Genzyme's sustainability depends upon constant innovation and discipline in the drug discovery and development process. We take a portfolio approach, focusing development efforts on specific medical areas and selecting from a broad technology base to identify the best treatment alternative for a particular disease.

Oncology
We are building our oncology franchise with clinical and preclinical programs in a variety of cancer types. The most advanced is tasidotin, a synthetic analog of the natural substance dolastatin that has a unique mechanism of action targeting tubulin. We are currently conducting phase 2 clinical trials of tasidotin in three solid-tumor indications — prostate cancer, melanoma, and non-small-cell lung cancer, which accounts for 80 percent of all lung cancers. We expect to have data from these trials in 2005. Tasidotin complements our marketed cancer therapies because it is directed at solid tumors rather than cancers of the blood.

We are also actively working to expand the use of Campath. Enrollment is complete in a phase 3 trial for earlier-line use in B-CLL. Progress is encouraging, and data are due in 2005. Additionally, an earlier-stage clinical study of Campath in non-Hodgkin's lymphoma is in progress. Campath may have potential outside of cancer, and we have completed enrollment in a phase 2 trial of this drug to treat multiple sclerosis. We are also expanding the use of Clolar, first by studying its efficacy in adult leukemia beginning in 2005 and continuing to investigate its application to a range of hemotologic malignancies and solid-tumor cancers.

In 2005, we anticipate having results from our phase 1 trial of the small molecule DENSPM in liver cancer. We are preparing to enter the clinic with cancer applications of our GC1008 antibody molecule, a collaboration with Cambridge Antibody Technology. We have made excellent progress in our antibody collaboration with the pharmaceutical division of Kirin Brewery of Japan around our proprietary portfolio of tumor endothelial markers (TEMs), and we plan to enter a candidate into preclinical development in the second half of 2005. Because cancer drugs are most often used in combination, our varied approaches offer distinct advantages. We are developing both small molecules and antibodies and are targeting both tumors and their blood supply.

Cardiovascular diseases
In 2004, we accelerated our ongoing work in some of the most intractable cardiovascular conditions by forming a joint venture with Medtronic, Inc., the world's leading medical technology company. The joint venture is conducting a phase 2 clinical trial of cell therapy to repair damaged heart tissue, collaborating on advanced devices to deliver cells to the heart in a less invasive manner, and pursuing potential next-generation cell therapy approaches.

In early 2005, we initiated a phase 2 clinical trial of our proprietary gene HIF- 1-alpha in peripheral arterial disease. This is Genzyme's first study of a gene therapy to advance to phase 2.

Genetic diseases
Genzyme is committed to new approaches to lysosomal storage disorders, and we are developing treatments that will complement or replace our current infusion enzyme replacement therapies. We have completed a phase 1 trial for an oral, small molecule treatment for Gaucher disease and plan to initiate a phase 2 trial in 2005. We also anticipate beginning a phase 1 trial for ASM-deficient Niemann Pick disease, a progressive and fatal neurodegenerative LSD, in 2005. We have made a significant commitment to gene therapy for LSDs for 2005 and are optimizing the delivery of missing enzymes directly to the brain through gene transfer. This approach may also hold promise for other diseases.

Genzyme is making an important contribution to patients with LSDs by facilitating the development of newborn screening tests. We are not commercializing this work, but rather making it available to aid in early intervention and treatment. The technology allows newborns to be screened for a broad range of LSDs. It is now being evaluated in pilot studies and could be added to standard newborn screening programs in the next few years.

Our small molecule iron chelator entered a phase 1-2 trial in 2004. This therapy is directed at patients with forms of chronic anemia, who are subject to iron overload because of the frequent infusions necessitated by their primary disease. Patients in the trial have thalassemia, which has the greatest requirement for iron clearance of all anemias.

Immune-mediated diseases
Based on productive work in 2004, we plan to enter the clinic with three programs directed at diseases of the immune system during 2005. One study will investigate our multiple-indication molecule GC1008, an antagonist to TGF-beta, in idiopathic pulmonary fibrosis. This disease affects approximately 100,000 patients worldwide with an estimated 50 percent mortality within three years, and it has no approved therapy. Spanning the immune and renal areas, we are also advancing GC1008 as a potential treatment for kidney sclerosis, which eventually leads to end-stage renal disease. Another trial will examine an antibody to the Fc receptor CD16 molecule in idiopathic thrombocytopenic purpura.

The Immune Tolerance Network is collaborating with Genzyme and sponsoring a clinical trial of Thymoglobulin to modify the immune systems of patients with Type 1 diabetes. We hope to begin this trial in 2005. Scientists and physicians are studying Thymoglobulin in many uses, and there is high interest in developing new products based on its mechanism of action.

Renal disease
We are continuing to investigate our small molecule treatment for polycystic kidney disease. Preclinical work has demonstrated that this molecule is a potent inhibitor of cyst formation in vivo. We believe that it may also have potential in other polycystic disorders.