzyme Genetics and Genzyme Diagnostics, net of tax.

Genzyme Corporation (GENZ)
Analyst Schedule
(Amounts in thousands, except percentage amounts)
PRIOR PERIODS REVISED FOR DISCONTINUED OPERATIONS - UNAUDITED																							Q4-10
																							vs.
																							Q4-09
			Q4-09				Q1-10				Q2-10				Q3-10				Q4-10				% B/(W)				FY 2008				FY 2009				FY 2010
Total revenues:
Personalized Genetic Health
Cerezyme			$	105,368			$	179,147			$	138,736			$	179,781			$	221,966			111	%			$	1,238,977			$	793,024			$	719,630
Fabrazyme				58,026				53,241				39,484				33,882				61,603			6	%				494,260				429,690				188,210
Myozyme				91,900				86,059				92,054				106,223				127,467			39	%				296,176				324,545				411,803
Aldurazyme				38,706				39,897				43,651				40,766				42,466			10	%				151,664				155,064				166,780
Other Personalized Genetic Health				54,042				34,160				36,619				43,531				52,052			(4	%)				114,950				147,285				166,362
Total Personalized Genetic Health product and service revenue				348,042				392,504				350,544				404,183				505,554			45	%				2,296,027				1,849,608				1,652,785
R&D Revenue				-				-				-				-				-								110				-				-
Total Personalized Genetic Health				348,042				392,504				350,544				404,183				505,554			45	%				2,296,137				1,849,608				1,652,785
Renal and Endocrinology
Renagel and Renvela (including Sevelamer)				178,891				164,607				170,066				178,755				184,222			3	%				677,729				706,590				697,650
Hectorol				31,877				42,025				41,863				49,285				56,705			78	%				128,153				130,757				189,878
Subtotal				210,768				206,632				211,929				228,040				240,927			14	%				805,882				837,347				887,528
Thyrogen				47,267				45,625				46,300				42,257				47,772			1	%				148,448				170,644				181,954
Other Renal and Endocrinology				-				-				-				-				-								-				30				-
Total Renal and Endocrinology product and service revenue				258,035				252,257				258,229				270,297				288,699			12	%				954,330				1,008,021				1,069,482
R&D revenue				155				166				150				134				178			15	%				90				331				628
Total Renal and Endocrinology				258,190				252,423				258,379				270,431				288,877			12	%				954,420				1,008,352				1,070,110
Biosurgery
Synvisc				95,419				79,507				107,686				99,998				105,885			11	%				263,094				328,533				393,076
Sepra products				40,365				37,177				38,935				40,858				44,026			9	%				133,663				148,538				160,996
Other Hyaluronic Acid products				6,698				8,984				4,818				5,908				6,937			4	%				45,587				34,597				26,647
Total Hyaluronic Acid product and service revenue				142,482				125,668				151,439				146,764				156,848			10	%				442,344				511,668				580,719
Cell Based Therapy				14,081				10,645				11,837				9,510				12,996			(8	%)				42,547				45,789				44,988
Other Biosurgery				343				494				300				258				360			5	%				3,564				1,866				1,412
Total Biosurgery product and service revenue				156,906				136,807				163,576				156,532				170,204			8	%				488,455				559,323				627,119
R&D revenue				414				559				404				200				468			13	%				2,645				2,493				1,631
Total Biosurgery				157,320				137,366				163,980				156,732				170,672			8	%				491,100				561,816				628,750
Hematology and Oncology
Mozobil				19,267				18,966				22,141				23,630				27,284			42	%				639				54,650				92,021
Thymoglobulin				58,265				52,910				58,232				56,891				61,885			6	%				183,296				215,964				229,918
Clolar				22,230				24,688				25,520				26,129				27,564			24	%				64,044				81,280				103,901
Other Hematology and Oncology				68,977				59,727				70,597				60,645				61,858			(10	%)				47,120				158,658				252,827
Total Hematology and Oncology product and service revenue				168,739				156,291				176,490				167,295				178,591			6	%				295,099				510,552				678,667
R&D revenue				24				19				7				1				80			233	%				14,439				2,367				107
Total Hematology and Oncology				168,763				156,310				176,497				167,296				178,671			6	%				309,538				512,919				678,774
Multiple Sclerosis R&D revenue				110				-				-				-				-			(100	%)				21,709				12,467				-
Other
Other product and service revenue				5,137				3,099				3,397				2,848				7,841			53	%				51,473				29,442				17,185
Total Other product and service revenue				5,137				3,099				3,397				2,848				7,841			53	%				51,473				29,442				17,185
R&D revenue				728				189				367				310				238			(67	%)				3,048				2,684				1,104
Total Other				5,865				3,288				3,764				3,158				8,079			38	%				54,521				32,126				18,289
Total revenues			$	938,290			$	941,891			$	953,164			$	1,001,800			$	1,151,853			23	%			$	4,127,425			$	3,977,288			$	4,048,708

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.

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Year Ended December 31, 2010
(Amounts in thousands, except percentage and per share data)
UNAUDITED
																																																OTHER DISCRETE ITEMS
																																																(included in GAAP and Non-GAAP results)
			GAAP As Reported								Consent Decree				Bayer Acquisition Related			Stock Compensation Expense				Exit Activities				Genzyme Pharmaceuticals (5)				Cell Based Therapy				Discontinued Operations (3)							NON-GAAP (1)							Manufacturing Related (2)				Genzyme Pharmaceuticals (5)				Investment Impairment (4)
Income Statement Classification:
Total revenues						$	4,048,708				$	-			$	-		$	-			$	-			$	(5,658	)		$	(12,995	)		$	-						$	4,030,055						$	-			$	(3,082	)		$	-
Cost of products and services sold						$	(1,191,540	)			$	-			$	35,854		$	19,041			$	-			$	8,247			$	15,037			$	-						$	(1,113,361	)					$	44,938			$	3,200			$	-
Gross margin			71	%		$	2,857,168				$	-			$	35,854		$	19,041			$	-			$	2,589			$	2,042							72	%		$	2,916,694						$	44,938			$	118			$	-
Selling, general and administrative						$	(1,553,921	)			$	175,000			$	-		$	89,575			$	3,207			$	2,169			$	4,312			$	-						$	(1,279,658	)					$	-			$	625			$	-
Research and development						$	(847,284	)			$	-			$	-		$	54,470			$	1,094			$	938			$	4,467			$	-						$	(786,315	)					$	-			$	686			$	-
Amortization of intangibles						$	(262,254	)			$	-			$	-		$	-			$	-			$	-			$	329			$	-						$	(261,925	)					$	-			$	-			$	-
Restructuring charges						$	(28,260	)			$	-			$	-		$	-			$	28,260			$	-			$	-			$	-						$	-						$	-			$	-			$	-
Contingent consideration expense						$	(102,746	)			$	-			$	102,746		$	-			$	-			$	-			$	-			$	-						$	-						$	-			$	-			$	-
Charge for impaired assets						$	(26,873	)							$	-		$	-			$	-			$	26,873			$	-			$	-						$	-						$	-			$	-			$	-
Equity in loss of equity method investments						$	(3,004	)			$	-			$	-		$	-			$	-			$	-			$	-			$	-						$	(3,004	)					$	-			$	-			$	-
Other						$	(29,869	)			$	-			$	-		$	-			$	-			$	-			$	-			$	-						$	(29,869	)					$	-			$	-			$	32,250
Investment income						$	11,382				$	-			$	-		$	-			$	-			$	-			$	-			$	-						$	11,382						$	-			$	-			$	-
Interest expense						$	(7,026	)			$	-			$	-		$	-			$	-			$	-			$	2			$	-						$	(7,024	)					$	-			$	-			$	-
Summary:
Income (loss) from continuing operations before income taxes						$	7,313				$	175,000			$	138,600		$	163,086			$	32,561			$	32,569			$	11,152			$	-						$	560,281						$	44,938			$	1,429			$	32,250
(Provision for) benefit from income taxes			-338.44	%		$	24,750				$	(51,299	)		$	6,120		$	(45,436	)		$	(8,214	)		$	(3,482	)		$	(4,240	)		$	-			14.60	%		$	(81,801	)					$	(12,633	)		$	(362	)		$	(11,909	)
Income (loss) from continuing operations						$	32,063				$	123,701			$	144,720		$	117,650			$	24,347			$	29,087			$	6,912			$	-						$	478,480						$	32,305			$	1,067			$	20,341
Income (loss) from discontinued operations, net of tax						$	390,081				$	-			$	-		$	-			$	-			$	-			$	-			$	(390,081	)					$	-						$	-			$	-			$	-
Net income (loss)						$	422,144				$	123,701			$	144,720		$	117,650			$	24,347			$	29,087			$	6,912			$	(390,081	)					$	478,480						$	32,305			$	1,067			$	20,341
Net income (loss) per share-basic:
Income (loss) from continuing operations, net of tax						$	0.12				$	0.47			$	0.55		$	0.45			$	0.09			$	0.11			$	0.03			$	-						$	1.83						$	0.12			$	0.00			$	0.08
Income (loss) from discontinued operations, net of tax						$	1.49				$	-			$	-		$	-			$	-			$	-			$	-			$	(1.49	)					$	-						$	-			$	-			$	-
Net income (loss)						$	1.61				$	0.47			$	0.55		$	0.45			$	0.09			$	0.11			$	0.03			$	(1.49	)					$	1.83						$	0.12			$	0.00			$	0.08
Net income (loss) per share-diluted:
Income (loss) from continuing operations, net of tax						$	0.12				$	0.46			$	0.54		$	0.44			$	0.09			$	0.11			$	0.03			$	-						$	1.78						$	0.12			$	0.00			$	0.08
Income (loss) from discontinued operations, net of tax						$	1.45				$	-			$	-		$	-			$	-			$	-			$	-			$	(1.45	)					$	-						$	-			$	-			$	-
Net income (loss)						$	1.57				$	0.46			$	0.54		$	0.44			$	0.09			$	0.11			$	0.03			$	(1.45	)					$	1.78						$	0.12			$	0.00			$	0.08
Weighted average shares outstanding:
Basic							261,531					261,531				261,531			261,531				261,531				261,531				261,531				261,531							261,531							261,531				261,531				261,531
Diluted							268,601					268,601				268,601			268,601				268,601				268,601				268,601				268,601							268,601							268,601				268,601				268,601

Notes:

(1) Represents the Non-GAAP results of operations for Genzyme Corporation for the applicable period. 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) Represents write-offs of inventory that did not meet the necessary quality specifications.

(3) Discontinued Operations represents the operations of Genzyme Genetics and Genzyme Diagnostics, net of tax.

(4) Represents a write-down of our investment in the common stock of ISIS Pharmaceuticals, Inc., to the extent our cost exceeds the market value, in accordance with GAAP.

(5) Genzyme Pharmaceuticals was treated as a discrete item for Q3 2010 and a Non-GAAP item for Q4 2010.

GENZYME CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Three Months Ended December 31, 2010
(Amounts in thousands, except percentage and per share data)
UNAUDITED
	GAAP As Reported										Bayer Acquisition Related				Stock Compensation Expense					Exit Activities					Genzyme Pharmaceuticals					Cell Based Therapy					Discontinued Operations (2)									NON-GAAP (1)
Income Statement Classification:
Total revenues					$	1,151,853					$	-			$	-				$	-				$	(5,658	)			$	(12,995	)			$	-								$	1,133,200
Cost of products and services sold					$	(335,067	)				$	8,560			$	4,842				$	-				$	8,247				$	15,037				$	-								$	(298,381	)
Gross margin	71	%			$	816,786					$	8,560			$	4,842									$	2,589				$	2,042									74	%			$	834,819
Selling, general and administrative					$	(350,002	)				$	-			$	19,123				$	-				$	2,169				$	4,312				$	-								$	(324,398	)
Research and development					$	(202,097	)				$	-			$	13,103				$	1,094				$	938				$	4,467				$	-								$	(182,495	)
Amortization of intangibles					$	(67,927	)				$	-			$	-				$	-				$	-				$	329				$	-								$	(67,598	)
Restructuring charges					$	(28,260	)				$	-			$	-				$	28,260				$	-				$	-				$	-								$	-
Contingent consideration expense					$	(33,310	)				$	33,310			$	-				$	-				$	-				$	-				$	-								$	-
Charge for impaired assets					$	(26,873	)				$	-			$	-				$	-				$	26,873				$	-				$	-								$	-
Equity in loss of equity method investments					$	(795	)				$	-			$	-				$	-				$	-				$	-				$	-								$	(795	)
Other					$	(2,474	)				$	-			$	-				$	-				$	-				$	-				$	-								$	(2,474	)
Investment income					$	2,595					$	-			$	-				$	-				$	-				$	-				$	-								$	2,595
Interest expense					$	(3,668	)				$	-			$	-				$	-				$	-				$	2				$	-								$	(3,666	)
Summary:
Income (loss) from continuing operations before income taxes					$	103,975					$	41,870			$	37,068				$	29,354				$	32,569				$	11,152				$	-								$	255,988
(Provision for) benefit from income taxes	31.71	%			$	(32,968	)				$	21,514			$	(8,085	)			$	(7,610	)			$	(3,482	)			$	(4,240	)			$	-				13.62	%			$	(34,871	)
Income (loss) from continuing operations					$	71,007					$	63,384			$	28,983				$	21,744				$	29,087				$	6,912				$	-								$	221,117
Income (loss) from discontinued operations, net of tax					$	400,904					$	-			$	-				$	-				$	-				$	-				$	(400,904	)							$	-
Net income (loss)					$	471,911					$	63,384			$	28,983				$	21,744				$	29,087				$	6,912				$	(400,904	)							$	221,117
Net income (loss) per share-basic:
Income (loss) from continuing operations, net of tax					$	0.27					$	0.24			$	0.11				$	0.08				$	0.11				$	0.03				$	-								$	0.85
Income (loss) from discontinued operations, net of tax					$	1.55					$	-			$	-				$	-				$	-				$	-				$	(1.55	)							$	-
Net income (loss)					$	1.82					$	0.24			$	0.11				$	0.08				$	0.11				$	0.03				$	(1.55	)							$	0.85
Net income (loss) per share-diluted:
Income (loss) from continuing operations, net of tax					$	0.27					$	0.24			$	0.11				$	0.08				$	0.11				$	0.03				$	-								$	0.82
Income (loss) from discontinued operations, net of tax					$	1.49					$	-			$	-				$	-				$	-				$	-				$	(1.49	)							$	-
Net income (loss)					$	1.76					$	0.24			$	0.11				$	0.08				$	0.11				$	0.03				$	(1.49	)							$	0.82
Weighted average shares outstanding:
Basic						259,245						259,245				259,245					259,245					259,245					259,245					259,245									259,245
Diluted						268,513						268,513				268,513					268,513					268,513					268,513					268,513									268,513

Notes:

(1) Represents the Non-GAAP results of operations for Genzyme Corporation for the applicable period. 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) Discontinued Operations represents the operations of Genzyme Genetics and Genzyme Diagnostics, net of tax.

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)
REVISED FOR DISCONTINUED OPERATIONS - UNAUDITED
	GAAP As Reported									Bayer Acquisition Related					Stock Compensation Expense					Discontinued Operations (2)							NON-GAAP (1)
Income Statement Classification:
Total revenues				$	3,977,288					$	-				$	-				$	-						$	3,977,288
Cost of products and services sold				$	(1,070,347	)				$	36,822				$	22,273				$	-						$	(1,011,252	)
Gross margin	73	%		$	2,906,941					$	36,822				$	22,273				$	-			75	%		$	2,966,036
Selling, general and administrative				$	(1,244,398	)				$	-				$	100,741				$	-						$	(1,143,657	)
Research and development				$	(833,853	)				$	-				$	60,118				$	-						$	(773,735	)
Amortization of intangibles				$	(253,507	)				$	-				$	-				$	-						$	(253,507	)
Contingent consideration expense				$	(65,584	)				$	65,584				$	-				$	-						$	-
Gains (losses) on investments in equity securities				$	(57	)				$	-				$	-				$	-						$	(57	)
Gain on acquisition of business				$	24,159					$	(24,159	)			$	-				$	-						$	-
Other				$	(1,646	)				$	-				$	-				$	-						$	(1,646	)
Investment income				$	17,642					$	-				$	-				$	-						$	17,642
Summary:
Income (loss) from continuing operations before income taxes				$	549,697					$	78,247				$	183,132				$	-						$	811,076
(Provision for) benefit from income taxes	22.33	%		$	(122,766	)				$	(29,780	)			$	(46,987	)			$	-			24.60	%		$	(199,533	)
Income (loss) from continuing operations				$	426,931					$	48,467				$	136,145				$	-						$	611,543
Income (loss) from discontinued operations, net of tax				$	(4,631	)				$	-				$	-				$	4,631						$	-
Net income (loss)				$	422,300					$	48,467				$	136,145				$	4,631						$	611,543
Net income (loss) per share-basic:
Income (loss) from continuing operations, net of tax				$	1.59					$	0.18				$	0.51				$	-						$	2.27
Income (loss) from discontinued operations, net of tax				$	(0.02	)				$	-				$	-				$	0.02						$	-
Net income (loss)				$	1.57					$	0.18				$	0.51				$	0.02						$	2.27
Net income (loss) per share-diluted:
Income (loss) from continuing operations, net of tax				$	1.56					$	0.18				$	0.50				$	-						$	2.23
Income (loss) from discontinued operations, net of tax				$	(0.02	)				$	-				$	-				$	0.02						$	-
Net income (loss)				$	1.54					$	0.18				$	0.50				$	0.02						$	2.23
Weighted average shares outstanding:
Basic					268,841						268,841					268,841					268,841							268,841
Diluted					274,071						274,071					274,071					274,071							274,071

Notes:

(1) Represents the Non-GAAP results of operations for Genzyme Corporation for the applicable period. 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) Discontinued Operations represents the operations of Genzyme Genetics and Genzyme Diagnostics, net of tax.

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)
REVISED FOR DISCONTINUED OPERATIONS - UNAUDITED
			GAAP As Reported									Bayer Acquisition Related					Stock Compensation Expense					Discontinued Operations (2)							NON-GAAP (1)
Income Statement Classification:
Total revenues						$	938,290					$	-				$	-				$	-						$	938,290
Cost of products and services sold						$	(296,136	)				$	19,082				$	7,388				$	-						$	(269,666	)
Gross margin			68	%		$	642,154					$	19,082				$	7,388				$	-				71	%	$	668,624
Selling, general and administrative						$	(340,374	)				$	-				$	21,767				$	-						$	(318,607	)
Research and development						$	(224,918	)				$	-				$	13,657				$	-						$	(211,261	)
Amortization of intangibles						$	(70,237	)				$	-				$	-				$	-						$	(70,237	)
Contingent consideration expense						$	(28,297	)				$	28,297				$	-				$	-						$	-
Gains (losses) on investments in equity securities						$	1,276					$	-				$	-				$	-						$	1,276
Other						$	700					$	-				$	-				$	-						$	700
Investment income						$	3,605					$	-				$	-				$	-						$	3,605
Summary:
Income (loss) from continuing operations before income taxes						$	(16,091	)				$	47,379				$	42,812				$	-						$	74,100
(Provision for) benefit from income taxes			233.72	%		$	37,608					$	(22,232	)			$	(11,391	)			$	-				-5.38	%	$	3,985
Income (loss) from continuing operations						$	21,517					$	25,147				$	31,421				$	-						$	78,085
Income (loss) from discontinued operations, net of tax						$	1,728					$	-				$	-				$	(1,728	)					$	-
Net income (loss)						$	23,245					$	25,147				$	31,421				$	(1,728	)					$	78,085
Net income (loss) per share-basic:
Income (loss) from continuing operations, net of tax						$	0.08					$	0.09				$	0.12				$	-						$	0.29
Income (loss) from discontinued operations, net of tax						$	0.01					$	-				$	-				$	(0.01	)					$	-
Net income (loss)						$	0.09					$	0.09				$	0.12				$	(0.01	)					$	0.29
Net income (loss) per share-diluted:
Income (loss) from continuing operations, net of tax						$	0.08					$	0.09				$	0.12				$	-						$	0.29
Income (loss) from discontinued operations, net of tax						$	0.01					$	-				$	-				$	(0.01	)					$	-
Net income (loss)						$	0.09					$	0.09				$	0.12				$	(0.01	)					$	0.29
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 applicable period. 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) Discontinued Operations represents the operations of Genzyme Genetics and Genzyme Diagnostics, net of tax.