Genzyme Acquires Verigen AG, Bolstering Global Orthopaedic Franchise


Adds Second Generation Cell Therapy Product for Cartilage Repair

Feb 08, 2005, 00:00 ET from Genzyme Corporation

    CAMBRIDGE, Mass., Feb. 8 /PRNewswire/ -- Genzyme Corporation
 (Nasdaq:   GENZ) announced today that it has acquired Verigen AG, a private
 company based in Germany with a proprietary cell therapy product for cartilage
 repair currently sold in Europe and Australia. This product, Matrix-induced
 Autologous Chondrocyte Implantation (MACI(R)), will both expand Genzyme's
 orthopaedic offerings in these markets, and provide a strong second generation
 product to develop for the United States market.  Carticel(R) (autologous
 cultured chondrocytes), Genzyme's first generation product, has been used in
 more than 10,000 patients since it was introduced in 1995.
     "This strategic acquisition will help advance our global orthopaedic
 franchise by providing a strong second generation cartilage repair product
 with a solid foundation in Europe and Australia," said Ann Merrifield,
 president of Genzyme Biosurgery. "We look forward to building on Verigen's
 established presence with orthopaedic surgeons in Europe and Australia --
 where we already market Synvisc for pain from osteoarthritis of the knee --
 and to launching US clinical trials for MACI by early 2006."
     The transaction will provide Genzyme with cell culture facilities in
 Europe and Australia to support sales in these territories. Genzyme has gained
 substantial expertise in the manufacture of cell therapy products through
 production of Carticel at its cell culture facility in Cambridge, Mass.
     Genzyme has acquired Verigen for $10 million in initial payments, and
 potential additional payments of up to $40 million over the next six years
 based upon the achievement of development and commercial milestones. These
 include approval of a biologic license application in the US, marketing
 approval in the US, and royalties on sales. To date Genzyme has acquired
 approximately 96 percent of Verigen's shares, and anticipates acquiring the
 remaining shares in the first half of the year. The transaction is not
 material to Genzyme from a financial standpoint.
     A Simpler Procedure
     Verigen's patent-protected MACI approach offers a more convenient method
 of delivery than the traditional autologous chondrocyte implantation (ACI)
 method used with Carticel. Both procedures begin when an orthopaedic surgeon
 harvests a biopsy of healthy cartilage from a patient's knee and sends it to a
 cell processing facility, where technicians grow millions of new cells. These
 new cells are then delivered to the surgeon, who implants them into the
 defect, where they produce new cartilage to effect a repair.
     In Verigen's MACI procedure, technicians in the laboratory seed the
 patient's cells onto a collagen membrane, which is fitted by a surgeon into
 the cartilage defect and can be secured without suturing.  MACI eliminates the
 need for surgeons to suture a piece of the periosteum (the skin covering the
 bone) over the implanted cells, as they do during the Carticel procedure. As a
 result, MACI can be performed during a faster, less invasive procedure than
 Carticel surgery, offering advantages for surgeons and patients. MACI has been
 delivered to more than 3,200 patients in Europe and Australia since it was
 first offered in 1998.
     Cell Therapy at Genzyme
     Genzyme has more than a decade of experience in developing and
 manufacturing autologous cell therapy products that have been used to treat
 thousands of patients. Epicel(R) (cultured epidermal autografts), a cell
 therapy for treating patients with severe burns, is also manufactured by
 Genzyme. Together, Carticel(R) and Epicel(R) represent the first such products
 ever brought to market in the United States, providing Genzyme with superior
 scientific and commercial expertise in this field. Carticel was licensed by
 the U.S. Food and Drug Administration in 1997.
     Genzyme is also conducting cell therapy research in novel treatments for
 heart disease, and is exploring the use of adult stem cells in treating a
 variety of diseases.  Its largest cell therapy development effort is the
 ongoing Phase 2 MAGIC trial (Myoblast Autologous Graft in Ischemic
 Cardiomyopathy), designed to determine whether cell therapy can be used to
 reverse damage done to cardiac muscle following a heart attack, or to safely
 halt a patient's further progression of heart failure. The trial is currently
 being conducted in Europe with plans to enroll up to 300 patients.
     About Carticel
     Carticel(R) is indicated for the repair of symptomatic, cartilaginous
 defects of the femoral condyle (medial, lateral or trochlear), caused by acute
 or repetitive trauma, in patients who have had an inadequate response to a
 prior arthroscopic or other surgical repair procedure. Carticel(R) is not
 indicated for the treatment of cartilage damage associated with
 osteoarthritis. It should not be used in patients with a history of allergy to
 the antibiotic gentamicin or in those with sensitivities to materials of
 bovine origin or in patients who have previously had cancer in the bones,
 cartilage, fat, or muscle of the treated limb. Data regarding outcomes beyond
 three years are limited. Any instability of the knee or malalignment of the
 joint should be corrected prior to or concurrent with Carticel(R)
 implantation. Use in children, or in joints other than the knee has not yet
 been assessed. The most frequently reported adverse events are: hypertrophic
 tissue at the repair site, intraarticular adhesions, superficial wound
 infection, hypertrophic synovitis, and post-operative hematoma.
     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. Founded in 1981, Genzyme has grown from a small start-up to a
 diversified enterprise with annual revenues exceeding $2 billion and nearly
 7,000 employees in locations spanning the globe.  With many established
 products and services helping patients in more than 80 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, orthopaedic, cancer, transplant and
 immune diseases, and diagnostic testing. Genzyme's commitment to innovation
 continues today with a substantial development program focused on these fields
 as well as heart disease and other areas of unmet medical need.
     This press release contains forward-looking statements, including the
 statements regarding: the extent to which this acquisition ultimately advances
 Genzyme's orthopaedic franchise, the extent to which Genzyme is able to
 increase Verigen's existing business, the extent to which Genzyme is able to
 obtain regulatory approval to market and sell MACI in the United States, the
 extent to which Genzyme ultimately obtains 100% of the outstanding shares of
 Verigen and the extent to which Genzyme ultimately enrolls up to 300 patients
 in the on-going MAGIC trial.  These statements are subject to risks and
 uncertainties that could cause actual results to differ materially from those
 projected in these forward-looking statements.  These risks and uncertainties
 include, among others, Genzyme's ability to successfully market and sell MACI,
 the continued and increased market acceptance of MACI, the ability of Genzyme
 to satisfy the regulatory requirements in the United States associated with
 obtaining marketing approval for MACI, Genzyme's ability to avail itself of
 the statutory provisions under German law that allow it to buy out minority
 shareholders, the extent to which the safety and efficacy of the therapy in
 the MAGIC trial is demonstrated and the factors discussed under the caption
 "Factors Affecting Future Operating Results" in Genzyme's Quarterly Report on
 Form 10-Q, for the period ended June 30, 2004.  We caution investors not to
 place undue reliance on the forward-looking statements contained in this
 document.  These statements speak only as of the date of this document and we
 undertake no obligation to update or revise the statements.
     Genzyme(R), Carticel(R) and Epicel(R) are registered trademarks of Genzyme
 Corporation.  MACI(R) is a registered trademark of Verigen AG.
     Genzyme's press releases and other company information are available at and by calling Genzyme's investor information line at
 1-800-905-4369 within the United States or 1-703-797-1866 outside the United
      Media Contact:      Investor Contact:
      Dan Quinn           Kristen Galfetti
      (617) 768-6849      (617) 768-6563

SOURCE Genzyme Corporation