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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
COMMISSION FILE NUMBER: 0-14680
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GENZYME CORPORATION
(Exact name of Registrant as specified in its charter)
MASSACHUSETTS
(State or other jurisdiction of 06-1047163
incorporation or organization) (I.R.S. Employer Identification Number)
ONE KENDALL SQUARE 02139
CAMBRIDGE, MASSACHUSETTS (Zip Code)
(Address of principal executive offices)
(617) 252-7500
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
GENZYME GENERAL DIVISION COMMON STOCK, $0.01 PAR VALUE ("GGD STOCK")
GENZYME TISSUE REPAIR DIVISION COMMON STOCK, $0.01 PAR VALUE ("GTR STOCK")
GENZYME MOLECULAR ONCOLOGY DIVISION COMMON STOCK, $0.01 PAR VALUE ("GMO STOCK")
GGD STOCK PURCHASE RIGHTS
GTR STOCK PURCHASE RIGHTS
GMO STOCK PURCHASE RIGHTS
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of voting stock held by non-affiliates of the Registrant
as of March 1, 1998: $2,470,667,321
Number of shares of the Registrant's GGD Stock outstanding as of March 1, 1998:
77,952,860
Number of shares of the Registrant's GTR Stock outstanding as of March 1, 1998:
20,022,438
Number of shares of the Registrant's GMO Stock outstanding as of March 1, 1998
3,909,908
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Reports to Stockholders for its General
Division, Tissue Repair Division and Molecular Oncology Division for the fiscal
year ended December 31, 1997 are incorporated by reference into Parts I and II
of this Form 10-K and portions of the Registrant's Proxy Statement for the
Annual Meeting of Stockholders to be held May 28, 1998 are incorporated by
reference into Part III of this Form 10-K.
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NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This Annual Report on Form 10-K for Genzyme Corporation ("Genzyme" or the
"Company") contains forward-looking statements concerning, among other things,
the Company's expected future revenues, operations and expenditures, estimates
of the potential markets for the Company's products and services, assessments of
competitors and potential competitors, projected timetables for the preclinical
and clinical development, regulatory approval and market introduction of the
Company's products and services and estimates of the capacity of manufacturing
and other facilities to support such products and services. All such
forward-looking statements are necessarily only estimates of future results and
the actual results achieved by the Company may differ materially from these
projections due to a number of factors, including (i) the Company's ability to
successfully complete preclinical and clinical development and obtain timely
regulatory approval and patent and other proprietary rights protection of its
products and services, (ii) the content and timing of decisions made by the U.S.
Food and Drug Administration (the "FDA") and other agencies regarding the
indications for which the Company's products may be approved, (iii) the accuracy
of the Company's estimates of the size and characteristics of markets to be
addressed by the Company's products and services, (iv) market acceptance of the
Company's products and services, (v) the Company's ability to obtain
reimbursement for its products from third-party payers, where appropriate, and
(vi) the accuracy of the Company's information concerning the products and
resources of competitors and potential competitors. See also "Factors Affecting
Future Operating Results" under the headings (x) "Management's Discussion and
Analysis of Genzyme General's Financial Condition and Results of Operations" and
"Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries'
Financial Condition and Results of Operations" in the Genzyme General Annual
Report for the fiscal year ended December 31, 1997 (the "1997 Genzyme General
Annual Report"), (y) "Management's Discussion and Analysis of Genzyme Tissue
Repair's Financial Condition and Results of Operations" in the Genzyme Tissue
Repair Annual Report for the fiscal year ended December 31, 1997 (the "1997 GTR
Annual Report") and (z) "Management's Discussion and Analysis of Genzyme
Molecular Oncology's Financial Condition and Results of Operations" in the
Genzyme Molecular Oncology Annual Report for the fiscal year ended December 31,
1997 (the "1997 GMO Annual Report") set forth in Exhibits 13.1, 13.2 and 13.3,
respectively, to this Annual Report on Form 10-K.
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PART I
ITEM 1. BUSINESS
INTRODUCTION
Genzyme is a biotechnology company that develops innovative products and
services for major unmet medical needs. Genzyme has three divisions: Genzyme
General Division ("Genzyme General"), which develops and markets therapeutic and
surgical products and diagnostic services and products; Genzyme Tissue Repair
Division ("Genzyme Tissue Repair" or "GTR"), which develops and markets
biological products for the treatment of cartilage damage, severe burns, chronic
skin ulcers and neurodegenerative diseases; and Genzyme Molecular Oncology
Division ("Genzyme Molecular Oncology" or "GMO"), which was formed in June 1997
in connection with the acquisition of PharmaGenics, Inc. ("PharmaGenics") and
develops gene-based approaches to cancer therapy through genomics, gene therapy
and a small molecule drug discovery program. Genzyme has three outstanding
series of common stock, each of which is intended to reflect the value and track
the performance of one of Genzyme's three divisions: Genzyme General Division
Common Stock ("GGD Stock"), Genzyme Tissue Repair Division Common Stock ("GTR
Stock") and Genzyme Molecular Oncology Division Common Stock ("GMO Stock"). GGD
Stock and GTR Stock are listed on the Nasdaq National Market under the symbols
"GENZ" and "GENZL," respectively. GMO Stock is not yet publicly traded.
For purposes of financial statement presentation, all of the Company's
programs, products, assets and liabilities are allocated to Genzyme General,
Genzyme Tissue Repair or Genzyme Molecular Oncology. Notwithstanding this
allocation, Genzyme continues to hold title to all of the assets and is
responsible for all of the liabilities allocated to each of the divisions.
Holders of GGD Stock, GTR Stock and GMO Stock have no specific claim against the
assets attributed to the division whose performance is associated with the
series of stock they hold. Liabilities or contingencies of any division that
affect Genzyme's resources or financial condition could affect the financial
condition or results of operations of all three divisions.
Cerezyme(R), Ceredase(R), Thyrogen(R), Seprafilm(R), Pleur-evac(R),
Thora-Klex(R), Tevdek(R), InSight(R), MASDA(R) and Vianain(R) are registered
trademarks of Genzyme. Sepracoat(TM), Sepragel(TM), EndoCABG(TM), Sahara(TM),
N-geneous LDL(TM), N-geneous HDL(TM), Contrast(TM), Carticel(TM) and SAGE(TM)are
trademarks and Epicel(sm)and Epicel ASAP(sm) are service marks of Genzyme.
RenaGel(R) is a registered trademark of GelTex Pharmaceuticals, Inc. ("GelTex").
NeuroCell(TM)-PD and NeuroCell(TM)-HD are trademarks of Diacrin, Inc.
("Diacrin"). Provisc(R) is a registered trademark of Alcon Laboratories, Inc.
("Alcon"). Pulmozyme(R) is a registered trademark of Genentech, Inc.
GENZYME GENERAL -- PRODUCTS AND DEVELOPMENT PROGRAMS
Recent Developments
In January 1998, Genzyme General announced strategic changes in its
pharmaceuticals and surgical products business units. Genzyme General will focus
its efforts within three broad business areas -- therapeutics, surgical products
and diagnostics. The new diagnostics business area comprises two units, genetic
diagnostic services and diagnostic products. The business of the pharmaceuticals
unit has been redirected toward its higher-value products, including
phospholipids, peptides and hyaluronic acid ("HA"), for drug delivery and other
purposes. The fine chemicals, bulk pharmaceuticals such as clindamycin
phosphate, and dietary supplements such as melatonin businesses have been
discontinued. The pharmaceuticals unit's phospholipid and peptide products for
drug delivery have been incorporated into the therapeutics business area and its
HA product for ophthalmic use is included in the surgical products business
unit. Additionally, the surgical products unit has discontinued development of
Sepracoat(TM) coating solution for the U.S. market.
Therapeutics
Cerezyme(R) Enzyme (Imiglucerase Injection)/Ceredase(R) Enzyme (Alglucerase
Injection). Treatment with Cerezyme(R) enzyme or Ceredase(R) enzyme replacement
therapy currently represents the only safe and effective treatment for Type I
Gaucher disease, a seriously debilitating, sometimes fatal, genetic disorder
caused by a deficiency in an important enzyme in the body called
glucocerebrosidase ("GCR"). This deficiency results in the accumulation of the
lipid glucocerebroside in the body. The disease is characterized
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by an enlarged liver or spleen, anemia, bleeding problems, bone and joint pain,
fatigue and orthopedic complications such as repeated fractures and bone
erosion. Ceredase(R) enzyme is a modified form of human GCR in which
glycoprotein remodeling technology has been used to target GCR to the cells
where the lipid accumulation occurs. Cerezyme(R) enzyme is a recombinant form of
GCR which has been remodeled in a similar manner.
Genzyme General is marketing these products directly to physicians,
hospitals and treatment centers worldwide through a highly trained sales force.
This marketing effort is directed at identifying and initiating treatment for
the 5,000 Gaucher patients Genzyme General believes exist worldwide. Currently,
approximately 44% of these patients are receiving treatment. Cerezyme(R) enzyme
and Ceredase(R) enzyme, together, are available in approximately 50 countries
worldwide. Cerezyme(R) enzyme has received marketing approval in five countries
as well as the 15 countries forming the European Union ("EU"). Ceredase(R)
enzyme has received marketing approval in 13 countries. The Company's results of
operations are highly dependent on sales of these products which, for 1997,
totaled approximately $333.7 million.
Genzyme General produces Ceredase(R) enzyme from an extract of human
placental tissue supplied by Pasteur Merieux, a French company that is the only
significant commercial source of this material. Historically, the supply
available was not sufficient to produce enough Ceredase(R) enzyme to treat all
known patients. To address supply constraints, Genzyme developed Cerezyme(R)
enzyme and received approval from the FDA in October 1996 to manufacture
Cerezyme(R) enzyme in Boston, Massachusetts. Patients receiving Ceredase(R)
enzyme are currently being converted to Cerezyme(R) enzyme. Genzyme General will
continue to manufacture Ceredase(R) enzyme until the process of patient
conversions is completed. The conversion process is approximately 97% completed
in the U.S. and is expected to be nearly completed on a worldwide basis by the
end of 1998.
Synthetic Phospholipids. Phospholipids are the major structural components
of cell membranes. They are useful in drug delivery systems, emulsion
formulations and as components of pharmaceutical products such as liposomes.
Genzyme General has developed proprietary technology for the large scale
manufacture of synthetic phospholipids with high purity and consistency and
currently produces and sells synthetic phospholipids to pharmaceutical and
biotechnology companies for use in the formulation and delivery of certain of
their products.
Synthetic Peptides and Amino Acid Derivatives. Synthetic peptides are a
class of biologically active compounds comprised of chains of amino acids. Many
of these compounds have applications as active drug compounds and are used by
the pharmaceutical industry in final dosage form preparations. Genzyme General
is a commercial scale contract manufacturer for third parties of synthetic
peptides for many such applications. Amino acid derivatives are the materials
used in the production of synthetic peptides. In addition to producing these
materials for use in its own peptide manufacturing processes, Genzyme General
sells amino acid derivatives to the pharmaceutical industry.
RenaGel(R) Non-Absorbed Phosphate Binder. RenaGel(R) phosphate binder is
designed to be used in the treatment of chronic kidney failure patients to
remove dietary phosphorus in the gastrointestinal tract without being absorbed
into the bloodstream. Elevated serum phosphorus levels can cause serious
complications in chronic kidney failure patients, such as renal bone disease and
soft tissue and vascular calcifications. There are an estimated 214,000
end-stage renal failure patients in the U.S., 95% of whom receive a phosphate
control product, and 180,000 end-stage renal failure patents in Europe. Genzyme
and GelTex have formed a joint venture for the final development and
commercialization of RenaGel(R) phosphate binder. Genzyme General, as the
exclusive distributor for the joint venture, will commercialize RenaGel(R)
phosphate binder worldwide, excluding Japan and Pacific Rim countries, upon
receipt of regulatory approvals. An application for marketing approval of a new
drug ("NDA") was submitted to the FDA for RenaGel(R) phosphate binder in
November 1997, and the FDA determined that the NDA was acceptable for filing.
RenaGel(R) phosphate binder also received "Part B" status from the European
Medicines Evaluation Agency ("EMEA"), which status is assigned to innovative
medicinal products having novel characteristics, and means that only one
application
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need be submitted in order to obtain marketing approval in all 15 EU countries.
Applications for marketing authorization in Europe and Canada are expected to be
submitted in 1998. See Note H., "Investments" to the Genzyme Corporation and
Subsidiaries Consolidated Financial Statements (the "Consolidated Financial
Statements") for a description of the joint venture between Genzyme and GelTex.
Thyrogen(R) Hormone. Genzyme General has developed Thyrogen(R) hormone, a
recombinant form of human thyroid stimulating hormone, for use as an adjunct to
the approximately 100,000 to 200,000 diagnostic and therapeutic procedures
undertaken each year to detect and treat metastases of thyroid cancer.
Thyrogen(R) hormone is designed to allow patients to continue taking their
thyroid hormone supplements while they are being screened for metastases,
thereby allowing patients to avoid the debilitating effects of hypothyroidism.
An NDA for Thyrogen(R) hormone was submitted to the FDA on December 12, 1997 for
the diagnostic indication. The FDA has accepted the NDA under its priority
review process, which requires the agency to provide a letter to Genzyme
indicating approval or non-approval within six months of the filing date. FDA
priority review is reserved for therapies that have the potential to improve
treatments for particular diseases or conditions substantially. A marketing
authorization application for Thyrogen(R) hormone was also filed in Europe in
December 1997. Genzyme General expects to file a new drug submission for
Thyrogen(R) hormone in Canada in 1998.
Antithrombin III. Antithrombin III is a plasma protein that helps regulate
blood clotting. Genzyme and Genzyme Transgenics Corporation ("GTC") have formed
a joint venture for the development and commercialization of transgenically
produced recombinant human antithrombin III ("ATIII"). Transgenic ATIII is
produced by GTC in goat milk. A Phase II clinical trial of ATIII was completed
in December 1997, confirming safety of ATIII at all administered doses and
supporting its ability to affect the anticoagulation response to heparin in
patients undergoing coronary artery bypass grafting ("CABG"). The companies will
conduct Phase III clinical trials of ATIII in 1998. Subject to the receipt of
regulatory approvals, Genzyme General will market ATIII worldwide, excluding
Asia, as the exclusive distributor for the joint venture. Genzyme owns
approximately 43% of the outstanding shares of GTC common stock. See Note H.,
"Investments" to the Consolidated Financial Statements for a description of the
relationship between Genzyme and GTC, including the joint venture.
Other Development Programs. In addition to the products and programs
described above, Genzyme General has several therapeutic products in various
stages of the research, development and clinical testing.
PRODUCT/PROGRAM DESCRIPTION
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CFTR/adenovirus vector Genzyme General is developing a gene therapy approach using
adenovirus vectors to correct the basic defect in cystic
fibrosis ("CF") cells whereby the mutant genes are
augmented with genes that would enable the patient's cells
to produce normal cystic fibrosis transmembrane conductance
regulator ("CFTR") protein.
CFTR/lipid vector Genzyme General is developing lipid-DNA complexes as
vectors for an alternative gene therapy approach to the
treatment of CF.
Ex vivo stem cells/retrovirus vector Through its collaborations with the University of
Pittsburgh and IntroGene B.V., Genzyme General is
developing a hematopoietic stem cell gene therapy for
Gaucher disease.
Various proprietary vectors for gene Through its collaborations with Duke University and the
therapy University of California at San Diego, Genzyme General is
developing gene therapies for congestive heart failure,
vein graft failure and restenosis, as well as a gene
therapy application to protect heart tissue from oxygen
damage that can occur during various types of cardiac
procedures.
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PRODUCT/PROGRAM DESCRIPTION
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Alpha-Gal Genzyme General is developing a recombinant form of the
human enzyme Alpha-galactosidase ("Alpha-Gal") as a
treatment for Fabry disease, a usually fatal inherited
disorder of lipid metabolism.
Prolactin Genzyme General is developing a recombinant form of the
human hormone prolactin for use as an immune stimulant.
Potential clinical indications include
immunologic/hematopoietic reconstitution for
myelosuppressed and immunocompromised patient populations
and use as a vaccine adjuvant.
Chitinase Genzyme General is evaluating recombinant human chitinase
as a therapeutic agent for treating systemic fungal
infections, which are often observed in immunosuppressed
individuals.
Surgical Products
Genzyme General develops, manufactures and markets surgical products for
four principal business lines: the Sepra Products (described below),
cardiovascular fluid management systems (chest drainage and autotransfusion
systems), surgical closure systems (sutures and needles) and surgical
instruments (cardiovascular punches and other cardiovascular, plastic surgery,
endoscopic and general instruments). Genzyme General's sales force markets
products directly to cardiac, general, gynecologic, colon and rectal surgeons
and hospital purchasing departments throughout the U.S. and Europe.
Sepra Products. Genzyme General, on behalf of a joint venture (the "Joint
Venture") between Genzyme Development Partners, L.P. ("GDP") and Genzyme, is
developing and marketing products for use during surgical procedures to limit
the formation of postoperative adhesions (the "Sepra Products"). The Sepra
Products are based on HA, a biopolymer produced naturally by the body to
lubricate and protect tissue. Under the terms of various agreements between GDP
and Genzyme, GDP has the exclusive right to sell the Sepra Products in the U.S.
and Canada though the Joint Venture. Genzyme has the exclusive right to sell
these products outside the U.S. and Canada subject to a royalty on European
sales under certain circumstances. In March 1997, Genzyme and the Joint Venture
entered into an exclusive marketing and distribution agreement whereby Genzyme
acts as the sole distributor of the Sepra Products on behalf of the Joint
Venture.
The Sepra Products portfolio is primarily comprised of Seprafilm(R)
bioresorbable membrane, Sepragel(TM) bioresorbable gel and Sepracoat(TM) coating
solution. Seprafilm(R) bioresorbable membrane is a solid formulation of modified
HA that is used to separate and protect tissues and organs that have been
damaged during surgery. During the third quarter of 1996, the FDA granted
approval to market Seprafilm(R) for use in any open abdominal or pelvic surgery.
Genzyme General launched a broad U.S. marketing effort for Seprafilm(R) during
the fourth quarter of 1996 using the sales force it acquired in connection with
Genzyme's acquisition of Deknatel Snowden Pencer, Inc. in 1996. Genzyme General
is initially targeting the top 300 hospitals that perform 27% of the colorectal
and general abdominal surgeries in which Seprafilm(R) could be used in the
United States. Genzyme is focusing on high-risk colorectal surgeries, where
adhesions are a particular concern. Internationally, Genzyme launched sales of
Seprafilm(R) in Europe in 1996 after the product was granted the Approval of
Conformity Certificate in accordance with the European Medical Devices Directive
(a "CE Mark"). Genzyme also began sales of Seprafilm(R) in Canada and Israel in
1997. Japan granted Seprafilm(R) regulatory approval in 1997, and working with
Kaken Pharmaceuticals Co., Ltd., Genzyme plans to launch Seprafilm(R) in Japan
in 1998.
Because Seprafilm(R) represents such a notable departure from the
techniques of the past, Genzyme General has faced challenges in establishing
Seprafilm(R) as the new standard of care in the surgical industry. To improve
its marketing efforts, Genzyme General hired and trained 20 Seprafilm(R) sales
specialists in 1997. Genzyme General is also initiating a clinical trial
designed to measure long-term outcomes related to small bowel obstruction in
patients who receive Seprafilm(R) during surgery compared to those who do not,
thereby providing information about Seprafilm(R)'s cost effectiveness and role
in reducing intestinal obstructions. Genzyme General is currently developing a
second generation Seprafilm(R) product, which is designed to have
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improved elasticity and ease of use suitable for laparoscopic procedures.
Genzyme General plans to file a supplemental Pre-Marketing Approval application
("PMA") with the FDA and apply for a CE Mark for the second generation
Seprafilm(R) product in 1998.
Sepragel(TM) bioresorbable gel is a highly viscous gel form of modified HA
and is intended to be used in laparoscopic procedures and on tissue surfaces
that are inaccessible to Seprafilm(R). Genzyme is continuing development of an
alternative formulation for Sepragel(TM) with improved properties. Once work on
the formulation is completed, additional patients are expected to be enrolled
over the next 12 months in the Phase I clinical trial.
Sepracoat(TM) coating solution is a liquid formulation of HA that, when
used to coat tissues and organ surfaces at the start of and throughout surgical
procedures, forms a temporary physical barrier that may protect tissues during
surgery. In January 1996, Genzyme filed a PMA with the FDA to market
Sepracoat(TM) for use in abdominal, pelvic and cardio-thoracic surgical
procedures. In 1997, an advisory panel to the FDA recommended that Genzyme not
be granted approval to market Sepracoat(TM) for the reduction of adhesions in
abdominal and pelvic surgery. Genzyme General has since ceased development of
Sepracoat(TM) for the U.S. market.
Genzyme General believes that successful initial market penetration and
subsequent maintenance of market share for Seprafilm(R) require a specialized
hospital-based sales force and has deployed its surgical products sales force
and additional sales specialists to accelerate the market introduction of these
products in the U.S. and Europe. Substantial additional efforts to educate
surgeons and hospital administrators as to the benefits of these products will
also be required in order for the products to penetrate target markets and gain
broad market acceptance. There can be no assurance that Genzyme General will be
successful in its efforts to implement a commercialization strategy for the
Sepra Products. See Note L., "Research and Development Agreements" to the
Consolidated Financial Statements for a description of the relationship between
Genzyme, GDP and the Joint Venture and details concerning funding of the
development of the Sepra Products.
Bulk and Pharmaceutical Grade Hyaluronic Acid. Genzyme General currently
produces and sells bulk HA for a number of applications. Under an agreement with
Alcon, Genzyme General supplies pharmaceutical grade HA powder to Alcon for
incorporation into Provisc(R), an HA-based ophthalmic surgical aid product,
which Alcon introduced in 1994. Genzyme General also receives a royalty based on
Alcon's product sales. In addition, HA is sold to a number of customers for
various research and development applications.
Cardiovascular Fluid Management Systems. This product line consists
primarily of self-contained, disposable chest drainage devices used to drain
blood from the chest cavity following open heart surgery, other surgical
procedures and trauma. Genzyme General also sells autotransfusion devices that
allow the collection of blood shed by the patient and its reinfusion
postoperatively, thus eliminating the risks associated with blood transfusions.
Genzyme General's self-contained, disposable chest drainage unit, Pleur-evac(R),
was introduced in 1967 and is the market leader in chest drainage devices.
Genzyme General also sells a line of dry suction-controlled chest drainage and
autotransfusion devices under the Sahara(TM) and Thora-Klex(R) brand names.
Surgical Closure Systems. Surgical sutures, including Tevdek(R) and Silkey
Polydek, are sold in packs consisting of suture/needle combinations and are
Genzyme General's oldest product line. Genzyme General emphasizes high quality
specialty sutures for cardiovascular and plastic surgery, utilizing special
materials, advanced metallurgy and packaging innovations. Approximately 50% of
Genzyme General's U.S. sales of surgical products are attributable to high
margin "specials" in which individual surgeons order nonstandard products and
customized suture/needle combinations for specific procedures.
Surgical Instruments. Genzyme General sells cardiovascular punches, which
are used during coronary artery bypass surgery to make cleanly cut holes, and
hand-held, reusable instruments such as needleholders, scissors, forceps,
graspers, dissectors and retractors. Genzyme General's instruments are used in
cardiovascular, plastic, endoscopic and general surgery and are sold directly to
the surgeon, the key decision maker on purchases of specialty instruments.
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In September 1997, the surgical products business area created a unit
focused on the development and marketing of broad and flexible systems for
minimally invasive cardiovascular procedures. Genzyme General intends to
leverage the core products under the Deknatel and Snowden Pencer brand names by
combining these disposable and reusable devises with new minimally invasive
cardiovascular systems. Genzyme General believes that up to 30% of the 430,000
conventional CABG and valve replacement procedures performed in the U.S. will be
performed in a minimally invasive fashion in the next five years.
Genzyme General entered into two agreements to expand its line of minimally
invasive cardiac systems and to extend its use to other cardiac procedures.
Under one agreement, this product line will be expanded so that surgeons can
stop the heart with the aid of an aortic occlusion balloon developed by the Cook
Group. Genzyme General will market the balloons exclusively and expects to begin
offering the balloons as part of Genzyme General's line of instruments for use
in endoscopic CABG procedures, called the EndoCABG(TM) System, in the first half
of 1998. The other agreement covers a product development and marketing alliance
with CarboMedics, Inc. ("CarboMedics"), pursuant to which the companies are
developing a system of instrumentation and supplies which will allow cardiac
surgeons to introduce CarboMedics's mechanical heart valves through a small
incision in the patient's chest wall.
Diagnostics
Genetic Diagnostic Services
Genzyme General applies advanced biotechnology to develop and provide high
quality, sophisticated genetic diagnostic services to physicians, hospitals,
universities, medical centers, clinical laboratories, genetic centers and
managed care organizations in the U.S. and internationally through a national
network of laboratories and a direct sales force. Genzyme General offers three
types of genetic diagnostic services: biochemical testing, classical and
molecular cytogenetic testing, and DNA testing. Biochemical testing services
consist primarily of a widely used screening test (AFP3) to determine if further
prenatal genetic testing is appropriate. Classical and molecular cytogenetic
testing involves the analysis of fetal cells obtained through amniocentesis or
chorionic villi sampling ("CVS") to evaluate chromosomal abnormalities. DNA
testing is performed to determine the likelihood that the subject has, or is a
carrier for, a specific genetic disorder, such as CF, Fragile X syndrome,
Huntington's disease, spinal muscular atrophy, polycystic kidney disease, sickle
cell anemia, hemophilia and Gaucher disease. Genzyme General employs over 70
board certified genetics professionals who interpret results and provide genetic
counseling and support services to medical practitioners and their patients.
InSight(R) Test. Genzyme General's InSight(R) test is a faster cytogenetic
test based on in situ hybridization of chromosome-specific DNA probes. This
technology permits identification of the most frequently occurring chromosomal
abnormalities within 48 hours, as compared to the one to three weeks required to
perform classical cytogenetic testing (karyotyping). The InSight(R) analysis is
provided in conjunction with a complete karyotype.
MASDA(R) Service. Genzyme General's patented Multiplex Allele-Specific
Diagnostic Assay (the "MASDA(R) Service") can analyze in a single assay up to
500 DNA samples simultaneously for over 100 known gene mutations. The MASDA(R)
Service not only analyzes different patient samples for different disease
indications in a single assay, it also identifies multiple mutations in one or
more genes in a single patient's DNA sample. Genzyme General is pursuing a
number of commercialization strategies for the MASDA(R) Service. In February
1997, Genzyme General launched a 70-mutation CF test, called the "CF-70" test.
Previous CF tests could only identify 32 or fewer mutations, thereby producing
negative results for people with rare mutations. In addition, the MASDA(R)
Service is also being used to provide genetic profiling services for clinical
trials being conducted by pharmaceutical companies.
Genzyme General has established a federally certified clinical trials
laboratory to support diagnostic assay development using the MASDA(R) Service.
In addition, the laboratory provides population segmentation services for
internal drug development programs and external customers. These studies are
designed to identify genetic markers that might provide information about the
severity of a disease as well as the likelihood that a patient might respond
either favorably or adversely to a therapy.
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Development Programs. Genzyme General is developing additional platforms
for complex mutational analysis and conducts major research and development
programs in such areas as genomics and rare cell separation and analysis
methods. For example, Genzyme General is continuing its efforts to develop
methods and procedures to isolate and genetically analyze fetal cells obtained
from maternal blood samples. Fetal cells obtained from maternal blood serum
could potentially be used in lieu of cells derived from amniotic fluid or
chorionic villi for genetic testing, thereby avoiding the risk associated with
amniocentesis or CVS. Genzyme General also is developing a technology called
cleavage and ligation associated mutation specific sequencing, or "CLAMSS," to
detect and identify unknown mutations in genes.
Diagnostic Products
Genzyme General is a primary supplier of diagnostic components (enzymes,
substrates, antibodies and antigens), bulk reagents and devices to manufacturers
of clinical diagnostic reagents and kits as well as directly to clinical
reference laboratories. It also manufactures and sells a broad line of antibody
and antigen-based ELISA test kits. In addition, Genzyme General distributes a
broad product line of research products to academic, industrial and governmental
laboratories for use in immunology and cell biology and has developed
manufacturing expertise in enzyme fermentation, purification, reagent
formulation and immunoassay test development.
Cardiovascular Products. Genzyme General sells devices and reagents for
the quantification of low-density lipoprotein ("LDL") and high-density
lipoprotein ("HDL") cholesterol levels. In September 1997, Genzyme General
introduced a second-generation homogenous direct LDL cholesterol test, called
N-geneous LDL(TM), and a second-generation homogenous HDL test, N-geneous
HDL(TM), in the U.S. Both of the new tests accurately measure cholesterol levels
that are present in a patient's serum or plasma directly without the labor
intensive pretreatment steps that were needed previously and are easily
adaptable to automated chemistry analyzers. N-geneous LDL(TM) is the only
homogenous LDL test available for sale in the U.S. Both tests are being
distributed in the U.S. by Genzyme General under a worldwide agreement with the
manufacturer of the tests, Daiichi Pure Chemicals Co., Ltd., of Tokyo. In
addition to the U.S., Genzyme General is also the exclusive marketing partner
for the N-geneous LDL(TM) and N-geneous HDL(TM) tests in Europe and the rest of
the world, with the exception of Asia, where Genzyme holds co-exclusive
distribution rights.
Diagnostic Intermediates. Genzyme General produces and sells intermediates
such as diagnostic enzymes, substrates and reagents for use in diagnostic kits
used for blood analysis in clinical chemistry laboratories. One area of emphasis
is pancreatic function, where Genzyme General provides enzymes, substrates, bulk
reagents and patented methodologies for amylase and lipase determination to
diagnostic kit manufacturers. Genzyme General is also a primary supplier of
cholesterol enzymes used in testing for coronary heart disease. Sales of its
diagnostic intermediates are made to over 200 manufacturers and users of
diagnostic kits worldwide through its own technical sales representatives in the
U.S. and Europe and through distributors in Japan.
ELISA Test Kits. Genzyme General manufactures and sells a broad range of
ELISA test kits for infectious disease and endocrinology determinations. In
addition, it supplies monoclonal and polyclonal antibodies plus other
immunoassay raw materials to immunodiagnostic kit manufacturers. Patented
Contrast(TM) rapid tests for pregnancy, Strep A and infectious mononucleosis
determination are also becoming key contributors to Genzyme Generals' product
portfolio.
Research Products. The diagnostics business unit's research products
consist of a comprehensive line of cytokines, growth factors, antibodies,
proteins and cytokine and apoptosis ELISA systems which play an integral role in
activating and modulating the body's immune system. These research products are
used primarily to conduct research in the areas of immunology and cellular
biology.
GENZYME TISSUE REPAIR -- PRODUCTS AND DEVELOPMENT PRODUCTS
GTR is a leading developer of biological products for the treatment of
cartilage damage, severe burns, chronic ulcers, and neurodegenerative diseases.
GTR believes that strong capabilities in three groups of core
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technologies -- cell processing, therapeutic protein development and
biomaterials -- enhance its ability to successfully develop and market a
portfolio of novel products and services in the field of tissue repair.
Carticel(TM) Autologous Cultured Chondrocytes ("Carticel(TM) AuCC"). GTR's
lead product, Carticel(TM) AuCC, is used to treat damaged articular knee
cartilage. GTR employs a proprietary process to grow a patient's own
("autologous") cartilage cells for use in repairing damaged knee cartilage. In
addition to cartilage cell processing, GTR trains orthopedic surgeons, collects
and analyzes outcomes data and assists physicians and patients in obtaining
reimbursements from third party payers. GTR's comprehensive surgeon training
program consists of lectures and hands-on bioskills sessions involving practice
of the surgical procedures (including biopsy harvesting, implantation and
surgical follow-up), as well as an orientation on reimbursement and billing
procedures. Since inception, GTR has trained 1,988 surgeons in this program.
In August 1997, the FDA granted GTR a biologics license (a "BLA") for the
manufacture of Carticel(TM) AuCC for use in repairing clinically significant
cartilage defects of the femoral condyle. Carticel(TM) AuCC is not indicated for
the treatment of cartilage damage associated with osteoarthritis. GTR is making
a substantial effort to establish the procedure known as autologous chondrocyte
implantation ("ACI") using Carticel(TM) AuCC as the new standard of care for
repair of cartilage damage to the femoral condyle. As part of these efforts, GTR
shifted its focus in 1996 to increasing the rate of reimbursement approvals by
establishing an educational program for third party payers. As a result of this
program, several payers have established protocols for selecting patients and
determining eligibility. Approximately 101 million people in the U.S. were
covered by health plans with protocols for reviewing Carticel(TM) AuCC
reimbursement requests as of December 31, 1997. In addition, one-third of GTR's
59-person U.S. sales and reimbursement staff is involved directly in claims
processing and educating insurers about the appropriate uses of the Carticel(TM)
AuCC. The commercial success of Carticel(TM) AuCC will depend materially on the
ability of GTR to increase the approval rate for reimbursement of the product
from third party payers. Although GTR has seen a substantial increase in the
development of broad policy coverage for Carticel(TM) AuCC since receipt of the
BLA, there can be no assurance that the recent increase in reimbursement
approvals will continue.
GTR also believes that successful commercialization of Carticel(TM) AuCC is
dependent on its being accepted by and incorporated into routine use by a large
number of orthopedic surgeons. GTR markets Carticel(TM) AuCC to orthopedic
surgeons in the U.S. and Europe directly and through distributors. GTR's sales
force promotes Carticel(TM) AuCC by contacting and educating orthopedic surgeons
about the service and maintaining an ongoing relationship with each surgeon who
receives training from GTR; assisting physicians with administrative, clinical
and reimbursement issues involved in arranging to perform the biopsy and
implantation procedures at hospitals; and assisting physicians in obtaining the
necessary approval from the hospital's Institutional Review Board to collect
outcomes data in accordance with GTR's protocol. GTR expects that its revenues
from the sale of Carticel(TM) AuCC may be lower in the summer months as fewer
operative procedures are typically performed during those months.
GTR is required by the FDA to conduct two confirmatory post-marketing
studies to gain a better understanding of the role of implanted cells in ACI and
to assess longer term clinical results. Each of these studies is required to
demonstrate that Carticel(TM) AuCC is superior to the alternatives studied. The
first, a five year, randomized study, will compare outcomes of patients treated
with Carticel(TM) AuCC to those of patients treated with abrasion and
microfracture -- two common alternative treatments for articular cartilage
defects. The second study will be a smaller scale study in which patients will
undergo the ACI biopsy and implantation procedure, but will randomly be assigned
to receive either Carticel(TM) AuCC or a placebo. This study is targeted to last
three to five years, not including a 36-month follow-up.
Epicel(sm) Service. GTR's Epicel(sm) Service, which provides cultured
autologous skin cells as permanent skin replacement for patients with severe
burns, was first introduced in 1987. These epidermal grafts are grown from a
patient's own skin cells and, therefore, are not rejected by the patient's
immune system. Starting with a patient biopsy about the size of a postage stamp,
GTR can grow enough skin grafts in three to four weeks to cover a patient's
entire body surface area.
Most burn wounds involving less than 60% body surface area are covered with
conventional skin grafts within the three to four weeks it currently takes to
grow skin grafts produced using the Epicel(sm) Service.
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Therefore, GTR believes that the primary candidates for the Epicel(sm) Service
are the approximately 400 patients each year in the U.S. who survive burn
injuries covering more than 60% of their body surface area. GTR markets the
Epicel(sm) Service to burn centers in the U.S. and parts of Europe through its
own direct sales force and in Japan through a distributor.
NeuroCell(TM)-PD and NeuroCell(TM)-HD. GTR, through a joint venture with
Diacrin, is developing NeuroCell(TM)-PD for the treatment of Parkinson's disease
and NeuroCell(TM)-HD for the treatment of Huntington's disease. GTR estimates
that the patient population with advanced Parkinson's disease ranges from
115,000 - 155,000 in the U.S., and that the U.S. patient population with
Huntington's disease is approximately 25,000. Both of the NeuroCell(TM) products
involve the implantation of fetal porcine brain cells into patients to replace
damaged brain tissue. The joint venture has a license to use patented technology
developed at Massachusetts General Hospital ("MGH") to protect the NeuroCell(TM)
products from the host's immune system without the need for chronic, lifetime
administration of immunosuppressive drugs.
In January 1998, the joint venture received FDA approval to initiate
patient recruitment in a Phase II/III trial of NeuroCell(TM)-PD. Enrollment in a
Phase I clinical trial of NeuroCell(TM)-PD involving 12 patients was completed
in October 1996. Patients in this trial are being evaluated at periodic
intervals to assess long term clinical outcomes. The results at six months
post-treatment showed marked improvement in symptoms and restored efficacy of
the drug levodopa, which the brain converts to dopamine, in ten of the 12
patients. An analysis of the ten evaluable patients also demonstrated
statistically significant improvement in mean scores on the Unified Parkinson's
Disease Rating Scale ("UPDRS") six months post-treatment. Without treatment,
scores on UPDRS generally deteriorate over time as the disease progresses. These
results are similar to those obtained by other researchers treating Parkinson's
patients with human fetal cells. Commercialization of treatments using human
fetal cells is not practical, however, because of ethical concerns, supply
constraints and inconsistent quality.
A histological study published in the March 1997 issue of Nature Medicine
showed that NeuroCell(TM)-PD cells transplanted into one of the patients in the
Phase I clinical trial survived for more than seven months and showed signs of
reconnecting nerve tissue damaged by the disease. The study marks the first
documentation of survival of cells transplanted from another species into the
human brain and of the appropriate growth of non-human neurons for a potential
therapeutic response. The patient, a 69-year old man, died of a pulmonary
embolism unrelated to treatment with NeuroCell(TM)-PD. The brain of the patient
showed minimal signs of inflammation or rejection of the foreign tissue.
The results of a Phase I clinical trial of NeuroCell(TM)-HD analyzed at
three months post-treatment showed no observable improvements in patient
outcomes. GTR believes, however, that such improvements may require a longer
period to become evident. See Note H., "Investments" to the Consolidated
Financial Statements for a description of the joint venture between Genzyme and
Diacrin.
Other Development Programs. GTR has a number of ongoing development
programs supporting Carticel(TM) AuCC. GTR is conducting basic research and
development into the biology of cartilage and the cartilage repair process. The
objective of this research is to identify biologic materials that promote more
rapid regeneration of articular cartilage, to develop new methods for the repair
of arthritic joints and large surface area cartilage defects and to enable the
ACI procedure to be performed less invasively. GTR is also committing resources
to meet requirements specified by the FDA for validation of certain product
manufacturing parameters. GTR is also developing recombinant Transforming Growth
Factor Beta(2)("TGF-Beta(2)") for the treatment of chronic skin ulcers and as an
intravenous injectable product for administration to multiple sclerosis ("MS")
patients for the prevention of autoimmune damage to nerve tissue.
GENZYME MOLECULAR ONCOLOGY -- PRODUCTS AND DEVELOPMENT PROGRAMS
GMO is engaged in the development and commercialization of novel cancer
therapeutics using an integrated, gene-based approach. GMO's products and
services include: a genomics service business based on its patented Serial
Analysis of Gene Expression, or "SAGE(TM) ", technology, gene therapy programs
focused on gene immunotherapy and tumor targeting, and a drug discovery program
to identify small molecules that interact with cancer-related targets, which
includes access to Genzyme's library of over one million small
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molecule compounds. GMO was formed in June 1997 by acquiring PharmaGenics and
combining it with several of Genzyme's ongoing programs in the field of
oncology.
SAGE(TM)
SAGE(TM) is a high throughput, high efficiency method of simultaneously
detecting and measuring the expression level of most, and possibly all, genes
expressed in a cell at a given time. Differential gene expression is the
comparison of how, when and in what amounts genes are expressed in a given
tissue or cell line versus another (e.g., cancer tissue versus normal tissue).
GMO has an exclusive, worldwide license to the SAGE(TM) technology from the
Johns Hopkins University School of Medicine ("JHU"). In December 1997, the U.S.
Patent and Trademark Office ("PTO") issued a patent covering the methodology by
which SAGE(TM) identifies and measures gene expression.
GMO believes that an understanding of differential gene expression will
accelerate the development of more effective cancer and other therapeutics and
diagnostics. Potential uses of SAGE(TM) in evaluating therapeutic targets
include comparison of disease tissue with normal tissue, comparison of genes
expressed at different stages of disease, elucidation of disease pathways and
measurement of response to drug candidates. SAGE(TM) may also be used to develop
diagnostics (by identifying tumor or other biological markers), discover novel
genes, map the genetic profiles of model organisms or optimize and monitor
production methods. GMO has entered into several commercial agreements for the
provision of SAGE services and SAGE(TM) sublicenses, including agreements with
Hexagen plc, Ontogeny, Inc., Parke-Davis, a division of Warner-Lambert Company,
and Reprogen, Inc.
Development Programs
GMO is conducting several gene therapy programs for the development of
alternative or complementary approaches to existing cancer therapies, including
the following:
PRODUCT/PROGRAM DESCRIPTION
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Immunotherapy:
MART-1 and gp100 GMO is collaborating with researchers at the National Cancer
Institute ("NCI") to develop adenoviral vectors carrying the
MART-1 and gp100 genes for use as tumor "vaccines" for the
treatment of melanoma. Two Phase I clinical trials completed
in 1997 showed the vectors were safe and well tolerated and
that a small subset of patients showed substantial tumor
regression. These product candidates will continue to be
evaluated in Phase I clinical trials in the next year.
HSP65 GMO is collaborating with StressGen Biotechnologies Corp.
("StressGen") to optimize lipid delivery of the HSP65 gene.
See "Collaborations -- StressGen" below.
Tumor Targeting:
Lipid vectors GMO is optimizing its lipid gene delivery vectors for use in
systemic administration for delivery of genes to both
primary tumors and metastasized cancers.
p53 Schering-Plough Corporation ("Schering") is funding a
research program to develop cancer gene therapy products by
combining Schering's proprietary p53 tumor suppressor gene
with GMO's lipid delivery vectors. See "Collaborations --
Schering" below.
GMO also has a number of cancer screens running both internally and through
efforts with collaborators to identify small molecules that could have
therapeutic benefit in treating cancer. Two areas of priority interest for GMO's
small molecule program are metastasis inhibition and anti-angiogenesis.
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Collaborations
GMO is currently a party to a number of commercial and academic
collaborations and licensing arrangements to provide access to complementary
technologies, enhance its expertise in specific cancer indications and
out-license products it does not choose to pursue internally, including the
arrangements discussed below.
StressGen. GMO, StressGen and the Canadian Medical Discoveries Fund Inc.
("CMDF") formed a joint venture in July 1997 to combine StressGen's proprietary
stress genes with Genzyme's gene delivery technology. The joint venture will
initially focus on the use of mycobacterial stress genes that have been licensed
exclusively to the joint venture in the field of cancer. Subject to the
successful completion of preclinical studies, the companies plan to initiate a
Phase I clinical trial for ovarian cancer during the next 12 months. See Note
H., "Investments" to the Consolidated Financial Statements for a description of
the joint venture between Genzyme, StressGen and CMDF.
Schering. In December 1997, GMO entered into a research and option
agreement with Schering to combine GMO's proprietary lipid delivery systems with
six of Schering's proprietary genes, including the p53 tumor suppressor gene, to
develop gene therapy products. The agreement provides for up-front payments,
research funding and potential milestone payments for research progress on a
lipid-based p53 tumor suppressor gene therapy. At any time during the one-year
research period, Schering may exercise its option to exclusively license GMO's
lipid vector technology for delivery of the p53 gene. If this option is
exercised, Schering will have the option to exclusively license the vector
technology for delivery of five additional genes.
Merck & Co., Inc. ("Merck"). In January 1998, GMO non-exclusively licensed
an assay to Merck relating to methods for identifying small molecules that
interfere with the binding of the MDM2 protein with the p53 protein. GMO
received a license fee for the assay and could receive additional milestone
payments if certain defined development milestones are achieved by Merck for a
product developed by a method licensed from GMO or covered by GMO patent rights.
In addition, GMO would receive royalties on worldwide sales of any such product.
NCI. GMO has a collaborative research and development agreement ("CRADA")
with the NCI relating to the development of treatments for metastatic melanoma.
The CRADA, which is effective until August 1999, covers the use of adenoviral
vectors that incorporate the genes for the proprietary melanoma tumor antigens
MART-1 and gp100. Under the CRADA, GMO provides Dr. Steven Rosenberg at NCI with
clinical grade adenoviral vectors, research funding and support for the conduct
of clinical trials at the NCI relating to these vectors in exchange for an
option to obtain either an exclusive or non-exclusive license to the technology
developed under the CRADA. Dr. Rosenberg is also collaborating with third
parties regarding the use of non-adenoviral vectors for the MART-1 and gp100
tumor antigen genes.
JHU. GMO has a research agreement with JHU and Dr. Kenneth Kinzler under
which GMO provides funding for Dr. Kinzler's SAGE(TM)-related research at JHU
through 2000 in exchange for an option to obtain an exclusive worldwide license
to technology developed as a part of that research. Under this agreement, GMO
will be obligated to make milestone payments upon the fulfillment of research
objectives. Furthermore, GMO has the rights to the SAGE(TM) data generated in
Dr. Kinzler's laboratory and an option to license diagnostic and therapeutic
rights to discoveries using SAGE(TM) that are further developed in Dr. Kinzler's
laboratory.
Under another research agreement with JHU, GMO sponsors certain
cancer-based research (other than SAGE(TM)) in Dr. Kinzler's laboratory through
2000 in exchange for an option to obtain an exclusive, worldwide license to
technology developed in the course of such research. In addition, GMO has
retained Dr. Bert Vogelstein's services on a non-exclusive basis through a
consulting agreement that is effective through April 2000.
In addition, GMO, JHU and Hoffman La-Roche, Inc. ("Roche") are parties to a
broad-based license agreement (the "1992 License Agreement") relating to the
development and commercialization of technology developed by Dr. Vogelstein
under an earlier research agreement. Under the 1992 License Agreement,
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JHU granted Roche an exclusive license for diagnostic products and services and
GMO an exclusive license for oligonucleotide therapeutics, each with the right
to sublicense, and a co-exclusive license to GMO and Roche for
non-oligonucleotide therapeutics and other products not covered by either GMO's
or Roche's exclusive licenses. While the licenses from JHU are exclusive as to
all rights that JHU possesses, some of the genes licensed from JHU are covered
by patent applications that are co-owned with entities from which GMO and Roche
have not obtained a license. GMO will owe royalties to JHU on net sales by GMO
and its sublicensees of therapeutic products incorporating technology licensed
under the 1992 License Agreement. In April 1997, Roche granted GMO a
non-exclusive sublicense of its diagnostics rights licensed from JHU, along with
the exclusive right to sublicense diagnostic rights to the JHU technology. GMO
will owe royalties to Roche on net sales by GMO and its sublicensees of
diagnostic products incorporating technology licensed under the 1992 License
Agreement.
COMPETITION
Genzyme is engaged in a segment of the human health care products industry
that is extremely competitive. Competitors in the U.S. and elsewhere are
numerous and include major pharmaceutical, chemical, surgical device and
biotechnology companies, many of which have substantially greater financial and
human resources, more experience in research, preclinical and clinical
development, and obtaining regulatory approvals and more extensive production
and marketing infrastructure than Genzyme and its divisions. These companies may
succeed in developing products that are more effective than any that have been
or may be developed by Genzyme and may also prove to be more successful than
Genzyme in producing and marketing their products.
Each of Genzyme's products and services faces different competitive
challenges:
Cerezyme(R) Enzyme and Ceredase(R) Enzyme. Although Genzyme General is not
aware of any current effective alternative to its products for the treatment for
Gaucher disease, competition potentially could come from other protein
replacement therapies or gene therapy. Genzyme General believes that its
proprietary production techniques, exclusive raw material source for Ceredase(R)
enzyme and, to a certain extent, the orphan drug status of its products give it
a number of advantages over potential competitors using protein replacement
therapy for the treatment of Gaucher disease. Gene therapy techniques are still
in experimental stages. Genzyme General believes that the principal factors that
will affect competition for Cerezyme(R) enzyme and Ceredase(R) enzyme will be
clinical effectiveness and absence of adverse side effects. One company is
attempting to develop an alternative form of recombinant GCR by producing the
enzyme in insect cells and modifying it by applying a coating of polyethylene
glycol.
RenaGel(R) Phosphate Binder. Phosphate binders are currently the only
available treatment for hyperphosphatemia. There are several phosphate binders
available or under development. A prescription calcium acetate preparation is
currently the only product approved in the U.S. for the control of elevated
phosphorus levels in patients with chronic kidney failure. Other products used
as phosphate binders include over-the-counter calcium- and aluminum-based
antacids and dietary calcium supplements. Calcium acetate and calcium carbonate,
the most commonly used agents, must be taken at sufficient doses to achieve
adequate reductions in phosphate absorption, which can lead to constipation and
patient noncompliance. In addition, calcium therapy requires frequent monitoring
because its use can cause hypercalcemia. Aluminum hydroxide is more effective at
lower doses than calcium acetate or calcium carbonate, but it is infrequently
used because aluminum absorbed from the intestinal tract accumulates in the
tissues of patients with chronic kidney failure, causing aluminum-related
osteomalacia, anemia and dialysis dementia. RenaGel(R) phosphate binder binds
dietary phosphate without the use of either calcium or aluminum and, therefore,
will not cause hypercalcemia or aluminum toxicities. Genzyme believes that
RenaGel(R) phosphate binder will effectively compete with existing phosphate
binders by offering an excellent tolerability profile and a more palatable
formulation than those of currently available phosphate binders.
CF. There are a number of organizations, both academic and commercial,
engaged in developing therapies to treat either the symptoms of CF or the cause
of the disease. Several groups are developing gene therapy approaches to the
disease and also have received approval from the FDA and the Recombinant DNA
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Advisory Committee ("RAC") to initiate limited human studies of CF gene therapy.
In addition, other organizations are investigating pharmacological and
biological agents that would treat CF. One such product, Pulmozyme(R), which was
developed by Genentech, Inc., is currently on the market. These groups may
succeed in developing gene therapy products before Genzyme General, in obtaining
patent protection that may effectively block Genzyme General from
commercializing its gene therapy products or in developing other drug therapies
that relieve the symptoms of CF and, thus, compete with products under
development by Genzyme General.
Sepra Products. Genzyme General believes that its expertise in developing
proprietary fermentation processes and its access to proprietary strains of
micro-organisms used in its HA production process will give it a competitive
advantage in the marketing of the Sepra Products. Its anti-adhesion products may
face significant competition, however, from other HA-based products, from
non-HA-based products and from changes in surgical techniques that would obviate
the use of HA. Genzyme General believes that the principal factor that will
affect competition in this area is acceptance of the product by surgeons, which
depends, in large part, upon product performance, safety and price.
Other Surgical Products. The principal methods by which Genzyme General's
surgical products business unit competes are continued innovative product
development, the performance and breadth of its product lines, brand name
recognition, sales force training and educational services, including
sponsorship of training programs in advanced surgical techniques. Genzyme
General's key product in the cardiovascular fluid management category is the
Pleur-evac(R) chest drainage product. Genzyme General believes that it leads the
chest drainage category and that this position is sustainable due to a broad
product line possessing patented features and brand name recognition.
Substantial competition in the market for fluid management devices resulted in a
decrease in surgical products sales during 1997. Corrective actions taken by
Genzyme General to boost sales in this market began yielding positive results in
the fourth quarter of 1997. Genzyme General continues to compete aggressively in
this market. The surgical closure category is dominated by Ethicon, a subsidiary
of Johnson & Johnson, and Sherwood, a division of American Home Products
Corporation. Genzyme General had focused on the cardiovascular suture market
within this category and believes that favorable demographics such as the aging
population and lengthening life expectancies will provide continued growth in
this market. Competition within the surgical instruments category varies by
segment, such as cardiovascular, endoscopic and plastic surgery instruments,
with no one company dominating the entire category. Unique features and product
innovation within its surgical instruments line, such as the recently launched
EndoCABG(TM) System, have allowed Genzyme General to compete effectively across
this category.
Genetic Diagnostic Services. The U.S. market for prenatal cytogenetic and
biochemical testing is divided among approximately 500 laboratories, many of
which offer both types of testing. Of this total group, less than 20
laboratories market their services nationally. Genzyme General believes that the
industry as a whole is still quite fragmented, with the top 20 laboratories
accounting for approximately 50% of market revenues, and with no individual
company accounting for more than 18% of the total other than Genzyme, which
accounts for approximately 22% of the total. Genzyme General believes, however,
that the industry will experience increasing consolidation, as smaller
laboratories face the challenges of more complex and stringent regulation.
Competitive factors in the genetic diagnostics services business generally
include reputation of the laboratory, range of services offered, pricing,
convenience of sample collection and pick-up, quality of analysis and reporting
and timeliness of delivery of completed reports. Genzyme General believes that
its research and development program, which has enabled it to develop and
introduce testing services based on new technology, and its active sales and
marketing force have played significant roles in the growth of its genetic
diagnostics services business. In addition to Genzyme General, several companies
and academic groups are attempting to develop fetal cell separation techniques.
Genzyme General believes that its combination of separation and analytical
technologies will give it a competitive advantage.
Diagnostic Products. Genzyme General acts as a primary supplier of enzymes
and substrates, and generally does not compete with its customers in the sale of
complete diagnostic kits. This philosophy enables Genzyme General to maintain
unique relationships with major diagnostic kit manufacturers and to engage with
them in development efforts to produce new or improved kits. The market in the
diagnostic products
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industry is mature and competition is based on price, reliability of supply and
the purity and specific activity of products.
Carticel(TM) AuCC. GTR is aware of one other company, Verigen, Inc., that
is culturing autologous chondrocytes for cartilage repair in Europe. In addition
to Verigen, GTR knows of three other companies, Advanced Tissue Sciences, Inc.
("ATS"), in conjunction with Smith & Nephew PLC, Integra LifeSciences Corp.
("Integra") and LifeCell Corp., that are engaged in research on cultured
cartilage products. In addition, a surgical technique known as osteochondral
grafting may be competitive to Carticel(TM) AuCC. This procedure, which can be
performed arthroscopically, involves transferring plugs of low weight bearing
cartilage and bone to the area of a defect. Smith & Nephew, Arthrex, Inc. and
Innovasive Devices, Inc. are known to have programs relating to this procedure.
NeuroCell(TM) -PD and NeuroCell(TM) -HD. While there are currently no
effective long-term therapies for advanced Parkinson's disease and no effective
treatments for Huntington's disease, GTR is aware of other companies and
institutions pursuing research and development of alternative treatments for the
diseases. Experimental therapies under development for Parkinson's disease
include surgical destruction of certain portions of the brain (pallidotomy),
gene therapy, the use of growth factors and neuroprotectant therapy.
Epicel(sm) Service. GTR is the only commercial provider of cultured skin
grafts that have been shown to provide permanent skin replacement for burn
patients in the U.S. However, GTR may face competition from companies using
other approaches to culture skin tissue. Integra is marketing a collagen-based
dermal replacement product for severely burned patients. This product will still
require a skin graft from the patient or the Epicel(sm) Service to close a
full-thickness wound, however, and therefore will not compete directly with the
Epicel(sm) Service. ATS also has received approval for a temporary wound
covering for burns. Organogenesis, Inc. has submitted a PMA for a product to be
used for the closure of venous stasis ulcers. LifeCell Corp. currently has
freeze-dried enzymatically processed human cadaver dermis on the market.
TGF-Beta(2). The use of growth factors is emerging as a treatment for
partial-thickness or very small full-thickness wounds. A number of companies are
currently conducting or planning to conduct clinical trials with growth factors.
Potential competitors include Chiron Corp., in collaboration with the Ethicon
division of Johnson & Johnson, Curative Technologies, Inc., and Scios Novo, Inc.
Curative Technologies, Inc., also has one product on the market which does not
require FDA approval. Such growth factors may prove to be complementary to, as
well as competitive with, TGF-Beta(2). GTR does not believe, however, that
growth factors can provide permanent skin replacement to compete with the
Epicel(sm)Service. Additionally, TGF-Beta(2) will compete with interferon-based
immunomodulators produced by Chiron Corp. and Biogen Inc. for the treatment of
MS.
Cancer. Competition in the field of cancer therapeutics and diagnostics is
intense. GMO faces, and will continue to face, significant competition from
organizations such as large pharmaceutical and biotechnology companies,
universities, government agencies and other research institutions in each of
these fields. GMO is aware of clinical trials sponsored by Rhone-Poulenc Rorer
relating to p53 gene therapy for cancer and expects that other large companies
will be initiating gene therapy clinical trials in the near future. GMO also
relies on its collaborators for support in some of its cancer research and
development programs and intends to rely on these partners for preclinical
evaluation and clinical development of its potential products and services.
Competition may arise from the use of the same or similar technologies as those
currently used or contemplated to be used by GMO, as well as from existing
therapeutics and diagnostics, any or all of which may be more effective or less
expensive than those developed by GMO. For instance, other companies provide
genomics services that are competitive with SAGE(TM). Genzyme believes, however,
that SAGE(TM) offers several advantages over competing genomics services,
including that the genetic sequences used in SAGE(TM) for gene identification
can be considerably shorter than those used in competing techniques, thereby
increasing the rate at which genetic information can be analyzed and the
probability of detecting rare genes. In addition, certain of its collaborators
are conducting multiple product development programs in fields similar to those
that are the subject of the partner's alliance with GMO. For instance, the NCI,
with whom GMO is collaborating regarding the use of adenoviral vectors
incorporating the MART-1 and gp100 tumor antigen genes for the treatment of
melanoma, is currently working with others on non-adenoviral vector delivery
systems for these
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antigens. Any product candidate of GMO, therefore, may be subject to competition
with a potential product under development by a third party, including GMO's
collaborators.
PATENTS AND PROPRIETARY TECHNOLOGY
In general, Genzyme pursues a policy of obtaining patent protection both in
the U.S. and in selected foreign countries for subject matter considered
patentable and important to its business. In addition, a portion of Genzyme's
proprietary position is based upon patents that Genzyme has licensed from
others, including patents relating to RenaGel(R) phosphate binder, ATIII, the
AFP3 test, NeuroCell(TM)-PD and NeuroCell(TM)-HD, the Epicel(sm) Service,
TGF-Beta(2), SAGE(TM) and various cancer related genes such as p53. These
license agreements generally require Genzyme to pay royalties upon
commercialization of products covered by the licensed technology. Generally,
patents issued in the U.S. are effective for a period of seventeen years from
date of issue, although the GATT legislation changes this to twenty years from
the filing date for applications filed after June 8, 1995. The duration of
foreign patents varies in accordance with applicable local law. Genzyme also
relies on trade secrets, proprietary know-how and continuing technological
innovation to develop and maintain a competitive position in its product areas.
Genzyme's employees, consultants and corporate partners who have access to its
proprietary information have signed confidentiality agreements. Genzyme's patent
position and proprietary technology are subject to certain risks and
uncertainties. The information set forth under the subheading "Factors Affecting
Future Operating Results -- Uncertainty Regarding Patents and Protection of
Proprietary Technology" under (i) "Management's Discussion and Analysis of
Genzyme Corporation and Subsidiaries' Financial Condition and Results of
Operations" in the 1997 Genzyme General Annual Report, (ii) "Management's
Discussion and Analysis of Genzyme Tissue Repair's Financial Condition and
Results of Operations" in the 1997 GTR Annual Report and (iii) "Management's
Discussion and Analysis of Genzyme Molecular Oncology's Financial Condition and
Results of Operations" in the 1997 GMO Annual Report is incorporated herein by
reference.
The Company's registered trademarks Cerezyme(R), Ceredase(R), Thyrogen(R),
Seprafilm(R), Pleur-evac(R), Thora-Klex(R), Tevdek(R), InSight(R), MASDA(R) and
Vianain(R), together with its trademarks and service marks Sepragel(TM),
Sepracoat(TM), EndoCABG(TM), Sahara(TM), N-geneous LDL(TM), N-geneous HDL(TM),
Contrast(TM), Carticel(TM), Epicel(sm), Epicel ASAP(sm), and SAGE(TM), in the
aggregate are considered to be of material importance to the Company.
GOVERNMENT REGULATION
Governmental regulation, in the U.S. and other countries, is a significant
factor in the production and marketing of many of Genzyme's products and in its
ongoing research and development activities.
FDA Regulation
In the U.S., products that do not achieve their principal intended purpose
through chemical action within or on the body and which are not dependent upon
being metabolized by the patient's body in order to be effective are classified
by the FDA as "devices" while other products are classified as "drugs" or
"biologics." Cerezyme(R) enzyme and Ceredase(R) enzyme are regulated in the U.S.
as drugs, as are Thyrogen(R) hormone and RenaGel(R) phosphate binder. ATIII,
Alpha-Gal, prolactin and the Company's gene therapy products are regulated as
biologics. The Sepra Products and Genzyme's other surgical products are
regulated as devices. The N-geneous LDL(TM) and N-geneous HDL(TM) cholesterol
tests are classified as in vitro diagnostic devices.
The activities required before drugs or biologics may be marketed in the
U.S. include (i) preclinical laboratory tests, in vitro and in vivo preclinical
studies and formulation and stability studies, (ii) the submission to the FDA
and approval of an application for human clinical testing (an "IND"), (iii)
adequate and well controlled human clinical trials to prove the safety and
effectiveness of the drug or biologic, (iv) the submission of an NDA for a drug
or a Product License Application ("PLA") for a biologic or a BLA for biologics
identified by the FDA as "Specified Biologics" and (v) the approval by the FDA
of the NDA, BLA or PLA.
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In addition to product approval, the manufacturer of the product may have
to obtain an establishment license (for a biologic that is not considered well
characterized) or a pre-approval Good Manufacturing Practices ("GMP") inspection
(for a drug or well-characterized biologic) from the FDA. Since any license
granted by the FDA is both site and process specific, any material change by a
company in the manufacturing process, equipment or location necessitates
additional FDA review and approval.
Products that are classified as devices also require FDA approval prior to
marketing. Devices are classified as Class I, II or III, depending upon the
information available to assure their safety and effectiveness. In general,
Class I and Class II devices are devices whose safety and effectiveness can
reasonably be assured through general or specific controls, respectively. Class
III devices are life sustaining, life supporting or implantable devices or new
devices which have been found not to be substantially equivalent to legally
marketed devices. The steps required for approval of a Class III device include
(i) preclinical laboratory tests and in vitro and in vivo preclinical studies,
(ii) the submission to the FDA and approval of an investigational device
exemption (an "IDE") to allow initiation of clinical testing, (iii) human
clinical studies to prove safety and effectiveness of the device, (iv) the
submission of a PMA and (v) the approval by the FDA of the PMA. Typically,
clinical testing of devices involves initial testing to evaluate safety and
feasibility and expanded trials to collect sufficient data to prove safety and
effectiveness. In addition, the procedures and the facilities used to
manufacture the device are subject to review and approval by the FDA.
A device (other than a Class III device) which is proved to be
substantially equivalent to a device marketed prior to May 28, 1976, when
government regulations for devices were first introduced, can be marketed after
approval of a 510(k) application rather than the filing of an IDE and a PMA. The
510(k) application must contain a description of the device, its methods of
manufacture and quality control procedures and the results of testing to
demonstrate that the device is substantially equivalent to the device already
marketed.
In May 1996, the FDA published a new guidance document that provided for
the regulation of products such as Carticel(]) AuCC that use manipulated
autologous structural cells. Under these regulations, companies that are not
currently marketing autologous cultured chondrocytes would likely be required to
provide a prospective randomized blinded control study comparing the treatment
to alternative treatments. GTR estimates that it could take eight years for any
competitor to complete a study of this nature that would demonstrate the
clinical efficacy of its proposed treatment. In August 1997, the FDA granted GTR
a BLA under these regulations for Carticel(TM) AuCC. GTR has initiated
discussions with the FDA regarding an application for the Epicel(sm) Service,
which has been on the market as an unregulated medical device. GTR expects that
the FDA will permit the service to remain on the market until its regulatory
status is resolved.
The time and expense required to perform the clinical testing necessary to
obtain FDA approval can far exceed the time and expense of the research and
development initially required to create the product. Even after initial FDA
approval has been obtained, further studies may be required to provide
additional data on safety or to gain approval for the use of a product as a
treatment for clinical indications other than those initially targeted. In
addition, use of these products during testing and after marketing approval has
been obtained could reveal side effects which, if serious, could delay, impede
or prevent marketing approval, limit uses, force a recall of the product or
expose Genzyme to product liability claims.
Regulation Outside the U.S.
For marketing outside the U.S., Genzyme is subject to foreign regulatory
requirements governing human clinical testing and marketing approval for its
products. These requirements vary by jurisdiction, differ from those in the U.S.
and may necessitate additional pre-clinical or clinical testing whether or not
FDA approval has been obtained.
Generally, Genzyme's initial focus for obtaining marketing approval outside
the U.S. is Europe. EU Directives ("regulations") generally classify products
either as medicinal products or devices. For medicinal products, like those
produced by Genzyme, marketing approval may be sought using either the
centralized procedure of the Committee for Proprietary Medicine or Products (the
"CPMP") or the decentralized (mutual recognition) process. The CPMP centralized
procedure of the EMEA results in a recommendation in
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all member states, while the EU multi-state process involves country by country
approval. EU regulations for products classified as devices have been
implemented for some devices. Devices such as Genzyme's Sepra Products must
receive market approval through a centralized procedure, where the device
receives a CE Mark allowing distribution to all member states of the EU. For
those devices where EU regulations have not been implemented, marketing approval
must be obtained on a country by country basis. The CE mark certification
requires the company to receive International Standards Organization ("ISO")
certification for each facility involved in the manufacture or distribution of
the device. This certification only comes after the development of an all
inclusive quality system which is reviewed for compliance to International
Quality Standards by a licensed "Notified Body" working within the EU. After
certification is received a product dossier is reviewed which attests to the
product's compliance with EU directive 93/42/EEC for medical devices. Only after
this point is a CE Mark granted. Ceredase(R) enzyme has been registered for sale
in the EU through a CPMP centralized procedure. Genzyme expects Cerezyme(R)
enzyme, Thyrogen(R) hormone, RenaGel(R) phosphate binder, Alpha-Gal, prolactin
and the gene therapy products also will be regulated through centralized CPMP
procedure. Seprafilm(R) and Sepracoat(TM) have been granted the CE Mark. Genzyme
will apply for a CE Mark for all of its other surgical products.
Autologous products are specifically exempt from the European Device
Directive and Pharmaceutical Directive promulgated by the EU. Therefore, each
European country is free to impose its own regulations on the marketing of such
products. To date, GTR has not encountered any local registration requirements
for market introduction of Carticel(TM) AuCC. During September 1997, the Spanish
national health system approved Carticel(TM) AuCC for use by public hospitals,
representing the first broad approval of the product by a reimbursement
authority in Europe. GTR is currently assessing the regulatory requirements for
commercialization of Carticel(TM) AuCC in Japan.
Other Government Regulation
Orphan Drug Act. The Orphan Drug Act provides incentives to manufacturers
to develop and market drugs for rare diseases and conditions affecting fewer
than 200,000 persons in the U.S. at the time of application for orphan drug
designation. The first developer to receive FDA marketing approval for an orphan
drug is entitled to a seven-year exclusive marketing period in the U.S. for that
product. However, a drug that is considered by the FDA to be clinically superior
to or different from another approved orphan drug, even though for the same
indication, is not barred from sale in the U.S. during the seven-year exclusive
marketing period. Genzyme has been accorded orphan drug status for Cerezyme(R)
enzyme, Ceredase(R) enzyme and Thyrogen(R) hormone and has received orphan drug
designation for a number of other products currently under development,
including its gene therapy products MART-1 and gp100, NeuroCell(TM)-PD and
NeuroCell(TM)-HD. Legislation has been periodically introduced in recent years,
however, to amend the Orphan Drug Act. Such legislation has generally been
directed to shortening the period of automatic market exclusivity and granting
certain marketing rights to simultaneous developers of a drug. The effect on
Genzyme of any amendments ultimately adopted cannot be assessed at this time. It
believes that the commercial success of these products, including Cerezyme(R)
enzyme and Ceredase(R) enzyme, will depend more significantly on the associated
safety and efficacy profile and on the price relative to competitive or
alternative treatments and other marketing characteristics of each product than
on the exclusivity afforded by the Orphan Drug Act. Additionally, these products
may be protected by patents, exclusive raw material supply contracts and other
means.
Regulation of Diagnostic Services. The Clinical Laboratories Improvement
Act ("CLIA") provides for the regulation of clinical laboratories by the U.S.
Department of Health and Human Services. Regulations promulgated under CLIA
affect the genetics laboratories of Genzyme.
Regulation of Gene Therapy Products. In addition to FDA requirements, the
National Institutes of Health ("NIH") has established guidelines providing that
transfers of recombinant DNA into human subjects at NIH laboratories or with NIH
funds must be approved by the NIH Director. NIH has established RAC to review
gene therapy protocols. Genzyme expects that all of its gene therapy protocols
will be subject to RAC review. In the U.K., Genzyme's gene therapy protocols
will be subject to review by the Gene Therapy Advisory Committee.
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Tissue and Organ Bank Laws. A federal criminal statute that prohibits the
transfer of any human organ for valuable consideration for use in human
transplantation, but which permits recovery of reasonable costs associated with
such activities, has not been applied to Carticel(TM) AuCC or the
Epicel(sm)Service. Certain states have laws requiring the licensure of tissue
and organ banks and laws governing the sale of human organs and the safety and
efficacy of drugs, devices and biologics, including skin, all of which could be
interpreted to apply to GTR's production and distribution of cultured tissue
products. Provisions in certain states' statutes prohibit the receipt of
valuable consideration in connection with the sale of human tissue by a tissue
bank but permit licensed tissue banks, including companies, to recover their
reasonable costs associated with such sales. The application of these or other
regulations to GTR could result in significant expense to GTR, limit Genzyme's
reimbursement for its services and otherwise materially adversely affect GTR's
results of operations.
Other Laws and Regulations. Genzyme's operations are or may be also
subject to various federal, state and local laws, regulations and
recommendations relating to safe working conditions, laboratory and
manufacturing practices and the purchase, storage, movement, use and disposal of
hazardous or potentially hazardous substances used in connection with Genzyme's
research work and manufacturing operations, including radioactive compounds and
infectious disease agents. Although Genzyme believes that its safety procedures
comply with the standards prescribed by federal, state and local regulations,
the risk of contamination, injury or other accidental harm cannot be completely
eliminated. In the event of such an accident, Genzyme could be held liable for
any damages that result and any liabilities could exceed Genzyme's resources.
EMPLOYEES OF REGISTRANT
As of December 31, 1997, Genzyme (including all consolidated subsidiaries
and excluding GTC) had approximately 3,500 employees. None of the Company's
employees are covered by collective bargaining agreements. The Company considers
its employee relations to be excellent.
RESEARCH AND DEVELOPMENT COSTS
The information required by Item 101(c)(xi) of Regulation S-K is
incorporated by reference from the information set forth in Part II, Item 8
"Consolidated Financial Statements and Supplementary Schedules" and specifically
in the Genzyme Corporation and Subsidiaries Consolidated Statements of
Operations and in Note L., "Research and Development Agreements" to the
Consolidated Financial Statements in the 1997 Genzyme General Annual Report set
forth in Exhibit 13.1 to this Annual Report on Form 10-K.
SALES BY GEOGRAPHIC AREA, SIGNIFICANT CUSTOMERS AND PRODUCTS
The information required by Items 101(c)(1)(i) and (vii) and 101(d) of
Regulation S-K is incorporated by reference from the information set forth in
the 1997 Genzyme General Annual Report under the heading "Management's
Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial
Condition and Results of Operations" and in Note P., "Financial Information by
Geographic Area and Significant Customers and Suppliers" to the Consolidated
Financial Statements set forth in Exhibit 13.1 to this Annual Report on Form
10-K.
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ITEM 1A. EXECUTIVE OFFICERS OF THE REGISTRANT
The current executive officers of the Company are as follows:
NAME AGE TITLE
---- --- -----
Henri A. Termeer............ 52 Chairman of the Board, President and Chief Executive
Officer
Russell J. Campanello....... 42 Senior Vice President, Human Resources
Earl M. Collier, Jr......... 51 Executive Vice President, Health Systems and Surgical
Products
David D. Fleming............ 49 Group Senior Vice President, Diagnostic Products and
Genetics
John V. Heffernan........... 59 Senior Vice President
David J. McLachlan.......... 59 Chief Financial Officer; Executive Vice President,
Finance
Richard A. Moscicki, M.D.... 46 Chief Medical Officer; Senior Vice President, Clinical,
Medical and Regulatory Affairs
Alan E. Smith, Ph.D......... 53 Chief Scientific Officer; Senior Vice President,
Research
G. Jan van Heek............. 48 Executive Vice President, Therapeutics and Tissue
Repair
Peter Wirth................. 47 Chief Legal Officer; Executive Vice President, Legal,
Corporate Development and Molecular Oncology
Each officer's term of office extends until the meeting of the Board of
Directors following the next annual meeting of stockholders and until a
successor is elected and qualified or until his earlier resignation or removal.
Mr. Termeer has served as President and a Director of the Company since
October 1983, as Chief Executive Officer since December 1985 and as Chairman of
the Board since May 1988. For ten years prior to joining the Company, Mr.
Termeer worked for Baxter Travenol Laboratories, Inc., a manufacturer of human
health care products. Mr. Termeer is a director of ABIOMED, Inc., AutoImmune
Inc., Diacrin, GelTex and GTC and a trustee of Hambrecht & Quist Healthcare
Investors and Hambrecht & Quist Life Sciences Investors.
Mr. Campenello joined Genzyme in March 1998 as Senior Vice President, Human
Resources. Prior to joining Genzyme, from March 1996 to March 1998, Mr.
Campanello served as Vice President of Nets Incorporated, an internet-based
marketing company, and from June 1987 to February 1996 he served as Vice
President, Human Resources of Lotus Development Corp., a computer software
company. Mr. Campanello is a director of Restrac, Inc., a provider of
cross-industry human resource staffing products and related services.
Mr. Collier joined Genzyme in January 1997 as Senior Vice President, Health
Systems and has served as Executive Vice President, Health Systems and Surgical
Products since July 1997. Mr. Collier is responsible for Genzyme's surgical
products business unit. Prior to joining Genzyme, Mr. Collier was President of
Vitas HealthCare Corporation (formerly Hospice Care Incorporated), a provider of
health care services, from October 1991 until August 1995. Prior to that, Mr.
Collier was a partner in the Washington, D.C. law firm of Hogan & Hartson, which
he joined in 1981.
Mr. Fleming joined the Company in April 1984 and has served as Group Senior
Vice President, Diagnostic Products and Services since September 1996. Prior to
that date, he had served as President of Genzyme's diagnostics business unit
since January 1989 and has been Senior Vice President of the Company since
August 1989. For 11 years prior to joining the Company, he worked for Baxter
Travenol Laboratories, Inc.
Mr. Heffernan joined the Company as Vice President, Human Resources in
October 1989, served as Senior Vice President, Human Resources from May 1992
until March 1998 and currently serves as a Senior Vice President. Prior to
joining the Company, he served for more than five years as Vice President, Human
Resources Corporate Staff of GTE Corporation, a diversified communications and
electronics company.
Mr. McLachlan joined the Company in December 1989 and has served as
Executive Vice President, Finance, since September 1996. He served as Senior
Vice President, Finance, from December 1989 to September 1996 and has served as
Chief Financial Officer since 1989. Prior to joining the Company, he served
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for more than five years as Chief Financial Officer for Adams-Russell
Electronics Inc., a defense electronics manufacturer, and Adams-Russell Co.,
Inc., a cable television company. Mr. McLachlan is a director of HearX, Ltd., a
company providing products and services to the hearing impaired.
Dr. Moscicki joined the Company in March 1992 as Medical Director, became
Vice President, Medical Affairs in early 1993 and was named Vice President,
Clinical, Medical and Regulatory Affairs in December 1993. In September 1996 he
became Senior Vice President, Clinical, Medical and Regulatory Affairs and Chief
Medical Officer. Since 1979, he has also been a physician staff member at the
MGH and a faculty member at the Harvard Medical School.
Dr. Smith joined the Company in August 1989 as Senior Vice President,
Research and became Chief Scientific Officer in September 1996. Prior to joining
the Company, he served as Vice President-Scientific Director of Integrated
Genetics, Inc., from November 1984 until its acquisition by the Company in
August 1989. From October 1980 to October 1984, Dr. Smith was head of the
Biochemistry Division of the National Institute for Medical Research, Mill Hill,
London, England and from 1972 to October 1980, he was a member of the scientific
staff at the Imperial Cancer Research Fund in London, England. Dr. Smith also
serves as a director of GTC.
Mr. van Heek joined the Company in September 1991 as General Manager of its
wholly-owned subsidiary, Genzyme, B.V., and became a Genzyme Vice President and
President of Genzyme's therapeutics business unit in December 1993. From
September 1996 through July 1997, he served as Group Senior Vice President,
Therapeutics and since July 1997 has served as Executive Vice President,
Therapeutics and Tissue Repair, with responsibility for Genzyme's therapeutics
business unit, GTR and international operations. Prior to joining the Company,
he was, since 1988, Vice President/General Manager of the Fenwal Division of
Baxter Healthcare Corporation. Mr. van Heek also served as President and
Treasurer of Neozyme II from March 1992 to January 1996.
Mr. Wirth joined the Company in January 1996 and has served as Executive
Vice President and Chief Legal Officer since September 1996. Mr. Wirth has
responsibility for Genzyme's corporate development activities, GMO and legal.
From January 1996 to September 1996, Mr. Wirth served as Senior Vice President
and General Counsel of Genzyme. Mr. Wirth was a partner of Palmer & Dodge LLP, a
Boston, Massachusetts law firm, from 1982 through September 1996. Mr. Wirth
remains of counsel to Palmer & Dodge LLP, and is a director of Transkaryotic
Therapies, Inc., a gene therapy company.
Nets, Incorporated, a internet-based marketing company for which Mr.
Camparello served as Vice President, filed for Chapter 11 bankruptcy protection
in May 1997.
ITEM 2. PROPERTIES
Genzyme's operations are conducted in manufacturing, warehousing, pilot
plant, clinical laboratories, and research and office facilities principally in
the United States, United Kingdom, Netherlands, Switzerland and Germany. All
properties are leased except for certain properties in Haverhill and West
Malling, England, Coventry, Connecticut, Fall River, Massachusetts, Framingham,
Massachusetts, Boston, Massachusetts and Santa Fe, New Mexico. Genzyme's
principal properties are, for Genzyme General, its manufacturing facilities for
the large scale production of its therapeutic proteins, biomaterials, diagnostic
products and its genetic diagnostic facilities and, for GTR, its state-of-the
art cell processing facilities for Carticel(TM) AuCC and the Epicel(sm) Service.
Selling and marketing activities are concentrated at facilities leased by
the Company in Cambridge, Massachusetts and the Netherlands. The Company
conducts its research and development activities primarily at its laboratory
facilities in the United States.
Leases for the Company's facilities contain typical commercial lease
provisions including renewal options, rent escalators and tenant responsibility
for operating expenses. The Company believes that it has or is in the process of
developing adequate manufacturing capacity to support its requirements for the
next several years.
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Genzyme General
Therapeutics
In October 1996, the Company received FDA approval to manufacture
Cerezyme(R) enzyme at its multi-product manufacturing facility at Allston
Landing in Boston, Massachusetts which contains extensive sterile filling
capacity. The facility, which is owned by the Company, is built on land held
under a 60 year lease.
Ceredase(R) enzyme is produced under GMP conditions at Genzyme's FDA
inspected therapeutic products manufacturing facility located in Cambridge,
Massachusetts. Ceredase(R) enzyme is manufactured under GMP conditions in the
Company's small-scale manufacturing facility in Framingham, Massachusetts. This
facility is also used to make Thyrogen(R) hormone for clinical trial use and, if
approved by the FDA, for distribution to patients under a treatment IND.
A multi-use pharmaceutical facility in Liestal, Switzerland is used to
produce peptides.
Surgical Products
Genzyme has manufacturing capacity at two UK facilities to produce
commercial quantities of HA powder for its family of HA-based products currently
under development on behalf of the Partnership. Seprafilm(R) bioresorbable
membrane is produced at commercial scale from the HA powder in the Company's
manufacturing facility in Framingham, Massachusetts.
The Company leases certain office, laboratory and manufacturing facilities
in Fall River, Massachusetts, Coventry, Connecticut, Tucker, Georgia and Germany
for use in manufacturing and warehousing its Surgical Products.
Diagnostics
Immunobiological products, diagnostic test kits and reagents are produced
in manufacturing facilities in San Carlos, California, Cambridge, Massachusetts
and Russelsheim, Germany.
Diagnostic enzymes and other fermentation products are produced in a
multi-purpose fermentation facility in Maidstone, England and a protein
purification plant in West Malling, England.
In 1997, the Company completed construction of a new fermentation facility
and warehousing facility in West Malling, England.
The Company's genetic testing business primarily conducts operations in
clinical laboratory and administrative facilities which the Company's owns in
Framingham, Massachusetts and Santa Fe, New Mexico.
Genzyme Tissue Repair
Production for Carticel(TM) AuCC and the Epicel (SM) Service currently
occurs primarily in the Company's cell processing facilities in Cambridge,
Massachusetts. The facility has the capacity to provide Carticel(TM) AuCC to
approximately 5,000 patients per year. In 1996, the Company established a
surgeon training center at its facility in the Netherlands in conjunction with
the Carticel(TM) AuCC program.
ITEM 3. LEGAL PROCEEDINGS
As of the filing date of this Form 10-K, there are no pending legal
proceedings deemed material by the Company to which Genzyme or any of its
subsidiaries is a party or to which any of their property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the security holders of Genzyme during
the fourth quarter of the fiscal year ended December 31, 1997.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company has three series of common stock: GGD Stock, GTR Stock and GMO
Stock. The GGD Stock, GTR Stock and GMO Stock are intended to reflect the value
and track the performance of Genzyme General, Genzyme Tissue Repair and Genzyme
Molecular Oncology, respectively. The GGD Stock and the GTR Stock are traded on
the over-the-counter market and prices are quoted on the Nasdaq National Market
under the symbols GENZ and GENZL, respectively. The GMO Stock is not yet
publicly traded. On June 7, 1996 the Company declared a 2-for-1 stock split of
shares of GGD Stock which was paid in the form of a stock dividend on July 25,
1996. All share and per share amounts have been re-stated to reflect this split.
As of March 2, 1998, there were 2,671, 4,061 and 165 stockholders of record of
GGD Stock, GTR Stock and GMO Stock, respectively.
The following table sets forth, for the periods indicated, the high and low
sale prices for the GGD Stock and the GTR Stock as reported by the Nasdaq
National Market.
HIGH LOW
---- ---
GGD Stock
1997:
First Quarter........................... $28 7/8 $22 1/8
Second Quarter.......................... 27 7/8 20 3/4
Third Quarter........................... 33 25
Fourth Quarter.......................... 31 7/8 23 3/8
1996:
First Quarter........................... 38 1/2 25 5/8
Second Quarter.......................... 31 1/4 23 1/2
Third Quarter........................... 26 3/4 21 3/8
Fourth Quarter.......................... 26 1/8 19 3/4
GTR Stock
1997:
First Quarter........................... $14 7/8 $ 7
Second Quarter.......................... 13 8 1/2
Third Quarter........................... 12 1/2 9
Fourth Quarter.......................... 10 3/4 6 3/8
1996:
First Quarter........................... 28 3/4 13 7/8
Second Quarter.......................... 17 1/8 10 7/8
Third Quarter........................... 11 7/8 6 5/8
Fourth Quarter.......................... 11 1/8 6 1/2
No cash dividends have been paid to date on any series of common stock and
the Company does not anticipate paying cash dividends in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference from (i) the 1997 Genzyme General Annual Report
under the headings "Genzyme General -- Selected Financial Data" and "Genzyme
Corporation -- Selected Financial Data", (ii) the 1997 GTR Annual Report under
the heading "Genzyme Tissue Repair -- Selected Financial Data" and (iii) the
1997 GMO Annual Report under the heading "Genzyme Molecular Oncology -- Selected
Financial Data."
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated by reference from (i) the 1997 Genzyme General Annual Report
under the headings "Management's Discussion and Analysis of Genzyme General's
Financial Condition and Results of Operations" and "Management's Discussion and
Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and
Results of Operations," (ii) the 1997 GTR Annual Report under the heading
"Management's Discussion and Analysis of Genzyme Tissue Repair's Financial
Condition and Results of Operations" and (iii) the 1997 GMO Annual Report under
the heading "Management's Discussion and Analysis of Genzyme Molecular
Oncology's Financial Condition and Results of Operations" set forth in Exhibits
13.1, 13.2 and 13.3, respectively, to this Annual Report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES
The financial statements filed as part of this Annual Report on Form 10-K
are incorporated by reference from (i) the Genzyme General Combined Financial
Statements and notes thereto and Genzyme Corporation and Subsidiaries
Consolidated Financial Statements and notes thereto in the 1997 Genzyme General
Annual Report (ii) Genzyme Tissue Repair Combined Financial Statements and notes
thereto in the 1997 GTR Annual Report and (iii) the Genzyme Molecular Oncology
Combined Financial Statements and notes thereto in the 1997 GMO Annual Report
set forth in Exhibits 13.1, 13.2 and 13.3, respectively, to this Annual Report
on Form 10-K and are listed under Item 14 below.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
During the period from January 1, 1997 to the filing date of this Form
10-K, no independent accountant who was previously engaged as the principal
accountant to audit Genzyme's financial statements has resigned, indicated it
has declined to stand for re-election after completion of the current audit or
was dismissed.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The response to this item is contained in part under the caption "Executive
Officers of the Registrant" in Part I, Item 1A hereof and the remainder is
incorporated herein by reference from the discussion responsive thereto under
the captions "Election of Directors" and "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Company's Proxy Statement relating to the 1998
Annual Meeting of Stockholders.
ITEM 11. EXECUTIVE COMPENSATION
The response to this item is incorporated herein by reference from the
discussion responsive thereto under the following captions in the Company's
Proxy Statement relating to the 1998 Annual Meeting of Stockholders: "Election
of Directors -- Director Compensation," "Executive Compensation" and "Stock
Performance Graph."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The response to this item is incorporated herein by reference from the
discussion responsive thereto under the caption "Share Ownership" in the
Company's Proxy Statement relating to the 1998 Annual Meeting of Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The response to this item is incorporated herein by reference from the
discussion responsive thereto under the caption "Certain Transactions" in the
Company's Proxy Statement relating to the 1998 Annual Meeting of Stockholders.
25
26
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS
The following financial statements (and related notes) of Genzyme General
and Genzyme Corporation and subsidiaries are incorporated by reference from the
1997 Genzyme General Annual Report set forth in Exhibit 13.1 to this Annual
Report on Form 10-K:
PAGE*
-----
GENZYME GENERAL
Combined Balance Sheets -- December 31, 1997 and
1996.................................................. 12
Combined Statements of Operations -- For the Years
Ended December 31, 1997, 1996 and 1995................ 13-14
Combined Statements of Cash Flows -- For the Years
Ended December 31, 1997, 1996 and 1995................ 15-16
Notes to Combined Financial Statements................. 17-29
Report of Independent Accountants...................... 30
GENZYME CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets -- December 31, 1997 and
1996.................................................. 45-46
Consolidated Statements of Operations -- For the Years
Ended December 31, 1997, 1996 and 1995................ 47-48
Consolidated Statements of Cash Flows -- For the Years
Ended December 31, 1997, 1996 and 1995................ 49-50
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1997, 1996 and 1995.......... 51-52
Notes to Consolidated Financial Statements............. 53-82
Report of Independent Accountants...................... 83
- ---------------
* References are to page numbers in the 1997 Genzyme General Annual Report
as it appears in Exhibit 13.1 to this Annual Report on Form 10-K.
The following financial statements (and related notes) of GTR are
incorporated by reference from the 1997 GTR Annual Report set forth in Exhibit
13.2 to this Annual Report on Form 10-K:
PAGE*
-----
Combined Balance Sheets -- December 31, 1997 and 1996....... 10
Combined Statements of Operations -- For the Years Ended
December 31, 1997, 1996 and 1995.......................... 11
Combined Statements of Cash Flows -- For the Years Ended
December 31, 1997, 1996 and 1995.......................... 12
Notes to Combined Financial Statements...................... 13 - 20
Report of Independent Accountants........................... 21
- ---------------
* References are to page numbers in the 1997 GTR Annual Report as it
appears in Exhibit 13.2 to this Annual Report on Form 10-K.
26
27
The following financial statements (and related notes) of GMO are
incorporated by reference from the 1997 GMO Annual Report set forth in Exhibit
13.3 to this Annual Report on Form 10-K:
PAGE*
-----
Combined Balance Sheets -- December 31, 1997 and 1996....... 8
Combined Statements of Operations -- For the Years Ended
December 31, 1997, 1996 and 1995.......................... 9
Combined Statements of Cash Flows -- For the Years Ended
December 31, 1997, 1996 and 1995.......................... 10
Notes to Combined Financial Statements...................... 11 - 21
Report of Independent Accountants........................... 22
- ---------
* References are to page numbers in the 1997 GMO Annual Report as it
appears in Exhibit 13.3 to this Annual Report on Form 10-K.
2. FINANCIAL STATEMENT SCHEDULES
The schedules listed below for Genzyme General, Genzyme Corporation and
Subsidiaries, and GTR are filed as part of this Annual Report on Form 10-K:
PAGE*
-----
GENZYME GENERAL
Schedule II -- Valuation and Qualifying Accounts....... 31
GENZYME CORPORATION AND SUBSIDIARIES
Schedule II -- Valuation and Qualifying Accounts....... 84
GTR
Schedule II -- Valuation and Qualifying Accounts....... 22
- ---------
* References are to page numbers in the 1997 Genzyme General Annual Report
and 1997 GTR Annual Report as they appear in Exhibits 13.1 and 13.2,
respectively, to this Annual Report on Form 10-K.
All other schedules are omitted as the information required is inapplicable
or the information is presented in (i) the Genzyme General Combined Financial
Statements or notes thereto or the Consolidated Financial Statements or notes
thereto in the 1997 Genzyme General Annual Report, (ii) the GTR Combined
Financial Statements or notes thereto in the 1997 GTR Annual Report or (iii) the
GMO Combined Financial Statements or notes thereto in the 1997 GMO Annual
Report.
27
28
3. EXHIBITS
The exhibits are listed below under Part IV, Item 14(c) of this Annual
Report.
(B) REPORTS ON FORM 8-K
None.
(C) EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- -----------
*3.1 -- Restated Articles of Organization of Genzyme, as amended.
Filed as Exhibit 1 to Genzyme's Registration Statement on
Form 8-A dated June 18, 1997.
*3.2 -- By-laws of Genzyme. Filed as Exhibit 3.2 to Genzyme's Form
8-K dated December 31, 1991.
*4.1 -- Series Designation for Genzyme Molecular Oncology Division
Common Stock, $.01 par value. Filed as Exhibit 2 to
Genzyme's Registration Statement on Form 8-A dated June 18,
1997.
*4.2 -- Series Designation for Genzyme Series A, Series B and Series
C Junior Participating Preferred Stock, $.01 par value.
Filed as Exhibit 3 to Genzyme's Registration Statement on
Form 8-A dated June 18, 1997.
*4.3 -- Amended and Restated Rights Agreement dated as of June 12,
1997 between Genzyme and American Stock Transfer & Trust
Company. Filed as Exhibit 5 to Genzyme's Registration
Statement on Form 8-A dated June 18, 1997.
*4.4 -- Specimen Callable Warrant to purchase Genzyme Common Stock
issued to shareholders of Neozyme II. Filed as Exhibit 28.6
to Genzyme's Form 10-Q for the quarter ended March 31, 1992.
*4.5 -- Warrant issued to Richard Warren, Ph.D. Filed as Exhibit 4
to the Form 8-K of IG Laboratories, Inc. dated October 11,
1990 (File No. 0-18439).
*4.6 -- Genzyme Common Stock Purchase Warrant No. A-1 dated July 31,
1997 issued to Canadian Medical Discoveries Fund, Inc.
("CMDF"). Filed as Exhibit 10.2 to Genzyme's Form 10-Q for
the quarter ended September 30, 1997.
*4.7 -- Genzyme Common Stock Purchase Warrant No. A-2 dated July 31,
1997 issued to CMDF. Filed as Exhibit 10.3 to Genzyme's Form
10-Q for the quarter ended September 30, 1997.
*4.8 -- Genzyme Common Stock Purchase Warrant No. A-3 dated July 31,
1997 issued to CMDF. Filed as Exhibit 10.3 to Genzyme's Form
10-Q for the quarter ended September 30, 1997.
*4.9 -- Registration Rights Agreement dated as of July 31, 1997 by
and between Genzyme and CMDF. Filed as Exhibit 10.1 to
Genzyme's Form 10-Q for the quarter ended September 30,
1997.
*4.10 -- Genzyme Molecular Oncology Division Convertible Debenture
dated August 29, 1997, including a schedule with respect
thereto filed pursuant to Instruction 2 to Item 601 of
Regulation S-K. Filed as Exhibit 10.6 to Genzyme's Form 10-Q
for the quarter ended September 30, 1997.
*4.11 -- Form of Genzyme General Division Convertible Debenture.
Filed as Exhibit 10.7 to Genzyme's Form 10-Q for the quarter
ended September 30, 1997.
*4.12 -- Registration Rights Agreement dated as of August 29, 1997 by
and among Genzyme and the entities listed on the signature
pages thereto. Filed as Exhibit 10.8 to Genzyme's Form 10-Q
for the quarter ended September 30, 1997.
*4.13 -- Warrant Agreement between Genzyme and Comdisco, Inc. Filed
as Exhibit 10.22 to a Form 10 of PharmaGenics, Inc.
("PharmaGenics") (File No. 0-20138).
28
29
EXHIBIT
NO. DESCRIPTION
- ------- -----------
*10.1 -- Leases by Whatman Reeve Angel Limited to Whatman
Biochemicals Limited dated May 1, 1981. Filed as Exhibit
10.12 to Genzyme's Registration Statement on Form S-1 (File
No. 33-4904).
*10.2 -- Lease dated as of September 15, 1989 for 95-111 Binney
Street, Cambridge, Massachusetts between Genzyme and the
Trustees of the Cambridge East Trust. Filed as Exhibit 10.2
to Genzyme's Form 10-K for 1992. First amendment of lease
dated February 28, 1994. Filed as Exhibit 10.2 to Genzyme's
Form 10-K for 1993.
*10.3 -- Lease dated December 20, 1988 for Building 1400, One Kendall
Square, Cambridge, Massachusetts between Genzyme and the
Trustees of Old Binney Realty Trust, as amended by letters
dated December 20, 1988, January 19, 1989 and January 31,
1989. Filed as Exhibit 10.18 to Genzyme's Form 10-K for
1988. Addendum dated September 20, 1991 to Lease for
Building 1400, One Kendall Square, Cambridge, Massachusetts.
Filed as Exhibit 19.1 to Genzyme's Form 10-Q for the quarter
ended September 30, 1991. Addenda dated August 2, 1990 and
April 6, 1993 to Lease for Building 1400, One Kendall
Square, Cambridge, Massachusetts. Filed as Exhibit 10.3 to
Genzyme's Form 10-K for 1993.
*10.4 -- Lease dated December 20, 1988 for Building 700, One Kendall
Square, Cambridge, Massachusetts between Genzyme and
Trustees of Old Kendall Realty Trust, as amended by letters
dated December 20, 1988 and January 31, 1989. Filed as
Exhibit 10.19 to Genzyme's Form 10-K for 1988.
*10.5 -- Lease dated September 30, 1985 for 51 New York Avenue,
Framingham, Massachusetts. Filed as Exhibit 10.8 to
Genzyme's Form 10-K for 1990. Amendment No. 1, dated October
11, 1990, and Amendment No. 2, dated May 12, 1993, to lease
for 51 New York Avenue, Framingham, Massachusetts. Filed as
Exhibit 10.5 to Genzyme's Form 10-K for 1993.
*10.6 -- Lease dated April 30, 1990 for 64 Sidney Street, Cambridge,
Massachusetts between BioSurface Technology, Inc.
("BioSurface") and Forest City 64 Sidney Street, Inc. Filed
as Exhibit 10.22 to BioSurface's Registration Statement on
Form S-1 (File No. 33-55874).
*10.7 -- Sublease Lease dated May 22, 1992 for three buildings at
74-84 New York Avenue, Framingham, Massachusetts between
Genzyme and Prime Computer, Inc. Filed as Exhibit 10.7 to
Genzyme's Form 10-K for 1993.
*10.8 -- Lease dated May 22, 1992 for three buildings at 74-84 New
York Avenue, Framingham, Massachusetts between Genzyme and
Mark L. Fins, David J. Winstanley and Bruce A. Gurall,
tenants in common. Filed as Exhibit 10.8 to Genzyme's Form
10-K for 1993.
*10.9 -- Lease dated June 1, 1992 for land at Allston Landing,
Allston, Massachusetts between Allston Landing Limited
Partnership and the Massachusetts Turnpike Authority. Filed
as Exhibit 10.9 to Genzyme's Form 10-K for 1993.
*10.10 -- Underlease for Block 13 building at Kings Hill Business Park
West Malling Kent among Rouse and Associates Block 13
Limited, Genzyme (UK) Limited and Genzyme. Filed as Exhibit
10.11 to Genzyme's Registration Statement on Form 8-B dated
December 31, 1991, filed on March 2, 1992.
*10.11 -- Agreement of Limited Partnership dated as of September 13,
1989 between Genzyme Development Corporation II ("GDC II"),
as General Partner, and each of the Limited Partners named
therein. Filed as Exhibit 10(aa) to Genzyme's Registration
Statement on Form S-4 (File No. 33-32343).
*10.12 -- Cross License Agreement dated as of September 13, 1989
between Genzyme and Genzyme Development Partners, L.P.
("GDP"). Filed as Exhibit 10(bb) to Genzyme's Registration
Statement on Form S-4 (File No. 33-32343).
29
30
EXHIBIT
NO. DESCRIPTION
- ------- -----------
*10.13 -- Development Agreement dated as of September 13, 1989 between
Genzyme and GDP. Filed as Exhibit 10(cc) to Genzyme's
Registration Statement on Form S-4 (File No. 33-32343).
*10.14 -- Amendment No. 1 dated January 4, 1994 to Development
Agreement dated as of September 13, 1989 between Genzyme and
GDP. Filed as Exhibit 10.14 to Genzyme's Form 10-K for 1993.
*10.15 -- Partnership Purchase Option Agreement dated as of September
13, 1989 between Genzyme, GDC II, GDP, each Class A Limited
Partner and the Class B Limited Partner. Filed as Exhibit
10(dd) to Genzyme's Registration Statement on Form S-4 (File
No. 33-32343).
*10.16 -- Partnership Purchase Agreement, undated and unexecuted,
between Genzyme, GDC II, GDP, each Class A Limited Partner
and the Class B Limited Partner, as the case may be. Filed
as Exhibit 10(ee) to Genzyme's Registration Statement on
Form S-4 (File No. 33-32343).
*10.17 -- Amended and Restated Joint Venture Agreement between Genzyme
and GDP. Filed as Exhibit 10.1 to GDP's on Form 10-Q for the
quarter ended March 31, 1997 (File No. 0-18554).
*10.18 -- Tax Indemnification Agreement. Filed as Exhibit 10.2 to
GDP's Form 10-Q for the quarter ended March 31, 1997 (File
No. 0-18554).
*10.19 -- Marketing and Distribution Agreement. Filed as Exhibit 10.3
to GDP's Form 10-Q for the quarter ended March 31, 1997
(File No. 0-18554).
*10.20 -- Technology License and Supply Agreement dated as of
September 8, 1989 between Imedex and Genzyme. Filed as
Exhibit 10.30 to Genzyme's Form 10-K for 1990.**
*10.21 -- 1988 Director Stock Option Plan. Filed as Exhibit 99.1 to
Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33265).
*10.22 -- 1990 Equity Incentive Plan. Filed as Exhibit 99.1 to
Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33249).
*10.23 -- 1990 Employee Stock Purchase Plan. Filed as Exhibit 99.1 to
Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33291).
*10.24 -- 1996 Directors' Deferred Compensation Plan. Filed as Exhibit
99.1 to Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33251).
*10.25 -- Executive Employment Agreement dated as of January 1, 1990
between Genzyme and Henri A. Termeer. Filed as Exhibit 10.32
to Genzyme's Form 10-K for 1990.
*10.26 -- Form of Severance Agreement between Genzyme and certain
senior executives, together with schedule identifying the
provisions applicable to each executive. Filed as Exhibit
10.33 to Genzyme's Form 10-K for 1990. Current schedule
identifying the executives filed as Exhibit 10.32 to
Genzyme's Form 10-K for 1993.
*10.27 -- Form of Indemnification Agreement between Genzyme and
certain senior executives, together with schedule
identifying the provisions applicable to each executive.
Filed as Exhibit 10.34 to Genzyme's Form 10-K for 1990.
Current schedule identifying the executives filed as Exhibit
10.33 to Genzyme's Form 10-K for 1993.
*10.28 -- Consulting Agreement dated March 1, 1993 between Genzyme and
Henry E. Blair. Filed as Exhibit 10.29 to Genzyme's 10-K for
1992. Consulting Agreement dated February 3, 1994 between
Genzyme and Henry E. Blair. Filed as Exhibit 10.35 to
Genzyme's Form 10-K for 1993.
*10.29 -- Executive Employment Agreement dated as of January 1, 1996
between Genzyme and Peter Wirth. Filed as Exhibit 10.1 to
Genzyme's Form 10-Q for the quarter ended March 31, 1996.
30
31
EXHIBIT
NO. DESCRIPTION
- ------- -----------
*10.30 -- Technology Transfer Agreement between Genzyme and Genzyme
Transgenics Corporation ("GTC") dated as of May 1, 1993.
Filed as Exhibit 2.1 to the Registration Statement on Form
S-1 of GTC (File No. 33-62872).
*10.31 -- Research and Development Agreement between Genzyme and GTC
dated as of May 1, 1993. Filed as Exhibit 10.1 to the
Registration Statement on Form S-1 of GTC (File No.
33-62872).
*10.32 -- Services Agreement between Genzyme and GTC dated as of May
1, 1993. Filed as Exhibit 10.2 to the Registration Statement
on Form S-1 of GTC (File No. 33-62872).
*10.33 -- Series A Convertible Preferred Stock Purchase Agreement
between Genzyme and GTC dated as of May 1, 1993. Filed as
Exhibit 10.5 to the Registration Statement on Form S-1 of
GTC (File No. 33-62872).
*10.34 -- Convertible Debt and Development Funding Agreement dated as
of March 29, 1996 between Genzyme and GTC. Filed as Exhibit
10.39 to Genzyme's Form 10-K for 1995.
*10.35 -- Amended and Restated Convertible Debt Agreement dated as of
September 4, 1997 by and between Genzyme and GTC. Filed as
Exhibit 10.4 to GTC's Form 10-Q for the quarter ended
September 30, 1997 (File No. 0-21794).
10.36 -- Amended and Restated Operating Agreement of ATIII LLC dated
as of January 1, 1998 by and among Genzyme and GTC. Filed as
Exhibit 10.52.1 to GTC's Form 10-K for 1997 (File No.
0-21794).**
10.37 -- Purchase Agreement dated as of January 1, 1998 by and
between Genzyme and GTC. Filed as Exhibit 10.52.2 to GTC's
Form 10-K for 1997 (File No. 0-21794).**
10.38 -- Collaboration Agreement dated as of January 1, 1997 by and
among Genzyme, GTC and ATIII LLC. Filed as Exhibit 10.52.3
to GTC's Form 10-K for 1997 (File No. 0-21794) and
incorporated herein by reference.**
*10.39 -- Common Stock Purchase Agreement between Argus
Pharmaceuticals, Inc. and Genzyme Corporation dated as of
September 10, 1993. Filed as Exhibit A to Schedule 13D filed
by Genzyme on September 20, 1993.**
*10.40 -- Agreement and Plan of Reorganization dated as of July 25,
1994, as amended, among Genzyme, Phoenix Acquisition
Corporation and BioSurface. Filed as Annex X to Genzyme's
Registration Statement on Form S-4 (File No. 33-83346).
*10.41 -- License and Development Agreement between Celtrix
Pharmaceuticals, Inc. ("Celtrix") and Genzyme dated as of
June 24, 1994. Filed as Exhibit 10.42 to Celtrix's Form 10-K
for 1994.**
*10.42 -- Common Stock Purchase Agreement dated as of June 24, 1994
between Celtrix and Genzyme. Filed as Exhibit A to Schedule
13D filed by Genzyme on July 5, 1994.
*10.43 -- Credit Agreement dated November 14, 1996 among Genzyme and
those of its subsidiaries party thereto, Fleet National
Bank, as Administrative Agent, and The First National Bank
of Boston, as Documentation Agent. Filed as Exhibit 10.39 to
Genzyme's Form 10-K for 1996.
*10.44 -- Collaboration Agreement dated as of June 17, 1997 by and
among Genzyme, GelTex Pharmaceuticals, Inc. ("GelTex") and
RenaGel LLC. Filed as Exhibit 10.18 to GelTex's Form 10-Q
for the quarter ended June 30, 1997 (File No. 0-26872).**
*10.45 -- Purchase Agreement dated as of June 17, 1997 by and between
Genzyme and GelTex. Filed as Exhibit 10.19 to GelTex's Form
10-Q for the quarter ended June 30, 1997 (File No.
0-26872).**
31
32
EXHIBIT
NO. DESCRIPTION
- ------- -----------
*10.46 -- Operating Agreement of RenaGel LLC dated as of June 17, 1997
by and among Genzyme, GelTex and RenaGel, Inc. Filed as
Exhibit 10.20 to GelTex's Form 10-Q for the quarter ended
June 30, 1997 (File No. 0-26872).
*10.47 -- Purchase Agreement dated as of August 29, 1997 by and among
Genzyme Corporation and the entities listed on the signature
pages thereto. Filed as Exhibit 10.5 to Genzyme's Form 10-Q
for the quarter ended September 30, 1997.
*10.48 -- Composite copy of Agreement and Plan of Merger dated as of
January 31, 1997, as amended, between Genzyme and
PharmaGenics. Filed as Annex I to Genzyme's Registration
Statement on Form S-4 (File No. 333-26351).
13.1 -- Portions of the 1997 Genzyme General Annual Report
incorporated by reference into Parts I and II of this Form
10-K. Filed herewith.
13.2 -- Portions of the 1997 Genzyme Tissue Repair Annual Report
incorporated by reference into Parts I and II of this Form
10-K. Filed herewith.
13.3 -- Portions of the 1997 Genzyme Molecular Oncology Annual
Report incorporated by reference into Parts I and II of this
Form 10-K. Filed herewith.
21 -- Subsidiaries of the Registrant. Filed herewith.
23.1 -- Consent of Coopers & Lybrand L.L.P. Filed herewith.
23.2 -- Consent of Coopers & Lybrand L.L.P. relating to the Annual
Report of Genzyme Corporation Retirement Savings Plan on
Form 11-K. To be filed by amendment.
27 -- Financial Data Schedule for Genzyme Corporation. Filed
herewith.
99.1 -- Management and Accounting Policies Governing the
Relationship of Genzyme Divisions. Filed herewith.
- ---------------
* Indicates exhibit previously filed with the Securities and Exchange
Commission and incorporated herein by reference. Exhibits filed with Forms
10-K, 10-Q, 8-K, 8-A or 8-B of Genzyme Corporation were filed under
Commission File No. 0-14680.
** Confidential treatment has been granted or requested for the deleted portions
of Exhibits 10.20, 10.36, 10.37, 10.38, 10.39, 10.41, 10.44 and 10.45.
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Exhibits 10.21 through 10.29 above are management contracts or compensatory
plans or arrangements in which the executive officers or directors of Genzyme
participate.
32
33
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GENZYME CORPORATION
Dated: March 31, 1998 By: /s/ DAVID J. MCLACHLAN
----------------------------------
DAVID J. MCLACHLAN
Executive Vice President, Finance
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ HENRI A. TERMEER Director and Principal Executive March 31, 1998
- ------------------------------------ Officer
HENRI A. TERMEER
/s/ DAVID J. MCLACHLAN Principal Financial and Accounting March 31, 1998
- ------------------------------------ Officer
DAVID J. MCLACHLAN
/s/ CONSTANTINE E. ANAGNOSTOPOULOS Director March 31, 1998
- ------------------------------------
CONSTANTINE E. ANAGNOSTOPOULOS
/s/ DOUGLAS A. BERTHIAUME Director March 31, 1998
- ------------------------------------
DOUGLAS A. BERTHIAUME
/s/ HENRY E. BLAIR Director March 31, 1998
- ------------------------------------
HENRY E. BLAIR
/s/ ROBERT J. CARPENTER Director March 31, 1998
- ------------------------------------
ROBERT J. CARPENTER
/s/ CHARLES L. COONEY Director March 31, 1998
- ------------------------------------
CHARLES L. COONEY
/s/ HENRY R. LEWIS Director March 31, 1998
- ------------------------------------
HENRY R. LEWIS
33
34
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGES
- ------- ----------- ------------
*3.1 -- Restated Articles of Organization of Genzyme, as amended.
Filed as Exhibit 1 to Genzyme's Registration Statement on
Form 8-A dated June 18, 1997................................
*3.2 -- By-laws of Genzyme. Filed as Exhibit 3.2 to Genzyme's Form
8-K dated December 31, 1991.................................
*4.1 -- Series Designation for Genzyme Molecular Oncology Division
Common Stock, $.01 par value. Filed as Exhibit 2 to
Genzyme's Registration Statement on Form 8-A dated June 18,
1997........................................................
*4.2 -- Series Designation for Genzyme Series A, Series B and Series
C Junior Participating Preferred Stock, $.01 par value.
Filed as Exhibit 3 to Genzyme's Registration Statement on
Form 8-A dated June 18, 1997................................
*4.3 -- Amended and Restated Rights Agreement dated as of June 12,
1997 between Genzyme and American Stock Transfer & Trust
Company. Filed as Exhibit 5 to Genzyme's Registration
Statement on Form 8-A dated June 18, 1997...................
*4.4 -- Specimen Callable Warrant to purchase Genzyme Common Stock
issued to shareholders of Neozyme II. Filed as Exhibit 28.6
to Genzyme's Form 10-Q for the quarter ended March 31,
1992........................................................
*4.5 -- Warrant issued to Richard Warren, Ph.D. Filed as Exhibit 4
to the Form 8-K of IG Laboratories, Inc. dated October 11,
1990 (File No. 0-18439).....................................
*4.6 -- Genzyme Common Stock Purchase Warrant No. A-1 dated July 31,
1997 issued to Canadian Medical Discoveries Fund, Inc.
("CMDF"). Filed as Exhibit 10.2 to Genzyme's Form 10-Q for
the quarter ended September 30, 1997........................
*4.7 -- Genzyme Common Stock Purchase Warrant No. A-2 dated July 31,
1997 issued to CMDF. Filed as Exhibit 10.3 to Genzyme's Form
10-Q for the quarter ended September 30, 1997...............
*4.8 -- Genzyme Common Stock Purchase Warrant No. A-3 dated July 31,
1997 issued to CMDF. Filed as Exhibit 10.3 to Genzyme's Form
10-Q for the quarter ended September 30, 1997...............
*4.9 -- Registration Rights Agreement dated as of July 31, 1997 by
and between Genzyme and CMDF. Filed as Exhibit 10.1 to
Genzyme's Form 10-Q for the quarter ended September 30,
1997........................................................
*4.10 -- Genzyme Molecular Oncology Division Convertible Debenture
dated August 29, 1997, including a schedule with respect
thereto filed pursuant to Instruction 2 to Item 601 of
Regulation S-K. Filed as Exhibit 10.6 to Genzyme's Form 10-Q
for the quarter ended September 30, 1997....................
*4.11 -- Form of Genzyme General Division Convertible Debenture.
Filed as Exhibit 10.7 to Genzyme's Form 10-Q for the quarter
ended September 30, 1997....................................
*4.12 -- Registration Rights Agreement dated as of August 29, 1997 by
and among Genzyme and the entities listed on the signature
pages thereto. Filed as Exhibit 10.8 to Genzyme's Form 10-Q
for the quarter ended September 30, 1997....................
35
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGES
- ------- ----------- ------------
*4.13 -- Warrant Agreement between Genzyme and Comdisco, Inc. Filed
as Exhibit 10.22 to a Form 10 of PharmaGenics, Inc.
("PharmaGenics") (File No. 0-20138).........................
*10.1 -- Leases by Whatman Reeve Angel Limited to Whatman
Biochemicals Limited dated May 1, 1981. Filed as Exhibit
10.12 to Genzyme's Registration Statement on Form S-1 (File
No. 33-4904)................................................
*10.2 -- Lease dated as of September 15, 1989 for 95-111 Binney
Street, Cambridge, Massachusetts between Genzyme and the
Trustees of the Cambridge East Trust. Filed as Exhibit 10.2
to Genzyme's Form 10-K for 1992. First amendment of lease
dated February 28, 1994. Filed as Exhibit 10.2 to Genzyme's
Form 10-K for 1993..........................................
*10.3 -- Lease dated December 20, 1988 for Building 1400, One Kendall
Square, Cambridge, Massachusetts between Genzyme and the
Trustees of Old Binney Realty Trust, as amended by letters
dated December 20, 1988, January 19, 1989 and January 31,
1989. Filed as Exhibit 10.18 to Genzyme's Form 10-K for
1988. Addendum dated September 20, 1991 to Lease for
Building 1400, One Kendall Square, Cambridge, Massachusetts.
Filed as Exhibit 19.1 to Genzyme's Form 10-Q for the quarter
ended September 30, 1991. Addenda dated August 2, 1990 and
April 6, 1993 to Lease for Building 1400, One Kendall
Square, Cambridge, Massachusetts. Filed as Exhibit 10.3 to
Genzyme's Form 10-K for 1993................................
*10.4 -- Lease dated December 20, 1988 for Building 700, One Kendall
Square, Cambridge, Massachusetts between Genzyme and
Trustees of Old Kendall Realty Trust, as amended by letters
dated December 20, 1988 and January 31, 1989. Filed as
Exhibit 10.19 to Genzyme's Form 10-K for 1988...............
*10.5 -- Lease dated September 30, 1985 for 51 New York Avenue,
Framingham, Massachusetts. Filed as Exhibit 10.8 to
Genzyme's Form 10-K for 1990. Amendment No. 1, dated October
11, 1990, and Amendment No. 2, dated May 12, 1993, to lease
for 51 New York Avenue, Framingham, Massachusetts. Filed as
Exhibit 10.5 to Genzyme's Form 10-K for 1993................
*10.6 -- Lease dated April 30, 1990 for 64 Sidney Street, Cambridge,
Massachusetts between BioSurface Technology, Inc.
("BioSurface") and Forest City 64 Sidney Street, Inc. Filed
as Exhibit 10.22 to BioSurface's Registration Statement on
Form S-1 (File No. 33-55874)................................
*10.7 -- Sublease Lease dated May 22, 1992 for three buildings at
74-84 New York Avenue, Framingham, Massachusetts between
Genzyme and Prime Computer, Inc. Filed as Exhibit 10.7 to
Genzyme's Form 10-K for 1993................................
*10.8 -- Lease dated May 22, 1992 for three buildings at 74-84 New
York Avenue, Framingham, Massachusetts between Genzyme and
Mark L. Fins, David J. Winstanley and Bruce A. Gurall,
tenants in common. Filed as Exhibit 10.8 to Genzyme's Form
10-K for 1993...............................................
*10.9 -- Lease dated June 1, 1992 for land at Allston Landing,
Allston, Massachusetts between Allston Landing Limited
Partnership and the Massachusetts Turnpike Authority. Filed
as Exhibit 10.9 to Genzyme's Form 10-K for 1993.............
*10.10 -- Underlease for Block 13 building at Kings Hill Business Park
West Malling Kent among Rouse and Associates Block 13
Limited, Genzyme (UK) Limited and Genzyme. Filed as Exhibit
10.11 to Genzyme's Registration Statement on Form 8-B dated
December 31, 1991, filed on March 2, 1992...................
36
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NO. DESCRIPTION PAGES
- ------- ----------- ------------
*10.11 -- Agreement of Limited Partnership dated as of September 13,
1989 between Genzyme Development Corporation II ("GDC II"),
as General Partner, and each of the Limited Partners named
therein. Filed as Exhibit 10(aa) to Genzyme's Registration
Statement on Form S-4 (File No. 33-32343)...................
*10.12 -- Cross License Agreement dated as of September 13, 1989
between Genzyme and Genzyme Development Partners, L.P.
("GDP"). Filed as Exhibit 10(bb) to Genzyme's Registration
Statement on Form S-4 (File No. 33-32343)...................
*10.13 -- Development Agreement dated as of September 13, 1989 between
Genzyme and GDP. Filed as Exhibit 10(cc) to Genzyme's
Registration Statement on Form S-4 (File No. 33-32343)......
*10.14 -- Amendment No. 1 dated January 4, 1994 to Development
Agreement dated as of September 13, 1989 between Genzyme and
GDP. Filed as Exhibit 10.14 to Genzyme's Form 10-K for
1993........................................................
*10.15 -- Partnership Purchase Option Agreement dated as of September
13, 1989 between Genzyme, GDC II, GDP, each Class A Limited
Partner and the Class B Limited Partner. Filed as Exhibit
10(dd) to Genzyme's Registration Statement on Form S-4 (File
No. 33-32343)...............................................
*10.16 -- Partnership Purchase Agreement, undated and unexecuted,
between Genzyme Corporation, GDC II, GDP, each Class A
Limited Partner and the Class B Limited Partner, as the case
may be. Filed as Exhibit 10(ee) to Genzyme's Registration
Statement on Form S-4 (File No. 33-32343)...................
*10.17 -- Amended and Restated Joint Venture Agreement between Genzyme
and GDP. Filed as Exhibit 10.1 to GDP's on Form 10-Q for the
quarter ended March 31, 1997 (File No. 0-18554).............
*10.18 -- Tax Indemnification Agreement between Genzyme and GDP. Filed
as Exhibit 10.2 to GDP's Form 10-Q for the quarter ended
March 31, 1997 (File No. 0-18554)...........................
*10.19 -- Marketing and Distribution Agreement between Genzyme and
Genzyme Ventures II. Filed as Exhibit 10.3 to GDP's Form
10-Q for the quarter ended March 31, 1997 (File No.
0-18554)....................................................
*10.20 -- Technology License and Supply Agreement dated as of
September 8, 1989 between Imedex and Genzyme. Filed as
Exhibit 10.30 to Genzyme's Form 10-K for 1990.**............
*10.21 -- 1988 Director Stock Option Plan. Filed as Exhibit 99.1 to
Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33265)..................................................
*10.22 -- 1990 Equity Incentive Plan. Filed as Exhibit 99.1 to
Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33249)..................................................
*10.23 -- 1990 Employee Stock Purchase Plan. Filed as Exhibit 99.1 to
Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33291)..................................................
*10.24 -- 1996 Directors' Deferred Compensation Plan. Filed as Exhibit
99.1 to Genzyme's Form S-8 dated August 8, 1997 (File No.
333-33251)..................................................
*10.25 -- Executive Employment Agreement dated as of January 1, 1990
between Genzyme and Henri A. Termeer. Filed as Exhibit 10.32
to Genzyme's Form 10-K for 1990.............................
37
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NO. DESCRIPTION PAGES
- ------- ----------- ------------
*10.26 -- Form of Severance Agreement between Genzyme and certain
senior executives, together with schedule identifying the
provisions applicable to each executive. Filed as Exhibit
10.33 to Genzyme's Form 10-K for 1990. Current schedule
identifying the executives filed as Exhibit 10.32 to
Genzyme's Form 10-K for 1993................................
*10.27 -- Form of Indemnification Agreement between Genzyme and
certain senior executives, together with schedule
identifying the provisions applicable to each executive.
Filed as Exhibit 10.34 to Genzyme's Form 10-K for 1990.
Current schedule identifying the executives filed as Exhibit
10.33 to Genzyme's Form 10-K for 1993.......................
*10.28 -- Consulting Agreement dated March 1, 1993 between Genzyme and
Henry E. Blair. Filed as Exhibit 10.29 to Genzyme's 10-K for
1992. Consulting Agreement dated February 3, 1994 between
Genzyme and Henry E. Blair. Filed as Exhibit 10.35 to
Genzyme's Form 10-K for 1993................................
*10.29 -- Executive Employment Agreement dated as of January 1, 1996
between Genzyme and Peter Wirth. Filed as Exhibit 10.1 to
Genzyme's Form 10-Q for the quarter ended March 31, 1996....
*10.30 -- Technology Transfer Agreement between Genzyme and Genzyme
Transgenics Corporation ("GTC") dated as of May 1, 1993.
Filed as Exhibit 2.1 to the Registration Statement on Form
S-1 of GTC (File No. 33-62872)..............................
*10.31 -- Research and Development Agreement between Genzyme and GTC
dated as of May 1, 1993. Filed as Exhibit 10.1 to the
Registration Statement on Form S-1 of GTC (File No.
33-62872)...................................................
*10.32 -- Services Agreement between Genzyme and GTC dated as of May
1, 1993. Filed as Exhibit 10.2 to the Registration Statement
on Form S-1 of GTC (File No. 33-62872)......................
*10.33 -- Series A Convertible Preferred Stock Purchase Agreement
between Genzyme and GTC dated as of May 1, 1993. Filed as
Exhibit 10.5 to the Registration Statement on Form S-1 of
GTC (File No. 33-62872).....................................
*10.34 -- Convertible Debt and Development Funding Agreement dated as
of March 29, 1996 between Genzyme and GTC. Filed as Exhibit
10.39 to Genzyme's Form 10-K for 1995.......................
*10.35 -- Amended and Restated Convertible Debt Agreement dated as of
September 4, 1997 by and between Genzyme and GTC. Filed as
Exhibit 10.4 to GTC's Form 10-Q for the quarter ended
September 30, 1997 (File No. 0-21794).......................
10.36 -- Amended and Restated Operating Agreement of ATIII LLC dated
as of January 1, 1998 by and among Genzyme and GTC. Filed as
Exhibit 10.52.1 to GTC's Form 10-K for 1997 (File No.
0-21794)**..................................................
10.37 -- Purchase Agreement dated as of January 1, 1998 by and
between Genzyme and GTC. Filed as Exhibit 10.52.2 to GTC's
Form 10-K for 1997 (File No. 0-21794)**.....................
10.38 -- Collaboration Agreement dated as of January 1, 1997 by and
among Genzyme, GTC and ATIII LLC. Filed as Exhibit 10.52.3
to GTC's Form 10-K for 1997 (File No. 0-21794) and
incorporated herein by reference**..........................
*10.39 -- Common Stock Purchase Agreement between Argus
Pharmaceuticals, Inc. and Genzyme Corporation dated as of
September 10, 1993. Filed as Exhibit A to Schedule 13D filed
by Genzyme on September 20, 1993**..........................
38
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NO. DESCRIPTION PAGES
- ------- ----------- ------------
*10.40 -- Agreement and Plan of Reorganization dated as of July 25,
1994, as amended, among Genzyme, Phoenix Acquisition
Corporation and BioSurface. Filed as Annex X to Genzyme's
Registration Statement on Form S-4 (File No. 33-83346)......
*10.41 -- License and Development Agreement between Celtrix
Pharmaceuticals, Inc. ("Celtrix") and Genzyme dated as of
June 24, 1994. Filed as Exhibit 10.42 to Celtrix's Form 10-K
for 1994**..................................................
*10.42 -- Common Stock Purchase Agreement dated as of June 24, 1994
between Celtrix and Genzyme. Filed as Exhibit A to Schedule
13D filed by Genzyme on July 5, 1994........................
*10.43 -- Credit Agreement dated November 14, 1996 among Genzyme and
those of its subsidiaries party thereto, Fleet National
Bank, as Administrative Agent, and The First National Bank
of Boston, as Documentation Agent. Filed as Exhibit 10.39 to
Genzyme's Form 10-K for 1996................................
*10.44 -- Collaboration Agreement dated as of June 17, 1997 by and
among Genzyme, GelTex Pharmaceuticals, Inc. ("GelTex") and
RenaGel LLC. Filed as Exhibit 10.18 to GelTex's Form 10-Q
for the quarter ended June 30, 1997 (File No. 0-26872)**....
*10.45 -- Purchase Agreement dated as of June 17, 1997 by and between
Genzyme and GelTex. Filed as Exhibit 10.19 to GelTex's Form
10-Q for the quarter ended June 30, 1997 (File No.
0-26872)**..................................................
*10.46 -- Operating Agreement of RenaGel LLC dated as of June 17, 1997
by and among Genzyme, GelTex and RenaGel, Inc. Filed as
Exhibit 10.20 to GelTex's Form 10-Q for the quarter ended
June 30, 1997 (File No. 0-26872)............................
*10.47 -- Purchase Agreement dated as of August 29, 1997 by and among
Genzyme Corporation and the entities listed on the signature
pages thereto. Filed as Exhibit 10.5 to Genzyme's Form 10-Q
for the quarter ended September 30, 1997....................
*10.48 -- Composite copy of Agreement and Plan of Merger dated as of
January 31, 1997, as amended, between Genzyme and
PharmaGenics. Filed as Annex I to Genzyme's Registration
Statement on Form S-4 (File No. 333-26351)..................
13.1 -- Portions of the 1997 Genzyme General Annual Report
incorporated by reference into Parts I and II of this Form
10-K. Filed herewith........................................
13.2 -- Portions of the 1997 Genzyme Tissue Repair Annual Report
incorporated by reference into Parts I and II of this Form
10-K. Filed herewith........................................
13.3 -- Portions of the 1997 Genzyme Molecular Oncology Annual
Report incorporated by reference into Parts I and II of this
Form 10-K. Filed herewith...................................
21 -- Subsidiaries of the Registrant. Filed herewith..............
23.1 -- Consent of Coopers & Lybrand L.L.P. Filed herewith..........
23.2 -- Consent of Coopers & Lybrand L.L.P. relating to the Annual
Report of Genzyme Corporation Retirement Savings Plan on
Form 11-K. To be filed by amendment.........................
39
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NO. DESCRIPTION PAGES
- ------- ----------- ------------
27 -- Financial Data Schedule for Genzyme Corporation. Filed
herewith. ..................................................
99.1 -- Management and Accounting Policies Governing the
Relationship of Genzyme Divisions. Filed herewith...........
- ---------------
* Indicates exhibit previously filed with the Securities and Exchange
Commission and incorporated herein by reference. Exhibits filed with Forms
10-K, 10-Q, 8-K, 8-A or 8-B of Genzyme Corporation were filed under
Commission File No. 0-14680.
** Confidential treatment has been granted or requested for the deleted portions
of Exhibits 10.20, 10.35, 10.36, 10.37, 10.38, 10.40, 10.43 and 10.44.