The buyback of U.S. and major European sales and marketing rights to Synvisc positions Genzyme for significant growth in osteoarthritis and creates a sustainable business.

A unique cell therapy product, Carticel is used to repair injuries to articular knee cartilage that have not responded adequately to prior treatment. On the market since 1995, it has been used in more than 10,000 knees to help patients return to normal activities. In our quest for a less invasive next-generation Carticel, in early 2005 we acquired Verigen AG, a German company with a proprietary cell therapy product that is sold in Europe and Australia. The product, Matrix-assisted Autologous Chondrocyte Implantation (MACI), expands Genzyme's orthopaedics offerings and provides us with an excellent second-generation product to develop for the U.S. market. Based on the strong clinical data from Verigen, we intend to start a U.S. clinical study of this approach in 2006. With this acquisition we also gained manufacturing facilities in Europe and Australia.