The future at Genzyme looks bright following yet another transforming year in 2004. To continue to deliver
on our commitments, we increased the diversification of our product portfolio while broadening our worldwide
reach. In doing so, we have reshaped Genzyme to create long-term sustainability while fulfilling our responsibility
to reach as many patients as possible.
Financial results confirm strategy
Our strategy of diversification across five important and clearly defined medical areas and our diagnostics
business was instrumental in generating our strong, broad-based financial performance in 2004. We ended the
year with $2.2 billion in revenue and, equally important, this growth was evident across the full spectrum
of our products and services. In 2005, we expect revenues between $2.5 and $2.7 billion.
Building sustainable businesses
Early in 2004, we announced our intention to create a comprehensive oncology franchise. By year-end, we completed
the acquisition of ILEX Oncology, Inc., a leading development-stage cancer company, and IMPATH Inc.'s Physician
Services business, one of the largest and highest-quality oncology testing labs in the nation. As a result, we
now have two cancer drugs on the market, helping both adults and children with difficult forms of leukemia; a rich
oncology pipeline from both Genzyme and ILEX labs; and a premier cancer testing business.
In the first days of 2005, we bought back the sales and marketing rights to Synvisc from Wyeth in the United
States and five European countries. This strategic move positions us to realize the full value of the lead
product of our orthopaedics franchise, which will have a positive impact on revenues, earnings, and gross margin.
We now will reap the entire benefit of our investment in Synvisc, designed to capture an increasing share of this
expanding market.
We also integrated and are now expanding in the transplant area that we entered with the
acquisition of SangStat Medical Corporation in late 2003. We are studying new uses for Thymoglobulin in the
category of immune diseases.
Responsibility to patients worldwide
Genzyme's core responsibility is to create safe and effective products with high medical value and to help
ensure patient access to them. Following this course, we have made great progress in expanding geographical
markets for our products. Fabrazyme, launched in Europe in 2001, the United States in 2003, and Japan in 2004,
is now helping patients in 39 countries, and its sales more than doubled in 2004. Cerezyme continued to grow,
treating patients in 80 countries, even as our financial reliance on it decreased. Renagel revenue increased
by 29 percent in 2004, and this product is now marketed in 45 countries. Overall, nearly half of our revenue
for the year was generated from outside the United States. We will continue to improve access for patients
around the world as we make further investments in developing new markets in 2005, with particular focus on the
Americas and the Asia-Pacific region.
A strong, global infrastructure
As a vertically integrated company, our capabilities span research and development, the clinical and regulatory
process, manufacturing and distribution, and sales and marketing. We have built a truly global organization, not
only in terms of sales, but also in R&D and manufacturing. This infrastructure allows us to maximize the potential
of each product across geographies and additional indications. We continually expand our pipeline with a balanced
mix of internally developed and partnered programs. We invest in the growth and development of our employees by
providing challenging work experiences and an environment that fosters collaboration and innovation.
Choosing priorities
Genzyme is committed to developing products that make fundamental improvements in the lives of people with serious
diseases. Once we have identified a potentially effective treatment, we are driven to remain steadfast in our
commitment to reach patients with an approved therapy. There is no better example than Myozyme, our treatment for
Pompe disease. We have worked with a tremendous sense of urgency to develop a treatment for this devastating
genetic disorder. We have faced and overcome extraordinary challenges in our development efforts and never given
up, because we believed we could make a difference for patients and their families. This program has required
the enormous dedication of hundreds of employees across the company. Our investment in the program underscores
this broad effort as we fulfill our responsibility to Pompe patients and their families. Through 2005, we will
have spent approximately $500 million to bring a Pompe therapy to market. Beyond this year, we will continue to
invest several hundred million dollars in our Pompe program, as we conduct additional studies, expand manufacturing
capacity, and research next-generation therapies. Following our application in late 2004 for marketing approval in
Europe, we plan to file in the United States and Japan during 2005 and anticipate a 2006 launch.
Approach to growth
To maintain our historical growth rate of approximately 20 percent annually, we will take full advantage of our
research and development programs and of the exciting opportunities that we attract. We evaluate such opportunities
thoroughly and enter only into relationships where we can add significant value. Science is moving at an
unprecedented pace, and the best programs — no matter where initiated — need the kind of infrastructure we have so
carefully built.
The work ahead
I would like to take this opportunity to thank our employees for their dedication and hard work in 2004, and to
extend a warm note of welcome to those who have joined Genzyme from ILEX, IMPATH, Wyeth, and elsewhere. We also
welcome Gail K. Boudreaux, president of Blue Cross and Blue Shield of Illinois, to our board of directors. She
brings particularly valuable experience from more than 20 years of leadership in the managed care and health
insurance industries. The talents, energy, and determination of each Genzyme employee enable us to continue in the
work ahead. Together, with the support of our shareholders, we will act with a sense of urgency to advance solutions for patients
with compassion and dedication to quality.
Sincerely,
Henri A. Termeer
March 28, 2005
