Solidifying our position
Genzyme had an outstanding year in 2005. Our strong financial performance is a direct result of our strategy of diversification and global expansion. Our revenue for 2005 exceeded $2.7 billion, and we expect that we will generate between $3.1 and $3.3 billion for 2006.
We have built a solid foundation to sustain our growth over the next several years and beyond. Strong growth results from the momentum of our diversified, standard-of-care products, only one of which has reached maturity. In each of the five key medical areas we serve, we benefit from products in early stages of market penetration and from others with great potential for international expansion. We continue to invest in our marketed products, as evidenced by the important data reported from our post-marketing studies of Renagel. We successfully integrated ILEX Oncology, Inc. and brought Clolar to market in unprecedented time; acquired and integrated Bone Care International, Inc. and its lead product, Hectorol; and assumed ownership of Synvisc sales and marketing. We opened two new sophisticated biologics plants, and our steady investment in manufacturing and commercial infrastructure will continue to support our growth in 2006 and beyond.
The potential to transform lives
Our late-stage pipeline - containing some 16 product candidates - has never been richer with opportunities to help patients. In particular, three late-stage product candidates truly have the potential to transform patients' lives and the course of Genzyme's future. In anticipation of regulatory approvals in the United States and European Union, we are preparing to launch Myozyme, our therapy for Pompe disease, in the second quarter of 2006. Pompe disease is such a severe condition that we have brought to bear all the experience we have gained in 25 years of working with genetic diseases of its type to develop the first safe and effective treatment for this disorder.
We are making great progress with our two international clinical trials of tolevamer, our novel, non-antibiotic approach to treating Clostridium difficile-associated diarrhea. This infectious disease has assumed serious proportions in many hospitals, and a new, more virulent strain is believed to be caused by an overuse of antibiotics. Tolevamer has the potential not only to reduce suffering and death, but to reduce health-care costs. As a hospital-based product, it strengthens our presence in this important sales environment.
Genzyme continues to seek opportunities that will maximize the use of products in our portfolio. In 2005, interim data from our phase 2 trial of Campath in multiple sclerosis showed a promising treatment effect, which, if confirmed, would offer MS patients a meaningful new therapeutic option. As part of the ongoing development program, we have implemented a robust risk management plan to ensure that the drug can be used safely, and we expect to initiate a pivotal phase 3 study this year.
Consistent patient focus
We continue to invest in products that we know are making a significant difference in the lives of patients. Based on the success of Renagel for hemodialysis patients, we are developing sevelamer carbonate to address chronic kidney disease. In 2005, we formed a collaboration with RenaMed Biologics, Inc. to advance its program for treatment of acute renal failure - an opportunity to decrease mortality in this critically ill patient population. Myozyme is our fourth enzyme replacement therapy for a lysosomal storage disorder, and we are making progress on an oral therapy option for patients with Gaucher disease. Our orthopaedics business is pursuing next-generation formulations of Synvisc that will entail fewer injections to successfully manage the pain of osteoarthritis of the knee.
Applying our unique attributes
Genzyme has long been a leader in gene therapy. We continue to make progress toward reaching our goal of developing a successful gene therapy product through preclinical and clinical studies, including our phase 2 trial in peripheral arterial disease. In addition, the strategic acquisition of important clinical and technology assets from Avigen, Inc. and the manufacturing capacity of Cell Genesys, Inc. will allow us to make clinical progress for patients with Parkinson's disease and genetic diseases.
Similarly, for many years we have been involved in diagnostic testing, which is now having an increasingly significant impact in helping patients gain access to the right therapy at the right time, while eliminating the cost of unsuccessful, more broad-brush treatments. We are actively seeking opportunities to improve patient outcomes through testing that allows the use of targeted therapies. We are now expanding our diagnostics and therapeutics connection in other genetic diseases and in cancer. We have launched four new cancer tests linked to targeted therapies and are developing a diagnostic test for C. difficile colitis as we conduct the pivotal clinical trials for this infectious disease. These capabilities uniquely position us to lead the transformation of health care toward personalized medicine.
Worldwide reach and responsibilities
Genzyme has had an international presence since early in our history, and our global reach has grown tremendously in the past few years. Today our products help patients around the world, and nearly half our 2005 revenue came from outside the United States. The pace of development in large emerging markets, such as China and India, is driving us to understand and address their specific health-care systems and their business environments. In addition to selling products in these markets, we intend to conduct clinical studies and are considering manufacturing some of our products in them. Thymoglobulin is already available to patients in China, and we have opened two offices there.
Beyond our commercial interests, Genzyme is making a contribution to help improve global health. Neglected diseases such as malaria are enormous public health problems in many areas. Industry is uniquely qualified to apply drug discovery and development capabilities to create new solutions. In partnership with others, Genzyme seeks to be a catalyst in advancing the development of novel therapies for neglected diseases in Africa and in developing countries without adequate health-care systems.
Approaching our 25th anniversary
As we prepare to mark Genzyme's 25th anniversary in June 2006, we are at once grateful for our success and mindful of how that success heightens our responsibility. In 2006 and the next few years, as the product candidates in our pipeline reach commercialization, we will remain true to our mission of bringing innovative new products to market, expanding our global infrastructure and reach, and helping create greater access to therapy.
Our progress and growth are a realization of the creativity, drive, and teamwork of our employees around the globe, and I would like to take this opportunity to thank them. I also welcome Richard F. Syron, chairman and CEO of Freddie Mac, who brings extensive experience in business and government to our board of directors.
As Genzyme continues to grow, we cannot and will not become complacent or lose sight of the patients who never fail to inspire us.
Sincerely,
Henri A. Termeer
March 28, 2006
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