Genzyme General's Revenues Increase 25 Percent in First Quarter

Apr 19, 2001, 01:00 ET from Genzyme General

    CAMBRIDGE, Mass., April 19 /PRNewswire/ -- Genzyme Corp. today reported
 strong first-quarter 2001 financial results for Genzyme General
 (Nasdaq:   GENZ), with significant growth in both revenues and income from
 operations.
     Revenues for the quarter increased 25 percent to $222.7 million, up from
 revenues of $178.6 million for the same quarter last year including sales of
 Renagel(R) (sevelamer hydrochloride).
     Net income before special items and prior to amortization was $55.6
 million, or $.55 per diluted share, for the quarter.  Earnings per share were
 calculated using approximately 100 million shares, including approximately 8
 million new shares issued for the acquisition of GelTex Pharmaceuticals Inc.
     "We are pleased with the substantial revenue growth we generated in the
 first quarter, with solid gains across all of our product lines," said Henri
 A. Termeer, chairman and chief executive officer of Genzyme Corp.  "With the
 excellent growth of Renagel, the continuing strength of Cerezyme(R), and the
 solid performance of our other product lines, we have significantly increased
 profit from operations while at the same time ramping up our launch programs
 for Fabrazyme(TM) and increasing our investment in research and development,
 particularly in five new GelTex programs.  We are now accelerating from a very
 solid base."
     Genzyme General's reported net income of $40.3 million, or $.40 per
 diluted share, reflects special items including the continuing impact of
 purchase accounting for the GelTex acquisition (stock-based compensation and
 higher costs of acquired inventory), as well as the effect of implementing
 SFAS 133.
     The effective net tax rate, including tax benefits and excluding special
 items, allocated to Genzyme General stock for the quarter was approximately 15
 percent.  Genzyme General anticipates that its tax rate for the year will be
 in the low- to mid-twenty-percent range.
     Genzyme General also confirmed its earnings guidance of $2.25-$2.35 per
 share before amortization for the year.  Earnings per share for the second
 quarter are expected to be in the low- to mid-fifty-cents range, excluding the
 ongoing impact of purchase accounting and amortization.
 
     Business Update
     Genzyme General's revenue growth in the first quarter was led by
 accelerating sales of Renagel, a phosphate binder for patients with end-stage
 renal disease on dialysis.  Renagel sales in the quarter were more than three
 and a half times greater than in the same quarter a year ago, rising to
 $28.6 million from $8.0 million.  Over the past six months, the total number
 of prescriptions for Renagel has increased 75 percent, and the number of new
 prescriptions has grown 89 percent, underscoring the rapid clinical adoption
 of the product as it begins its third year on the market.
     Earlier this month, one of the largest providers of dialysis treatment in
 the United States, DaVita Inc., launched a program to help make Renagel widely
 available to its patients with end-stage renal disease.  Approximately 60
 percent of DaVita's 41,000 patients will be treated with Renagel when the
 program is fully implemented.
     During the quarter, Genzyme obtained rights to government licenses
 necessary to register and sell medical products in Brazil through its
 acquisition of Lisfarma Importacao, Exportacao e Comercio Ltda.  The
 transaction will substantially accelerate the launch of Renagel in Brazil,
 which has approximately 45,000 dialysis patients and a dialysis population
 that is growing at a rate of 12 percent per year.
     In June, Genzyme will report one-year results from its ongoing "Treat to
 Goal" clinical trial comparing Renagel with standard calcium-based phosphate
 binders at the European Dialysis and Transplantation Association meeting.  The
 three-year trial is designed to further demonstrate Renagel's ability to lower
 serum phosphorous levels into the normal range and to measure the product's
 ability to slow cardiac calcification.  Baseline data from this study was
 presented this week at the National Kidney Foundation Clinical Nephrology
 Meetings.  Similar data was presented at the American Society for Nephrology
 meeting in October.
     Genzyme General's revenues for the first quarter were bolstered by
 increased sales of Cerezyme(R) (imiglucerase for injection) enzyme replacement
 therapy for the treatment of Type I Gaucher disease, which were $139.6 million
 for the quarter, up 9 percent compared to revenues of $128.6 million for the
 first quarter of last year.
     Revenues from Genzyme's diagnostics businesses were $34.7 million for the
 first quarter, up 14 percent from revenues of $30.4 million for the first
 quarter of last year.  Within diagnostics, revenues from genetic testing
 services increased 21 percent, while revenues from diagnostic products grew 8
 percent.
     Genzyme expects that its cystic fibrosis testing volume will double over
 the next 24 months as physicians implement new guidelines published by the
 American College of Medical Genetics.  These guidelines recommend that couples
 planning a pregnancy or seeking prenatal care be offered DNA testing to screen
 for common mutations in the cystic fibrosis gene.
     Genzyme General also recorded a total of $17.5 million in revenues in the
 first quarter from sales of four additional products: Thyrogen(R) (thyrotropin
 alfa for injection), used in the diagnosis and management of patients with
 thyroid cancer; WelChol(R) (colesevelam hydrochloride), a cholesterol lowering
 agent for which Genzyme receives royalties from Sankyo Pharma; Fabrazyme
 (agalsidase beta) enzyme replacement therapy for Fabry disease; and
 pharmaceutical intermediates.
 Pipeline Update
     On March 28, the Committee for Proprietary Medicinal Products (CPMP) of
 the European Medicines Evaluation Agency issued a positive opinion
 recommending marketing authorization for Fabrazyme.  The CPMP decision has
 been forwarded to the European Commission, which is expected to make a final
 decision on marketing authorization within 3-4 months. The European Commission
 generally follows the advice of the CPMP.  Assuming marketing authorization is
 granted, Genzyme General plans to launch Fabrazyme immediately, drawing on its
 substantial commercial infrastructure and experienced sales force in Europe.
     In the United States, Genzyme has submitted its response to the Food and
 Drug Administration's request for additional data related to its biologics
 license application for Fabrazyme.  The FDA had completed its review of the
 Fabrazyme BLA in December and sought additional information from Genzyme
 before acting on the submission.  Genzyme anticipates receiving approval to
 market Fabrazyme in the United States this year.
     Positive results from the first clinical trial of Aldurazyme(TM)
 (recombinant human alpha-L-iduronidase), an enzyme replacement therapy for
 patients with MPS I, were published in January in the New England Journal of
 Medicine.  The results suggest that Aldurazyme may alleviate the primary
 symptoms of MPS I.  Two-year data from this trial will be presented in May at
 the International Congress of Human Genetics meeting.  Genzyme General is
 developing Aldurazyme in partnership with BioMarin Pharmaceutical Inc.
 Enrollment has been completed in the Phase 3 confirmatory trial of the
 product, which is scheduled to conclude later this year.
     Genzyme and its partner Pharming Group N.V. are initiating a second
 clinical trial of a cell-derived enzyme replacement therapy for Pompe disease.
 The trial will study the safety and efficacy of recombinant human alpha-
 Glucosidase in patients with the classical infantile form of Pompe disease.
 It will be conducted at medical centers in Europe and the United States.
     During the quarter, Genzyme General and partner Diacrin Inc. completed a
 preliminary analysis of results from the Phase 2 clinical trial evaluating the
 use of NeuroCell(TM)-PD for the treatment of patients with Parkinson's
 disease.  The analysis indicated that the trial did not meet its primary
 endpoint.  Genzyme and Diacrin expect to complete additional analysis of the
 Phase 2 data as quickly as possible and to reach a decision within a few
 months on whether to proceed with additional clinical studies of NeuroCell-PD.
     Genzyme is also aggressively pursuing a number of clinical development
 programs from the GelTex pipeline.  Pilot Phase 2 studies are underway of a
 toxin-binding polymer for treating and preventing Clostridium difficile
 colitis, a condition common in hospitals and nursing homes that affects
 approximately 700,000 people a year in the United States.  Larger Phase 2
 studies are scheduled to begin by the end of the year.  In addition, patient
 enrollment has begun in a Phase 1/2 clinical trial of a topical treatment for
 psoriasis, a chronic skin disorder that affects up to seven million people in
 the United States.  Later this year, Genzyme anticipates filing an IND to
 begin clinical studies of an orally available iron chelator for the treatment
 of disorders associated with excess levels of iron in the blood, such as
 sickle cell anemia, hemochromatosis, and thalassemia.
     Genzyme's pre-clinical development program for an orally available small-
 molecule drug candidate for the treatment of multiple sclerosis remains on
 track.  The compound has been shown in pre-clinical studies to prevent the
 onset of disease or slow its progression in several mouse models of multiple
 sclerosis.
     Genzyme General develops and markets therapeutic products and diagnostic
 products and services. Genzyme General has four therapeutic products on the
 market and a strong pipeline of products in development focused on the
 treatment of genetic disorders and other chronic debilitating diseases with
 well-defined patient populations. Genzyme General is a division of the
 biotechnology company Genzyme Corporation.
     This press release contains forward-looking statements based on
 management's current expectations, including without limitation statements
 about: expectations concerning Genzyme General's earnings per share for the
 year 2001 and for the second fiscal quarter of 2001 and tax rate for the year
 2001; the estimated number of DaVita patients that will be treated with
 Renagel upon completion of the program initiated in April; the anticipated
 impact of the acquisition of Lisfarma on the potential launch of Renagel in
 Brazil; estimates concerning the market for Renagel in Brazil, including
 growth projections; planned presentations of clinical trial data; the
 anticipated efficacy of Renagel to be demonstrated through the "Treat to Goal"
 trial; the anticipated impact of the implementation of new guidelines
 published by the American College of Medical Genetics on Genzyme General's
 cystic fibrosis genetic testing revenues; the potential receipt and timing of
 marketing approval from the European Commission for Fabrazyme; the anticipated
 significance and impact of the CPMP decision concerning Fabrazyme; the
 potential commercialization of Fabrazyme in Europe and related plans; the
 potential receipt and timing of marketing approval of Fabrazyme in the United
 States; the anticipated efficacy of alpha-Glucosidase therapy in Pompe
 patients; and the expected timing of the final analysis of the data from the
 Phase 2 trial of NeuroCell-PD and a determination as to whether to proceed
 with additional clinical studies.  Actual results may materially differ due to
 numerous factors, including: the actual results of Genzyme General's
 operations in 2001 and in the second fiscal quarter of 2001; the ability to
 increase market acceptance of Renagel; the ability to optimize patient
 compliance and dosing of Renagel; the accuracy of Genzyme General's
 information about the markets for Renagel and other products and services,
 including growth projections; Genzyme's ability to successfully retool and
 expand manufacturing systems related to Renagel; the actual timing and content
 of decisions made by the FDA, the European Commission and other regulatory
 authorities concerning submissions made by Genzyme and its competitors,
 including submissions made for therapies for Fabry disease; the ability to
 obtain necessary pricing and reimbursement approvals for Genzyme General's
 products in Europe, Brazil and other regions; the FDA's response to the
 clarification and additional data provided by Genzyme related to the BLA for
 Fabrazyme; Genzyme's ability to adequately respond to additional requests for
 data or clarification that may be made by the FDA, if any; enrollment rates
 for and results of clinical trials for Genzyme General's products; the actual
 efficacy and safety of Genzyme General's products; actual timing and results
 of the final analysis of data from the Phase 2 trial of NeuroCell-PD; the
 continued funding of collaborations by Genzyme and its partners; the actual
 number of additional pregnant women and couples who receive DNA testing as a
 result of the implementation of the new guidelines; the availability and
 extent of reimbursement from third-party payers for Genzyme General's products
 and services; the ability to obtain, maintain and successfully enforce
 adequate patent coverage for Genzyme General's products and services; the
 ability to manufacture sufficient quantities of products for development and
 commercialization activities; the ability of Genzyme General to successfully
 commercialize its products and services; the ability of Genzyme General to
 identify additional patients for its products and services; the competitive
 environment in the market for Genzyme General's products and services; and the
 risks and uncertainties described in reports filed by Genzyme with the
 Securities and Exchange Commission under the Securities Exchange Act of 1934,
 as amended, including without limitation Exhibit 99.2 to Genzyme's 2000 Annual
 Report on Form 10-K.  Genzyme General stock is a series of common stock of
 Genzyme Corporation.  Therefore, holders of Genzyme General stock are subject
 to all of the risks and uncertainties described in the aforementioned reports.
     Genzyme(R) and Cerezyme(R) are registered trademarks of Genzyme
 Corporation.  Renagel(R) is a registered trademark of GelTex Pharmaceuticals,
 Inc.  Fabrazyme(TM) is a trademark of Genzyme Corporation.  WelChol(TM) is a
 trademark of Sankyo Pharma Inc.  Aldurazyme(TM) is a trademark of
 BioMarin/Genzyme LLC.  NeuroCell(TM) is a trademark of Diacrin/Genzyme LLC.
 All rights are reserved.
 
     CONFERENCE CALL INFORMATION
     There will be a conference call at 11:00 a.m. Eastern on April 19 to
 discuss Genzyme General's financial results. This call will be broadcast live
 over the Internet at www.genzyme.com/ir/events.htm. If you would like to
 participate by telephone, please dial 212-346-0294.  A replay of the call will
 be available from 1:00 p.m. Eastern today through midnight on April 26.  The
 replay telephone number is 800-633-8284 in the United States and 1-858-812-
 6440 from outside the United States.  Please refer to reservation number
 18296013.
 
     UPCOMING EVENTS
     Genzyme General will broadcast its annual analyst and investor meeting
 live over the Internet on Friday, May 4, beginning at 8:30 a.m. Eastern.  To
 access the Webcast, please refer to genzyme.com/ir/events.htm.
     Genzyme Corporation will broadcast its annual shareholders meeting live
 over the Internet on Thursday, May 31, beginning at 2:00 p.m. Eastern.  To
 access the Webcast, please refer to www.genzyme.com/ir/events.htm.
     Genzyme Corporation will report second-quarter earnings results on July 19
 for Genzyme General (Nasdaq:   GENZ), Genzyme Molecular Oncology (Nasdaq:   GZMO)
 and Genzyme Biosurgery (Nasdaq:   GZBX).  Conference calls to discuss these
 results will follow.  If you wish to participate in the calls, please dial the
 following numbers:  for Genzyme General, dial 212-346-0294 at 11:00 a.m.
 Eastern; for Genzyme Molecular Oncology, dial 212-346-0281 at 1:00 p.m.
 Eastern; and for Genzyme Biosurgery, dial 212-346-7440 at 3:00 p.m. Eastern.
 To access the Webcast of these conference calls, please refer to
 www.genzyme.com/ir/events.htm.
     Genzyme's press releases are available at www.genzyme.com.  They are also
 available from Genzyme's fax-on-demand service at 1-800-436-1443 within the
 United States or 1-201-521-1080 outside the United States.
 
     CONTACT:
     Media Contact:
     Bo Piela
     617-252-7785
 
     Investor Contact:
     Sally Curley
     617-591-7140
 
 
 GENZYME GENERAL (A Division of Genzyme Corporation)
     Combined Statements of Operations                  Three Months Ended
     (Amounts in thousands, except per share amounts)       March 31,
                                                       2001           2000
 
     Total revenues                                  $222,693       $170,626
 
     Operating costs and expenses:
      Cost of products and services sold               58,178         41,048
      Selling, general and administrative              58,531         38,222
      Research and development                         40,186         42,743
      Amortization of intangibles                      17,670          1,968
       Total operating costs and expenses             174,565        123,981
 
     Operating income                                  48,128         46,645
 
     Other income (expenses):
      Equity in net loss of unconsolidated
       affiliates                                     (8,479)        (8,133)
      Gain on affiliate sale of stock                       -         20,270
      Minority interest in net loss of
       subsidiary                                       1,274            856
      Other                                           (3,717)           (21)
      Investment income                                 9,213          8,087
      Interest expense                                (6,398)        (3,551)
 
       Total other income (expenses)                  (8,107)         17,508
 
     Income before income taxes                        40,021         64,153
 
     Provision for income taxes                      (14,876)       (18,844)
     Genzyme General division net
      income before cumulative effect
      of change in accounting for
      derivative financial instruments (1)             25,145         45,309
 
     Cumulative effect of change in
      accounting for derivative
      financial instruments, net of tax (1)             4,167              -
     Genzyme General division net income               29,312         45,309
 
     Allocated tax benefits (2)                        10,942          6,328
     Net income allocated to
      Genzyme General Stock                          $ 40,254       $ 51,637
 
     Net income per share of Genzyme General Stock:
      Basic:
       Income per share before
        cumulative effect of change in
        accounting for derivative
        financial instruments                           $0.38          $0.61
 
       Per share cumulative effect of
        change in accounting for
        derivative financial instruments,
        net of tax (1)                                  $0.04              -
 
       Net income per share allocated to
        Genzyme General Stock                           $0.42          $0.61
 
      Diluted (3):
       Income per share before cumulative
        effect of change in accounting
        for derivative financial instruments            $0.36          $0.57
 
       Per share cumulative effect of
        change in accounting for
        derivative financial instruments,
        net of tax (1)                                  $0.04              -
 
       Net income per share allocated to
        Genzyme General Stock                           $0.40          $0.57
 
     Weighted average shares outstanding:
      Basic                                            95,875         84,502
 
      Diluted (3)                                     100,400         94,726
 
     (1)  Represents a transition adjustment for the 1/1/01 required adoption
          of SFAS 133 to record the fair value of certain derivative assets
          held on 1/1/01.
 
     (2)  Represents tax benefits allocated from Genzyme Biosurgery and Genzyme
          Molecular Oncology.
 
     (3)  Net income per share of Genzyme General Stock on a diluted basis and
          weighted average shares-diluted excludes the dilutive effect of the
          covertible subordinated notes and debentures allocated to Genzyme
          General as the effect would be anti-dilutive.
 
 
     Condensed Combined Balance Sheets              March 31,    December 31,
     (In thousands)                                    2001           2000
 
     Cash and all marketable securities              $575,029       $531,326
     Other current assets                             374,157        372,831
     Property, plant and equipment (net)              455,338        446,759
     Intangibles (net)                                959,878        977,147
     Other assets                                     129,757        170,990
       Total assets                                $2,494,159     $2,499,053
 
     Current liabilities                             $164,744       $166,583
     Noncurrent liabilities                           564,469        582,190
     Division equity                                1,764,946      1,750,280
       Total liabilities and division equity       $2,494,159     $2,499,053
 
 
                                GENZYME GENERAL
                   COMBINED INCOME AND PER SHARE INFORMATION
                          Quarter Ended March 31, 2001
                 (Amounts in thousands, except per share data)
 
                                    Continuing Effects Relating to
                                           GelTex Acquisition
                             Before     Turnover    Amortization  Revaluation
                             Gains/   of Inventory   of Deferred       of
                           (Charges)     Step-up    Compensation    SFAS 133
 
     Pretax profit          $49,563       $(3,418)      $(2,551)     $(3,573)
 
     Provision for
      income taxes           (7,369)        1,230          918         1,286
 
     Net income allocated
      to Genzyme General
      Stock                 $42,194       $(2,188)      $(1,633)     $(2,287)
 
     Net income per share of Genzyme General Stock:
      Basic                   $0.44       $(0.023)      $(0.017)     $(0.024)
 
      Diluted                 $0.42(1)    $(0.022)      $(0.016)     $(0.023)
 
     Weighted average shares outstanding:
      Basic                  95,875        95,875       95,875        95,875
 
      Diluted               100,400(1)    100,400      100,400       100,400
 
 
                                  Income Before
                                   Cumulative       Cumulative    Net Income
                                    Effect of       Effect of    Allocated to
                                    Adopting         Adopting       Genzyme
                                    SFAS 133         SFAS 133    General Stock
 
 
     Pretax profit                   $40,021          $4,167       $44,188
 
     Provision for
      income taxes                    (3,934)              -         (3,934)
 
     Net income allocated
      to Genzyme General
      Stock                          $36,087          $4,167       $40,254
 
     Net income per share of Genzyme General Stock:
      Basic                            $0.38           $0.04         $0.42
 
      Diluted                          $0.36           $0.04         $0.40  (1)
 
     Weighted average shares outstanding:
      Basic                           95,875          95,875        95,875
 
      Diluted                        100,400         100,400       100,400  (1)
 
     (1) Excludes potential dilutive convertible securities as they would be
         anti-dilutive.
 
 
 
                              WITHOUT AMORTIZATION
                                GENZYME GENERAL
                   COMBINED INCOME AND PER SHARE INFORMATION
                          Quarter Ended March 31, 2001
                 (Amounts in thousands, except per share data)
 
                                     Continuing Effects Relating to
                                           GelTex Acquisition
                             Before     Turnover    Amortization  Revaluation
                             Gains/   of Inventory   of Deferred       of
                           (Charges)     Step-up    Compensation    SFAS 133
 
 
     Pretax profit          $67,233       $(3,418)      $(2,551)     $(3,573)
 
     Provision for income
      taxes                 (11,610)        1,230          918         1,286
 
     Net income allocated
      to Genzyme General
      Stock                 $55,623       $(2,188)      $(1,633)     $(2,287)
 
     Net income per share
      of Genzyme General Stock:
      Basic                   $0.58       $(0.023)      $(0.017)     $(0.024)
 
      Diluted                 $0.55(1)    $(0.022)      $(0.016)     $(0.023)
 
     Weighted average shares outstanding:
      Basic                  95,875        95,875       95,875        95,875
 
      Diluted               100,400(1)    100,400      100,400       100,400
 
 
 
                                  Income Before
                                   Cumulative       Cumulative    Net Income
                                    Effect of       Effect of    Allocated to
                                    Adopting         Adopting       Genzyme
                                    SFAS 133         SFAS 133   General Stock
 
 
     Pretax profit                   $57,691          $4,167       $61,858
 
     Provision for income taxes       (8,175)              -         (8,175)
 
     Net income allocated to
      Genzyme General Stock          $49,516          $4,167       $53,683
 
     Net income per share of Genzyme General Stock:
      Basic                            $0.52           $0.04         $0.56
 
      Diluted                          $0.49           $0.04         $0.53  (1)
 
     Weighted average shares outstanding:
      Basic                           95,875          95,875        95,875
 
      Diluted                        100,400         100,400       100,400  (1)
 
     (1) Excludes potential dilutive convertible securities as they would be
         anti-dilutive.
 
 
       GENZYME CORPORATION
       Consolidated Statements of
       Operations
       (Amounts in thousands, except per
       share amounts)
                                                      Three Months Ended
                                                            March 31,
                                                     2001              2000
 
       Total revenues                              $278,261          $208,130
 
       Operating costs and expenses:
       Cost of products and services sold            89,953            60,110
       Selling, general and administrative           91,113            61,551
       Research and development                      57,110            55,699
       Amortization of intangibles                   28,991             6,098
       Total operating costs and expenses           267,167           183,458
 
       Operating income                              11,094            24,672
 
       Other income (expenses):
       Equity in net loss of
        unconsolidated affiliates                    (9,015)           (8,133)
       Gain on affiliate sale of stock                   --            20,270
       Minority interest                              1,274               856
       Other                                         (3,710)                2
       Investment income                             10,147             9,944
       Interest expense                             (11,370)           (3,939)
 
       Total other income (expenses)                (12,674)           19,000
 
       Income (loss) before income taxes             (1,580)           43,672
       Provision for income taxes                       670           (11,854)
       Net income (loss) before cumulative
        effect of change in
        accounting for derivative
        financial instruments                          (910)           31,818
 
       Cumulative effect of change in
        accounting for derivative
        financial instruments, net of tax (1)         4,167                --
       Net income                                    $3,257           $31,818
 
       Net income (loss) per share:
        Allocated to Genzyme General
         Stock:
       Net income before cumulative effect
        of change in accounting
        for derivative financial
        instruments                                 $25,145           $45,309
       Cumulative effect of change in
        accounting for derivative
        financial instruments, net of tax (1)
                                                      4,167                --
       Genzyme General net income                    29,312            45,309
       Tax benefit allocated from Genzyme
        Biosurgery                                    8,116             5,232
       Tax benefit allocated from Genzyme
        Molecular Oncology                            2,826             1,096
       Net income allocated to Genzyme
        General Stock                               $40,254           $51,637
 
       Net income per share of Genzyme
        General Stock:
         Basic:
           Net income per share before
            cumulative effect of change in
            accounting for derivative
            financial instruments                     $0.38             $0.61
           Per share cumulative effect of
            change in accounting for
            derivative financial
            instruments, net of tax (1)                0.04               --
           Net income per share allocated
            to Genzyme General Stock                  $0.42             $0.61
 
         Diluted (2):
           Net income per share before
            cumulative effect of change in
            accounting for derivative
            financial instruments                     $0.36             $0.57
           Per share cumulative effect of
            change in accounting for
            derivative financial
            instruments, net of tax (1)                0.04                --
           Net income per share allocated
            to Genzyme General Stock                  $0.40             $0.57
 
         Weighted average shares
          outstanding:
            Basic                                    95,875            84,502
 
         Diluted (2)                                100,400            94,726
 
 
 
       GENZYME CORPORATION
                                                        Three Months Ended
                                                             March 31,
                                                      2001              2000
       Net income (loss) per share
        (continued):
        Allocated to Biosurgery Stock (3):
          Genzyme Biosurgery division net
           loss                                    $(35,327)
          Tax benefit allocation                      4,604
          Net loss allocated to Biosurgery
           Stock                                   $(30,723)
 
         Net loss per share of Biosurgery
          Stock-basic and diluted
                                                     $(0.84)
 
         Weighted average shares
          outstanding                                36,403
 
        Allocated to Molecular Oncology
         Stock:
         Net loss                                   $(6,274)          $(5,057)
 
         Net loss per share of Molecular
          Oncology Stock-basic and diluted
                                                     $(0.39)           $(0.37)
 
         Weighted average shares
          outstanding                                15,907            13,495
 
        Allocated to Surgical Products
         Stock (3):
         Net loss                                                    $(10,043)
 
         Net loss per share of Surgical
          Products Stock-basic and diluted
                                                                       $(0.68)
 
         Weighted average shares
          outstanding                                                  14,855
 
       Allocated to Tissue Repair Stock
        (3):
         Net loss                                                     $(4,971)
 
         Net loss per share of Tissue
          Repair Stock-basic and diluted
                                                                       $(0.17)
 
         Weighted average shares
          outstanding                                                  28,531
 
 
       (1)  Represents a transition adjustment for the 1/1/01 required
       adoption of SFAS 133 to record the fair value of certain derivative
       assets held on 1/1/01.
       (2)  Net income per share allocated to Genzyme General Stock on a
       diluted basis and weighted average shares-diluted excludes
       the dilutive effect of the convertible subordinated notes and
       debentures allocated to Genzyme General as the effect
       would be anti-dilutive.
       (3)  On December 18, 2000, we acquired Biomatrix. Inc. and created
       Genzyme Biosurgery Division as a new division of Genzyme.
       We re-allocated the businesses of Genzyme Surgical Products and Genzyme
       Tissue Repair and allocated the acquired business
       of Biomatrix to Genzyme Biosurgery.  As a result of the transaction, we
       amended our charter to create Biosurgery Stock
       and eliminate Surgical Products Stock and Tissue Repair Stock.
       Accordingly, losses incurred before December 18, 2000
       have been allocated to Surgical Products Stock and Tissue Repair Stock.
       Losses incurred after December 18, 2000
       have been allocated to Biosurgery Stock.
 
 
 
       Condensed Consolidated Balance
       Sheets                                     March 31,        December 31,
       (In thousands)                                2001              2000
 
       Cash and all marketable securities          $619,614          $639,640
       Other current assets                         458,289           459,952
       Property, plant and equipment (net)          512,386           504,412
       Intangibles (net)                          1,511,123         1,539,782
       Other assets                                 163,622           174,314
       Total assets                              $3,265,034        $3,318,100
 
       Current liabilities                         $230,758          $241,099
       Noncurrent liabilities                       777,157           901,860
       Stockholders' equity                       2,257,119         2,175,141
       Total liabilities and stockholders'
        equity                                   $3,265,034        $3,318,100
 
 

SOURCE Genzyme General
    CAMBRIDGE, Mass., April 19 /PRNewswire/ -- Genzyme Corp. today reported
 strong first-quarter 2001 financial results for Genzyme General
 (Nasdaq:   GENZ), with significant growth in both revenues and income from
 operations.
     Revenues for the quarter increased 25 percent to $222.7 million, up from
 revenues of $178.6 million for the same quarter last year including sales of
 Renagel(R) (sevelamer hydrochloride).
     Net income before special items and prior to amortization was $55.6
 million, or $.55 per diluted share, for the quarter.  Earnings per share were
 calculated using approximately 100 million shares, including approximately 8
 million new shares issued for the acquisition of GelTex Pharmaceuticals Inc.
     "We are pleased with the substantial revenue growth we generated in the
 first quarter, with solid gains across all of our product lines," said Henri
 A. Termeer, chairman and chief executive officer of Genzyme Corp.  "With the
 excellent growth of Renagel, the continuing strength of Cerezyme(R), and the
 solid performance of our other product lines, we have significantly increased
 profit from operations while at the same time ramping up our launch programs
 for Fabrazyme(TM) and increasing our investment in research and development,
 particularly in five new GelTex programs.  We are now accelerating from a very
 solid base."
     Genzyme General's reported net income of $40.3 million, or $.40 per
 diluted share, reflects special items including the continuing impact of
 purchase accounting for the GelTex acquisition (stock-based compensation and
 higher costs of acquired inventory), as well as the effect of implementing
 SFAS 133.
     The effective net tax rate, including tax benefits and excluding special
 items, allocated to Genzyme General stock for the quarter was approximately 15
 percent.  Genzyme General anticipates that its tax rate for the year will be
 in the low- to mid-twenty-percent range.
     Genzyme General also confirmed its earnings guidance of $2.25-$2.35 per
 share before amortization for the year.  Earnings per share for the second
 quarter are expected to be in the low- to mid-fifty-cents range, excluding the
 ongoing impact of purchase accounting and amortization.
 
     Business Update
     Genzyme General's revenue growth in the first quarter was led by
 accelerating sales of Renagel, a phosphate binder for patients with end-stage
 renal disease on dialysis.  Renagel sales in the quarter were more than three
 and a half times greater than in the same quarter a year ago, rising to
 $28.6 million from $8.0 million.  Over the past six months, the total number
 of prescriptions for Renagel has increased 75 percent, and the number of new
 prescriptions has grown 89 percent, underscoring the rapid clinical adoption
 of the product as it begins its third year on the market.
     Earlier this month, one of the largest providers of dialysis treatment in
 the United States, DaVita Inc., launched a program to help make Renagel widely
 available to its patients with end-stage renal disease.  Approximately 60
 percent of DaVita's 41,000 patients will be treated with Renagel when the
 program is fully implemented.
     During the quarter, Genzyme obtained rights to government licenses
 necessary to register and sell medical products in Brazil through its
 acquisition of Lisfarma Importacao, Exportacao e Comercio Ltda.  The
 transaction will substantially accelerate the launch of Renagel in Brazil,
 which has approximately 45,000 dialysis patients and a dialysis population
 that is growing at a rate of 12 percent per year.
     In June, Genzyme will report one-year results from its ongoing "Treat to
 Goal" clinical trial comparing Renagel with standard calcium-based phosphate
 binders at the European Dialysis and Transplantation Association meeting.  The
 three-year trial is designed to further demonstrate Renagel's ability to lower
 serum phosphorous levels into the normal range and to measure the product's
 ability to slow cardiac calcification.  Baseline data from this study was
 presented this week at the National Kidney Foundation Clinical Nephrology
 Meetings.  Similar data was presented at the American Society for Nephrology
 meeting in October.
     Genzyme General's revenues for the first quarter were bolstered by
 increased sales of Cerezyme(R) (imiglucerase for injection) enzyme replacement
 therapy for the treatment of Type I Gaucher disease, which were $139.6 million
 for the quarter, up 9 percent compared to revenues of $128.6 million for the
 first quarter of last year.
     Revenues from Genzyme's diagnostics businesses were $34.7 million for the
 first quarter, up 14 percent from revenues of $30.4 million for the first
 quarter of last year.  Within diagnostics, revenues from genetic testing
 services increased 21 percent, while revenues from diagnostic products grew 8
 percent.
     Genzyme expects that its cystic fibrosis testing volume will double over
 the next 24 months as physicians implement new guidelines published by the
 American College of Medical Genetics.  These guidelines recommend that couples
 planning a pregnancy or seeking prenatal care be offered DNA testing to screen
 for common mutations in the cystic fibrosis gene.
     Genzyme General also recorded a total of $17.5 million in revenues in the
 first quarter from sales of four additional products: Thyrogen(R) (thyrotropin
 alfa for injection), used in the diagnosis and management of patients with
 thyroid cancer; WelChol(R) (colesevelam hydrochloride), a cholesterol lowering
 agent for which Genzyme receives royalties from Sankyo Pharma; Fabrazyme
 (agalsidase beta) enzyme replacement therapy for Fabry disease; and
 pharmaceutical intermediates.
 Pipeline Update
     On March 28, the Committee for Proprietary Medicinal Products (CPMP) of
 the European Medicines Evaluation Agency issued a positive opinion
 recommending marketing authorization for Fabrazyme.  The CPMP decision has
 been forwarded to the European Commission, which is expected to make a final
 decision on marketing authorization within 3-4 months. The European Commission
 generally follows the advice of the CPMP.  Assuming marketing authorization is
 granted, Genzyme General plans to launch Fabrazyme immediately, drawing on its
 substantial commercial infrastructure and experienced sales force in Europe.
     In the United States, Genzyme has submitted its response to the Food and
 Drug Administration's request for additional data related to its biologics
 license application for Fabrazyme.  The FDA had completed its review of the
 Fabrazyme BLA in December and sought additional information from Genzyme
 before acting on the submission.  Genzyme anticipates receiving approval to
 market Fabrazyme in the United States this year.
     Positive results from the first clinical trial of Aldurazyme(TM)
 (recombinant human alpha-L-iduronidase), an enzyme replacement therapy for
 patients with MPS I, were published in January in the New England Journal of
 Medicine.  The results suggest that Aldurazyme may alleviate the primary
 symptoms of MPS I.  Two-year data from this trial will be presented in May at
 the International Congress of Human Genetics meeting.  Genzyme General is
 developing Aldurazyme in partnership with BioMarin Pharmaceutical Inc.
 Enrollment has been completed in the Phase 3 confirmatory trial of the
 product, which is scheduled to conclude later this year.
     Genzyme and its partner Pharming Group N.V. are initiating a second
 clinical trial of a cell-derived enzyme replacement therapy for Pompe disease.
 The trial will study the safety and efficacy of recombinant human alpha-
 Glucosidase in patients with the classical infantile form of Pompe disease.
 It will be conducted at medical centers in Europe and the United States.
     During the quarter, Genzyme General and partner Diacrin Inc. completed a
 preliminary analysis of results from the Phase 2 clinical trial evaluating the
 use of NeuroCell(TM)-PD for the treatment of patients with Parkinson's
 disease.  The analysis indicated that the trial did not meet its primary
 endpoint.  Genzyme and Diacrin expect to complete additional analysis of the
 Phase 2 data as quickly as possible and to reach a decision within a few
 months on whether to proceed with additional clinical studies of NeuroCell-PD.
     Genzyme is also aggressively pursuing a number of clinical development
 programs from the GelTex pipeline.  Pilot Phase 2 studies are underway of a
 toxin-binding polymer for treating and preventing Clostridium difficile
 colitis, a condition common in hospitals and nursing homes that affects
 approximately 700,000 people a year in the United States.  Larger Phase 2
 studies are scheduled to begin by the end of the year.  In addition, patient
 enrollment has begun in a Phase 1/2 clinical trial of a topical treatment for
 psoriasis, a chronic skin disorder that affects up to seven million people in
 the United States.  Later this year, Genzyme anticipates filing an IND to
 begin clinical studies of an orally available iron chelator for the treatment
 of disorders associated with excess levels of iron in the blood, such as
 sickle cell anemia, hemochromatosis, and thalassemia.
     Genzyme's pre-clinical development program for an orally available small-
 molecule drug candidate for the treatment of multiple sclerosis remains on
 track.  The compound has been shown in pre-clinical studies to prevent the
 onset of disease or slow its progression in several mouse models of multiple
 sclerosis.
     Genzyme General develops and markets therapeutic products and diagnostic
 products and services. Genzyme General has four therapeutic products on the
 market and a strong pipeline of products in development focused on the
 treatment of genetic disorders and other chronic debilitating diseases with
 well-defined patient populations. Genzyme General is a division of the
 biotechnology company Genzyme Corporation.
     This press release contains forward-looking statements based on
 management's current expectations, including without limitation statements
 about: expectations concerning Genzyme General's earnings per share for the
 year 2001 and for the second fiscal quarter of 2001 and tax rate for the year
 2001; the estimated number of DaVita patients that will be treated with
 Renagel upon completion of the program initiated in April; the anticipated
 impact of the acquisition of Lisfarma on the potential launch of Renagel in
 Brazil; estimates concerning the market for Renagel in Brazil, including
 growth projections; planned presentations of clinical trial data; the
 anticipated efficacy of Renagel to be demonstrated through the "Treat to Goal"
 trial; the anticipated impact of the implementation of new guidelines
 published by the American College of Medical Genetics on Genzyme General's
 cystic fibrosis genetic testing revenues; the potential receipt and timing of
 marketing approval from the European Commission for Fabrazyme; the anticipated
 significance and impact of the CPMP decision concerning Fabrazyme; the
 potential commercialization of Fabrazyme in Europe and related plans; the
 potential receipt and timing of marketing approval of Fabrazyme in the United
 States; the anticipated efficacy of alpha-Glucosidase therapy in Pompe
 patients; and the expected timing of the final analysis of the data from the
 Phase 2 trial of NeuroCell-PD and a determination as to whether to proceed
 with additional clinical studies.  Actual results may materially differ due to
 numerous factors, including: the actual results of Genzyme General's
 operations in 2001 and in the second fiscal quarter of 2001; the ability to
 increase market acceptance of Renagel; the ability to optimize patient
 compliance and dosing of Renagel; the accuracy of Genzyme General's
 information about the markets for Renagel and other products and services,
 including growth projections; Genzyme's ability to successfully retool and
 expand manufacturing systems related to Renagel; the actual timing and content
 of decisions made by the FDA, the European Commission and other regulatory
 authorities concerning submissions made by Genzyme and its competitors,
 including submissions made for therapies for Fabry disease; the ability to
 obtain necessary pricing and reimbursement approvals for Genzyme General's
 products in Europe, Brazil and other regions; the FDA's response to the
 clarification and additional data provided by Genzyme related to the BLA for
 Fabrazyme; Genzyme's ability to adequately respond to additional requests for
 data or clarification that may be made by the FDA, if any; enrollment rates
 for and results of clinical trials for Genzyme General's products; the actual
 efficacy and safety of Genzyme General's products; actual timing and results
 of the final analysis of data from the Phase 2 trial of NeuroCell-PD; the
 continued funding of collaborations by Genzyme and its partners; the actual
 number of additional pregnant women and couples who receive DNA testing as a
 result of the implementation of the new guidelines; the availability and
 extent of reimbursement from third-party payers for Genzyme General's products
 and services; the ability to obtain, maintain and successfully enforce
 adequate patent coverage for Genzyme General's products and services; the
 ability to manufacture sufficient quantities of products for development and
 commercialization activities; the ability of Genzyme General to successfully
 commercialize its products and services; the ability of Genzyme General to
 identify additional patients for its products and services; the competitive
 environment in the market for Genzyme General's products and services; and the
 risks and uncertainties described in reports filed by Genzyme with the
 Securities and Exchange Commission under the Securities Exchange Act of 1934,
 as amended, including without limitation Exhibit 99.2 to Genzyme's 2000 Annual
 Report on Form 10-K.  Genzyme General stock is a series of common stock of
 Genzyme Corporation.  Therefore, holders of Genzyme General stock are subject
 to all of the risks and uncertainties described in the aforementioned reports.
     Genzyme(R) and Cerezyme(R) are registered trademarks of Genzyme
 Corporation.  Renagel(R) is a registered trademark of GelTex Pharmaceuticals,
 Inc.  Fabrazyme(TM) is a trademark of Genzyme Corporation.  WelChol(TM) is a
 trademark of Sankyo Pharma Inc.  Aldurazyme(TM) is a trademark of
 BioMarin/Genzyme LLC.  NeuroCell(TM) is a trademark of Diacrin/Genzyme LLC.
 All rights are reserved.
 
     CONFERENCE CALL INFORMATION
     There will be a conference call at 11:00 a.m. Eastern on April 19 to
 discuss Genzyme General's financial results. This call will be broadcast live
 over the Internet at www.genzyme.com/ir/events.htm. If you would like to
 participate by telephone, please dial 212-346-0294.  A replay of the call will
 be available from 1:00 p.m. Eastern today through midnight on April 26.  The
 replay telephone number is 800-633-8284 in the United States and 1-858-812-
 6440 from outside the United States.  Please refer to reservation number
 18296013.
 
     UPCOMING EVENTS
     Genzyme General will broadcast its annual analyst and investor meeting
 live over the Internet on Friday, May 4, beginning at 8:30 a.m. Eastern.  To
 access the Webcast, please refer to genzyme.com/ir/events.htm.
     Genzyme Corporation will broadcast its annual shareholders meeting live
 over the Internet on Thursday, May 31, beginning at 2:00 p.m. Eastern.  To
 access the Webcast, please refer to www.genzyme.com/ir/events.htm.
     Genzyme Corporation will report second-quarter earnings results on July 19
 for Genzyme General (Nasdaq:   GENZ), Genzyme Molecular Oncology (Nasdaq:   GZMO)
 and Genzyme Biosurgery (Nasdaq:   GZBX).  Conference calls to discuss these
 results will follow.  If you wish to participate in the calls, please dial the
 following numbers:  for Genzyme General, dial 212-346-0294 at 11:00 a.m.
 Eastern; for Genzyme Molecular Oncology, dial 212-346-0281 at 1:00 p.m.
 Eastern; and for Genzyme Biosurgery, dial 212-346-7440 at 3:00 p.m. Eastern.
 To access the Webcast of these conference calls, please refer to
 www.genzyme.com/ir/events.htm.
     Genzyme's press releases are available at www.genzyme.com.  They are also
 available from Genzyme's fax-on-demand service at 1-800-436-1443 within the
 United States or 1-201-521-1080 outside the United States.
 
     CONTACT:
     Media Contact:
     Bo Piela
     617-252-7785
 
     Investor Contact:
     Sally Curley
     617-591-7140
 
 
 GENZYME GENERAL (A Division of Genzyme Corporation)
     Combined Statements of Operations                  Three Months Ended
     (Amounts in thousands, except per share amounts)       March 31,
                                                       2001           2000
 
     Total revenues                                  $222,693       $170,626
 
     Operating costs and expenses:
      Cost of products and services sold               58,178         41,048
      Selling, general and administrative              58,531         38,222
      Research and development                         40,186         42,743
      Amortization of intangibles                      17,670          1,968
       Total operating costs and expenses             174,565        123,981
 
     Operating income                                  48,128         46,645
 
     Other income (expenses):
      Equity in net loss of unconsolidated
       affiliates                                     (8,479)        (8,133)
      Gain on affiliate sale of stock                       -         20,270
      Minority interest in net loss of
       subsidiary                                       1,274            856
      Other                                           (3,717)           (21)
      Investment income                                 9,213          8,087
      Interest expense                                (6,398)        (3,551)
 
       Total other income (expenses)                  (8,107)         17,508
 
     Income before income taxes                        40,021         64,153
 
     Provision for income taxes                      (14,876)       (18,844)
     Genzyme General division net
      income before cumulative effect
      of change in accounting for
      derivative financial instruments (1)             25,145         45,309
 
     Cumulative effect of change in
      accounting for derivative
      financial instruments, net of tax (1)             4,167              -
     Genzyme General division net income               29,312         45,309
 
     Allocated tax benefits (2)                        10,942          6,328
     Net income allocated to
      Genzyme General Stock                          $ 40,254       $ 51,637
 
     Net income per share of Genzyme General Stock:
      Basic:
       Income per share before
        cumulative effect of change in
        accounting for derivative
        financial instruments                           $0.38          $0.61
 
       Per share cumulative effect of
        change in accounting for
        derivative financial instruments,
        net of tax (1)                                  $0.04              -
 
       Net income per share allocated to
        Genzyme General Stock                           $0.42          $0.61
 
      Diluted (3):
       Income per share before cumulative
        effect of change in accounting
        for derivative financial instruments            $0.36          $0.57
 
       Per share cumulative effect of
        change in accounting for
        derivative financial instruments,
        net of tax (1)                                  $0.04              -
 
       Net income per share allocated to
        Genzyme General Stock                           $0.40          $0.57
 
     Weighted average shares outstanding:
      Basic                                            95,875         84,502
 
      Diluted (3)                                     100,400         94,726
 
     (1)  Represents a transition adjustment for the 1/1/01 required adoption
          of SFAS 133 to record the fair value of certain derivative assets
          held on 1/1/01.
 
     (2)  Represents tax benefits allocated from Genzyme Biosurgery and Genzyme
          Molecular Oncology.
 
     (3)  Net income per share of Genzyme General Stock on a diluted basis and
          weighted average shares-diluted excludes the dilutive effect of the
          covertible subordinated notes and debentures allocated to Genzyme
          General as the effect would be anti-dilutive.
 
 
     Condensed Combined Balance Sheets              March 31,    December 31,
     (In thousands)                                    2001           2000
 
     Cash and all marketable securities              $575,029       $531,326
     Other current assets                             374,157        372,831
     Property, plant and equipment (net)              455,338        446,759
     Intangibles (net)                                959,878        977,147
     Other assets                                     129,757        170,990
       Total assets                                $2,494,159     $2,499,053
 
     Current liabilities                             $164,744       $166,583
     Noncurrent liabilities                           564,469        582,190
     Division equity                                1,764,946      1,750,280
       Total liabilities and division equity       $2,494,159     $2,499,053
 
 
                                GENZYME GENERAL
                   COMBINED INCOME AND PER SHARE INFORMATION
                          Quarter Ended March 31, 2001
                 (Amounts in thousands, except per share data)
 
                                    Continuing Effects Relating to
                                           GelTex Acquisition
                             Before     Turnover    Amortization  Revaluation
                             Gains/   of Inventory   of Deferred       of
                           (Charges)     Step-up    Compensation    SFAS 133
 
     Pretax profit          $49,563       $(3,418)      $(2,551)     $(3,573)
 
     Provision for
      income taxes           (7,369)        1,230          918         1,286
 
     Net income allocated
      to Genzyme General
      Stock                 $42,194       $(2,188)      $(1,633)     $(2,287)
 
     Net income per share of Genzyme General Stock:
      Basic                   $0.44       $(0.023)      $(0.017)     $(0.024)
 
      Diluted                 $0.42(1)    $(0.022)      $(0.016)     $(0.023)
 
     Weighted average shares outstanding:
      Basic                  95,875        95,875       95,875        95,875
 
      Diluted               100,400(1)    100,400      100,400       100,400
 
 
                                  Income Before
                                   Cumulative       Cumulative    Net Income
                                    Effect of       Effect of    Allocated to
                                    Adopting         Adopting       Genzyme
                                    SFAS 133         SFAS 133    General Stock
 
 
     Pretax profit                   $40,021          $4,167       $44,188
 
     Provision for
      income taxes                    (3,934)              -         (3,934)
 
     Net income allocated
      to Genzyme General
      Stock                          $36,087          $4,167       $40,254
 
     Net income per share of Genzyme General Stock:
      Basic                            $0.38           $0.04         $0.42
 
      Diluted                          $0.36           $0.04         $0.40  (1)
 
     Weighted average shares outstanding:
      Basic                           95,875          95,875        95,875
 
      Diluted                        100,400         100,400       100,400  (1)
 
     (1) Excludes potential dilutive convertible securities as they would be
         anti-dilutive.
 
 
 
                              WITHOUT AMORTIZATION
                                GENZYME GENERAL
                   COMBINED INCOME AND PER SHARE INFORMATION
                          Quarter Ended March 31, 2001
                 (Amounts in thousands, except per share data)
 
                                     Continuing Effects Relating to
                                           GelTex Acquisition
                             Before     Turnover    Amortization  Revaluation
                             Gains/   of Inventory   of Deferred       of
                           (Charges)     Step-up    Compensation    SFAS 133
 
 
     Pretax profit          $67,233       $(3,418)      $(2,551)     $(3,573)
 
     Provision for income
      taxes                 (11,610)        1,230          918         1,286
 
     Net income allocated
      to Genzyme General
      Stock                 $55,623       $(2,188)      $(1,633)     $(2,287)
 
     Net income per share
      of Genzyme General Stock:
      Basic                   $0.58       $(0.023)      $(0.017)     $(0.024)
 
      Diluted                 $0.55(1)    $(0.022)      $(0.016)     $(0.023)
 
     Weighted average shares outstanding:
      Basic                  95,875        95,875       95,875        95,875
 
      Diluted               100,400(1)    100,400      100,400       100,400
 
 
 
                                  Income Before
                                   Cumulative       Cumulative    Net Income
                                    Effect of       Effect of    Allocated to
                                    Adopting         Adopting       Genzyme
                                    SFAS 133         SFAS 133   General Stock
 
 
     Pretax profit                   $57,691          $4,167       $61,858
 
     Provision for income taxes       (8,175)              -         (8,175)
 
     Net income allocated to
      Genzyme General Stock          $49,516          $4,167       $53,683
 
     Net income per share of Genzyme General Stock:
      Basic                            $0.52           $0.04         $0.56
 
      Diluted                          $0.49           $0.04         $0.53  (1)
 
     Weighted average shares outstanding:
      Basic                           95,875          95,875        95,875
 
      Diluted                        100,400         100,400       100,400  (1)
 
     (1) Excludes potential dilutive convertible securities as they would be
         anti-dilutive.
 
 
       GENZYME CORPORATION
       Consolidated Statements of
       Operations
       (Amounts in thousands, except per
       share amounts)
                                                      Three Months Ended
                                                            March 31,
                                                     2001              2000
 
       Total revenues                              $278,261          $208,130
 
       Operating costs and expenses:
       Cost of products and services sold            89,953            60,110
       Selling, general and administrative           91,113            61,551
       Research and development                      57,110            55,699
       Amortization of intangibles                   28,991             6,098
       Total operating costs and expenses           267,167           183,458
 
       Operating income                              11,094            24,672
 
       Other income (expenses):
       Equity in net loss of
        unconsolidated affiliates                    (9,015)           (8,133)
       Gain on affiliate sale of stock                   --            20,270
       Minority interest                              1,274               856
       Other                                         (3,710)                2
       Investment income                             10,147             9,944
       Interest expense                             (11,370)           (3,939)
 
       Total other income (expenses)                (12,674)           19,000
 
       Income (loss) before income taxes             (1,580)           43,672
       Provision for income taxes                       670           (11,854)
       Net income (loss) before cumulative
        effect of change in
        accounting for derivative
        financial instruments                          (910)           31,818
 
       Cumulative effect of change in
        accounting for derivative
        financial instruments, net of tax (1)         4,167                --
       Net income                                    $3,257           $31,818
 
       Net income (loss) per share:
        Allocated to Genzyme General
         Stock:
       Net income before cumulative effect
        of change in accounting
        for derivative financial
        instruments                                 $25,145           $45,309
       Cumulative effect of change in
        accounting for derivative
        financial instruments, net of tax (1)
                                                      4,167                --
       Genzyme General net income                    29,312            45,309
       Tax benefit allocated from Genzyme
        Biosurgery                                    8,116             5,232
       Tax benefit allocated from Genzyme
        Molecular Oncology                            2,826             1,096
       Net income allocated to Genzyme
        General Stock                               $40,254           $51,637
 
       Net income per share of Genzyme
        General Stock:
         Basic:
           Net income per share before
            cumulative effect of change in
            accounting for derivative
            financial instruments                     $0.38             $0.61
           Per share cumulative effect of
            change in accounting for
            derivative financial
            instruments, net of tax (1)                0.04               --
           Net income per share allocated
            to Genzyme General Stock                  $0.42             $0.61
 
         Diluted (2):
           Net income per share before
            cumulative effect of change in
            accounting for derivative
            financial instruments                     $0.36             $0.57
           Per share cumulative effect of
            change in accounting for
            derivative financial
            instruments, net of tax (1)                0.04                --
           Net income per share allocated
            to Genzyme General Stock                  $0.40             $0.57
 
         Weighted average shares
          outstanding:
            Basic                                    95,875            84,502
 
         Diluted (2)                                100,400            94,726
 
 
 
       GENZYME CORPORATION
                                                        Three Months Ended
                                                             March 31,
                                                      2001              2000
       Net income (loss) per share
        (continued):
        Allocated to Biosurgery Stock (3):
          Genzyme Biosurgery division net
           loss                                    $(35,327)
          Tax benefit allocation                      4,604
          Net loss allocated to Biosurgery
           Stock                                   $(30,723)
 
         Net loss per share of Biosurgery
          Stock-basic and diluted
                                                     $(0.84)
 
         Weighted average shares
          outstanding                                36,403
 
        Allocated to Molecular Oncology
         Stock:
         Net loss                                   $(6,274)          $(5,057)
 
         Net loss per share of Molecular
          Oncology Stock-basic and diluted
                                                     $(0.39)           $(0.37)
 
         Weighted average shares
          outstanding                                15,907            13,495
 
        Allocated to Surgical Products
         Stock (3):
         Net loss                                                    $(10,043)
 
         Net loss per share of Surgical
          Products Stock-basic and diluted
                                                                       $(0.68)
 
         Weighted average shares
          outstanding                                                  14,855
 
       Allocated to Tissue Repair Stock
        (3):
         Net loss                                                     $(4,971)
 
         Net loss per share of Tissue
          Repair Stock-basic and diluted
                                                                       $(0.17)
 
         Weighted average shares
          outstanding                                                  28,531
 
 
       (1)  Represents a transition adjustment for the 1/1/01 required
       adoption of SFAS 133 to record the fair value of certain derivative
       assets held on 1/1/01.
       (2)  Net income per share allocated to Genzyme General Stock on a
       diluted basis and weighted average shares-diluted excludes
       the dilutive effect of the convertible subordinated notes and
       debentures allocated to Genzyme General as the effect
       would be anti-dilutive.
       (3)  On December 18, 2000, we acquired Biomatrix. Inc. and created
       Genzyme Biosurgery Division as a new division of Genzyme.
       We re-allocated the businesses of Genzyme Surgical Products and Genzyme
       Tissue Repair and allocated the acquired business
       of Biomatrix to Genzyme Biosurgery.  As a result of the transaction, we
       amended our charter to create Biosurgery Stock
       and eliminate Surgical Products Stock and Tissue Repair Stock.
       Accordingly, losses incurred before December 18, 2000
       have been allocated to Surgical Products Stock and Tissue Repair Stock.
       Losses incurred after December 18, 2000
       have been allocated to Biosurgery Stock.
 
 
 
       Condensed Consolidated Balance
       Sheets                                     March 31,        December 31,
       (In thousands)                                2001              2000
 
       Cash and all marketable securities          $619,614          $639,640
       Other current assets                         458,289           459,952
       Property, plant and equipment (net)          512,386           504,412
       Intangibles (net)                          1,511,123         1,539,782
       Other assets                                 163,622           174,314
       Total assets                              $3,265,034        $3,318,100
 
       Current liabilities                         $230,758          $241,099
       Noncurrent liabilities                       777,157           901,860
       Stockholders' equity                       2,257,119         2,175,141
       Total liabilities and stockholders'
        equity                                   $3,265,034        $3,318,100
 
 SOURCE  Genzyme General