Total revenue in 2007 increased 20 percent to $3.8 billion from $3.2 billion in 2006. The increase was broadly driven by growth across all segments of the company.

GAAP net income was $480.2 million, or $1.74 per diluted share, compared with a net loss of $16.8 million, or $0.06 per diluted share, for the previous year.

Non-GAAP net income increased 27 percent to $939.9 million, compared with $742.7 million in 2006.

Non-GAAP earnings increased 25 percent to $3.47 per diluted share from $2.77, exceeding the increased guidance of $3.35-$3.40 that Genzyme provided in July.

The company generated approximately $1 billion in cash from operations and increased its ending cash position to $1.5 billion while completing two acquisitions, expanding its manufacturing infrastructure, and repurchasing approximately 3.5 million shares under a three-year program to reduce the dilutive effect of equity compensation.

Genzyme also continued to make excellent progress in building its business to drive future growth. The company:

Expanded its emerging oncology franchise by securing worldwide rights to its leukemia drug Clolar^® (clofarabine) through the acquisition of Bioenvision Inc.

Obtained marketing approval for four new products—Renvela^® (sevelamer carbonate) in the United States, Synvisc-ONE^™ (hylan G-F 20) and Cholestagel^® (colesevelam hydrochloride) in the European Union, and Elaprase^® (idursulfase) in Japan—and secured expanded U.S. labeling for Campath^® (alemtuzumab) and Thyrogen^® (thyrotropin alfa for injection).

Reported highly encouraging clinical trial results for two key late stage product candidates: Mozobil^™ (plerixafor) for stem-cell transplantation and alemtuzumab for multiple sclerosis.

Revenue increased 21 percent in the fourth quarter to $1.04 billion, up from $854.2 million in the prior fourth quarter.

GAAP net income increased to $78.9 million, or $0.29 per diluted share, compared with an acquisition-related net loss of $268.2 million, or $1.02 per diluted share, in the prior fourth quarter.

Non-GAAP net income increased 19 percent to $249.2 million, compared with $209.0 million in the previous fourth quarter.

Non-GAAP earnings rose 18 percent to $0.91 per diluted share from $0.77. The increased operating expenses and decreased interest income associated with Genzyme’s fourth-quarter acquisition of Bioenvision reduced earnings by $0.01 per diluted share. The company had noted previously that the impact of this transaction would be reflected in its fourth-quarter results.

Individual product sales for the fourth quarter and the year, along with expectations for the longer-term growth of Genzyme’s business segments, were detailed in a January 8, 2008, press release coinciding with the company’s presentation at the JPMorgan Healthcare Conference.

Genzyme expects revenue to reach $4.5-$4.7 billion in 2008. This estimate includes sales of Aldurazyme^® (laronidase), which now will be reflected in Genzyme’s top line under a restructured agreement with BioMarin Pharmaceutical Inc. Genzyme’s goal is to increase its top line at a compound average rate of 16-17 percent over the five-year period from 2006-2011. Annual revenue is expected to reach approximately $7 billion by 2012.

Genzyme is committed to increasing non-GAAP earnings over this five year period at a compound average rate of 20 percent. Non-GAAP earnings are projected to increase to approximately $4.00 per diluted share in 2008 and to rise to approximately $7.00 per diluted share by 2011.

GAAP earnings in 2008 are expected to increase to approximately $2.75 per share. GAAP figures include anticipated amortization and stock-compensation expenses and the effect of contingent convertible debt.

Genzyme expects non-GAAP earnings per share in the first quarter of this year in the low $0.90s. This estimate reflects several factors: (1) the continued integration of Bioenvision and the expanded introduction of Clolar in Europe; (2) investments in late-stage clinical trials—particularly the phase 3 study of alemtuzumab for multiple sclerosis; and (3) product launches, including the U.S. launch of Renvela and associated sales force expansion. This estimate also reflects the U.S. introduction of Myozyme^® (alglucosidase alfa), which has been constrained by limited product supply, as the FDA has yet to approve the larger scale manufacturing process for this product. This supply constraint will have an estimated impact of $0.03 per diluted share during the first quarter.

Sales of Myozyme are expected to increase to $320-$330 million this year, compared with $201 million last year. The launch of this product has been the most rapid for any of Genzyme’s lysosomal storage disorder treatments. In December, Genzyme announced that its post-marketing Late-Onset Treatment Study of Myozyme met its co-primary endpoints, confirming the benefit of the product for patients across the spectrum of Pompe disease. The company has begun submitting the results of this study for presentation at medical meetings and will pursue the inclusion of the trial results in the product’s labeling.

Sales of Fabrazyme^® (agalsidase beta) are expected to reach $495-$505 million this year, compared with $424 million in 2007. The European Commission has granted full marketing authorization for Fabrazyme, making the product the only Fabry disease treatment to earn this designation in Europe.

Sales of Cerezyme^® (imiglucerase for injection) are expected to reach $1.22-$1.24 billion this year, compared with $1.13 billion in 2007.

Sales of sevelamer therapies Renagel^® (sevelamer hydrochloride) and Renvela^® (sevelamer carbonate) are expected to rise to $690-$700 million this year, compared with $603 million in 2007. Renvela was approved by the FDA in October for the treatment of hemodialysis patients, and Genzyme plans to launch the product on March 1. Genzyme is currently engaged in active discussions with the FDA to expand the product’s labeling to include chronic kidney disease patients with hyperphosphatemia who have not progressed to dialysis. Therefore it will not be necessary for the company to file an sNDA for this indication. A CKD indication will expand the market for sevelamer and help sustain the long-term growth of the Renal franchise.

Sales of Synvisc^® (hylan G-F 20) and Synvisc-ONE are expected to reach $270-$280 million this year, compared with $242 million in 2007. Synvisc-One received CE Mark approval in the European Union in December. This single-injection regimen has the potential to redefine the market for viscosupplementation products and expand the benefits of this therapeutic approach to a broader set of patients by simplifying osteoarthritis pain management. Genzyme will pursue marketing approvals for Synvisc-One in Canada, Asia and Latin America based on the European CE mark approval. Action on a marketing application in the United States is expected later this year.

Transplant revenue is expected to increase to $210-$220 million this year, compared with $175 million in 2007, driven by increasing global demand for Thymoglobulin^® (Anti-thymocyte Globulin [Rabbit]). Thymoglobulin’s growth is being driven by its launch in new geographic markets and by publications and clinical studies.   The product’s growth over the past several quarters has been affected by manufacturing challenges resulting in stability issues affecting the appearance of the product.  Genzyme has worked closely with the FDA in addressing these challenges, and has implemented process changes at its Thymoglobulin manufacturing plant in Lyon, France.  These changes have resulted in improved stability, and Genzyme continues to work to optimize its processes.  The company is confident that it is making progress toward fully resolving the production issues that emerged in mid-2007.  In addition, the FDA has accepted the company’s responses to the warning letter issued last year. 

Total revenue for the Diagnostics/Genetics business is expected to reach $475-$485 million this year, compared with $411 million in 2007. The Genetics business has been experiencing particularly strong growth, driven by an increasing demand for diagnostic testing services. Genzyme is investing in additional information technology and infrastructure to continue to strengthen the competitive advantages the Genetics unit has created.

Sales of Aldurazyme are expected to increase to $135-$145 million this year, compared with $123 million in 2007. Genzyme will record sales of Aldurazyme and make tiered payments to BioMarin on worldwide product sales. These payments will be recorded as a cost of goods sold.

Genzyme’s recognition of Aldurazyme revenue and the associated payments to BioMarin will reduce the gross margin by approximately 1 percentage point without any net impact on the bottom line. The non-GAAP gross margin for 2008 is expected to be approximately 77 percent of revenue.

Non-GAAP selling, general and administrative expenses are expected to represent approximately 27 percent of revenue in 2008, consistent with SG&A expenses in 2007. SG&A spending reflects the integration of Bioenvision and the European rollout of Clolar, the ongoing introduction of Myozyme, the sales force expansion associated with the launch of Renvela, and the expanded U.S. sales effort for Sepra^® products.

Non-GAAP research and development spending is expected to represent approximately 17 percent of revenue in 2008, consistent with R&D spending in 2007. Genzyme’s pipeline is concentrated on programs in mid- to late-stage development and includes more than 25 phase 2 studies and several major pivotal studies. The company is re-prioritizing its R&D programs to make space for mipomersen, a lipid-lowering product currently in phase 3 clinical trials for high-risk cardiovascular disease patients. Mipomersen, which Genzyme is in the process of licensing from Isis Pharmaceuticals Inc., will strengthen an already substantial pipeline. The product will join Mozobil and alemtuzumab at the forefront of a development portfolio with significant potential to drive Genzyme’s growth beyond 2011.

Genzyme’s non-GAAP net tax rate this year is expected to be approximately 31 percent. The GAAP tax rate is expected to be 30 percent.

Capital expenditures are expected to total approximately $500 million this year. Genzyme continues to make a significant investment in manufacturing capacity to support the growth of existing products and to prepare for the launch of products in late-stage development.

Genzyme is making steady progress toward beginning commercial production of Myozyme at its Geel, Belgium, manufacturing plant. Process validation runs for Myozyme production at the site are expected to occur this year, with approval of commercial production anticipated next year. Genzyme is beginning the construction of a new manufacturing facility in Lyon for Thymoglobulin production.

Mozobil is an innovative product intended to facilitate and improve the outcome of stem-cell transplantation procedures. In two pivotal clinical studies, Mozobil showed the ability to quickly and predictably prepare cancer patients for a transplant to treat their disease. Genzyme plans to file mid year for U.S. and European approval for the product’s use in treating patients with multiple myeloma and patients with lymphoma. The company plans to launch the product early next year upon approval and to rapidly expand the product’s availability around the world. The company expects peak annual sales of the product in the transplant setting of $400 million. Genzyme is also exploring additional indications for Mozobil, including its near-term potential use in chemosensitization procedures.

Clolar is approved in the United States and Europe for the treatment of acute lymphoblastic leukemia in relapsed and refractory pediatric patients. Genzyme is developing the product for use globally as a first-line therapy for the treatment of adult acute myeloid leukemia and myelodysplastic syndromes, significantly larger indications that the company estimates will drive peak annual sales of the product to approximately $600 million. The company intends to submit a supplemental new drug application in the United States later this year to include an adult AML indication, following the completion of its CLASSIC II clinical trial involving older adult AML patients. The company also expects to provide additional clinical data to European authorities to supplement the regulatory submission filed previously by Bioenvision.

Mipomersen is being developed primarily for patients at significant cardiovascular risk who are unable to achieve target cholesterol levels with statins alone or who are intolerant of statins. Mipomersen is currently in phase 3 development for patients with homozygous familial hypercholesterolemia, and a U.S. marketing application for this indication is anticipated in 2009. The product offers an innovative approach to addressing a real, unmet medical need, and Genzyme believes it could prove to be the most effective lipid-lowering agent for high risk cardiovascular disease patients for whom conventional therapies are not sufficient. The product may potentially provide significant benefit over the standard of care and targets a well-defined and severely ill patient population.

Genzyme is enrolling patients in two phase 3 trials examining the safety and efficacy of alemtuzumab for the treatment of multiple sclerosis. One study includes previously untreated patients and one involves patients whose disease remains active following treatment with an approved therapy. Alemtuzumab’s effect in treating MS, observed in clinical studies, exceeds that of any currently marketed products and any products in development. Genzyme believes that alemtuzumab has the potential to be the best therapy in a market for MS drugs that is projected to reach $8-9 billion annually when the treatment is expected to be ready for launch in 2011-2012. Alemtuzumab is being developed in collaboration with Bayer Schering Pharma AG, Germany.

Genzyme is investing in the development of an innovative, next-generation product for the treatment of Gaucher disease. The company has completed enrollment in a phase 2 trial of the small molecule Genz-112638, a novel oral therapy that could provide an additional treatment option for physicians and patients. Initial results for the first group of participants enrolled in the study were encouraging, and one-year data from the study will be available this year. Final results from the trial will be available in the first quarter of 2009.

Based on its belief that early diagnosis can lead to improved outcomes for patients with lysosomal storage disorders, and as part of its commitment to serve this community, Genzyme has been working with researchers to develop technologies useful for newborn screening. Last month, the company provided a first shipment of reagents for newborn screening to the Centers for Disease Control and Prevention (CDC) for worldwide distribution to public health laboratories. Several laboratories in the United States and around the world have begun the process of implementing LSD newborn screening programs.