Defining sustainability
Like everything else at Genzyme, sustainability ultimately flows from our commitment to patients. Because we address serious unmet medical needs, we have diversified among medical areas. Because we assume the responsibility for getting our products to patients, we have built a solid infrastructure that includes discovery and development, clinical and regulatory affairs, manufacturing and distribution, and sales and marketing. Because we strive to treat all patients who can benefit from our products, we operate worldwide. Our concentration on five medical areas balances product risk, we leverage our infrastructure for a strong supply chain and margin improvements, and our global sales and manufacturing capabilities provide a natural hedge against regional financial cycles.
Financial performance and goals
Our financial performance in 2004 demonstrates that we are proceeding on a sustainable course. We exceeded our projections for revenue growth, profit, and earnings per share while holding our operating expense increase to the level we had targeted. Revenues from our marketed products increased across the board, with most surpassing our expectations. This kind of performance stems not only from diversification, leverage of our infrastructure, and global operations, but also from our disciplined fiscal controls. By managing on a cash flow basis, over the past several years we have increased our profit even while expanding and reshaping our product mix and steadily decreasing our reliance on any one product. Using this approach, we have generated substantial cash for research and development, capital projects, and acquisitions.
We have set a goal of continued earnings growth for 2005. As in the prior year, we expect our current product mix to generate this growth as we expand to new markets and indications while leveraging our manufacturing capacity and managing closely to improve gross margins. In particular, we anticipate that Synvisc will increase its revenue and gross margin contribution now that it is fully under our control. We are confident that our track record of growth and the tremendous momentum resulting from our performance in 2004 will provide a springboard for new levels of success.
