| For Immediate Release | Media Contact: | Investor Contact: | ||
|---|---|---|---|---|
| April 15, 2004 | Dan Quinn | Sally Curley | ||
| (617) 768-6849 | (617) 768-6140 |
Genzyme Reports Financial Results for First Quarter
CAMBRIDGE, Mass.—Genzyme Corporation (Nasdaq: GENZ) today reported financial results for the first quarter of 2004. Genzyme achieved strong sales growth in its three largest products—Cerezyme® (imiglucerase for injection), Renagel® (sevelamer hydrochloride), and Fabrazyme® (agalsidase beta). Total revenues rose to $491.3 million, from $314.0 million in the same period a year ago.
Genzyme consolidated its capital structure on June 30, 2003, by eliminating its tracking stocks. Therefore, financial results for the first two quarters of 2003 reflect only the performance Genzyme General, while subsequent quarters include the entire corporation.
Net income for the first quarter of 2004 was $67.9 million, or $0.29 per diluted share, compared with $61.9 million, or $0.28 per diluted share, for the first quarter a year earlier.
Excluding special items and amortization, net income was $85.6 million, or $0.37 per share, compared with $68.0 million, or $.31 per share, for the first quarter of 2003. Special items included a charge of $1.8 million from the sale of inventory acquired from SangStat Medical Corp. Amortization of $26.2 million included the acquisitions of SangStat and Alfigen, Inc.
"We had an excellent first quarter, building on the strong momentum we achieved in 2003," said Henri A. Termeer, chairman and chief executive officer of Genzyme Corporation. "We executed well across our businesses, increasing revenue while making progress in our pipeline. By mid-year we plan to expand our commercial presence in oncology through two strategic acquisitions. These steps position Genzyme well for continued growth in the future."
Selling, general and administrative (SG&A) expenses totaled $143.2 million for the quarter, compared with $85.2 million in the first quarter of 2003. This total includes spending related to the U.S. launch of Fabrazyme, the continued global expansion of Renagel, the cost of new manufacturing facilities that are not yet operational, and the integration of the tracking stocks and SangStat.
Research and development spending totaled $92.8 million, compared with $56.3 million in the first quarter of 2003. This quarter the R&D total reflects the impact of FIN 46, a recent FASB rule which results in the consolidation of Genzyme's joint venture with Dyax Corp.
Genzyme recorded net interest expenses of $2.7 million during the quarter, compared with net interest income of $7.0 million in the first quarter of 2003. The company issued new 1.25 percent subordinated notes in December of 2003. On May 20, 2004 Genzyme intends to use part of the proceeds from these notes to redeem $575 million in outstanding 3 percent debentures, which will reduce interest expenses going forward.
Genzyme ended the first quarter of 2004 with $1.2 billion in cash and investments. The company's effective net tax rate was 30 percent for the first quarter, compared with 26 percent in the first quarter of 2003.
In the second quarter of 2004, Genzyme expects GAAP earnings to be in the range of $.32 to $.34 per diluted share. Excluding expected amortization of $26.2 million, earnings are expected to be in the range of $.39 to $.41 per share.
Genzyme announced its intention during the first quarter to acquire ILEX Oncology in an approximately $1 billion stock transaction, and to purchase all of the assets of the Physician Services business unit of IMPATH, Inc. for $215 million in cash. These acquisitions remain on track to close in mid-2004.
Upon closing, the ILEX acquisition will bring Genzyme a marketed cancer product, a pipeline of late-stage cancer therapies, and a strong cancer development and commercialization team. Completion of the IMPATH transaction will strengthen Genzyme's presence in oncology diagnostics focused on solid-tumor and blood-based cancers. Together, these transactions will significantly expand Genzyme's presence across the entire continuum of oncology patient care, from diagnosis to treatment.
Product Revenues
Genzyme's revenues are reported within six product groups: Renal, Therapeutics, Biosurgery, Transplant, Diagnostic Products and Services, and Other.
Within the Renal business, revenues for Renagel were $83.5 million in the first quarter, approximately 42 percent higher than the $58.8 million recorded in the same quarter of 2003. International sales grew approximately 80 percent from the same period last year, fueled by expansion into new markets in Europe and South America. In addition to Renagel sales, revenue totals include royalties and sales of bulk sevelamer to Chugai Pharmaceutical Co. Ltd., Genzyme's commercial partner in Japan.
Renagel's year-on-year increase worldwide has come from solid growth in the number of patients using the drug, and from a rise in the average dose that patients are taking. These changes have been aided by the publication of the K/DOQI guidelines last fall, which identified Renagel as a first-line option for lowering phosphorus, and recommended aggressive new targets for serum phosphorus and calcium levels. Renagel controls serum phosphorus in Stage 5 patients with chronic kidney disease on hemodialysis.
Total Therapeutics revenue for the quarter was $255.1 million, approximately 35 percent higher than the $189.2 million recorded in the first quarter of 2003. Within this unit, sales of Fabrazyme enzyme replacement therapy for Fabry disease were $38.1 million, compared with $11.8 million recorded in the first quarter of 2003 and $31.9 million in the previous quarter. Approximately $15.8 million of this total came from the United States, where sales of Fabrazyme have grown strongly since the product was launched in May, 2003.
In late March, the Japanese Ministry of Health, Labor and Welfare approved reimbursement for Fabrazyme. Genzyme began the commercial launch in Japan during the second quarter.
Sales of Cerezyme enzyme replacement therapy for Type 1 Gaucher disease were $203.0 million for the quarter, up 21 percent from $167.2 million in 2003.
Sales of Genzyme's newest therapeutic product, Aldurazyme® (laronidase) enzyme replacement therapy for patients with MPS I, were $7.3 million for the quarter, compared with $6.7 million in the fourth quarter of 2003. Aldurazyme was launched in the United States and Europe in mid-2003 through a joint venture with BioMarin Pharmaceutical, Inc.
Revenue from sales of Thyrogen® (thyrotropin alfa for injection), an adjunctive diagnostic used in follow-up screenings of thyroid cancer patients, rose to $14.0 million for the quarter, from $9.7 million in the same quarter of 2003. Strong sales growth has been supported by the recent publication of new oncology clinical practice guidelines and consensus papers that confirm Thyrogen's role in monitoring patients with well-differentiated thyroid cancer.
Genzyme has completed a comparative clinical trial of Thyrogen in the ablation of thyroid cancer tumors, and is completing a phase 1 trial of Thyrogen for goiter. The ablation results are expected to be reported during the first half of the year.
Total revenues from Biosurgery products were $47.7 million for the quarter. Sales of this unit's leading product, Synvisc® (hylan G-F 20), which is used to treat knee pain from osteoarthritis, were $22.4 million, compared with $27.9 million in the same quarter last year. This quarter's revenues were impacted by Medicare pricing changes, the launch of a competitive product and inventory reductions by Genzyme's U.S. marketing partner in preparation for the launch of this competitive product. Synvisc end-user demand remains strong.
Genzyme has made substantial progress in its efforts to expand the indications for Synvisc, and to develop next-generation versions of the product. Patients are being enrolled in a pivotal clinical trial in the U.S. for Synvisc in the hip, an indication already approved in Europe. Patients are also enrolled in open-label European trials of Synvisc in the shoulder and ankle. Additionally, Genzyme anticipates launching a phase 1 trial in the second half of the year of a next-generation version of Synvisc.
Also in the Biosurgery product area, Genzyme anticipates receiving FDA approval for Hylaform during the quarter. Hylaform is a hyaluronic acid-based cosmetic dermal filler for the treatment of soft tissue contour deficiencies such as wrinkles.
Revenues for Genzyme's Transplant business were $36.2 million. Sales of Thymoglobulin® (anti-thymocyte globulin, rabbit) and Lymphoglobuline® (anti-Thymocyte-globulin, equine), used in conjunction with immunosuppressive drugs to treat acute rejection in renal transplant patients, were $25.0 million for the quarter, compared with $25.1 million in the fourth quarter of 2003. Genzyme announced on April 1 that it had licensed to Procter & Gamble Pharmaceuticals the rights to develop and market the investigative drug candidate RDP58 for the treatment of gastrointestinal and other disorders.
Revenues for Genzyme's Diagnostic Products and Services businesses rose to $52.1 million for the first quarter of 2004, from $47.7 million in the same quarter of 2003, led by increased demand for carrier testing in cystic fibrosis and other rare diseases.
Other revenues—including sales of WelChol® (colesevelum hydrochloride) and pharmaceutical intermediates, along with oncology research revenue—totaled $16.6 million for the quarter.
Pipeline Update
Genzyme made substantial progress in the first quarter in advancing its near- and long-term pipeline of products in development for a range of conditions.
Enrollment is nearly complete in two pivotal clinical trials of Myozyme® (alglucosidase alfa), an investigational enzyme replacement therapy for Pompe disease. Enrollment is also proceeding rapidly in Genzyme's observational study of approximately 60 patients with mild to moderate late onset Pompe disease, which will help to define the parameters of a subsequent treatment study.
Preliminary results are expected in the second quarter from a phase 2 study of DX-88, which is being developed by Genzyme and its partner, Dyax Corp., for the treatment of hereditary angioedema (HAE). DX-88 has received orphan drug designation for the treatment of HAE in the U.S. and European Union.
Genzyme expects to announce full results on May 2 from its phase 2 clinical trial of tolevamer, an investigational polymer therapy for patients withClostridium difficile associated diarrhea. The results will be presented at the European Congress of Clinical Microbiology and Infectious Diseases meeting in Prague.
In multiple sclerosis, Genzyme has shifted its focus from Genz-29155 to an alternative internally developed compound due to safety issues observed in the phase 1 trial, which has been suspended.
Genzyme will present preliminary results from its phase 1 study of a small molecule oral iron chelator being developed for thalassesmia, a form of chronic anemia, at a meeting of the European Society for Clinical Investigation. The European Agency for the Evaluation of Medicinal Products has granted Genzyme orphan drug status for this indication.
Genzyme has enrolled the first patients in a phase 1/2 trial of DENSPM, a small molecule developed for use in liver cancer, an indication that has orphan drug status.
Enrollment has also begun in a phase 1 trial of GENZ-112638, a small molecule substrate inhibitor being developed as an oral treatment for one or more lysosomal storage disorders. The goal of this early-stage program is to develop a next generation treatment for a lysosomal storage disorder.
Genzyme Corporation is a global biotechnology company dedicated to making a major positive impact on the lives of people with serious diseases. The company's broad product portfolio is focused on rare genetic disorders, renal disease, osteoarthritis and immune-mediated diseases, and includes an industry-leading array of diagnostic products and services. Genzyme's commitment to innovation continues today with research into novel approaches to cancer, heart disease, and other areas of unmet medical need. More than 5,600 Genzyme employees in offices around the globe serve patients in over 80 countries.
This press release contains forward-looking statements, including Genzyme's second quarter financial projections, Genzyme's intention to redeem its outstanding 3% debentures, Genzyme's acquisition plans, the timing of Genzyme's announcement of clinical trial results for several product candidates, Genzyme's expectations regarding FDA approval of Hylaform and other statements regarding Genzyme's future performance and strategy. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those forecast in these forward-looking statements. These risks and uncertainties include, among others, Genzyme's ability to successfully complete preclinical and clinical development of its product candidates, including Myozyme; the content and timing of submissions to and decisions made by the FDA and other regulatory authorities; Genzyme's ability to manufacture products and product candidates in a timely and cost effective manner; Genzyme's ability to expand the use of current products in existing and new indications, including Renagel, Synvisc, Thymoglobulin, and Thyrogen; Genzyme's ability to maintain and obtain regulatory approvals for products and services; Genzyme's ability to successfully identify and market to new patients; the accuracy of Genzyme's estimates regarding patient populations; Genzyme's success in marketing its products and services against new and existing competitive products and services; the availability and amount of reimbursement for Genzyme's products and services from third-party payors; Genzyme's ability to consummate expected acquisitions and its success at integrating those businesses, including ILEX Oncology and IMPATH, Inc.; Genzyme's ability to effectively manage inventory levels; changes in legislation and regulations affecting the sale of Genzyme's products and services; and the other factors described in Genzyme's periodic filings with the Securities and Exchange Commissions. Please see the disclosure under the heading "Factors Affecting Future Operating Results" in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Genzyme Annual Report on Form 10-K for the year ending December 31, 2003, for a more complete discussion of these and other risk factors. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of April 15, 2004, and Genzyme undertakes no obligation to update or revise the statements.
Genzyme®, Cerezyme®, Fabrazyme®, Renagel®, Thyrogen®, Myozyme® and Synvisc® are registered trademarks of Genzyme Corporation. Aldurazyme® is a registered trademark of BioMarin/Genzyme LLC. WelChol® is a registered trademark of Sankyo Pharma Inc. SangStat®, Thymoglobulin® and Lymphoglobulin® are registered trademarks of SangStat Medical Corporation or its subsidiaries. All rights reserved.
There will be a conference call today at 11:00 a.m. EST to discuss Genzyme Corporation's first quarter 2004 financial results. If you would like to participate in the call, please dial 719-457-2642. A replay of this call will be available from 2:30 p.m. EST today through midnight on April 22 by dialing 719-457-0820. Please refer to reservation number 395372. This call will also be Webcast live on the investor events section ofwww.genzyme.com
Genzyme will be host its annual investor meeting on May 7 in New York City. A webcast of this meeting will be available live on the investor events section of www.genzyme.com
Genzyme will report its second quarter financial results on July 14. If you would like to participate in the call please dial (719) 457-2642. Please check www.genzyme.com one week prior to the reporting date for any changes to this information.
# # #
Genzyme's press releases and other company information are available atwww.genzyme.com 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 States.
GENZYME GENERAL
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
Quarter Ended March 31, 2004
(Amounts in thousands, except per share data)
| | NON-GAAP Before Effect of FIN 46, Charges & Amortization | Sangstat Acquisition- Related Costs | Amortization | NON-GAAP Before Effect of FIN 46 | Effect of FIN 46 | GAAP As Reported | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement Classification: | ||||||||||||||||||||
| Cost of products and services sold | $ | (125,127 | ) | $ | (1,835 | ) | $ | (126,962 | ) | $ | (126,962 | ) | ||||||||
| Selling, general and administrative | $ | (143,198 | ) | $ | (143,198 | ) | $ | (22 | ) | $ | (143,220 | ) | ||||||||
| Research and development | $ | (90,514 | ) | $ | (90,514 | ) | $ | (2,302 | ) | $ | (92,816 | ) | ||||||||
| Amortization of intangibles | $ | — | $ | (26,245 | ) | $ | (26,245 | ) | $ | (26,245 | ) | |||||||||
| Equity in loss of equity method investments | $ | (4,993 | ) | $ | (4,993 | ) | $ | 1,162 | $ | (3,831 | ) | |||||||||
| Minority interest | $ | — | $ | — | $ | 1,162 | $ | 1,162 | ||||||||||||
Summary: | ||||||||||||||||||||
| Pretax profit | $ | 124,798 | $ | (1,835 | ) | $ | (26,245 | ) | $ | 96,718 | $ | — | $ | 96,718 | ||||||
| Provision for income taxes | (39,157 | ) | 675 | 9,658 | $ | (28,824 | ) | $ | — | (28,824 | ) | |||||||||
| Net income | $ | 85,641 | $ | (1,160 | ) | $ | (16,587 | ) | $ | 67,894 | $ | — | $ | 67,894 | ||||||
| Net income per share: | ||||||||||||||||||||
| Basic | $ | 0.38 | $ | (0.01 | ) | $ | (0.07 | ) | $ | 0.30 | $ | — | $ | 0.30 | ||||||
| Diluted | $ | 0.37 | $ | (0.01 | ) | $ | (0.07 | ) | $ | 0.29 | $ | — | $ | 0.29 | ||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 225,711 | 225,711 | 225,711 | 225,711 | 225,711 | 225,711 | ||||||||||||||
| Diluted | 231,917 | 231,917 | 231,917 | 231,917 | 231,917 | 231,917 | ||||||||||||||
GENZYME GENERAL (GENZ)
Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)
| | Q1-03 | Q2-03 | Q3-03(1) | Q4-03(1) | Q1-04(1) | Q1-04 vs. Q1-03 % B/(W) | FY 2002 | FY 2003(1) | YTD 03/31/04(1) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total revenues: | |||||||||||||||||||||||||||||
| Renal | |||||||||||||||||||||||||||||
| Renagel phosphate binder (including Sevelamer) | $ | 58,766 | $ | 66,002 | $ | 75,468 | $ | 81,465 | $ | 83,523 | 42 | % | $ | 156,864 | $ | 281,701 | $ | 83,523 | |||||||||||
| Other Renal | — | — | — | — | — | — | — | — | |||||||||||||||||||||
| Total Renal product and service revenue | 58,766 | 66,002 | 75,468 | 81,465 | 83,523 | 42 | % | 156,864 | 281,701 | 83,523 | |||||||||||||||||||
| Renal R&D revenue | — | — | — | — | — | — | — | — | |||||||||||||||||||||
| Total Renal | 58,766 | 66,002 | 75,468 | 81,465 | 83,523 | 42 | % | 156,864 | 281,701 | 83,523 | |||||||||||||||||||
| Therapeutics | |||||||||||||||||||||||||||||
| Cerezyme enzyme | 167,187 | 184,724 | 189,223 | 192,683 | 202,970 | 21 | % | 619,184 | 733,817 | 202,970 | |||||||||||||||||||
| Fabrazyme enzyme | 11,846 | 15,430 | 21,452 | 31,889 | 38,103 | 222 | % | 26,101 | 80,617 | 38,103 | |||||||||||||||||||
| Thyrogen hormone | 9,714 | 9,790 | 11,405 | 12,529 | 13,997 | 44 | % | 28,270 | 43,438 | 13,997 | |||||||||||||||||||
| Other | 407 | 448 | 499 | 448 | 39 | (90 | %) | 871 | 1,802 | 39 | |||||||||||||||||||
| Total Therapeutics product and service revenue | 189,154 | 210,392 | 222,579 | 237,549 | 255,109 | 35 | % | 674,426 | 859,674 | 255,109 | |||||||||||||||||||
| Therapeutics R&D revenue | — | 1 | — | — | — | 834 | 1 | — | |||||||||||||||||||||
| Total Therapeutics | 189,154 | 210,393 | 222,579 | 237,549 | 255,109 | 35 | % | 675,260 | 859,675 | 255,109 | |||||||||||||||||||
| Transplant | |||||||||||||||||||||||||||||
| Thymoglobulin/Lymphoglobuline | — | — | 4,898 | 25,055 | 25,012 | — | 29,953 | 25,012 | |||||||||||||||||||||
| Other products | — | — | 2,421 | 11,946 | 11,222 | — | 14,367 | 11,222 | |||||||||||||||||||||
| Total Transplant product and service revenue | — | — | 7,319 | 37,001 | 36,234 | — | 44,320 | 36,234 | |||||||||||||||||||||
| Transplant R&D revenue | — | — | — | — | — | — | — | — | |||||||||||||||||||||
| Total Transplant | — | — | 7,319 | 37,001 | 36,234 | — | 44,320 | 36,234 | |||||||||||||||||||||
| Biosurgery | |||||||||||||||||||||||||||||
| Synvisc viscosupplementation product and services | — | — | 29,754 | 25,825 | 22,363 | — | 55,579 | 22,363 | |||||||||||||||||||||
| Sepra products | — | — | 11,951 | 14,008 | 14,212 | — | 25,959 | 14,212 | |||||||||||||||||||||
| Other Biosurgery | 2,814 | 3,628 | 12,969 | 13,003 | 10,807 | 284 | % | 12,828 | 32,414 | 10,807 | |||||||||||||||||||
| Total Biosurgery product and service revenue | 2,814 | 3,628 | 54,674 | 52,836 | 47,382 | 1584 | % | 12,828 | 113,952 | 47,382 | |||||||||||||||||||
| Biosurgery R&D revenue | — | — | 4,721 | 406 | 321 | — | 5,127 | 321 | |||||||||||||||||||||
| Total Biosurgery | 2,814 | 3,628 | 59,395 | 53,242 | 47,703 | 1595 | % | 12,828 | 119,079 | 47,703 | |||||||||||||||||||
| Diagnostics/Genetics | |||||||||||||||||||||||||||||
| Diagnostic Products | 23,196 | 22,554 | 21,116 | 21,722 | 23,370 | 1 | % | 83,065 | 88,588 | 23,370 | |||||||||||||||||||
| Genetic Testing | 24,502 | 25,379 | 25,530 | 26,736 | 28,744 | 17 | % | 89,745 | 102,147 | 28,744 | |||||||||||||||||||
| Total Diagnostics/Genetics product and service revenue | 47,698 | 47,933 | 46,646 | 48,458 | 52,114 | 9 | % | 172,810 | 190,735 | 52,114 | |||||||||||||||||||
| Diagnostic/Genetics R&D revenue | — | — | — | — | — | — | — | — | |||||||||||||||||||||
| Total Diagnostics/Genetics | 47,698 | 47,933 | 46,646 | 48,458 | 52,114 | 9 | % | 172,810 | 190,735 | 52,114 | |||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Other product and service revenue | 15,062 | 18,919 | 21,487 | 16,242 | 14,784 | (2 | %) | 57,084 | 71,710 | 14,784 | |||||||||||||||||||
| Other R&D revenue | 551 | 788 | 4,084 | 2,174 | 1,784 | 224 | % | 5,339 | 7,597 | 1,784 | |||||||||||||||||||
| Total Other | 15,613 | 19,707 | 25,571 | 18,416 | 16,568 | 6 | % | 62,423 | 79,307 | 16,568 | |||||||||||||||||||
| Total revenues | $ | 314,045 | $ | 347,663 | $ | 436,978 | $ | 476,131 | $ | 491,251 | 56 | % | $ | 1,080,185 | $ | 1,574,817 | $ | 491,251 | |||||||||||
GENZYME GENERAL (GENZ)
Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)
| | Q1-03 | Q2-03 | Q3-03(1) | Q4-03(1) | Q1-04(1) | Q1-04 vs. Q1-03 % B/(W) | FY 2002 | FY 2003(1) | YTD 03/31/04(1) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues: | |||||||||||||||||||||||||||||
| Total product and service revenue | $ | 313,494 | $ | 346,874 | $ | 428,173 | $ | 473,551 | $ | 489,146 | 56 | % | $ | 1,074,012 | $ | 1,562,092 | $ | 489,146 | |||||||||||
| Total R&D revenue | 551 | 789 | 8,805 | 2,580 | 2,105 | 282 | % | 6,173 | 12,725 | 2,105 | |||||||||||||||||||
| Total revenues | 314,045 | 347,663 | 436,978 | 476,131 | 491,251 | 56 | % | 1,080,185 | 1,574,817 | 491,251 | |||||||||||||||||||
| Total product and service gross profit | 230,454 | 255,200 | 313,310 | 344,159 | 362,184 | 57 | % | 808,194 | 1,143,123 | 362,184 | |||||||||||||||||||
| SG&A expense | 85,246 | 95,203 | 127,340 | 147,606 | 143,220 | (68 | %) | 323,683 | 455,395 | 143,220 | |||||||||||||||||||
| R&D expense | 56,329 | 58,834 | 82,974 | 97,588 | 92,816 | (65 | %) | 230,043 | 295,725 | 92,816 | |||||||||||||||||||
| Amortization of intangibles | 9,736 | 9,873 | 19,267 | 25,844 | 26,245 | (170 | %) | 38,998 | 64,720 | 26,245 | |||||||||||||||||||
| Purchase of in-process research and development (2) | — | — | 158,000 | — | — | — | 158,000 | — | |||||||||||||||||||||
| Charge for impaired assets (3) | — | — | 7,996 | — | — | 13,986 | 7,996 | — | |||||||||||||||||||||
| Operating income (loss) | 79,694 | 92,079 | (73,462 | ) | 75,701 | 102,008 | 28 | % | 207,657 | 174,012 | 102,008 | ||||||||||||||||||
| Other income (expenses): | |||||||||||||||||||||||||||||
| Equity in loss of equity method investments | (4,194 | ) | (4,804 | ) | (5,503 | ) | (2,242 | ) | (3,831 | ) | 9 | % | (16,858 | ) | (16,743 | ) | (3,831 | ) | |||||||||||
| Gain (loss) on investments in equity securities | — | (3,620 | ) | 1,183 | 1,236 | 353 | (14,497 | ) | (1,201 | ) | 353 | ||||||||||||||||||
| Minority interest | — | — | — | 2,232 | 1,162 | — | 2,232 | 1,162 | |||||||||||||||||||||
| Gain on sale of product line (4) | — | — | — | 1,709 | — | — | 1,709 | — | |||||||||||||||||||||
| Other | 780 | 774 | (338 | ) | (222 | ) | (324 | ) | (142 | %) | (152 | ) | 994 | (324 | ) | ||||||||||||||
| Investment income | 11,281 | 12,058 | 11,422 | 7,551 | 7,676 | (32 | %) | 48,944 | 42,312 | 7,676 | |||||||||||||||||||
| Interest expense | (4,277 | ) | (4,328 | ) | (4,382 | ) | (9,393 | ) | (10,326 | ) | (141 | %) | (17,847 | ) | (22,380 | ) | (10,326 | ) | |||||||||||
| Income (loss) before income taxes | 83,284 | 92,159 | (71,080 | ) | 76,572 | 96,718 | 16 | % | 207,247 | 180,935 | 96,718 | ||||||||||||||||||
| Provision for income taxes | (25,491 | ) | (29,378 | ) | (24,653 | ) | (19,270 | ) | (28,824 | ) | (13 | %) | (56,516 | ) | (98,792 | ) | (28,824 | ) | |||||||||||
| Division net income (loss) before allocated tax benefits | 57,793 | 62,781 | (95,733 | ) | 57,302 | 67,894 | 17 | % | 150,731 | 82,143 | 67,894 | ||||||||||||||||||
| Allocated tax benefits | 4,085 | 8,055 | — | — | — | (100 | %) | 27,795 | 12,140 | — | |||||||||||||||||||
| Net income (loss) allocated to Genzyme General Stock (5) | $ | 61,878 | $ | 70,836 | $ | (95,733 | ) | $ | 57,302 | $ | 67,894 | 10 | % | $ | 178,526 | $ | 94,283 | $ | 67,894 | ||||||||||
| Net income (loss) per share of Genzyme General Stock-diluted (5,6,7) | $ | 0.28 | $ | 0.32 | $ | (0.43 | ) | $ | 0.25 | $ | 0.29 | 4 | % | $ | 0.81 | $ | 0.42 | $ | 0.29 | ||||||||||
| Weighted average shares outstanding-diluted (6,7) | 220,432 | 222,867 | 222,000 | 229,970 | 231,917 | 5 | % | 219,388 | 225,419 | 231,917 | |||||||||||||||||||
GENZYME GENERAL (GENZ)
Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)
| | Q1-03 | Q2-03 | Q3-03(1) | Q4-03(1) | Q1-04(1) | FY 2002 | FY 2003(1) | YTD 03/31/04(1) | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total product and service revenue | $ | 313,494 | $ | 346,874 | $ | 428,173 | $ | 473,551 | $ | 489,146 | $ | 1,074,012 | $ | 1,562,092 | $ | 489,146 | |||||||||||
| As a % of total product and service revenue: | |||||||||||||||||||||||||||
| Renagel (including Sevelamer) | 19 | % | 19 | % | 17 | % | 17 | % | 17 | % | 15 | % | 18 | % | 17 | % | |||||||||||
| Cerezyme enzyme | 53 | % | 53 | % | 44 | % | 41 | % | 41 | % | 58 | % | 47 | % | 41 | % | |||||||||||
| Fabrazyme enzyme | 4 | % | 4 | % | 5 | % | 7 | % | 8 | % | 2 | % | 5 | % | 8 | % | |||||||||||
| Thyrogen hormone | 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | |||||||||||
| Thymoglobulin/Lymphoglobuline | 0 | % | 0 | % | 1 | % | 5 | % | 5 | % | 0 | % | 2 | % | 5 | % | |||||||||||
| Synvisc viscosupplementation product and services | 0 | % | 0 | % | 7 | % | 5 | % | 5 | % | 0 | % | 3 | % | 5 | % | |||||||||||
| Sepra products | 0 | % | 0 | % | 3 | % | 3 | % | 3 | % | 0 | % | 2 | % | 3 | % | |||||||||||
| Diagnostics/Genetics | 15 | % | 14 | % | 11 | % | 10 | % | 11 | % | 16 | % | 12 | % | 11 | % | |||||||||||
| Other | 6 | % | 7 | % | 9 | % | 9 | % | 7 | % | 6 | % | 8 | % | 7 | % | |||||||||||
| Total product and service gross margin | 74 | % | 74 | % | 73 | % | 73 | % | 74 | % | 75 | % | 73 | % | 74 | % | |||||||||||
| Total revenues | $ | 314,045 | $ | 347,663 | $ | 436,978 | $ | 476,131 | $ | 491,251 | $ | 1,080,185 | $ | 1,574,817 | $ | 491,251 | |||||||||||
| SG&A expense as % of total revenue | 27 | % | 27 | % | 29 | % | 31 | % | 29 | % | 30 | % | 29 | % | 29 | % | |||||||||||
| R&D expense as % of total revenue | 18 | % | 17 | % | 19 | % | 20 | % | 19 | % | 21 | % | 19 | % | 19 | % | |||||||||||
| Operating income (loss) as % of total revenue | 25 | % | 26 | % | (17% | ) | 16 | % | 21 | % | 19 | % | 11 | % | 21 | % | |||||||||||
| Provision for income taxes as % of profit (loss) before tax | 26 | % | 23 | % | (35% | ) | 25 | % | 30 | % | 14 | % | 48 | % | 30 | % | |||||||||||
Balance sheet trends: | 03/31/03 | 06/30/03 | 9/30/03(8 | ) | 12/31/03(8 | ) | 03/31/04(8 | ) | 12/31/02 | 12/31/03(8 | ) | 03/31/04(8 | ) | ||||||||||||||
| Cash and all marketable securities | $ | 1,205,571 | $ | 1,263,949 | $ | 869,912 | $ | 1,227,460 | $ | 1,235,859 | $ | 1,149,145 | $ | 1,227,460 | $ | 1,235,859 | |||||||||||
| Other current assets | 639,753 | 673,076 | 842,180 | 909,490 | 906,759 | 633,501 | 909,490 | 906,759 | |||||||||||||||||||
| Property, plant and equipment, net | 779,199 | 841,175 | 926,569 | 1,151,133 | 1,157,143 | 749,840 | 1,151,133 | 1,157,143 | |||||||||||||||||||
| Intangibles, net | 923,640 | 925,890 | 1,537,571 | 1,517,791 | 1,537,411 | 933,360 | 1,517,791 | 1,537,411 | |||||||||||||||||||
| Other assets | 106,746 | 122,556 | 151,084 | 198,654 | 208,345 | 89,955 | 198,654 | 208,345 | |||||||||||||||||||
| Total assets | $ | 3,654,909 | $ | 3,826,646 | $ | 4,327,316 | $ | 5,004,528 | $ | 5,045,517 | $ | 3,555,801 | $ | 5,004,528 | $ | 5,045,517 | |||||||||||
| Current liabilities | $ | 277,168 | $ | 284,563 | $ | 735,976 | $ | 392,025 | $ | 348,092 | $ | 274,872 | $ | 392,025 | $ | 348,092 | |||||||||||
| Noncurrent liabilities | 697,711 | 676,602 | 815,637 | 1,676,091 | 1,657,116 | 695,045 | 1,676,091 | 1,657,116 | |||||||||||||||||||
| Stockholders' equity | 2,680,030 | 2,865,481 | 2,775,703 | 2,936,412 | 3,040,309 | 2,585,884 | 2,936,412 | 3,040,309 | |||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,654,909 | $ | 3,826,646 | $ | 4,327,316 | $ | 5,004,528 | $ | 5,045,517 | $ | 3,555,801 | $ | 5,004,528 | $ | 5,045,517 | |||||||||||
GENZYME GENERAL (GENZ)
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share amounts)
| | Three Months Ended March 31, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| | 2004(1) | 2003(1) | |||||||
| Total revenues | $ | 491,251 | $ | 314,045 | |||||
| Operating costs and expenses: | |||||||||
| Cost of products and services sold | 126,962 | 83,040 | |||||||
| Selling, general and administrative | 143,220 | 85,246 | |||||||
| Research and development | 92,816 | 56,329 | |||||||
| Amortization of intangibles | 26,245 | 9,736 | |||||||
| Total operating costs and expenses | 389,243 | 234,351 | |||||||
| Operating income | 102,008 | 79,694 | |||||||
| Other income (expenses): | |||||||||
| Equity in loss of equity method investments | (3,831 | ) | (4,194 | ) | |||||
| Gain on investments in equity securities | 353 | — | |||||||
| Minority interest | 1,162 | — | |||||||
| Other | (324 | ) | 780 | ||||||
| Investment income | 7,676 | 11,281 | |||||||
| Interest expense | (10,326 | ) | (4,277 | ) | |||||
| Total other income (expenses) | (5,290 | ) | 3,590 | ||||||
| Income before income taxes | 96,718 | 83,284 | |||||||
| Provision for income taxes | (28,824 | ) | (25,491 | ) | |||||
| Net income | $ | 67,894 | $ | 57,793 | |||||
| Allocated to Genzyme General Stock(2): | |||||||||
| Net income | $ | 67,894 | $ | 57,793 | |||||
| Tax benefit allocated from Genzyme Biosurgery | — | 2,322 | |||||||
| Tax benefit allocated from Genzyme Molecular Oncology | — | 1,763 | |||||||
| Net income allocated to Genzyme General Stock | $ | 67,894 | $ | 61,878 | |||||
| Net income per share of Genzyme General Stock: | |||||||||
| Basic | $ | 0.30 | $ | 0.29 | |||||
| Diluted (3) | $ | 0.29 | $ | 0.28 | |||||
| Weighted average shares outstanding: | |||||||||
| Basic | 225,711 | 215,091 | |||||||
| Diluted (3) | 231,917 | 220,432 | |||||||
GENZYME GENERAL (GENZ)
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)
| | March 31, 2004(1) | December 31, 2003(1) | |||||
|---|---|---|---|---|---|---|---|
| Cash and all marketable securities | $ | 1,235,859 | $ | 1,227,460 | |||
| Other current assets | 906,759 | 909,490 | |||||
| Property, plant and equipment, net | 1,157,143 | 1,151,133 | |||||
| Intangibles, net | 1,537,411 | 1,517,791 | |||||
| Other assets | 208,345 | 198,654 | |||||
| Total assets | $ | 5,045,517 | $ | 5,004,528 | |||
| Current liabilities | $ | 348,092 | $ | 392,025 | |||
| Noncurrent liabilities | 1,657,116 | 1,676,091 | |||||
| Stockholders' equity | 3,040,309 | 2,936,412 | |||||
| Total liabilities and stockholders' equity | $ | 5,045,517 | $ | 5,004,528 | |||
GENZYME CORPORATION
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share amounts)
| | Three Months Ended March 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| | 2004 | 2003 | ||||||||
| Total revenues | $ | 491,251 | $ | 381,859 | ||||||
| Operating costs and expenses: | ||||||||||
| Cost of products and services sold | 126,962 | 111,812 | ||||||||
| Selling, general and administrative | 143,220 | 114,224 | ||||||||
| Research and development | 92,816 | 75,631 | ||||||||
| Amortization of intangibles | 26,245 | 17,505 | ||||||||
| Total operating costs and expenses | 389,243 | 319,172 | ||||||||
| Operating income | 102,008 | 62,687 | ||||||||
| Other income (expenses): | ||||||||||
| Equity in loss of equity method investments | (3,831 | ) | (4,194 | ) | ||||||
| Gain on investments in equity securities | 353 | — | ||||||||
| Minority interest | 1,162 | — | ||||||||
| Other | (324 | ) | 750 | |||||||
| Investment income | 7,676 | 11,614 | ||||||||
| Interest expense | (10,326 | ) | (6,490 | ) | ||||||
| Total other income (expenses) | (5,290 | ) | 1,680 | |||||||
| Income before income taxes | 96,718 | 64,367 | ||||||||
| Provision for income taxes | (28,824 | ) | (18,998 | ) | ||||||
| Net income | $ | 67,894 | $ | 45,369 | ||||||
| Net income (loss) per share: | ||||||||||
| Allocated to Genzyme General Stock(1): | ||||||||||
| Net income | $ | 67,894 | $ | 57,793 | ||||||
| Tax benefit allocated from Genzyme Biosurgery | — | 2,322 | ||||||||
| Tax benefit allocated from Genzyme Molecular Oncology | — | 1,763 | ||||||||
| Net income allocated to Genzyme General Stock | $ | 67,894 | $ | 61,878 | ||||||
| Net income per share of Genzyme General Stock: | ||||||||||
| Basic | $ | 0.30 | $ | 0.29 | ||||||
| Diluted (2) | $ | 0.29 | $ | 0.28 | ||||||
| Weighted average shares outstanding: | ||||||||||
| Basic | 225,711 | 215,091 | ||||||||
| Diluted (2) | 231,917 | 220,432 | ||||||||
| Allocated to Biosurgery Stock(1): | ||||||||||
| Net loss | — | $ | (14,102 | ) | ||||||
| Allocated tax benefit | — | 2,408 | ||||||||
| Net loss allocated to Biosurgery Stock | — | $ | (11,694 | ) | ||||||
| Net loss per share of Biosurgery Stock—basic and diluted: | — | $ | (0.29 | ) | ||||||
| Weighted average shares outstanding | — | 40,578 | ||||||||
| Allocated to Molecular Oncology Stock(1): | ||||||||||
| Net loss and net loss allocated to Molecular Oncology Stock | — | $ | (4,815 | ) | ||||||
| Net loss per share of Molecular Oncology Stock—basic and diluted | — | $ | (0.28 | ) | ||||||
| Weighted average shares outstanding | — | 16,939 | ||||||||
GENZYME CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)
| | March 31, 2004 | December 31, 2003 | |||||
|---|---|---|---|---|---|---|---|
| Cash and all marketable securities | $ | 1,235,859 | $ | 1,227,460 | |||
| Other current assets | 906,759 | 909,490 | |||||
| Property, plant and equipment, net | 1,157,143 | 1,151,133 | |||||
| Intangibles, net | 1,537,411 | 1,517,791 | |||||
| Other assets | 208,345 | 198,654 | |||||
| Total assets | $ | 5,045,517 | $ | 5,004,528 | |||
| Current liabilities | $ | 348,092 | $ | 392,025 | |||
| Noncurrent liabilities | 1,657,116 | 1,676,091 | |||||
| Stockholders' equity | 3,040,309 | 2,936,412 | |||||
| Total liabilities and stockholders' equity | $ | 5,045,517 | $ | 5,004,528 | |||
