Exhibit 99.1
For Immediate Release |
| Media Contact: |
| Investor Contact: |
February 19, 2004 |
| Bo Piela |
| Sally Curley |
|
| (617) 768-6579 |
| (617) 768-6140 |
Genzyme Reports Financial Results for 2003 and Provides Guidance for 2004
CAMBRIDGE, Mass. – Genzyme Corporation (Nasdaq: GENZ) today reported financial results for the fourth quarter of 2003 and for the year. The company also provided guidance for its financial performance in 2004.
Genzyme consolidated its capital structure on June 30, 2003, by eliminating its tracking stocks. Figures reported for 2003 represent results for Genzyme General in the first and second quarters of the year and for the entire corporation in the third and fourth quarters.
Net income for the fourth quarter was $66.7 million, or $0.29 per diluted share, compared with net income of $44.7 million, or $0.20 per diluted share, for the fourth quarter a year earlier. Excluding special items and amortization, net income increased 17 percent to $86.8 million, or $0.38 per share, compared with net income of $74.1 million, or $.34 per share, for the fourth quarter of 2002.
Special items included pre-tax expenses of $2.9 million associated with the acquisition of SangStat Medical Corp. and $3.1 million in up-front fees and other considerations paid to Transkaryotic Therapies Inc. upon the formation of a commercialization agreement. Amortization totaled $25.8 million for the quarter.
(more)
For the year, net income was $103.7 million, or $0.46 per diluted share, compared with $178.5 million or $0.81 per diluted share, in 2002. Excluding special items and amortization, net income grew 36 percent to $314.7 million, or $1.39 per share, up from $231.6 million, or $1.06 per share, for 2002.
Revenues increased 61 percent to $481.2 million for the fourth quarter, up from $298.0 million in the same period a year ago. For the year, revenues grew 46 percent to $1.58 billion, up from $1.08 billion in 2002.
Selling, general and administrative expenses before special items totaled $443.7 million for the year, reflecting spending on the U.S. launch of Fabrazyme® (agalsidase beta), the global rollout of Renagel® (sevelamer hydrochloride), the integration of SangStat, and the impact of foreign exchange rates.
Research and development spending before special items was $289.8 million, or 18 percent of revenue, underscoring Genzyme’s commitment to help drive future growth with products from its pipeline.
The company’s effective net tax rate, excluding special items and amortization, was 27 percent for the fourth quarter and 28 percent for the year. The tax rate for 2002 was 22 percent before special items and amortization.
“Last year was a transforming year in many ways, and we begin 2004 as a more diversified, truly global company,” said Henri A. Termeer, chairman and chief executive officer of Genzyme Corp. “We continue to build a business that is sustainable over time. For 2004, our focus is on execution—on increasing market share for our products and expanding their availability worldwide, capitalizing on investments we’ve made in our infrastructure, managing the opportunities within our pipeline, and adding new programs in cancer and other emerging markets.”
2
2004 Guidance
Genzyme provided the following guidance for its financial performance in 2004. This guidance is based on current and anticipated foreign exchange rates for the year.
Revenues
The company’s revenues are expected to reach $1.9-$2.0 billion this year, up from $1.58 billion for 2003. Genzyme’s revenues are allocated within six business units: Renal, Therapeutics, Biosurgery, Transplant, Diagnostic Products and Services, and Other.
Within the Renal business, revenues for Renagel are expected to rise to $325-$345 million this year, compared with $281.7 million for 2003. Renagel revenues include product sales, royalties on product sales in Japan, and sales of bulk sevelamer to Chugai Pharmaceutical Co. Ltd., which is commercializing Renagel in Japan with its partner Kirin Brewery Co. Ltd. Renagel is a phosphate binder for patients with end-stage renal disease on hemodialysis.
Genzyme expects Renagel’s growth to be driven by increasing adoption in international markets, as well as the implementation of new National Kidney Foundation K/DOQI clinical guidelines in the United States and around the world. Genzyme recently signed new two-year inventory management arrangements with its major U.S. wholesalers, which will help ensure that Renagel inventories remain at the 4-5 week level going forward.
Within the Therapeutics business, sales of Fabrazyme enzyme replacement therapy for Fabry disease are expected to reach $170-$185 million, compared with $80.6 million in 2003. Fabrazyme’s growth will be driven by increasing penetration of the U.S. market, where the product was introduced less than a year ago; its launch in
3
international markets such as Japan and Canada, where it was approved recently; and continued growth in more established markets such as the European Union.
Sales of Cerezyme® (imiglucerase for injection) enzyme replacement therapy for Type 1 Gaucher disease are expected to reach $770-$790 million, compared with $738.9 million in 2003, based on a steady but low rate of growth in the number of patients beginning treatment.
Sales of Aldurazyme® (laronidase) enzyme replacement therapy for patients with MPS I are expected to reach $40-$44 million, compared with $11.5 million in 2003, its first year of sales. Genzyme is commercializing Aldurazyme in a joint venture with BioMarin Pharmaceutical Inc., and Aldurazyme sales and expenses are therefore not included within Genzyme’s operating lines.
Sales of Thyrogen® (thyrotropin alfa for injection), an adjunctive diagnostic used in follow-up screenings of thyroid cancer patients, are expected to rise to $48-$52 million, compared with $43.4 million in 2003.
Biosurgery revenues are expected to reach $215-$225 million, compared with revenues of $119.1 million in the second half of 2003 following the consolidation of Genzyme’s capital structure. Sales of this business’s leading product, Synvisc® (hylan G-F 20), which is used to treat knee pain from osteoarthritis, are expected to total $110-$115 million, compared with $55.6 million for the second half of 2003 following the consolidation. Total Synvisc revenues for all of 2003 were $115 million. Revenues in 2004 are expected to be flat due to lower support payments from Genzyme’s U.S. marketing partner, a competitive product launch, and small Medicare reimbursement rate reductions.
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Revenues for Genzyme’s Transplant business are expected to reach $130-$145 million, compared with $44.3 million in 2003 following Genzyme’s merger with SangStat. 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, are expected to reach $90-$100 million this year. Sales of these products were $30.0 million in 2003 following Genzyme’s merger with SangStat.
Revenues for Genzyme’s Diagnostic Products and Services businesses are expected to increase to $200-$215 million this year, up from $190.7 million in 2003. Within this area, revenues from genetic testing services are expected to increase to $110-$120 million, compared with $102.1 million in 2003, led by growth in carrier testing for cystic fibrosis and other rare diseases, plus recent and planned launches of prenatal and oncology tests.
Other revenues—including sales of WelChol® (colesevelum hydrochloride) and pharmaceutical intermediates, along with oncology research revenue—are expected to total $65-$70 million this year.
Gross Margin
Total gross margin is expected to be in the range of 76-77 percent of revenue in 2004, compared with 74 percent in 2003 prior to special items. New manufacturing facilities for Renagel in Ireland and the United Kingdom are having an increasingly positive impact on the gross margin. This impact is partially offset by product-mix changes and the affect of foreign exchange rates on the cost of products made in Europe.
SG&A Expenses
Selling, general and administrative expenses are expected to be in the range of $565-$575 million this year, holding at approximately 28 percent of sales.
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R&D Spending
Research and development spending in 2004 is expected to grow to $385-$395 million, or 19-20 percent of revenue. Important components of R&D spending include (1) Genzyme’s substantial investment in its Myozyme® (alglucosidase alfa) clinical development program for Pompe disease; (2) studies designed to expand product indications as well as other post-marketing studies; (3) the planned Phase 3 clinical trial of Tolevamer toxin binder for C. difficile colitis; and (4) earlier-stage clinical studies of small-molecule drug candidates including GENZ-29155 for multiple sclerosis.
Earnings Per Share
Diluted earnings per share are expected to reach $1.37-$1.47 in 2004. For 2004, amortization is expected to be approximately $103 million, or $0.28 per share. Excluding amortization, earnings are expected to reach $1.65-$1.75 in 2004. Genzyme expects to have a weighted average of 230 million diluted shares outstanding this year.
Earnings for the first quarter of the year are expected to be in the range of $0.35-$0.37 per share prior to amortization.
Tax Rate
The company’s effective net tax rate for 2004 is expected to be 29-31 percent.
Cash
Genzyme ended 2003 with $1.2 billion in cash and equivalents. In 2004, it expects to record capital expenditures of approximately $180-200 million, down from approximately $260 million in 2003, as it completes several major projects.
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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 5,300 Genzyme employees in offices around the globe serve patients in over 80 countries.
This press release contains forward-looking statements, including the financial projections included under the heading “2004 Guidance” 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 manufacture products and product candidates in a timely and cost effective manner; Genzyme’s ability to effectively manage inventory levels; 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 payers; exchange rate fluctuations; 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 Quarterly Report on Form 10-Q for the quarter ending September 30, 2003, for a more complete discussion of these and other risk factors. Furthermore, in the past Genzyme has engaged in several business combination and capital raising transactions. The financial guidance included in this press release does not reflect the potential impact of any M&A or financing activity beyond what Genzyme has publicly announced prior to February 19, 2004. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of February 19, 2004, and Genzyme undertakes no obligation to update or revise the statements.
Genzyme®, Cerezyme®, Fabrazyme®, Renagel®, Thyrogen® and Synvisc® are registered trademarks and MyozymeTM and TovelamerTM are trademarks of Genzyme Corporation. Aldurazyme® is a registered trademark of BioMarin/Genzyme LLC. WelChol® is a registered trademark of Sankyo Pharma Inc. SangStat® and
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Thymoglobulin® and Lymphoglobulin® are registered trademarks of SangStat Medical Corporation or its subsidiaries. All rights reserved.
Conference Call Information
There will be a conference call today at 11:00 a.m. EST to discuss Genzyme Corporation’s 2003 financial results and 2004 financial guidance. 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 February 26 by dialing 719-457-0820. Please refer to reservation number 710137. This call will also be Webcast live on the investor events section of www.genzyme.com
Upcoming Events
Genzyme Corp. will report First Quarter 2004 financial results on April 15, 2004 at 11:00 a.m. EST. If you would like to participate in the call, please dial 719-457-2642. No passcode is necessary. Please refer to www.genzyme.com one week prior to the financial reporting date for any updates to this information and on the day of this call for any supplemental information. This call will also be webcast live on the investor events section on www.genzyme.com.
# # #
Genzyme’s press releases and other company information are available at www.genzyme.com and by calling Genzyme’s investor information line at 1-800-905-4369 within the United States or 1-703-797-1866 outside the United States.
8
GENZYME
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
Quarter Ended December 31, 2003
(Amounts in thousands, except per share data)
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| Before |
| Sangstat |
| TKT |
| Amortization |
| GAAP |
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Income Statement Classification: |
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Cost of sales |
| $ | (126,842 | ) | $ | (2,550 | ) |
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| $ | (129,392 | ) | ||
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Selling, general and administrative |
| $ | (139,751 | ) | $ | (258 | ) | $ | (1,550 | ) |
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| $ | (141,559 | ) | |
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Research and development |
| $ | (91,692 | ) | $ | (137 | ) | $ | (1,500 | ) |
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| $ | (93,329 | ) | |
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Amortization of intangibles |
| $ | — |
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| $ | (25,844 | ) | $ | (25,844 | ) | ||
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Summary: |
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Pretax profit |
| $ | 119,318 |
| $ | (2,945 | ) | $ | (3,050 | ) | $ | (25,844 | ) | $ | 87,479 |
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Provision for income taxes |
| (32,507 | ) | 1,084 |
| 1,122 |
| 9,511 |
| (20,790 | ) | |||||
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Net income allocated to Genzyme General Stock |
| $ | 86,811 |
| $ | (1,861 | ) | $ | (1,928 | ) | $ | (16,333 | ) | $ | 66,689 |
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Net income per share of Genzyme General Stock: |
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Basic |
| $ | 0.39 |
| $ | (0.008 | ) | $ | (0.009 | ) | $ | (0.073 | ) | $ | 0.30 |
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Diluted |
| $ | 0.38 |
| $ | (0.008 | ) | $ | (0.008 | ) | $ | (0.071 | ) | $ | 0.29 |
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Weighted average shares outstanding: |
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Basic |
| 224,101 |
| 224,101 |
| 224,101 |
| 224,101 |
| 224,101 |
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Diluted |
| 229,970 |
| 229,970 |
| 229,970 |
| 229,970 |
| 229,970 |
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GENZYME CORPORATION
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share amounts)
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| Three Months Ended |
| Year Ended |
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| 2003 |
| 2002 |
| 2003 |
| 2002 |
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Total revenues |
| $ | 481,195 |
| $ | 359,174 |
| $ | 1,718,935 |
| $ | 1,329,472 |
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Operating costs and expenses: |
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Cost of products and services sold |
| 129,392 |
| 102,435 |
| 475,644 |
| 376,209 |
| ||||
Selling, general and administrative |
| 141,559 |
| 108,681 |
| 513,930 |
| 438,035 |
| ||||
Research and development |
| 93,329 |
| 75,714 |
| 330,997 |
| 308,487 |
| ||||
Amortization of intangibles |
| 25,844 |
| 17,512 |
| 80,257 |
| 70,278 |
| ||||
Purchase of in-process research and development (1) |
| — |
| — |
| 158,000 |
| 1,879 |
| ||||
Charge for impairment of goodwill (2) |
| — |
| — |
| 102,792 |
| — |
| ||||
Charge for impaired assets (3) |
| — |
| 13,986 |
| 10,894 |
| 22,944 |
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Total operating costs and expenses |
| 390,124 |
| 318,328 |
| 1,672,514 |
| 1,217,832 |
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Operating income |
| 91,071 |
| 40,846 |
| 46,421 |
| 111,640 |
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Other income (expenses): |
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Equity in net loss of unconsolidated affiliates |
| (4,473 | ) | (6,429 | ) | (18,974 | ) | (16,858 | ) | ||||
Gain (loss) on investments in equity securities |
| 1,236 |
| (15,035 | ) | (1,201 | ) | (14,497 | ) | ||||
Gain (loss) on sale of product line (4) |
| 1,709 |
| — |
| (27,658 | ) | — |
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Other |
| (222 | ) | (689 | ) | 959 |
| 40 |
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Investment income |
| 7,551 |
| 12,021 |
| 43,015 |
| 51,038 |
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Interest expense |
| (9,393 | ) | (6,685 | ) | (26,600 | ) | (27,152 | ) | ||||
Total other income (expenses) |
| (3,592 | ) | (16,817 | ) | (30,459 | ) | (7,429 | ) | ||||
Income before income taxes |
| 87,479 |
| 24,029 |
| 15,962 |
| 104,211 |
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(Provision for) benefit from income taxes |
| (20,790 | ) | 1,016 |
| (74,167 | ) | (19,015 | ) | ||||
Net income (loss) before cumulative effect of change in accounting for goodwill |
| 66,689 |
| 25,045 |
| (58,205 | ) | 85,196 |
| ||||
Cumulative effect of change in accounting for goodwill (5) |
| — |
| — |
| — |
| (98,270 | ) | ||||
Net income (loss) |
| $ | 66,689 |
| $ | 25,045 |
| $ | (58,205 | ) | $ | (13,074 | ) |
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Net income (loss) per share: |
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Allocated to Genzyme General Stock (6): |
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Genzyme General division net income |
| $ | 66,689 |
| $ | 37,493 |
| $ | 91,530 |
| $ | 150,731 |
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Tax benefit allocated from Genzyme Biosurgery |
| — |
| 4,890 |
| 8,720 |
| 18,508 |
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Tax benefit allocated from Genzyme Molecular Oncology |
| — |
| 2,349 |
| 3,420 |
| 9,287 |
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Net income allocated to Genzyme General Stock |
| $ | 66,689 |
| $ | 44,732 |
| $ | 103,670 |
| $ | 178,526 |
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Net income per share of Genzyme General Stock: |
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Basic |
| $ | 0.30 |
| $ | 0.21 |
| $ | 0.47 |
| $ | 0.83 |
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Diluted (7) |
| $ | 0.29 |
| $ | 0.20 |
| $ | 0.46 |
| $ | 0.81 |
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Weighted average shares outstanding: |
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Basic |
| 224,101 |
| 214,602 |
| 219,376 |
| 214,038 |
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Diluted (7) |
| 229,970 |
| 219,313 |
| 225,419 |
| 219,388 |
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Allocated to Biosurgery Stock (6): |
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Genzyme Biosurgery division net loss before cumulative effect of change in accounting for goodwill |
| — |
| $ | (16,954 | ) | $ | (166,656 | ) | $ | (79,322 | ) | |
Cumulative effect of change in accounting for goodwill (5) |
| — |
| — |
|
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| (98,270 | ) | ||||
Genzyme Biosurgery division net loss |
| — |
| (16,954 | ) | (166,656 | ) | (177,592 | ) | ||||
Allocated tax benefit |
| — |
| 2,408 |
| 14,005 |
| 9,706 |
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Net loss allocated to Biosurgery Stock |
| — |
| $ | (14,546 | ) | $ | (152,651 | ) | $ | (167,886 | ) | |
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Net loss per share of Biosurgery Stock - basic and diluted: |
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Net loss per share before cumulative effect of change in accounting for goodwill |
| — |
| $ | (0.36 | ) | $ | (3.76 | ) | $ | (1.74 | ) | |
Per share cumulative effect of change in accounting for goodwill (5) |
| — |
| — |
| — |
| (2.46 | ) | ||||
Net loss per share of Biosurgery Stock - basic and diluted |
| — |
| $ | (0.36 | ) | $ | (3.76 | ) | $ | (4.20 | ) | |
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Weighted average shares outstanding |
| — |
| 40,479 |
| 40,630 |
| 39,965 |
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Allocated to Molecular Oncology Stock (6): |
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Genzyme Molecular Oncology division net loss and net loss allocated to Molecular Oncology Stock |
| — |
| $ | (5,141 | ) | $ | (9,224 | ) | $ | (23,714 | ) | |
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Net loss per share of Molecular Oncology Stock - basic and diluted |
| — |
| $ | (0.30 | ) | $ | (0.54 | ) | $ | (1.41 | ) | |
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Weighted average shares outstanding |
| — |
| 16,897 |
| 16,958 |
| 16,827 |
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(1) Includes charges for in-process research and development of $(158,000)K in 2003 related to our acquisition of SangStat Medical Corporation in September 2003 and $(1,879)K in July 2002 related to our investment in Myosix SA.
(2) Represents the write off of the goodwill allocated to our orthopaedics reporting unit in June 2003 in accordance with Statement of Financial Accounting Standards, or SFAS, No. 142, “Goodwill and Other Intangible Assets.”
(3) In 2003, includes impairment charges of $(7,996)K recorded in September 2003 to write down the assets related to our FocalSeal business and $(2,898)K recorded in June 2003 to write down the carrying value of our cardiothoracic devices manufacturing facility in Fall River, Massachusetts to fair value. In 2002, includes impairment charges of $(8,958)K recorded in September 2002 to write down our bulk HA manufacturing facility in the United Kingdom and $(13,986)K recorded in December 2002 to write off engineering costs related to a proposed manufacturing facility in Framingham, Massachusetts.
(4) Represents the final adjustment to the net loss on the sale of our cardiothoracic devices business to Teleflex Inc. in accordance with the sale agreement. We recorded an estimated net loss on the sale of these assets of $(29,367)K in June 2003, which we allocated to the Biosurgery division. However, as a result of the elimination of our tracking stock capital structure effective July 1, 2003, the final adjustment to the net loss is allocated to Genzyme General.
(5) Effective January 1, 2002, in connection with the provisions of SFAS No. 142, we ceased amortizing goodwill. In connection with the adoption of SFAS No. 142, we tested the goodwill of our cardiothoracic reporting unit for impairment and, as a result, reduced goodwill by recording a cumulative effect impairment charge of $(98,270)K in our consolidated statements of operations in March 2002.
(6) Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating earnings to Biosurgery Stock and Molecular Oncology Stock. From that date forward, all of our earnings are allocated to Genzyme General Stock. Earnings or losses allocated to Biosurgery Stock and Molecular Oncology Stock prior to July 1, 2003 remain allocated to those stocks and are not affected by the elimination of our tracking stock structure.
(7) Net income per share on a diluted basis and weighted average shares-diluted for all periods presented include the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme General Stock, but exclude the potentially dilutive effect of the assumed conversion of our convertible subordinated debentures and notes because the conditions for conversion had not been met.
GENZYME CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)
|
| December 31, |
| December 31, |
| ||
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|
|
|
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| ||
Cash and all marketable securities |
| $ | 1,227,459 |
| $ | 1,195,004 |
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Other current assets |
| 921,994 |
| 676,231 |
| ||
Property, plant and equipment, net |
| 1,152,145 |
| 802,448 |
| ||
Intangibles, net |
| 1,517,246 |
| 1,326,553 |
| ||
Other assets |
| 200,481 |
| 82,813 |
| ||
Total assets |
| $ | 5,019,325 |
| $ | 4,083,049 |
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Current liabilities |
| $ | 469,170 |
| $ | 607,800 |
|
Noncurrent liabilities |
| 1,602,997 |
| 777,402 |
| ||
Stockholders’ equity |
| 2,947,158 |
| 2,697,847 |
| ||
Total liabilities and stockholders’ equity |
| $ | 5,019,325 |
| $ | 4,083,049 |
|
GENZYME GENERAL (GENZ)
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share amounts)
|
| Three Months Ended |
| Year Ended |
| ||||||||
|
| 2003(1) |
| 2002 |
| 2003(1) |
| 2002 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total revenues |
| $ | 481,195 |
| $ | 298,047 |
| $ | 1,579,881 |
| $ | 1,080,185 |
|
|
|
|
|
|
|
|
|
|
| ||||
Operating costs and expenses: |
|
|
|
|
|
|
|
|
| ||||
Cost of products and services sold |
| 129,392 |
| 77,237 |
| 418,969 |
| 265,818 |
| ||||
Selling, general and administrative |
| 141,559 |
| 80,553 |
| 449,348 |
| 323,683 |
| ||||
Research and development |
| 93,329 |
| 55,323 |
| 291,466 |
| 230,043 |
| ||||
Amortization of intangibles |
| 25,844 |
| 9,743 |
| 64,720 |
| 38,998 |
| ||||
Purchase of in-process research and development (2) |
| — |
| — |
| 158,000 |
| — |
| ||||
Charge for impaired assets (3) |
| — |
| 13,986 |
| 7,996 |
| 13,986 |
| ||||
Total operating costs and expenses |
| 390,124 |
| 236,842 |
| 1,390,499 |
| 872,528 |
| ||||
Operating income |
| 91,071 |
| 61,205 |
| 189,382 |
| 207,657 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Other income (expenses): |
|
|
|
|
|
|
|
|
| ||||
Equity in net loss of unconsolidated affiliates |
| (4,473 | ) | (6,429 | ) | (18,974 | ) | (16,858 | ) | ||||
Gain (loss) on investments in equity securities |
| 1,236 |
| (15,035 | ) | (1,201 | ) | (14,497 | ) | ||||
Gain on sale of product line (4) |
| 1,709 |
| — |
| 1,709 |
| — |
| ||||
Other |
| (222 | ) | (730 | ) | 994 |
| (152 | ) | ||||
Investment income |
| 7,551 |
| 11,483 |
| 42,312 |
| 48,944 |
| ||||
Interest expense |
| (9,393 | ) | (4,370 | ) | (22,380 | ) | (17,847 | ) | ||||
Total other income (expenses) |
| (3,592 | ) | (15,081 | ) | 2,460 |
| (410 | ) | ||||
Income before income taxes |
| 87,479 |
| 46,124 |
| 191,842 |
| 207,247 |
| ||||
Provision for income taxes |
| (20,790 | ) | (1,392 | ) | (88,172 | ) | (28,721 | ) | ||||
Net income |
| $ | 66,689 |
| $ | 44,732 |
| $ | 103,670 |
| $ | 178,526 |
|
|
|
|
|
|
|
|
|
|
| ||||
Allocated to Genzyme General Stock (5): |
|
|
|
|
|
|
|
|
| ||||
Genzyme General division net income |
| $ | 66,689 |
| $ | 37,493 |
| $ | 91,530 |
| $ | 150,731 |
|
Tax benefit allocated from Genzyme Biosurgery |
| — |
| 4,890 |
| 8,720 |
| 18,508 |
| ||||
Tax benefit allocated from Genzyme Molecular Oncology |
| — |
| 2,349 |
| 3,420 |
| 9,287 |
| ||||
Net income allocated to Genzyme General Stock |
| $ | 66,689 |
| $ | 44,732 |
| $ | 103,670 |
| $ | 178,526 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net income per share of Genzyme General Stock: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 0.30 |
| $ | 0.21 |
| $ | 0.47 |
| $ | 0.83 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted (6) |
| $ | 0.29 |
| $ | 0.20 |
| $ | 0.46 |
| $ | 0.81 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 224,101 |
| 214,602 |
| 219,376 |
| 214,038 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Diluted (6) |
| 229,970 |
| 219,313 |
| 225,419 |
| 219,388 |
| ||||
(1) Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating earnings to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our earnings are allocated to Genzyme General. Earnings or losses allocated to Genzyme Biosurgery and Genzyme Molecular Oncology prior to July 1, 2003 remain allocated to those divisions and are not affected by the elimination of our tracking stock structure.
(2) Represents a charge for in-process research and development of $(158,000)K related to our acquisition of SangStat Medical Corporation in September 2003.
(3) Includes impairment charges $(7,996)K recorded in September 2003 to write down the assets of our FocalSeal business and $(13,986)K recorded in December 2002 to write off engineering costs related to a proposed manufacturing facility in Framingham, Massachusetts.
(4) Represents the final adjustment to the net loss on the sale of our cardiothoracic devices business to Teleflex Inc. in accordance with the sale agreement. We recorded an estimated net loss on the sale of these assets of $(29,367)K in June 2003, which we allocated to the Biosurgery division. However, as a result of the elimination of our tracking stock capital structure effective July 1, 2003, this final adjustment to the net loss is allocated to Genzyme General.
(5) Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating earnings to Biosurgery Stock and Molecular Oncology Stock. From that date forward, all of our earnings are allocated to Genzyme General Stock. Earnings or losses allocated to Biosurgery Stock and Molecular Oncology Stock prior to July 1, 2003 remain allocated to those stocks and are not affected by the elimination of our tracking stock structure.
(6) Net income per share on a diluted basis and weighted average shares-diluted for all periods include the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme General Stock, but exclude the potentially dilutive effect of the assumed conversion of our convertible subordinated debentures and notes because the conditions for conversion had not been met.
GENZYME GENERAL (GENZ)
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)
|
| December 31, |
| December 31, |
| ||
|
|
|
|
|
| ||
Cash and all marketable securities |
| $ | 1,227,459 |
| $ | 1,149,145 |
|
Other current assets |
| 921,994 |
| 633,501 |
| ||
Property, plant and equipment, net |
| 1,152,145 |
| 749,840 |
| ||
Intangibles, net |
| 1,517,246 |
| 933,360 |
| ||
Other assets |
| 200,481 |
| 89,955 |
| ||
Total assets |
| $ | 5,019,325 |
| $ | 3,555,801 |
|
|
|
|
|
|
| ||
Current liabilities |
| $ | 469,170 |
| $ | 274,872 |
|
Noncurrent liabilities |
| 1,602,997 |
| 695,045 |
| ||
Stockholders’ equity |
| 2,947,158 |
| 2,585,884 |
| ||
Total liabilities and stockholders’ equity |
| $ | 5,019,325 |
| $ | 3,555,801 |
|
(1) �� Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating assets and liabilities to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our assets and liabilities are allocated to Genzyme General.
Genzyme General (GENZ)
Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)
|
| Q4-02 |
| Q1-03 |
| Q2-03 |
| Q3-03(1) |
| Q4-03(1) |
| Q4-03 |
| FY 2001 |
| FY 2002 |
| YTD |
| ||||||||
Total revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Renal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Renagel phosphate binder (including Sevelamer) |
| $ | 50,835 |
| $ | 58,766 |
| $ | 66,002 |
| $ | 75,468 |
| $ | 81,465 |
| 60 | % | $ | 176,921 |
| $ | 156,864 |
| $ | 281,701 |
|
Other Renal |
| — |
| — |
| — |
| — |
| — |
|
|
| — |
| — |
| — |
| ||||||||
Total Renal product and service revenue |
| 50,835 |
| 58,766 |
| 66,002 |
| 75,468 |
| 81,465 |
| 60 | % | 176,921 |
| 156,864 |
| 281,701 |
| ||||||||
Renal R&D revenue |
| — |
| — |
| — |
| — |
| — |
|
|
| — |
| — |
| — |
| ||||||||
Total Renal |
| 50,835 |
| 58,766 |
| 66,002 |
| 75,468 |
| 81,465 |
| 60 | % | 176,921 |
| 156,864 |
| 281,701 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Therapeutics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cerezyme enzyme |
| 158,930 |
| 167,187 |
| 184,724 |
| 189,223 |
| 197,747 |
| 24 | % | 569,887 |
| 619,184 |
| 738,881 |
| ||||||||
Fabrazyme enzyme |
| 8,887 |
| 11,846 |
| 15,430 |
| 21,452 |
| 31,889 |
| 259 | % | 5,793 |
| 26,101 |
| 80,617 |
| ||||||||
Thyrogen hormone |
| 8,075 |
| 9,714 |
| 9,790 |
| 11,405 |
| 12,529 |
| 55 | % | 18,684 |
| 28,270 |
| 43,438 |
| ||||||||
Other |
| 377 |
| 407 |
| 448 |
| 499 |
| 448 |
| 19 | % | 1,012 |
| 871 |
| 1,802 |
| ||||||||
Total Therapeutics product and service revenue |
| 176,269 |
| 189,154 |
| 210,392 |
| 222,579 |
| 242,613 |
| 38 | % | 595,376 |
| 674,426 |
| 864,738 |
| ||||||||
Therapeutics R&D revenue |
| 127 |
| — |
| 1 |
| — |
| — |
| (100 | )% | 1,230 |
| 834 |
| 1 |
| ||||||||
Total Therapeutics |
| 176,396 |
| 189,154 |
| 210,393 |
| 222,579 |
| 242,613 |
| 38 | % | 596,606 |
| 675,260 |
| 864,739 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Transplant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Thymoglobulin/Lymphoglobuline |
| — |
| — |
| — |
| 4,898 |
| 25,055 |
|
|
| — |
| — |
| 29,953 |
| ||||||||
Other products |
| — |
| — |
| — |
| 2,421 |
| 11,946 |
|
|
| — |
| — |
| 14,367 |
| ||||||||
Total Transplant product and service revenue |
| — |
| — |
| — |
| 7,319 |
| 37,001 |
|
|
| — |
| — |
| 44,320 |
| ||||||||
Transplant R&D revenue |
| — |
| — |
| — |
| — |
| — |
|
|
| — |
| — |
| — |
| ||||||||
Total Transplant |
| — |
| — |
| — |
| 7,319 |
| 37,001 |
|
|
| — |
| — |
| 44,320 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Biosurgery |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Synvisc viscosupplementation product and services |
| — |
| — |
| — |
| 29,754 |
| 25,825 |
|
|
| — |
| — |
| 55,579 |
| ||||||||
Sepra products |
| — |
| — |
| — |
| 11,951 |
| 14,008 |
|
|
| — |
| — |
| 25,959 |
| ||||||||
Other Biosurgery |
| 4,127 |
| 2,814 |
| 3,628 |
| 12,969 |
| 13,002 |
| 215 | % | 13,804 |
| 12,828 |
| 32,413 |
| ||||||||
Total Biosurgery product and service revenue |
| 4,127 |
| 2,814 |
| 3,628 |
| 54,674 |
| 52,835 |
| 1180 | % | 13,804 |
| 12,828 |
| 113,951 |
| ||||||||
Biosurgery R&D revenue |
| — |
| — |
| — |
| 4,721 |
| 406 |
|
|
| — |
| — |
| 5,127 |
| ||||||||
Total Biosurgery |
| 4,127 |
| 2,814 |
| 3,628 |
| 59,395 |
| 53,241 |
| 1190 | % | 13,804 |
| 12,828 |
| 119,078 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Diagnostics/Genetics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Diagnostic Products |
| 22,041 |
| 23,196 |
| 22,554 |
| 21,116 |
| 21,722 |
| (1 | )% | 76,858 |
| 83,065 |
| 88,588 |
| ||||||||
Genetic Testing |
| 23,358 |
| 24,502 |
| 25,379 |
| 25,530 |
| 26,736 |
| 14 | % | 74,187 |
| 89,745 |
| 102,147 |
| ||||||||
Total Diagnostics/Genetics product and service revenue |
| 45,399 |
| 47,698 |
| 47,933 |
| 46,646 |
| 48,458 |
| 7 | % | 151,045 |
| 172,810 |
| 190,735 |
| ||||||||
Diagnostic/Genetics R&D revenue |
| — |
| — |
| — |
| — |
| — |
|
|
| — |
| — |
| — |
| ||||||||
Total Diagnostics/Genetics |
| 45,399 |
| 47,698 |
| 47,933 |
| 46,646 |
| 48,458 |
| 7 | % | 151,045 |
| 172,810 |
| 190,735 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other product and service revenue |
| 20,567 |
| 15,062 |
| 18,919 |
| 21,487 |
| 16,243 |
| (21 | )% | 35,641 |
| 57,084 |
| 71,711 |
| ||||||||
Other R&D revenue |
| 723 |
| 551 |
| 788 |
| 4,084 |
| 2,174 |
| 201 | % | 7,909 |
| 5,339 |
| 7,597 |
| ||||||||
Total Other |
| 21,290 |
| 15,613 |
| 19,707 |
| 25,571 |
| 18,417 |
| (13 | )% | 43,550 |
| 62,423 |
| 79,308 |
| ||||||||
Total revenues |
| $ | 298,047 |
| $ | 314,045 |
| $ | 347,663 |
| $ | 436,978 |
| $ | 481,195 |
| 61 | % | $ | 981,926 |
| $ | 1,080,185 |
| $ | 1,579,881 |
|
Genzyme General (GENZ)
Analyst Schedule
(Unaudited, amounts in thousands, except percentage and per share amounts)
|
| Q4-02 |
| Q1-03 |
| Q2-03 |
| Q3-03(1) |
| Q4-03(1) |
| Q4-03 |
| FY 2001 |
| FY 2002 |
| YTD |
| ||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total product and service revenue |
| $ | 297,197 |
| $ | 313,494 |
| $ | 346,874 |
| $ | 428,173 |
| $ | 478,615 |
| 61 | % | $ | 972,787 |
| $ | 1,074,012 |
| $ | 1,567,156 |
|
R&D revenue |
| 850 |
| 551 |
| 789 |
| 8,805 |
| 2,580 |
| 204 | % | 9,139 |
| 6,173 |
| 12,725 |
| ||||||||
Total revenues |
| 298,047 |
| 314,045 |
| 347,663 |
| 436,978 |
| 481,195 |
| 61 | % | 981,926 |
| 1,080,185 |
| 1,579,881 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total product and service gross profit |
| 219,960 |
| 230,454 |
| 255,200 |
| 313,310 |
| 349,223 |
| 59 | % | 735,445 |
| 808,194 |
| 1,148,187 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
SG&A expense |
| 80,553 |
| 85,246 |
| 95,203 |
| 127,340 |
| 141,559 |
| (76 | )% | 295,068 |
| 323,683 |
| 449,348 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
R&D expense |
| 55,323 |
| 56,329 |
| 58,834 |
| 82,974 |
| 93,329 |
| (69 | )% | 187,502 |
| 230,043 |
| 291,466 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Amortization of intangibles |
| 9,743 |
| 9,736 |
| 9,873 |
| 19,267 |
| 25,844 |
| (165 | )% | 74,296 |
| 38,998 |
| 64,720 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Purchase of in-process research and development (2) |
| — |
| — |
| — |
| 158,000 |
| — |
|
|
| 95,568 |
| — |
| 158,000 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Charge for impaired assets (3) |
| 13,986 |
| — |
| — |
| 7,996 |
| — |
| 100 | % | — |
| 13,986 |
| 7,996 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income (loss) |
| 61,205 |
| 79,694 |
| 92,079 |
| (73,462 | ) | 91,071 |
| 49 | % | 92,150 |
| 207,657 |
| 189,382 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Equity in net loss of unconsolidated affiliates |
| (6,429 | ) | (4,194 | ) | (4,804 | ) | (5,503 | ) | (4,473 | ) | 30 | % | (34,365 | ) | (16,858 | ) | (18,974 | ) | ||||||||
Gain (loss) on investments in equity securities |
| (15,035 | ) | — |
| (3,620 | ) | 1,183 |
| 1,236 |
| 108 | % | (25,996 | ) | (14,497 | ) | (1,201 | ) | ||||||||
Gain on sale of product line (4) |
| — |
| — |
| — |
| — |
| 1,709 |
|
|
| — |
| — |
| 1,709 |
| ||||||||
Minority interest |
| — |
| — |
| — |
| — |
| — |
|
|
| 2,259 |
| — |
| — |
| ||||||||
Other |
| (730 | ) | 780 |
| 774 |
| (338 | ) | (222 | ) | 70 | % | (2,117 | ) | (152 | ) | 994 |
| ||||||||
Investment income |
| 11,483 |
| 11,281 |
| 12,058 |
| 11,422 |
| 7,551 |
| (34 | )% | 47,806 |
| 48,944 |
| 42,312 |
| ||||||||
Interest expense |
| (4,370 | ) | (4,277 | ) | (4,328 | ) | (4,382 | ) | (9,393 | ) | (115 | )% | (23,192 | ) | (17,847 | ) | (22,380 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Income (loss) before income taxes |
| 46,124 |
| 83,284 |
| 92,159 |
| (71,080 | ) | 87,479 |
| 90 | % | 56,545 |
| 207,247 |
| 191,842 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Provision for income taxes |
| (8,631 | ) | (25,491 | ) | (29,378 | ) | (24,653 | ) | (20,790 | ) | (141 | )% | (52,666 | ) | (56,516 | ) | (100,312 | ) | ||||||||
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|
|
|
|
|
|
| ||||||||
Division net income (loss) |
| 37,493 |
| 57,793 |
| 62,781 |
| (95,733 | ) | 66,689 |
| 78 | % | 3,879 |
| 150,731 |
| 91,530 |
| ||||||||
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|
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|
|
|
| ||||||||
Cumulative effect of change in accounting for derivative financial instruments, net of tax (5) |
| — |
| — |
| — |
| — |
| — |
|
|
| 4,167 |
| — |
| — |
| ||||||||
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| ||||||||
Division net income (loss) before allocated tax benefits |
| 37,493 |
| 57,793 |
| 62,781 |
| (95,733 | ) | 66,689 |
| 78 | % | 8,046 |
| 150,731 |
| 91,530 |
| ||||||||
|
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|
|
| ||||||||
Allocated tax benefits |
| 7,239 |
| 4,085 |
| 8,055 |
| — |
| — |
| (100 | )% | 36,497 |
| 27,795 |
| 12,140 |
| ||||||||
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| ||||||||
Net income (loss) allocated to Genzyme General Stock (6) |
| $ | 44,732 |
| $ | 61,878 |
| $ | 70,836 |
| $ | (95,733 | ) | $ | 66,689 |
| 49 | % | $ | 44,543 |
| $ | 178,526 |
| $ | 103,670 |
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| ||||||||
Net income (loss) per share of Genzyme General Stock-diluted (6,7,8) |
| $ | 0.20 |
| $ | 0.28 |
| $ | 0.32 |
| $ | (0.43 | ) | $ | 0.29 |
| 45 | % | $ | 0.21 |
| $ | 0.81 |
| $ | 0.46 |
|
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| ||||||||
Weighted average shares outstanding-diluted (7,8,9) |
| 219,313 |
| 220,432 |
| 222,867 |
| 222,000 |
| 229,970 |
| 5 | % | 211,176 |
| 219,388 |
| 225,419 |
| ||||||||
Genzyme General (GENZ)
Analyst Schedule
(Unaudited, amounts in thousands, except percentage amounts)
|
| Q4-02 |
| Q1-03 |
| Q2-03 |
| Q3-03(1) |
| Q4-03(1) |
| FY 2001 |
| FY 2002 |
| YTD |
| ||||||||
Total product and service revenue |
| $ | 297,197 |
| $ | 313,494 |
| $ | 346,874 |
| $ | 428,173 |
| $ | 478,615 |
| $ | 972,787 |
| $ | 1,074,012 |
| $ | 1,567,156 |
|
As a % of total product and service revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Renagel (including Sevelamer) |
| 17 | % | 19 | % | 19 | % | 17 | % | 17 | % | 18 | % | 15 | % | 18 | % | ||||||||
Cerezyme enzyme |
| 54 | % | 53 | % | 53 | % | 44 | % | 41 | % | 59 | % | 58 | % | 47 | % | ||||||||
Fabrazyme enzyme |
| 3 | % | 4 | % | 4 | % | 5 | % | 7 | % | 1 | % | 2 | % | 5 | % | ||||||||
Thyrogen hormone |
| 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | 2 | % | 3 | % | 3 | % | ||||||||
Thymoglobulin/Lymphoglobuline |
| 0 | % | 0 | % | 0 | % | 1 | % | 5 | % | 0 | % | 0 | % | 2 | % | ||||||||
Synvisc viscosupplementation product and services |
| 0 | % | 0 | % | 0 | % | 7 | % | 5 | % | 0 | % | 0 | % | 4 | % | ||||||||
Sepra products |
| 0 | % | 0 | % | 0 | % | 3 | % | 3 | % | 0 | % | 0 | % | 2 | % | ||||||||
Diagnostics/Genetics |
| 15 | % | 15 | % | 14 | % | 11 | % | 10 | % | 15 | % | 16 | % | 12 | % | ||||||||
Other |
| 8 | % | 6 | % | 7 | % | 9 | % | 9 | % | 5 | % | 6 | % | 7 | % | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total product and service gross margin |
| 74 | % | 74 | % | 74 | % | 73 | % | 73 | % | 76 | % | 75 | % | 73 | % | ||||||||
|
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|
|
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|
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|
|
|
|
|
|
| ||||||||
Total revenues |
| $ | 298,047 |
| $ | 314,045 |
| $ | 347,663 |
| $ | 436,978 |
| $ | 481,195 |
| $ | 981,926 |
| $ | 1,080,185 |
| $ | 1,579,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
SG&A expense as % of total revenue |
| 27 | % | 27 | % | 27 | % | 29 | % | 29 | % | 30 | % | 30 | % | 28 | % | ||||||||
R&D expense as % of total revenue |
| 19 | % | 18 | % | 17 | % | 19 | % | 19 | % | 19 | % | 21 | % | 18 | % | ||||||||
Operating income (loss) as % of total revenue |
| 21 | % | 25 | % | 26 | % | (17 | )% | 19 | % | 9 | % | 19 | % | 12 | % | ||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Provision for income taxes as % of profit (loss) before tax |
| 3 | % | 26 | % | 23 | % | (35 | )% | 24 | % | 29 | % | 14 | % | 46 | % | ||||||||
|
|
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|
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|
|
|
|
|
| ||||||||
Balance sheet trends: |
| 12/31/02 |
| 03/31/03 |
| 06/30/03 |
| 9/30/03(10) |
| 12/31/03(10) |
| 12/31/01 |
| 12/31/02 |
| 12/31/03(10) |
| ||||||||
Cash and all marketable securities |
| $ | 1,149,145 |
| $ | 1,205,571 |
| $ | 1,263,949 |
| $ | 869,912 |
| $ | 1,227,459 |
| $ | 1,041,500 |
| $ | 1,149,145 |
| $ | 1,227,459 |
|
Other current assets |
| 633,501 |
| 639,753 |
| 673,076 |
| 842,180 |
| 921,994 |
| 482,837 |
| 633,501 |
| 921,994 |
| ||||||||
Property, plant and equipment, net |
| 749,840 |
| 779,199 |
| 841,175 |
| 926,569 |
| 1,152,145 |
| 581,401 |
| 749,840 |
| 1,152,145 |
| ||||||||
Intangibles, net |
| 933,360 |
| 923,640 |
| 925,890 |
| 1,537,571 |
| 1,517,246 |
| 981,468 |
| 933,360 |
| 1,517,246 |
| ||||||||
Other assets |
| 89,955 |
| 106,746 |
| 122,556 |
| 151,084 |
| 200,481 |
| 138,048 |
| 89,955 |
| 200,481 |
| ||||||||
Total assets |
| $ | 3,555,801 |
| $ | 3,654,909 |
| $ | 3,826,646 |
| $ | 4,327,316 |
| $ | 5,019,325 |
| $ | 3,225,254 |
| $ | 3,555,801 |
| $ | 5,019,325 |
|
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|
|
|
|
|
| ||||||||
Current liabilities |
| $ | 274,872 |
| $ | 277,168 |
| $ | 284,563 |
| $ | 735,976 |
| $ | 469,170 |
| $ | 242,701 |
| $ | 274,872 |
| $ | 469,170 |
|
Noncurrent liabilities |
| 695,045 |
| 697,711 |
| 676,602 |
| 815,637 |
| 1,602,997 |
| 702,201 |
| 695,045 |
| 1,602,997 |
| ||||||||
Stockholders’ equity |
| 2,585,884 |
| 2,680,030 |
| 2,865,481 |
| 2,775,703 |
| 2,947,158 |
| 2,280,352 |
| 2,585,884 |
| 2,947,158 |
| ||||||||
Total liabilities and stockholders’ equity |
| $ | 3,555,801 |
| $ | 3,654,909 |
| $ | 3,826,646 |
| $ | 4,327,316 |
| $ | 5,019,325 |
| $ | 3,225,254 |
| $ | 3,555,801 |
| $ | 5,019,325 |
|
Notes:
(1) Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating earnings to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our earnings are allocated to Genzyme General. Earnings or losses allocated to Genzyme Biosurgery and Genzyme Molecular Oncology prior to July 1, 2003 remain allocated to those divisions and are not affected by the elimination of our tracking stock structure.
(2) Represents charges for the purchase of in-process research and development of $(158,000)K recorded in September 2003 related to our acquisition of SangStat Medical Corporation, $(8,768)K recorded in June 2002 related to our acquisition of Wyntek Diagnostics Inc. and $(86,800)K in September 2002 related to our acquisition of Novazyme Pharmaceuticals, Inc.
(3) Includes impairment charges of $(13,986)K recorded in December 2002 to write off engineering costs related to a proposed manufacturing facility in Framingham, Massachusetts and $(7,996)K recorded in September 2003 to write down the assets of our FocalSeal business.
(4) Represents the final adjustment to the net loss on the sale of our cardiothoracic devices business to Teleflex Inc. in accordance with the sale agreement. We recorded an estimated net loss of $(29,367)K in June 2003, which we allocated to the Biosurgery division. However, as a result of the elimination of our tracking stock capital structure effective July 1, 2003, the final adjustment to the net loss is allocated to Genzyme General.
(5) On January 1, 2002, we adopted SFAS No. 133, “Accounting for Derivative Financial Instruments and Hedging Activities,” as amended by SFAS No. 137 and SFAS No. 138. In accordance with the transition provisions of SFAS No. 133, Genzyme General recorded a cumulative adjustment of $4.2 million, net of tax, in its consolidated statements of operations for the year ended December 31, 2001 to recognize the fair value of warrants to purchase shares of GTC Biotherapeutics, Inc. (formerly Genzyme Transgenics Corporation) common stock held on January 1, 2001.
(6) Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating earnings to Biosurgery Stock and Molecular Oncology Stock. From that date forward, all of our earnings earnings are allocated to Genzyme General Stock. Earnings or losses allocated to Biosurgery Stock and Molecular Oncology Stock prior to July 1, 2003 remain allocated to those stocks and are not affected by the elimination of our tracking stock structure.
(7) For all periods except Q3-03 and 2001, includes the dilutive effect of options, stock purchase rights and warrants allocated to Genzyme General but excludes the dilutive effect of the assumed conversion of the 3% convertible subordinated debentures allocated to Genzyme General because the conditions for conversion had not been met.
(8) In Q3-03, excludes: (i) the dilutive effect of options, stock purchase rights and warrants to purchase shares of Genzyme General Stock because the effect would be anti-dilutive due to the net loss for the period; and (ii) the potentially dilutive effect of the assumed conversion of the 3% convertible subordinated notes allocated to Genzyme General because the conditions for conversion had not been met.
In 2001, includes the dilutive effect of options, stock purchase rights and warrants and the assumed conversion of the 5% convertible subordinated debentures and 5 1/4% convertible subordinated notes allocated to Genzyme General but excludes the assumed conversion of the convertible subordinated debentures and notes allocated to Genzyme General because the conditions for conversion had not been met.
(9) All weighted average shares data reflect the 2 for 1 split of Genzyme General Stock on June 1, 2001.
(10) Effective July 1, 2003, in connection with the elimination of our tracking stock structure, we ceased allocating assets and liabilities to Genzyme Biosurgery and Genzyme Molecular Oncology. From that date forward, all of our assets and liabilities are allocated to Genzyme General.
GENZYME 2004 GUIDANCE |
| (in millions) |
|
| GENZ (1) |
|
|
| 2004 GUIDANCE |
| |||||
DESCRIPTION |
| 2003A |
|
|
| Ranges |
| |||||
Cerezyme |
| $ | 739 |
|
|
| $ | 770 |
| $ | 790 |
|
Fabrazyme |
| 81 |
|
|
| 170 |
| 185 |
| |||
Thyrogen |
| 43 |
|
|
| 48 |
| 52 |
| |||
Other |
| 2 |
|
|
| 2 |
| 3 |
| |||
Total Therapeutics |
| 865 |
|
|
| 990 |
| 1,030 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Renal |
| 282 |
|
|
| 325 |
| 345 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Thymoglobulin |
| 30 |
|
|
| 90 |
| 100 |
| |||
Other Products |
| 14 |
|
|
| 40 |
| 45 |
| |||
Total Transplant |
| 44 |
|
|
| 130 |
| 145 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Synvisc |
| 56 |
|
|
| 110 |
| 115 |
| |||
Sepra |
| 26 |
|
|
| 58 |
| 62 |
| |||
Other Biosurgery |
| 38 |
|
|
| 45 |
| 48 |
| |||
Total Biosurgery |
| 119 |
|
|
| 215 |
| 225 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Diagnostic Products |
| 89 |
|
|
| 90 |
| 95 |
| |||
Genetic Testing |
| 102 |
|
|
| 110 |
| 120 |
| |||
Total Diag/Genetics |
| 191 |
|
|
| 200 |
| 215 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total Other |
| 79 |
|
|
| 65 |
| 70 |
| |||
TOTAL REVENUE (2) |
| $ | 1,581 |
|
|
| $ | 1,930 |
| $ | 2,030 |
|
|
|
|
|
|
|
|
|
|
| |||
GROSS MARGIN |
| 74 | % |
|
| 76 | % | 77 | % | |||
|
|
|
|
|
|
|
|
|
| |||
SGA |
| (444 | ) |
|
| (565 | ) | (575 | ) | |||
R&D |
| (290 | ) |
|
| (385 | ) | (395 | ) | |||
AMORT |
| (65 | ) |
|
| (103 | ) | (103 | ) | |||
|
|
|
|
|
|
|
|
|
| |||
NET INTEREST |
| 20 |
|
|
| (1 | ) | 1 |
| |||
NET OTHER |
| (14 | ) |
|
| (14 | ) | (15 | ) | |||
|
|
|
|
|
|
|
|
|
| |||
TAX RATE |
| 28 | % |
|
| 29 | % | 31 | % | |||
|
|
|
|
|
|
|
|
|
| |||
GENZ NON-GAAP EPS |
| $ | 1.21 |
| 2004 GAAP EPS |
| $ | 1.37 |
| $ | 1.47 |
|
GENZ NON-GAAP EPS ex. amort |
| $ | 1.39 |
| 2004 AMORTIZATION |
| $ | 0.28 |
| $ | 0.28 |
|
|
|
|
| 2004 NON-GAAP EPS |
| $ | 1.65 |
| $ | 1.75 |
| |
|
|
|
|
|
|
|
|
|
| |||
|
|
|
| WTD AVG SHARES O/S |
| 230 |
| 230 |
| |||
|
|
|
|
|
|
|
|
|
| |||
|
|
|
| CAPITAL EXPENDITURES |
| $ | 180 |
| $ | 200 |
| |
This financial guidance, which is provided as part of a press release dated February 19, 2004, is subject to all of the qualifications and limitations described therein. Actual results may differ from these forward-looking statements due to the numerous factors described in the press release.
Notes:
(1) Include 6 months (Q1 and Q2 2003) General Division and 6 months (Q3 and Q4 2004) Genzyme Corporation.
(2) Total revenues do not include estimated 2004 Aldurazyme revenues of $40 - $44M.
