This is an exciting time for Genzyme. Our patient-centered approach has driven us to innovate, grow, and extend our reach around the world. It has also given us a deep sense of responsibility for creating a strong, sustainable company. In 2006, we made significant progress that sets the stage for 2007 and the following years.
Our revenue in 2006 reached $3.2 billion from our sound, growing businesses. A number of our product lines had revenue gains of nearly 20 percent over 2005. Due to product diversification and global expansion, our overall compound annual growth rate over the past six years has been approximately 27 percent, with international sales growing at a compound annual growth rate of 31 percent. Based on current products alone, we expect our annual revenue to approximately double over the next five years.
Genzyme has become far more than a rare disease company as we have continued to build a diversified product portfolio and pipeline focused in five major medical areas. As 2006 ended, we had approximately 20 pivotal trials in process or about to begin. Many of these late-stage product candidates target debilitating diseases and have large patient populations with no optimal treatment. Nearly half of these late-stage clinical trials should yield data in 2007 or early 2008, and we fully expect to make a number of important regulatory filings by the end of 2007.
CONTINUED INVESTMENT
In 2006, Genzyme invested in research programs, clinical trials, infrastructure, and product launches that will begin to have clear financial benefits in 2008 and the years beyond. By manufacturing and selling our products directly, we mitigate risk, ensure quality, and generate significant positive cash flow.
During the past year, we increased our manufacturing capacity in Ireland, Belgium, the United Kingdom, and the United States while preparing for further expansion in 2007. We established a direct commercial presence in China, laid important groundwork in India, and added to our medical and regulatory staff worldwide. These infrastructure investments are an important part of our long-term success because this expanding global network enables us to bring products to even the most difficult-to-reach geographies.
RAPID MYOZYME LAUNCH
In 2006, we launched our Myozyme therapy for Pompe disease - our fourth product to treat a lysosomal storage disorder. The global introduction of Myozyme was the most rapid in our history, demonstrating not only the experience and capability of our organization, but also the value societies around the world place on life-saving therapies.
OPTIMIZING EXISTING PRODUCTS
Our commitment to innovation and patients extends to improving current therapies. We have an unparalleled record of optimizing our existing products to benefit patients. In 2007, we plan to seek approval of next-generation versions of our highly successful products Renagel and Synvisc. We also expand products through post-marketing studies. During 2006, important data from such studies testified to greater patient benefits from treatment with Fabrazyme, Campath, Thymoglobulin, and Renagel. All of the results pave the way for us to reach more patients through expanded use.
HIGH-IMPACT LATE-STAGE PROGRAMS
Our late-stage product candidates include highly innovative, first-of-a-kind therapies that treat life-threatening diseases. In 2007, we expect to have top-line data for Mozobil, an aid to stem cell transplantation that we acquired with AnorMED, Inc. in late 2006. In 2008, we expect to file for approval of tolevamer, a novel approach to the growing international problem of Clostridium difficile-associated disease. We are tremendously excited by the early efficacy that Campath has shown in treating multiple sclerosis and plan to initiate two phase 3 trials in 2007.
COMMITMENT TO INNOVATION
We prepare for our next generation of products by investing in the most promising and transforming areas of innovation. For example, Genzyme was one of the first companies to make a major investment in gene therapy, and we continue to make important progress in this area, where we have exceptional experience and assets. In 2006, we advanced our phase 2 clinical trial of a gene therapy approach to peripheral arterial disease. We are also on the frontiers of personalized medicine, both because of our diagnostic testing services and our work in genetic diseases and oncology.
We work with governments and regulatory agencies to help ensure that they continue to acknowledge innovation. We recognize our responsibility to provide health outcomes data to support the value of our therapies, and to provide access to medicines for all patients who need them. At the same time, it is essential for regulatory bodies to develop better systems to support patient safety. The political environment is changing, and we are engaged in the debate about policies that will affect the future of our industry. We believe that by conducting our business with socially responsible positions toward patients, the environment, and our communities, we will make a positive difference.
A CLEAR SENSE OF PURPOSE
Genzyme's commitment to patients has shaped the way we do business. We operate with transparency and seek to benefit the communities that support us. This stance is the basis for our humanitarian and educational programs and for our environmentally compatible operations. It has also inspired us to lend our skills to large, global efforts that we could not accomplish alone. A notable advance has been the creation of our Humanitarian Assistance for Neglected Diseases initiative, through which we are contributing to global health.
Genzyme's people embody this sense of purpose. Our work requires uncommon drive and personal responsibility. I thank our employees for their strong performance and dedication to bring greater innovation and better health to more people, creating value for our shareholders.
Sincerely,
Henri A. Termeer
March 28, 2007
ANNUAL REPORT HOME
