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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2002

Commission File No. 0-14680

GENZYME CORPORATION
(Exact name of registrant as specified in its charter)

(617) 252-7500
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Genzyme General Division Common Stock, $0.01 Par Value ("Genzyme General Stock")
Genzyme Biosurgery Division Common Stock, $0.01 Par Value ("Biosurgery Stock")
Genzyme Molecular Oncology Division Common Stock, $0.01 Par Value ("Molecular Oncology Stock")
Genzyme General Stock Purchase Rights
Biosurgery Stock Purchase Rights
Molecular Oncology Stock Purchase Rights

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). YES ý NO o

Aggregate market value of voting stock held by non-affiliates of the Registrant as of June 28, 2002: $4,320,206,618

Number of shares of Genzyme General Stock outstanding as of March 1, 2003: 215,119,078
Number of shares of Biosurgery Stock outstanding as of March 1, 2003: 40,583,935
Number of shares of Molecular Oncology Stock outstanding as of March 1, 2003: 16,940,769

DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the 2002 Genzyme General, Genzyme Biosurgery and Genzyme Molecular Oncology Annual Reports are incorporated by reference into Parts I, II and IV of this Form 10-K. Portions of the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on May 29, 2003 are incorporated by reference into Part III of this Form 10-K.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This Annual Report on Form 10-K contains forward-looking statements, including statements regarding our:

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projected timetables for the preclinical and clinical development of, regulatory submissions and approvals for, and market introduction of, our products and services;



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estimates of the potential markets for our products and services, including the anticipated drivers for future growth;



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sales and marketing plans;



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assessments of competitors and potential competitors;



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estimates of the capacity of, and the projected timetable of approvals for, manufacturing and other facilities to support our products and services;



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expected future revenues, operations and expenditures;



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allocations of revenue, expenses, liabilities and income tax benefits;



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maintenance of financial covenants contained in our credit facility;



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assessment of the outcome of litigation and other governmental proceedings;



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potential milestone payments to the former stockholders of Novazyme Pharmaceuticals, Inc.; and



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projected cash needs.

These statements are subject to risks and uncertainties, and our actual results may differ significantly from those that are described in this report. These risks and uncertainties include:

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our ability to successfully complete preclinical and clinical development of our products and services;



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our ability to manufacture sufficient amounts of our products for development and commercialization activities and to do so in a timely and cost-effective manner;



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our ability to obtain and maintain adequate patent and other proprietary rights protection of our products and services and successfully enforce our proprietary rights;



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the scope, validity and enforceability of patents and other proprietary rights held by third parties and their impact on our ability to commercialize our products and services;



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the accuracy of our estimates of the size and characteristics of the markets to be addressed by our products and services, including growth projections;



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market acceptance of our products and services;



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our ability to identify new patients for our products and services;



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the accuracy of our information regarding the products and resources of our competitors and potential competitors;



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the content and timing of submissions to and decisions made by the Food and Drug Administration, commonly referred to as the FDA, and other regulatory agencies;



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decisions made by the U.S. Federal Trade Commission, the U.K. Competition Appeal Tribunal, and other judicial bodies;



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the impact of the May 2001 expiration of orphan drug status for Cerezyme® and Ceredase® enzymes on our revenues from these products;

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the outcome of our ongoing discussions with the FDA and other regulatory authorities in connection with our marketing applications and ongoing clinical trials for Fabrazyme® and Aldurazyme® enzymes and manufacturing facilities for those products and Renagel® phosphate binder;



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the availability of reimbursement for our products and services from third-party payors, and the extent of such coverage;



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our ability to expand manufacturing capacity for Renagel phosphate binder and Myozyme™ enzyme;



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our ability to optimize dosing and improve patient compliance with Renagel phosphate binder;



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our ability to effectively manage wholesaler inventories of Renagel phosphate binder and the levels of compliance with our inventory management programs;



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our ability to establish and maintain strategic license, collaboration and distribution arrangements;



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the continued funding and operation of our joint ventures by our partners;



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our ability to successfully increase market penetration for Synvisc® viscosupplementation product as a treatment for osteoarthritis of the knee and to expand its use in other joints;



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our ability to increase market penetration in Europe for our Fabrazyme enzyme, Thyrogen® hormone and Renagel phosphate binder; and



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the possible disruption of our operations due to terrorist activities and armed conflict, including as a result of the disruption of operations of our subsidiaries, our manufacturing facilities and our customers, suppliers, distributors, couriers, collaborative partners, licensees and clinical trial sites.

        We have included more detailed descriptions of these risks and uncertainties in Exhibit 99.2, "Factors Affecting Future Operating Results," to this Annual Report on Form 10-K. We encourage you to read those descriptions carefully. We caution investors not to place undue reliance on the forward-looking statements contained in this report. These statements, like all statements in this report, speak only as of the date of this report (unless another date is indicated) and we undertake no obligation to update or revise the statements.

NOTE REGARDING REFERENCES TO GENZYME DIVISIONS

        Throughout this Annual Report on Form 10-K, the words "we," "us," "our" and "Genzyme" refer to Genzyme Corporation and all of its operating divisions taken as a whole, and "our board of directors" refers to the board of directors of Genzyme Corporation. In addition, we refer to our three operating divisions as follows:

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Genzyme General Division = "Genzyme General;"



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Genzyme Biosurgery Division = "Genzyme Biosurgery;" and



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Genzyme Molecular Oncology Division = "Genzyme Molecular Oncology."

NOTE REGARDING INCORPORATION BY REFERENCE

        The Securities and Exchange Commission allows us to disclose important information to you by referring you to other documents we have filed with the SEC. The information that we refer you to is "incorporated by reference" into this Annual Report on Form 10-K. Please read that information.

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NOTE REGARDING TRADEMARKS

        Genzyme®, Cerezyme®, Ceredase®, Fabrazyme®, Thyrogen®, Contrast®, N-geneous®, GlyPro®, InSight®, AFP3®, AFP4®, Carticel®, Pleur-evac®, Tevdek®, Polydek®, Deklene®, SaphLITE®, NextStitch®, Seprafilm®, Sepragel®, and Epicel® are registered trademarks of Genzyme. Myozyme™, CF87™, Sahara™, Immobilizer™, RadLITE™, Sepra™, Sepramesh™, Seprapack™, SAGE™, LongSAGE™, and SPHERE™ are trademarks of Genzyme. WelChol® is a registered trademark of Sankyo Pharma, Inc. Aldurazyme® is a registered trademark of BioMarin/Genzyme LLC. Renagel® is a registered trademark and Cholestagel™ is a trademark of GelTex Pharmaceuticals, Inc. Synvisc®, Hylaform® and Hylashield® are registered trademarks, and Hylashield Nite™ is a trademark, of Genzyme Biosurgery Corporation. Focal® and FocalSeal® are registered trademarks of Focal, Inc. AVONEX® is a registered trademark of Biogen, Inc. Zavesca® is a registered trademark of Oxford Glycosciences, Inc. Replagal™ is a trademark of Transkaryotic Therapies, Inc. Hylagan® is a registered trademark of Fidia S.p.A. Orthovisc® is a registered trademark of Anika Therapeutics, Inc. Artz® and Supartz® are registered trademarks of Seikagaku Kogyo. Durolane® is a registered trademark of Q-Med AB, Anthrease® is a registered trademark of Bio-Technology General Corp. Interceed® is a registered trademark and Intergel™ and ClearGlide™ are trademarks of Johnson & Johnson Corporation. Spraygel® is a registered trademark of Confluent Surgical, Inc. Oxiplex® is a registered trademark of FzioMed, Inc. Botox® is a registered trademark of Allergan, Inc. Octopus® is a registered trademark of Medtronic, Inc. VasoView® is a registered trademark and Axius™ is a trademark of Guidant Corporation. KM Mice™ is a trademark of Kirin Brewery Co., Ltd. All rights reserved.

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TABLE OF CONTENTS

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PART I

ITEM 1.    BUSINESS

Introduction

        We are a biotechnology and human healthcare company that develops innovative products and provides services for major unmet medical needs. We were founded as a Delaware corporation in June 1981 and became a Massachusetts corporation in 1991. We currently have three operating divisions, each of which has a related series of common stock that is intended to reflect its value and track its financial performance. These divisions are:

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Genzyme General, which develops and markets therapeutic products and diagnostic products and services with an emphasis on genetic disorders and other chronic debilitating diseases with well-defined patient populations. Genzyme General Stock is listed on the NASDAQ® National Market under the symbol "GENZ;"



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Genzyme Biosurgery, which develops and markets biotherapeutic and biomaterial products, with an emphasis on orthopaedics, heart disease and broader surgical applications. Biosurgery Stock is listed on the NASDAQ® National Market under the symbol "GZBX;" and



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Genzyme Molecular Oncology, which is developing a new generation of cancer products focused on cancer vaccines and angiogenesis inhibitors through the integration of its genomics, gene and cell therapy, small molecule drug discovery and protein therapeutic capabilities. Molecular Oncology Stock is listed on the NASDAQ® National Market under the symbol "GZMO."

        We allocate all of our products, services, programs, assets and liabilities among our divisions for purposes of financial statement presentation; however, Genzyme, the corporation, together with its subsidiaries, continues to own all of the assets and is responsible for all of the liabilities allocated to each of the divisions.

Genzyme General—Products and Development Programs

        Genzyme General is organized into three reportable segments—Therapeutics, Renal and Diagnostic Products. The Therapeutics segment focuses on developing and marketing products for genetic diseases and other chronic debilitating diseases, including a family of diseases known as lysosomal storage disorders, and specialty therapeutics. The Therapeutics segment also includes the business of GelTex Pharmaceuticals, Inc., which we acquired in December 2000. GelTex is focused on developing non-absorbed polymer drugs that bind and eliminate targeted substances in the gastrointestinal tract and small-molecule pharmaceuticals consisting of novel polyamine analogues and metal chelators. The Renal segment focuses on developing and marketing products for diseases of the kidney, including chronic renal failure. The Diagnostic Products segment develops, markets and distributes in vitro diagnostic products. Outside of these reportable segments, Genzyme General also provides genetic diagnostic services and develops, manufactures and sells pharmaceutical products that are used by other biotechnology and pharmaceutical companies in their research and development activities.

Therapeutics

        Genzyme General's Therapeutics segment currently has four therapeutic products on the market and several other therapeutic products in varying stages of development. The chart set forth below

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provides summary information on these products and certain late-stage clinical development programs as of March 1, 2003.

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        Additional details on Genzyme General's Therapeutic products and late-stage development programs are set forth below.

        Cerezyme® (imiglucerase for injection)/Ceredase® (alglucerase injection).    Treatment with Cerezyme or Ceredase enzyme replacement therapy currently represents the only safe and effective enzyme replacement therapy available for Type I Gaucher disease, a lysosomal storage disorder. We began marketing Ceredase enzyme in 1991. Because production of Ceredase enzyme was subject to supply constraints, we developed Cerezyme enzyme, a recombinant form of human beta glucocerebrosidase, the enzyme that is deficient in Gaucher patients. Recombinant technology uses specially engineered cells to produce enzymes, or other substances, by inserting into cells of one organism the genetic material of a different species. In the case of Cerezyme enzyme, Chinese hamster ovary, or CHO, cells are engineered to produce human beta glucocerebrosidase. We stopped producing Ceredase enzyme, except for small quantities, in 1998 after we converted substantially all of the patients who previously used Ceredase enzyme to Cerezyme enzyme.

        Genzyme General is marketing these products directly to physicians, hospitals and treatment centers worldwide through a highly trained sales force. This marketing effort is directed at identifying and initiating treatment for the estimated 5,000 Gaucher patients we believe exist worldwide. We distribute Cerezyme enzyme in 79 countries worldwide. Our results of operations are highly dependent on sales of these products. Sales of Cerezyme and Ceredase enzymes totaled approximately $619.2 million in 2002, which represented approximately 52% of our consolidated product revenues in that year. Sales of these products totaled approximately $569.9 million, or 51% of our consolidated product revenues, in 2001 and $536.9 million, or 66% of our consolidated product revenues, in 2000. Please refer to our discussion on Ceredase and Cerezyme enzymes under the heading "Competition" on page 22.

        Fabrazyme® (agalsidase beta).    Genzyme General is developing Fabrazyme enzyme, a recombinant form of the human enzyme alpha-galactosidase, as a treatment for Fabry disease. Fabry disease is a lysosomal storage disorder that is estimated to affect 1 in 40,000 males worldwide, with an estimated 5,000 patients worldwide. We filed for marketing approval for Fabrazyme enzyme in the United States and in Europe in 2000. In August 2001, we received marketing approval in Europe for Fabrazyme enzyme as a long-term enzyme replacement therapy in patients with a confirmed diagnosis of Fabry disease. We have now launched Fabrazyme enzyme in 26 countries outside of the United States and plan to continue product launches on a country-by-country basis as additional pricing and reimbursement approvals are obtained. Where it is approved, Fabrazyme enzyme is sold by our existing Cerezyme sales force, which maintains close relationships with physicians who specialize in the treatment of genetic disorders.

        We submitted our Biologics License Application, or BLA, for Fabrazyme enzyme to the FDA in June 2000 and the FDA accepted our application for review under an accelerated approval mechanism. Following submission of additional information that was requested by the FDA, the Endocrinologic and Metabolic Drugs Advisory Committee of the FDA met in January 2003 to review our BLA for Fabrazyme enzyme. While this advisory panel was not asked by the FDA to vote on whether to approve the product, the panel affirmed, by a vote of 14-1, that the primary endpoint studied in our phase 3 trial for Fabrazyme enzyme was an appropriate surrogate marker for purposes of accelerated approval. The advisory panel also:

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determined that the available data on antibody formation to Fabrazyme enzyme did not suggest a waning of the enzyme's effect, and that it is reasonable to permit longer-term data on antibody formation to be collected after marketing approval;



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concluded, in general, that the potential benefits of Fabrazyme enzyme's use outweigh the risks presented by the infusion reactions associated with administration of the enzyme;

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agreed that the benefits of providing accelerated approval of Fabrazyme enzyme outweigh the risk that the ongoing phase 4, post-marketing verification study we are currently conducting may yield inconclusive data on clinical effects; and



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recommended that we do the best we can to complete the ongoing placebo-controlled phase 4 study of Fabrazyme enzyme as currently designed.

        The FDA will review the advisory panel's input and make a determination about the next steps for marketing approval of Fabrazyme enzyme in the United States. We expect formal FDA action by the end of April 2003. Please refer to our discussion on Fabrazyme enzyme under the heading "Competition" on page 22.

        Thyrogen® (thyrotropin alfa for injection).    Thyrogen hormone is an adjunctive diagnostic agent used in the follow-up of patients with well-differentiated thyroid cancer. It was developed by Genzyme General to allow patients to continue taking their thyroid hormone supplements while they are being screened for residual or recurring thyroid cancer, which helps patients avoid the debilitating effects of hypothyroidism. Genzyme General began marketing Thyrogen hormone in the United States in 1998 and pursues its marketing efforts through a direct sales force. In the United States, physicians order approximately 150,000 thyroglobulin tests and 30,000 radioiodine imaging whole body scans each year for thyroid cancer patients. Brazil has the highest incidence of thyroid cancer in the developed world, outside of the United States. Physicians order approximately 28,000 thyroglobulin tests and 12,000 radioiodine imaging whole body scans each year in Brazil for thyroid cancer patients. We market the product in Brazil through a distributor. Genzyme General began marketing Thyrogen hormone in Europe in August 2001. Physicians order approximately 110,000 thyroglobulin tests and 25,000 radioiodine imaging whole body scans each year in Europe for thyroid cancer patients. In Europe, the product is sold primarily by our existing specialty therapeutics sales force.

        Genzyme General is actively pursuing additional indications for Thyrogen hormone, including its use with radioiodine in post-thyroidectomy thyroid cancer ablation, and for nontoxic multinodal goiter.

        WelChol®/Cholestagel™ (colesevelam hydrochloride).    We received marketing approval for WelChol bile acid binder from the FDA in May 2000 for administration alone or in combination with an HMG-CoA reductase inhibitor, also known as a "statin," as adjunctive therapy to diet and exercise for the reduction of elevated LDL cholesterol in patients with primary hypercholesterolemia. While the risks of high cholesterol are well recognized, the condition remains significantly under-treated worldwide. An estimated 25 million Americans require drug therapy to achieve adequate reductions in cholesterol levels. However, only approximately 14 million Americans are receiving cholesterol-reducing drugs, and it is estimated that more than 60% of this population is not at their appropriate National Cholesterol Education Program LDL cholesterol goal. Worldwide, it is estimated that approximately one-third of the individuals who should be receiving cholesterol-reducing drugs are receiving therapy. Sankyo Pharma, Inc. has been marketing WelChol bile acid binder in the United States since its launch in September 2000. In August 2002, Genzyme General submitted a Marketing Authorization Application, or MAA, to the European Agency for the Evaluation of Medicinal Products, or EMEA, for the compound. A final decision by the EMEA is expected by the end of 2003. If approved in the European Union, the product will be marketed under the trademark Cholestagel™.

        Aldurazyme® (laronidase).    Genzyme General and BioMarin Pharmaceutical, Inc. have formed a joint venture to develop and market Aldurazyme enzyme, a recombinant form of the human enzyme alpha-L-iduronidase, to treat a lysosomal storage disorder known as mucopolysaccharidosis I, or MPS I. We believe that approximately 3,000 to 4,000 people in the developed world have MPS I. The joint venture filed for marketing approval in Europe, the United States, Australia and Canada in 2002.

        The Endocrinologic and Metabolic Drugs Advisory Committee of the FDA met in January 2003 to review the BLA for Aldurazyme enzyme. While the FDA did not ask the advisory panel to vote on

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whether or not to recommend Aldurazyme enzyme's approval, the panel voted unanimously that the companies' phase 3 trial of Aldurazyme showed a meaningful treatment effect in each of two primary endpoints. Later in that month, the FDA issued a complete response letter to our joint venture partner which noted that the data submitted in the BLA supported the safety and efficacy of Aldurazyme enzyme and that additional clinical data was not required to be submitted. The letter did request, however, additional information on post-marketing commitments, final product labeling, and completion of the manufacturing inspection process. This information has been submitted to the FDA. The FDA has set April 30, 2003 as the formal action date by which it will respond to the BLA for Aldurazyme enzyme. In addition, the Committee for Proprietary Medicinal Products of the EMEA issued a positive opinion on the MAA for Aldurazyme enzyme in February 2003. This non-binding opinion has been forwarded to the European Commission for consideration, and a final decision is expected later in 2003 regarding the marketing and sale of Aldurazyme enzyme in the European Union for treating the non-neurological manifestations of MPS I in patients with a confirmed diagnosis of the disease.

        AVONEX® (Interferon-beta 1a).    In September 1998, we entered into an agreement with Biogen, Inc. under which Genzyme General will, following regulatory approval, exclusively distribute AVONEX in Japan. AVONEX is Biogen's treatment for relapsing forms of multiple sclerosis. Genzyme General is managing the clinical development program for AVONEX in Japan and is working to obtain registration and reimbursement approvals for the product. Genzyme General completed a bridging study of the product during 2002 and submitted a regulatory dossier to the Japanese Ministry of Health, Labor and Welfare seeking approval of the product in Japan in the first quarter of 2003. Review of the regulatory filing is expected to last approximately one year. Genzyme General estimates that there are 5,000 multiple sclerosis patients in Japan.

        Myozyme™ enzyme.    Genzyme General is developing a potential therapy for Pompe disease, which is a lysosomal storage disorder that is estimated to affect between 5,000 and 10,000 people worldwide. As part of its efforts to develop a safe and effective therapy for patients suffering with Pompe disease as quickly as possible, Genzyme General has devoted resources to the development of several potential therapies. In 2002, Genzyme General began to transition patients participating in the phase 2 trial of transgenically-derived human alpha-glucosidase to a product produced in CHO cells. Genzyme General will continue supplying its remaining inventory of the transgenic product. Genzyme General has also begun scaling up manufacturing of Myozyme enzyme, a recombinant form of human alpha-glucosidase. Genzyme General has met with the FDA to outline a plan for initiating additional clinical trials in infantile and delayed-onset Pompe patients and to discuss the regulatory pathway going forward. Following these meetings, Genzyme General launched a clinical trial of Myozyme enzyme for use in children between six months and three years of age. It also anticipates initiating a pivotal clinical trial of Myozyme enzyme in the United States, Europe and Asia for children less than six months old during 2003. Genzyme General expects to pursue product registrations globally based on the results of these two trials and previous studies of other enzyme replacement therapies for Pompe disease.

        Tolevamer toxin binder.    Genzyme General is developing a toxin binder for diarrhea associated with Clostridium difficile, also known as C. difficile. C. difficile is a major cause of antibiotic associated colitis, a condition common in hospitals and nursing homes. C. difficile is estimated to affect over 300,000 patients each year in the United States, resulting in prolonged hospital stays and increased costs, and is the cause of an estimated 5,000 deaths annually. In December 2001, Genzyme General launched a phase 2 trial of this toxin binder and expects preliminary data from this trial to be available in the second half of 2003.

        Other Development Programs.    Genzyme General has several ongoing preclinical and research programs. During 2003, Genzyme General plans to file INDs for clinical testing of an enzyme replacement therapy for Type B Niemann-Pick disease, an antibody to transforming growth factor

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(TGF)-beta for an additional fibrotic condition, and small molecule therapies for lysosomal storage diseases and multiple sclerosis. Further, Genzyme General is engaged in research of next-generation enzyme replacement therapies for Type I Gaucher and Pompe diseases, small molecule products for multiple sclerosis, transplant rejection and inflammatory bowel disease, and gene therapies for lysosomal storage diseases and other genetic diseases.

Renal

        Genzyme General's Renal segment consists primarily of Renagel® (sevelamer hydrochloride). Renagel phosphate binder is used for the reduction of serum phosphorus in patients with end-stage renal disease on hemodialysis. Three formulations of the product have been approved by the FDA—the 403 mg. capsules were launched in the fourth quarter of 1998 and the 400 and 800 mg. tablets were launched in September 2000. Renagel phosphate binder was also approved for sale in Israel in 1999, Europe in 2000, Brazil in 2001 and Japan in January 2003. There are an estimated 320,000 end-stage renal disease patients in the United States, approximately 95% of whom receive a phosphate control product. There are also an estimated 170,000 end-stage renal disease patients in Europe, 50,000 in Brazil and 200,000 in Japan. Genzyme General is marketing Renagel phosphate binder capsules and tablets in the United States, Europe and Brazil directly to nephrologists, renal dieticians and payors through a dedicated sales force. Chugai Pharmaceutical Co., Ltd. and its partner, Kirin Brewery Co., Ltd., have rights to develop and market Renagel phosphate binder in Japan, China and other Pacific Rim countries, and Chugai plans to launch commercial sales in Japan later in 2003 following receipt of reimbursement approval.

        During 2002, Genzyme General implemented arrangements that successfully reduced wholesaler inventory levels for Renagel phosphate binder. This process of inventory reduction impacted revenues for the year, but Genzyme General believes that, based on prescription rates, end-user demand for the product increased during that period. Our results of operations are becoming increasingly dependent on sales of Renagel phosphate binder, which totaled approximately $156.8 million, or 13% of our consolidated product revenues, in 2002, $176.9 million, or 16% of our consolidated product revenues, in 2001, and approximately $56.0 million, or 6% of our consolidated product revenues, in 2000.

        Data from the "Treat-to-Goal" study funded by Genzyme General, which compared Renagel phosphate binder to the standard calcium-based phosphate binders, were published in July 2002. These data demonstrated that the patients treated with Renagel phosphate binder had notably less progression in cardiac calcification than patients who took calcium-based phosphate binders, thus suggesting that calcium-based phosphate binders taken by hemodialysis patients may contribute to the progression of cardiac calcification. The patients who took Renagel phosphate binder in this study also experienced a lipid-lowering effect, with a marked reduction in their levels of both LDL and total cholesterol.

        In addition, Genzyme General is conducting a 2,000-patient post-marketing study of Renagel phosphate binder to evaluate the ability of the product to improve patient morbidity and mortality. The trial, which is expected to be completed in 2004, compares Renagel phosphate binder to calcium-based phosphate binders with respect to overall morbidity and mortality. Further studies being conducted by Genzyme General are directed to expanding the use of the product into larger populations, notably for patients who have chronic kidney disease but have not progressed to kidney failure.

        Renal Research Programs.    Genzyme General is also engaged in a number of early-stage research programs directed to kidney disease, including a small molecule therapy for polycystic kidney disease, gene therapy for AV shunt failure in renal dialysis patients, and TGF-beta antagonists for renal diseases.

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Diagnostic Products

        Genzyme General develops, markets and distributes in vitro diagnostic products with an emphasis on point of care products for the in-hospital and out of hospital rapid test segment, and clinical chemistry reagents and raw materials focused on the clinical laboratory. Sales in Europe and the United States are made primarily to diagnostic reagent and equipment manufacturers who, in turn, distribute the products under their own brand. In Japan, sales are primarily made to distributors. Genzyme General also maintains a sales organization in Germany that sells diagnostic products directly to hospital laboratories. We have described some of Genzyme General's diagnostic products and development programs below.

        Qualitative Rapid Tests.    Genzyme General's qualitative rapid test portfolio expanded with the acquisition of Wyntek Diagnostics, Inc., in June 2001. In addition to private label products, Wyntek's sales include multiple formats of pregnancy, Strep A and infectious mono rapid tests. Adding these products to the current hCG rapid pregnancy test, the Contrast® rapid tests, and the combination rapid test for giardia and cryptosporidium broadened Genzyme General's position as a premier supplier of rapid tests. In this regard, during 2002 Genzyme General was awarded an exclusive contract from the government of France to supply a rapid test for Strep A infection. Genzyme General also has three rapid tests for infectious disease planned for introduction by early 2004, including a test for C. difficile colitis.

        Quantitative Rapid Tests.    Expanding on its rapid test product offerings, Genzyme General is developing cardiac and stroke quantitative point of care, rapid tests. We anticipate submitting the cardiac point-of-care product to the FDA in the second half of 2003. This product is expected to combine with Genzyme General's first instrument platform and to afford the footprint to offer other, quantitative point of care products in the future. Because heart disease is the leading cause of death in the United States, rapid identification and management of acute coronary syndromes at the point of care meets an important medical need. Genzyme General also is developing a quantitative stroke panel. Following FDA marketing clearance, Genzyme General intends to exclusively manufacture and sell the product worldwide. It is expected that, as a result of launch of the cardiac product, the stroke product will be Genzyme General's second quantitative panel, and will utilize the instruments already in place in the field. Stroke is the third leading cause of death in the United States, affecting approximately 700,000 people annually with a similar incidence in both Europe and Japan. Approximately 150,000 Americans die as a result of a stroke each year.

        Cardiovascular Products.    Genzyme General sells reagents for the measurement of low-density lipoprotein, or LDL, cholesterol, and high density lipoprotein, or HDL, cholesterol. Genzyme General's liquid N-geneous® LDL and liquid N-geneous® HDL tests measure cholesterol levels directly without the imprecise labor intensive pretreatment methods that were previously used. These methods are also easily adapted to automated chemistry analyzers, through instrument applications Genzyme General develops as part of its value contribution to its partners. The N-geneous LDL cholesterol test was the first direct, liquid homogeneous LDL cholesterol test available for sale in the United States. Genzyme General is distributing both tests exclusively in the United Sates and Europe under an agreement with the manufacturer of the tests, Daiichi Pure Chemicals., Ltd., of Tokyo. In Asia and Japan, we hold non-exclusive distribution rights. In the primary markets we serve, Genzyme General supports approximately 50% of the 150 to 200 million annual direct HDL cholesterol tests performed.

        GlyPro® Test.    Genzyme General's GlyPro test is a tool for monitoring diabetes. The GlyPro test measures glycated serum protein and provides an intermediate-term assessment of a patient's average blood glucose control over the preceding two to three weeks.

        Diagnostic Intermediates.    Genzyme General produces intermediates such as diagnostic enzymes and substrates for use in diagnostic kits. Complimentary to Genzyme General's unique formulated

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reagents, the raw materials are formulated by its instrument and reagent manufacturer partners into finished reagents for use on mainframe clinical chemistry analyzers in the clinical lab. Genzyme General is also a primary supplier of cholesterol enzymes used in testing for coronary heart disease.

Other Genzyme General Products and Services

        Genzyme General derives revenues from other products and services not included in the Therapeutics, Renal or Diagnostic Products segments. Those revenues are derived primarily from the provision of genetic diagnostic services and the sale of pharmaceutical intermediates.

Genetic Services

        Genzyme General applies advanced biotechnology to develop and provide high quality, sophisticated genetic diagnostic services in the United States and Japan. These services are promoted through a direct sales force in the United States with testing provided by Genzyme General's clinical laboratories, which are located throughout the United States. Our wholly-owned Japanese subsidiary services the Japanese market through a direct sales force and distributors, with testing services provided for Japan by Genzyme General's clinical laboratory in Santa Fe, New Mexico. Genzyme General employs over 120 board-certified genetics professionals who interpret results and provide genetic counseling and support services to medical practitioners and their patients. Genzyme General offers three types of genetic diagnostic services. We have described those services below.

        Cytogenetic Testing.    Most of Genzyme's cytogenetic testing is routine chromosome analysis done through karyotyping. Karyotyping is an analysis of the chromosomes in a single cell from one individual. Genzyme General's InSight® test utilizes Fluorescence In Situ Hybridization (FISH) technology to expand the capabilities of routine chromosome analysis in prenatal testing. It is used by cytogenetics laboratories and physicians as an adjunct to traditional chromosome analysis, and permits preliminary identification of the most frequently occurring numerical chromosomal abnormalities within 48 hours. Classical cytogenetic testing typically takes one to two weeks. Traditional cytogenetic and FISH molecular cytogenetic tests are routinely used to identify genetic abnormalities in pregnancy as well as hematologic cancers.

        Biochemical Testing.    Genzyme General offers a variety of biochemical genetic screening tests, including triple (AFP3®) & quad (AFP4®) marker prenatal genetic screening tests and Tay-Sachs enzyme analysis. Genzyme General's AFP4® advanced screening test has a higher detection rate and a lower false positive rate than the previous triple screen in assessing fetal risk of neural tube defects, Down Syndrome and Trisomy 18.

        Molecular Genetics (DNA) Testing.    Genzyme General's test menu includes over 20 DNA tests used in the screening and diagnosis of single gene disorders and hematological cancers. Genzyme General's CF87™ mutation analysis screens for 87 genetic mutations associated with cystic fibrosis. The American College of Obstetricians and Gynecologists (ACOG) guidelines include a recommendation that all Caucasian women who are pregnant and couples considering pregnancy be offered a genetic test to determine if they are carriers of cystic fibrosis. In 2002, Genzyme General expanded its menu of tests for childhood genetic diseases found disproportionately among people of Ashkenazi Jewish descent, which currently include tests for, among other diseases, Tay-Sachs disease, Cystic Fibrosis, Gaucher disease, Niemann-Pick disease, and Familial Dysautonomia.

        Genzyme General also has in vitro diagnostic rights to cancer markers which have been identified, or may be identified through 2006, using Genzyme Molecular Oncology's antigen discovery program. In addition, it has access to Genzyme Molecular Oncology's Serial Analysis of Gene Expression (SAGE™) database to identify diagnostic cancer markers, and options to diagnostic-related discoveries found through research collaborations with laboratories at The Johns Hopkins University and other

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institutions. Genzyme General is conducting clinical trials of the most promising subset of these novel markers.

Pharmaceuticals

        Genzyme General develops, custom manufactures and sells pharmaceutical drug materials, specializing in synthetic peptides, amino acid derivatives, phospholipids and complex chemical products, which are used by pharmaceutical and biotechnology companies as active pharmaceutical ingredients, key intermediates/excipients or raw materials in their products. These pharmaceutical materials are sold through a direct sales force to customers around the world. In addition, we develop and license to companies innovative lipid-based drug delivery technologies for use in their product development programs. Genzyme General's multi-purpose chemical manufacturing facility located in Liestal, Switzerland has a range of manufacturing scale to support the pharmaceutical industry's drug development programs from the research phase through clinical trials and product commercialization.

Genzyme Biosurgery—Products and Development Programs

        We created Genzyme Biosurgery in December 2000 by combining two of our former divisions, Genzyme Surgical Products and Genzyme Tissue Repair, and simultaneously acquiring Biomatrix, Inc. Genzyme Biosurgery is organized into three reportable segments—Orthopaedics, Cardiothoracic and Biosurgical Specialties. Its product and development program portfolio consists of biomaterials, biotherapeutics, cardiothoracic surgical devices and sutures. Genzyme Biosurgery's sales force markets products directly to physicians and hospital administrators throughout the United States and Europe. It also uses a network of distributors to sell certain products in the United States, Europe, Asia, Latin America and Africa.

Orthopaedics

        Synvisc® (hylan G-F 20).    Synvisc viscosupplementation product is a hyaluronan-based biomaterial used to treat the pain associated with osteoarthritis of the knee. An estimated 9 million of the 13.6 million people in the United States with osteoarthritis of the knee may be candidates for treatment with Synvisc viscosupplementation product. Synvisc viscosupplementation product is approved in approximately 60 countries and is sold in more than 35 countries, both directly and through marketing and distribution agreements with several companies, including Wyeth Laboratories in the United States and parts of Europe, Bayer AG in Israel, Australia, New Zealand and parts of the Pacific Rim, and Novartis Pharma AG in Latin America.

        In 2002, we received European authorization to market Synvisc viscosupplementation product for treating osteoarthritis-induced pain in the hip. During 2003, we plan to initiate a pivotal clinical trial evaluating Synvisc viscosupplementation product as a treatment for osteoarthritis of the hip in the United States, and to conduct clinical trials in Europe and possibly the United States to evaluate Synvisc in other joints such as the shoulder, ankle, and digits. We are also continuing preclinical development of an improved formulation of the product.

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        Carticel® (autologous cultured chondrocytes).    Carticel chondrocytes are used to treat damaged articular cartilage in the knee. Genzyme Biosurgery employs a proprietary process to grow a patient's own, or "autologous," cartilage cells (chondrocytes) for use in repairing damaged knee cartilage in patients who have had an inadequate response to a prior surgical procedure. The cells are implanted into the damaged area of the knee in a surgical procedure called autologous chondrocyte implantation. Genzyme Biosurgery markets Carticel chondrocytes to orthopedic surgeons in the United States and Europe directly and through distributors. Genzyme Biosurgery also sells biopsy kits and a variety of disposable instruments and sutures that are typically used in the implantation procedure. Sales of Carticel chondrocytes are usually lower in the summer months as fewer operative procedures are typically performed during those months. Genzyme Biosurgery is continuing development of a next-generation product intended to allow the procedure to be performed less invasively, thus decreasing the length of surgical and rehabilitation time for patients.

Cardiothoracic

        Minimally Invasive Cardiovascular Surgery Systems.    Genzyme Biosurgery markets products for minimally invasive cardiovascular surgery, with a focus on beating-heart surgery and vein harvesting. In beating-heart surgery, procedures are performed on the heart without stopping the heart and without the use of a heart/lung machine to circulate blood and supply oxygen. Genzyme Biosurgery's Immobilizer™ System for beating-heart surgery consists of a reusable retractor with disposable coronary artery stabilization and heart manipulation devices. Genzyme Biosurgery's SaphLITE® and RadLITE™ systems are used to remove the saphenous vein from a patient's leg or the radial artery from the patient's arm, respectively, in minimally-invasive procedures for use as a graft during a coronary artery bypass graft operation.

        FocalSeal®-L Surgical Sealant.    Genzyme Biosurgery launched FocalSeal-L surgical sealant in 2000 for use in pulmonary procedures. FocalSeal-L surgical sealant is a synthetic biomaterial approved for use in preventing air leaks following surgery. Approximately 180,000 lung surgeries are performed in the United States annually, with almost all patients at risk for debilitating air leaks. Genzyme Biosurgery markets FocalSeal-L surgical sealant in North America through its existing sales force. In other parts of the world where it is approved for sale, Genzyme Biosurgery sells the product directly or markets it through distributors.

        Chest Drainage Systems, Sutures and Aortic Punches.    Genzyme Biosurgery's products for traditional cardiothoracic surgery include a portfolio of products, including fluid management (chest drainage) systems, coronary bypass and valve sutures, and aortic punches. Its line of chest drainage systems consists of self-contained, disposable devices that utilize either wet suction or dry suction technology, or a combination of both, and are used to drain blood from the chest cavity following open-heart and lung surgery. The chest drainage products are primarily sold under the Pleur-evac® and Sahara™ brand names. Genzyme Biosurgery has entered into selling agreements for its chest drainage devices with several hospital group purchasing organizations. Genzyme Biosurgery also markets specialty cardiovascular sutures, including the Tevdek®, Polydek® and NextStitch® valve sutures and Deklene® sutures for coronary anastomoses. Additionally, Genzyme Biosurgery sells aortic punches, which are used during bypass surgery to make clean, precise openings in the aorta prior to bypass grafting.

        Biotherapeutics.    During 2002, Genzyme Biosurgery, in collaboration with Myosix, S.A. of France and Assistance Publique-Hospitaux de Paris, commenced a double-blind, placebo-controlled phase 2 clinical trial of an experimental cell therapy product designed to prevent the progression of heart failure in patients who have had a heart attack by harvesting autologous skeletal muscle cells (myoblasts) prior to bypass surgery through a small biopsy in the leg, multiplying the cells over the course of three weeks in the laboratory, and injecting them into a scarred region of the heart during a coronary artery bypass operation. The phase 2 trial is currently open for enrollment in France under

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the direction of Dr. Phillippe Menasche, the study's principal investigator. Genzyme Biosurgery expects that patient enrollment elsewhere in Europe, as well as in the United States and Canada, will commence in 2003.

        Genzyme Biosurgery is developing a gene therapy approach to ischemia, or inadequate circulation caused by blood vessel constriction or blockage, for coronary artery disease (CAD) and peripheral arterial disease (PAD). Genzyme Biosurgery currently is testing this approach in two phase 1 clinical trials to investigate the effect of HIF-1 alpha (hypoxia inducible factor-1), a proprietary gene, in stimulating angiogenesis, or new blood vessel growth. In preclinical studies, HIF-1 alpha has been shown to activate growth factors associated with angiogenesis. Enrollment of patients in the PAD phase 1 clinical trial has been completed, and preliminary results are expected to be available later in 2003. Genzyme Biosurgery anticipates that enrollment will be complete in its CAD phase 1 clinical trial in the first half of 2003.

Biosurgical Specialties

        Biomaterials.    Genzyme Biosurgery has an extensive line of biomaterial products on the market and in development for the general and plastic surgery markets, including principally its Sepra™ line of products. Genzyme Biosurgery sells the Sepra products in the United States and Europe primarily through its own sales force, and sells the Sepra and other biomaterial products in Japan and the rest of the world primarily through distributors.

        The chart set forth below provides summary information on certain of Genzyme Biosurgery's biomaterial products and development programs as of March 1, 2003.

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        The Sepra products are aimed primarily at preventing or reducing adhesions (scar tissue) following surgery. These products are based on hyaluronan, which is a substance that is naturally created in the body to lubricate and protect tissue.

        Seprafilm adhesion barrier, a bioresorbable membrane, is the only FDA-approved product clinically proven to reduce the incidence, extent and severity of postsurgical adhesions in the abdomen and pelvis. There are approximately 4,000,000 abdominal and pelvic procedures performed annually in the United States. Genzyme Biosurgery is conducting a multi-center phase 4 clinical trial to evaluate the use of Seprafilm adhesion barrier for the reduction of adhesion-related postoperative bowel obstruction following abdominal and pelvic surgery. The study, which tracks patient outcomes for two years after surgery, is expected to be completed at the end of 2003. Seprafilm adhesion barrier is also approved for marketing in Japan for use in patients with colorectal cancer.

        Seprafilm II adhesion barrier is a modified form of Seprafilm adhesion barrier designed to have improved handling and ease of use. Seprafilm II adhesion barrier currently is marketed in Europe, Canada and other countries for use in open and laproscopic abdominal and pelvic surgery to reduce the incidence, extent and severity of postoperative adhesions. Genzyme Biosurgery completed enrollment in its pivotal study of Seprafilm II adhesion barrier in abdominal surgery during 2002, and intends to submit an application seeking FDA approval in 2003.

        Sepragel Sinus and Seprapack bioresorbable nasal packing and sinus stents, designed to prevent nasal adhesions and control minimal bleeding after sinus surgery, were launched in 2002. Genzyme Biosurgery estimates that annually approximately 360,000 patients worldwide could be helped by one or both of these products. Genzyme Biosurgery has entered into an agreement with Gyrus ENT LLC for the exclusive worldwide distribution of Sepragel Sinus and Seprapack bioresorbable nasal packing and sinus stents.

        Hylaform is a hyaluronan-based biomaterial used to correct facial wrinkles by injection directly into the dermal tissue. Inamed Corporation sells this product in Europe and Canada and has the right to sell the product in the United States, Japan, Australia, Israel and other designated countries. Genzyme Biosurgery, in collaboration with Inamed, expects to complete its pivotal clinical trial of Hylaform in 2003 and to file an application for FDA approval by the end of the year. Inamed also distributes Hylaform® Plus and Hylaform® Fineline, closely associated products to Hylaform, outside the United States.

        Epicel® (cultured epidermal autografts).    Genzyme Biosurgery's Epicel skin grafts are cultured autologous skin cells used for permanent skin replacement for patients with severe burns. These epidermal grafts are grown from a patient's own skin cells. The primary candidates for Epicel skin grafts are the approximately 1,500 patients each year in the United States who survive burn injuries covering more than 60% of their body surface area. Genzyme Biosurgery markets Epicel skin grafts to burn centers in the United States and in parts of Europe through its own direct sales force and in Japan through a distributor. Sales of Epicel skin grafts fluctuate from quarter to quarter depending on a number of unpredictable factors, including the number of severe burn patients and their survival rate prior to treatment with Epicel skin grafts.

Genzyme Molecular Oncology—Technology Platforms and Development Programs

        Genzyme Molecular Oncology is developing a new generation of cancer therapeutics based upon the growing understanding of the molecular basis of cancer. It believes that these therapeutics have the potential to treat multiple types of cancer, minimize toxicity and side effects, and complement both existing and novel therapies. Genzyme Molecular Oncology supplements its internal resources through collaborations with some of the world's preeminent scientists and clinicians in the field of cancer.

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Technology Platforms

        Antigen Discovery.    Genzyme Molecular Oncology has built a proprietary, state-of-the-art platform for the discovery of antigens—molecular markers in tumor cells that enable the body's immune system to recognize and respond to these cells as "foreign." The power of this platform is its ability to combine antigen identification and validation in one step, thus enabling Genzyme Molecular Oncology to rapidly and efficiently incorporate antigens into novel antigen-specific peptide and gene-based cancer vaccines and to generate antibodies which recognize that antigen. During 2002, Genzyme Molecular Oncology received a U.S. patent covering the SPHERE™ method, one of the key components of the antigen discovery platform.

        The primary focus of Genzyme Molecular Oncology's internal program is on antigens that are highly prevalent across a wide range of cancers and which either stimulate a cellular immune response against tumors (for which vaccines presenting tumor-specific antigens to the immune system may be a suitable treatment method) or are located on the surface of cells (which may serve as targets for antibody-based therapies).

        In addition to using its antigen discovery platform for its internal programs, Genzyme Molecular Oncology has used it to enter into strategic alliances. To date, Genzyme Molecular Oncology has identified and submitted more than three dozen antigens under its antigen discovery and licensing arrangement with Purdue Pharma L.P. Purdue has selected several of these antigens for validation and launched a formal preclinical research program for certain antigens. Under this arrangement, Purdue may select up to 20 cancer antigens for use with its proprietary delivery platforms, with Genzyme Molecular Oncology retaining all rights to these antigens for use in its gene, cell, protein and peptide-based therapeutics, as well as to all antigens not selected for development by Purdue.

        SAGE™ Technology.    Genzyme Molecular Oncology has exclusive commercial rights to the patented SAGE (Serial Analysis of Gene Expression) technology, which is a high-throughput, high efficiency method of simultaneously detecting and measuring the expression level of virtually all genes expressed in a cell at a given time. The SAGE technology detects and quantifies expression of novel as well as known genes and, because of its high efficiency and sensitivity, the SAGE technology can detect genes expressed at low levels. Some of the uses of the SAGE technology are comparison of disease tissue with healthy tissue, comparison of genes expressed at different stages of disease, elucidation of disease pathways and measurement of response to and toxicity of drug candidates. In early 2003, a U.S. patent issued covering LongSAGE™, an expansion of the SAGE technique that allows for the matching of gene expression data directly with genomic information, thereby enabling the rapid and conclusive identification of previously unknown genes.

        Genzyme Molecular Oncology has used the SAGE technologies to analyze the most prevalent types of cancer and corresponding normal tissue and also has access to SAGE and LongSAGE data generated in the laboratories of Drs. Bert Vogelstein and Kenneth Kinzler at The Johns Hopkins University. Genzyme Molecular Oncology has accumulated from its proprietary analyses, its collaborators, and the Cancer Genome Anatomy Project at the National Cancer Institute a database of over seven million gene sequence identification tags, representing over 125,000 unique transcripts.

        Genzyme Molecular Oncology also employs the SAGE technologies extensively in its own drug discovery and development efforts to identify genes that are functionally relevant. In its cancer vaccine program, Genzyme Molecular Oncology combines the SAGE technologies with other proprietary tools to identify tumor-associated antigens. In the field of anti-angiogenesis, Genzyme Molecular Oncology is using the SAGE technologies to identify genes overexpressed in tumor vasculature relative to normal vasculature and to dissect the biological pathways resulting in angiogenesis.

        Genzyme Molecular Oncology also uses the SAGE technologies to generate revenue. Genzyme Molecular Oncology constructs SAGE and LongSAGE libraries on behalf of third parties on a

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fee-for-service basis and has granted rights to Invitrogen Corporation to market reagent kits that enable the use of the SAGE technology.

Development Programs

        Genzyme Molecular Oncology is developing products primarily focused on vaccines that aim to treat cancer by stimulating the body's immune system to fight tumor cells, and anti-angiogenic drugs that aim to treat cancer by preventing the formation and development of blood vessels that tumors require for growth. The following chart describes the status of Genzyme Molecular Oncology's development programs as of March 1, 2003:

*

Patient enrollment and treatment are complete, with data analysis ongoing.

Cancer Vaccines

        Genzyme Molecular Oncology believes that the most successful cancer vaccines will be those that activate a cellular immune response directed at the tumor. Its program features two types of investigational vaccines for generating a tumor-specific cellular immune response:

•

where specific tumor antigens are not known, a cell therapy product is created by using a technique that fuses the patient's own tumor cells with dendritic cells, the specialized immune system cells that present antigens to T cells (the immune system's cellular response to disease), which may allow for the selective recognition and destruction of the patients' tumor cells; and



•

where specific tumor antigens have been identified as targets of the cellular immune response, Genzyme Molecular Oncology uses gene-based or peptide-based tumor vaccines.

        Genzyme Molecular Oncology believes that both of these vaccine types may provide clinical benefit and have commercial potential. Genzyme Molecular Oncology believes, however, that antigen-specific vaccines provide the greater long-term opportunity and that over time, as Genzyme Molecular Oncology identifies more tumor-associated antigens, it will be able to develop off-the-shelf vaccines that are based on the specific antigens present in the patients' tumors.

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Patient-Specific Cancer Vaccines

        Genzyme Molecular Oncology is developing a number of patient-specific cancer vaccines. These vaccines are referred to as "fusion vaccines" because the product is made by fusing the patient's own tumor cells with dendritic cells, which are potent stimulators of the immune system. Through licenses from the Dana-Farber Cancer Institute and BruCells, S.A./N.V., Genzyme Molecular Oncology has a leading patent position around the fusion vaccines.

        Fusion Vaccine (Chemical Production Method).    During 2002, researchers at the Beth Israel Deaconess Medical Center and Dana-Farber Cancer Institute in Boston, with Genzyme Molecular Oncology's support, completed phase 1-2 trials of the fusion vaccine in each of metastatic breast cancer, melanoma and renal cell carcinoma (kidney cancer). In each of these trials, a chemical process was used to fuse the patient's tumor cells with dendritic cells isolated from that patient. The end points for these trials were safety, immunologic response and clinical response. The following chart summarizes the results of these trials:

        There were no serious adverse events in any of these studies, and all related adverse events were reported as mild or moderate.

        Fusion Vaccine (Electrofusion Production Method).    In 2002, Genzyme Molecular Oncology launched a multi-center phase 1-2 clinical trial of an additional fusion vaccine for advanced kidney cancer. Up to 20 patients are expected to be treated in the trial, which will assess the vaccine's safety profile as well as measure any clinical or immunological response in the treated patients. The methods used in this trial differ in several respects from the earlier fusion vaccine trials, including that the dendritic cell component of the vaccine is derived from a source other than the patient to test the hypothesis that the immune response may be enhanced by the presence of donor cells, and that the cells are being fused using an electrical, rather than chemical, process. We expect to complete patient enrollment in this trial in the second half of 2003. The comparison of these two fusion vaccine strategies will help guide the further development of this platform.

Antigen-Specific Cancer Vaccines

        Melan-A/MART-1 and gp100 Antigen-Specific Vaccines.    Genzyme Molecular Oncology has completed a phase 1-2 trial in melanoma patients at Massachusetts General Hospital/Dana-Farber Partners CancerCare. This trial involved isolating and expanding dendritic cells from the patient and combining these cells with adenoviral vectors encoding the Melan-A/MART-1 and gp100 genes outside of the patient (ex vivo). The gene-modified dendritic cells were then administered to the patient as a vaccine. Data from this trial were announced in January 2003. Fifteen of the 21 patients treated demonstrated some clinical or immunologic response, with one patient having an ongoing pathologic complete response, another having a partial response to the vaccine, and a third demonstrating stable

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disease. Some non-serious related adverse events were reported, and asymptomatic changes to the retina were the only reported treatment-related serious adverse events.

        Genzyme Molecular Oncology has also completed treatment in an additional phase 1-2 melanoma trial of adenoviral vectors encoding the Melan-A/MART-1 and gp100 tumor antigens. In this trial, the vaccine was delivered directly to the patient intradermally (in vivo), where large populations of dendritic cells reside. Genzyme Molecular Oncology is assessing safety with this in vivo vaccine delivery approach and monitoring patients' immune responses in order to elucidate whether direct, in vivo vaccine delivery warrants further clinical development. Genzyme Molecular Oncology expects safety and immunologic data from this study to be available in the second quarter of 2003.

        SPHERE™ Peptide Vaccines.    Genzyme Molecular Oncology has identified numerous proprietary peptides through its antigen discovery program. It is currently evaluating these peptides for multiple cancer indications in preclinical studies, and in 2003 plans to complete the preclinical work necessary to support its first Investigational New Drug application for a phase 1 trial using its proprietary SPHERE peptides in melanoma.

Angiogenesis Inhibitors

        Genzyme Molecular Oncology is pursuing multiple approaches to anti-angiogenesis, which is the treatment of cancer by cutting off the blood supply that tumors need to survive or by targeting the tumor vasculature. Genzyme Molecular Oncology's collaborators at The Johns Hopkins University used the SAGE technology to identify 46 tumor endothelial markers (TEMs), or genes involved in the growth of tumor blood vessels. Genzyme Molecular Oncology believes that some of these genes will yield targets for the development of cancer therapeutics.

        Genzyme Molecular Oncology is engaged in a strategic antibody collaboration around the TEMs with the pharmaceutical division of Kirin Brewery Co., Ltd. of Japan. The collaboration is focused on the development and commercialization of fully human monoclonal antibodies to a subset of the TEMs that can be used as therapies in the areas of antiangiogenesis and vascular-targeted cancer drug delivery. Product candidates will be generated by immunizing KM Mice™—Kirin's proprietary breed of transgenic mice—with a subset of TEMs that are both expressed on the cell surface and validated as antibody targets. Genzyme Molecular Oncology anticipates that, during 2003, an antibody candidate will be selected for further development under the collaboration.

        During 2002, Genzyme Molecular Oncology's portfolio of TEMs increased to over 400. Genzyme Molecular Oncology is investigating these additional TEMs to determine which of them would be the most suitable targets for antibody or small molecule-based therapeutics, and plans to enter into an additional collaboration during 2003 around small-molecule inhibitors of certain TEMs. In addition, it has begun to develop model systems that are more representative of human tumor endothelium than those employing commonly used cell lines in order to improve preclinical testing of drug candidates.

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Competition

        We are engaged in segments of the human healthcare products industry that are extremely competitive. Our competitors in the United States and elsewhere are numerous and include major pharmaceutical, surgical device and biotechnology companies. Some of these competitors may have more extensive research and development, regulatory, manufacturing and production capabilities. Some competitors may have greater financial resources. These companies may succeed in developing products that are more effective than any that we have or may develop and may also prove to be more successful than we are in producing and marketing products and services. In addition, technological advances or different approaches developed by one or more of our competitors may render our products obsolete, less effective or uneconomical. Each of our products and services faces different competitive challenges, and we have described many of them below.

Genzyme General—Therapeutics

        Cerezyme and Ceredase Enzymes.    Genzyme General is aware of companies that have initiated efforts to develop competitive products for the treatment of Gaucher disease. Oxford GlycoSciences plc, for example, is developing Zavesca®, a small molecule drug candidate for the treatment of Gaucher disease. Zavesca has been granted orphan drug status in the United States for treatment of Gaucher and Fabry diseases, and has been designated as an orphan medicinal product in the European Union for the treatment of Gaucher disease. In July 2002, the FDA issued a "non-approvable" letter to Oxford Glycosciences in response to its NDA for Zavesca; in November 2002, however, the agency agreed to examine additional data in support of that NDA. Also in November 2002, the European Commission approved Oxford GlycoSciences' MAA for Zavesca as an oral therapy for use in patients with mild to moderate Type 1 Gaucher disease for whom enzyme replacement therapy is unsuitable. Oxford Glycosciences is required to submit follow-up safety data on the product as a condition of such approval. Oxford Glycosciences has transferred the European marketing authorization to Actelion Ltd. In January 2003, a licensee of Oxford Glycosciences, Teva Pharmaceutical Industries Ltd., submitted an application for approval of Zavesca with the Israeli Ministry of Health.

        Other competitors could develop competitive products based on protein replacement therapy, small molecule or gene therapy approaches. Genzyme General believes that its proprietary production techniques give it a number of advantages over potential competitors using protein replacement therapy for the treatment of Gaucher disease. In addition, gene therapy approaches are still in experimental stages. Genzyme General believes that the principal factors that will affect competition for Cerezyme and Ceredase enzymes will be clinical effectiveness and absence of adverse side effects.

        Fabrazyme Enzyme.    Genzyme General is aware of other companies developing products for the treatment of Fabry disease. Transkaryotic Therapies Inc. also has an application for marketing approval for its Replagal™ | product for Fabry disease pending before the FDA, which was originally filed shortly before our BLA for Fabrazyme enzyme. If Transkaryotic Therapies or any other company receives FDA approval for a Fabry disease therapy with orphan drug designation before we receive FDA approval for Fabrazyme enzyme, the Orphan Drug Act may preclude us from selling Fabrazyme enzyme in the United States for up to seven years. In Europe, we received marketing approval for Fabrazyme enzyme at the same time that Transkaryotic Therapies' product received marketing approval for Replagal. Both products have been granted 10 years of market exclusivity in Europe. We currently are involved in litigation with Transkaryotic Therapies related to its product. For more information about this litigation, you should read the section of this Annual Report on Form 10-K entitled "Item 3. Legal Proceedings."

        WelChol Bile Acid Binder.    Products are currently available that address many of the needs of the cholesterol-reduction market. These products include other bile acid sequestrants, HMG-CoA reductase inhibitors, fibric acid derivatives and niacin-based products. In October 2002, Merck/Schering-Plough Pharmaceuticals received marketing approval in Germany and FDA approval in the United States for

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its product, ezetimibe, as a second line therapy for use alone and with all marketed statins for the treatment of elevated cholesterol levels. The introduction of this product in the United States may adversely affect the future growth of bulk sales and royalties earned on sales of WelChol bile acid binder.

        Other Lysosomal Storage Disorders.    Genzyme General is aware of other companies and institutions that are researching and developing enzyme replacement therapies, small molecules and gene therapies for lysosomal storage disorders. These include products for Pompe disease, MPS I and other lysosomal storage disorders Genzyme General and its collaborative partners are currently pursuing.

Genzyme General—Renal

        Phosphate binders, such as Renagel phosphate binder, are currently the only available treatment for hyperphosphatemia. There are several phosphate binders available or under development. A prescription calcium acetate preparation is currently the only other product approved in the United States for the control of elevated phosphorus levels in patients with chronic kidney failure and on hemodialysis. Other products used as phosphate binders include over-the-counter calcium- and aluminum-based antacids and dietary calcium supplements. The doses necessary for calcium acetate and calcium carbonate, the most commonly used agents, to achieve adequate reductions in phosphate absorption can lead to constipation and patient noncompliance. In addition, calcium therapy requires frequent monitoring because its use can cause hypercalcemia and evidence suggests that increasing doses of calcium-based binders may lead to cardiac calcification. Aluminum hydroxide is more effective at lower doses than calcium acetate or calcium carbonate, but it is infrequently used because aluminum absorbed from the intestinal tract accumulates in the tissues of patients with chronic kidney failure, causing aluminum-related osteomalacia, anemia and dialysis dementia. Genzyme General is aware of one other company, Shire Pharmaceuticals, Inc., that is developing a phosphate binder for the treatment of hyperphosphatemia in patients with chronic renal failure. Shire has filed for marketing approval of this product in the United States, the European Union and Canada, and received an "approvable" letter from the FDA in March 2003 requesting additional data and analysis on the product.

Genzyme General—Diagnostic Products and Other

        Diagnostic Products.    Genzyme General acts as a primary supplier of enzymes and substrates, and generally does not compete with its customers in the sale of complete diagnostic kits. The market in the diagnostic products industry is mature and competition is based on service, quality, technical support, price, reliability of supply and the purity and specific activity of products.

        Genetic Diagnostic Services.    The United States market for prenatal cytogenetic and biochemical testing is divided among approximately 500 laboratories, many of which offer both types of testing. Of this total group, less than 20 laboratories market their services nationally. Genzyme General believes that the industry as a whole is still quite fragmented, with the top 20 laboratories accounting for approximately 50% of market revenues. Genzyme General estimates that it accounts for approximately 10% of the total market. Genzyme General believes, however, that the industry will experience increasing consolidation as smaller laboratories face the challenges of more complex and stringent regulation.

        Competitive factors in the genetic diagnostics services business generally include reputation of the laboratory, range of services offered, pricing, convenience of sample collection and pick-up, quality of analysis and reporting and timeliness of delivery of completed reports. Genzyme General believes that its research and development program, which has enabled it to develop and introduce testing services

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based on new technology, and its active sales and marketing force have played significant roles in the growth of its genetic diagnostics services business.

Genzyme Biosurgery—Orthopaedics

        Synvisc Viscosupplementation Product.    Current competition for Synvisc viscosupplemetation product includes Hylagan®, produced by Fidia S.p.A. and marketed in the United States by Sanofi-Synthelabo, Orthovisc®, produced and marketed outside of the United States by Anika Therapeutics, Inc. and Artz®, a product manufactured by Seikagaku Kogyo that is sold in Japan by Kaken Pharmaceutical Co. and in the United States by Smith & Nephew Orthopaedics under the name Supartz®. Two other potential competitive products which have received European marketing authorization and are in the process of seeking approval in the United States are Durolane®, manufactured by Q-Med AB, and Arthrease®, manufactured by Bio-Technology General Corp. and distributed by the DuPuy Orthopaedics division of Johnson & Johnson. Durolane and Arthrease are produced by bacterial fermentation, as opposed to Synvisc viscosupplementation product, which is derived from chicken combs. Further, the treatment protocol for Durolane is a single injection, as compared to Synvisc viscosupplementation product's three injection regimen. Production via bacterial fermentation and treatment with a reduced number of injections may represent competitive advantages for these products if they are approved and launched in competition with Synvisc viscosupplementation product. Genzyme Biosurgery is aware of various other viscosupplementation products on the market, or in development, but is unaware of any other products that have physical properties of viscosity, elasticity or molecular weight comparable to those of Synvisc viscosupplementation product.

        Carticel Chondrocytes.    Genzyme Biosurgery is aware of three other companies, Verigen, Inc. (Denmark), Co.dons AG (Germany) and Fidia S.p.A (Italy) that have competitive cell based therapies for cartilage repair in Europe. In addition, Genzyme Biosurgery knows of two other companies, Integra LifeSciences Corp. and LifeCell Corp., which are engaged in research on cultured cartilage products. Further, a surgical technique known as osteochondral grafting may be competitive to Carticel chondrocytes. This procedure, which can be performed arthroscopically, involves transferring plugs of low weight bearing cartilage and bone to the area of a defect. Smith & Nephew plc, Arthrex, Inc. and Johnson & Johnson have instrumentation systems for use in treating small cartilage defects in the knee that are competitive to the Carticel implantation procedure.

Genzyme Biosurgery—Biosurgical Specialties

        Sepra Pro