Henri Termeer - Chairman and CEO Michael Wyzga - CFO John Butler - President, Renal Division David Meeker - President, Lysosomal Storage Disorder Therapeutics Ann Merrifield - President, Biosurgery Georges Gemayel - EVP, Therapeutics Kristen Galfetti - Director of IR

Ian Somaiya - Thomas Weisel Yaron Werber - Citigroup Geoff Meacham - JP Morgan Chris Raymond - Robert W. Baird & Company John Sonnier - William Blair Phil Nadeau - Cowen Meg Malloy - Goldman Sachs Adam Walsh - Jefferies Bill Tanner - Leerink Swann Eric Ende - Merrill Lynch Shiv Kapoor - Montgomery & Company Alex Silverstein - Bear Stearns Lavina Talukdar - MFS Investment Management

Good morning. My name is Jodie and I will be your conference operator today. At this time, I would like to welcome everyone to the Genzyme Quarter Four 2006 Results and 2007 Financial Guidance Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you. I would now like to turn the conference over Ms. Kristen Galfetti, Director of Investor Relations for Genzyme. Please go ahead, ma'am.

Thank you, Jodie, and welcome everyone to Genzyme Corporation's fourth quarter 2006 earnings and 2007 guidance conference call. I would like to remind everyone that earnings release and this call are available on the Investor's page of our website at www.genzyme.com. We will discuss Genzyme's business outlook on this call. Forward-looking statements about our projected future financial results and all other statements made on this call that are not historical facts are subject to a number of risks and uncertainties. Our actual results may differ materially. Please refer to our September 30th, 10-Q on file with the SEC for more information on those risks. Forward-looking statements include expectations regarding our future financial performance, including 2007 earnings per share, revenue, and expense guidance as well as our developments in our clinical pipeline. If during this call, we use any non-GAAP financial measure, you will find on our website at www.genzyme.com reconciliations to the most directly comparable GAAP financial measure. I'd like to remind everyone that our first quarter earnings conference will take place on April 25, 2007 at 11 o'clock am Eastern Time. Thank you and I would now like to turn the call over to Genzyme's Chairman and CEO, Henri Termeer.

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Thank you, Kristen, and welcome everybody to our 2006 results call on the fourth quarter and also the guidance for this coming year. This was a very, very solid year, 2006. We came in at non-GAAP earnings of $2.77 versus the guidance we gave at the beginning of year of the year of $2.65 to $2.75. Revenues were right on the guidance of $3.2 billion. And the fourth quarter was stronger actually than we had expected and anticipated. It came in at 77, non-GAAP on record revenues. And as you may know, in the early part of January, we did give preliminary non-GAAP EPS guidance for the year 2007 of $3.10 to $3.20 without counting for the AnorMED transaction. And because of the very strong ending of the year and if you know, the numbers going into this year, we have increased that guidance now to $3.20 to $3.30 a share non-GAAP excluding AnorMED. Including AnorMED, that's about $0.50 a share between interest loss because of the $600 million transaction and the operating costs that are now incorporated in our numbers for the coming year. We have now guidance for the year including non-GAAP guidance, including AnorMED of $3.05 and $3.15. So, this indeed was a very strong ending and we have strong expectations for this year. But the year really will be characterized, 2007, by what we see in the many late-stage clinical trials that were started in 2006 and 2005. We will see ten trials producing results during the year and they are quite material. They are quite material in terms of how we think about building the top line and bottom line for the corporation into the future. Without new products, we did also early in the year say that we would expect through the next five years to grow about 15% per year to about $6 billion in the year 2011. So, some of these late-stage trials actually are creating new opportunities to grow beyond the kind of expectation that we set at that time. Some of these programs relates to market expansion as those are related to completely new markets. In the case of market expansion, very important things to watch this year are the results of Myozyme, the late-stage trial, late-onset trial for Myozyme in Pompe disease. That is fully enrolled, running. Through this year, we will see by the end of the year what these results are. Myozyme is doing very well, as you may have noticed and we have high expectations, as you may have noticed from our guidance for this year. But this trial is very important from a reimbursement point of view, from a guidance point of view, to physicians in terms of what the expectorations can be for patients that are late-onset. We also will see in a market expansion sense, results of the Renvela trial, the second generation Renagel. We filed the first phase of this program with the FDA late last year, that's for the hemodialysis patients. But for this year, we will see results in CKD, that's clearly a very important market of expansion and results of once-a-day dosing trial, which is important for compliance and also for market expansion. The Campath, CLL, first line label, we will ask for that in Europe and in the United States. That's a very, very interesting additional piece of market for that program and for Clolar, we are now enrolling in two adult AML trials, and these are clearly Phase III trials which we expect will lead to regulatory filings. Late last year, we saw Synvisc II showing result of single injection versus three to five injections at the current standards for the management of osteoarthritis pain. And imagine this, once we have gotten approved for label, changes in Europe and the United States also to lead to market expansion, because this clearly decreases the burden of treatment for patients very, very significantly including the cost as well. Hylastan is another program that is directed to the same purpose, and we will see the results of that program by mid this year. We are believers that this osteoarthritis program will become very, very material part of the mix of programs that we have in the corporation. So, we have made these investments. We are now seeing some results of these investments, and we are quite optimistic indeed that these markets will continue to be very receptive to these kinds of treatments. And in terms of new markets, the Mozobil programs, which we've acquired through the acquisition of AnorMED, will show by mid this year results of two Phase 3 clinical trials, and we hope to file this year or early next year for these programs to become commercializable in 2009. Very, very exciting programs, very important in the transplant field, very important in the oncology field, and because things we learn about these products some that may come out in our Q&A. Certainly during our Analyst Meeting in May, we will talk about this more. We think this product and products of this nature will have all kinds of additional potential indications that will be quite important. Tolevamer, the program for C. difficile colitis, the first program that's non-antibiotic treatment for that increasingly large problem, as in nosocomial diarrhea. We think that Tolevamer would be very exciting indeed if it does show positive results of the two Phase 3 trials that are currently being accrued throughout the world. These trials are based on a very solid Phase II results. So, we are somewhat optimistic, but of course we have to rate these results. And then if they do happen to be very positive, we will start to develop hospital-based infectious disease marketing capability, a new market for Genzyme, we think market that has great deal of excitement in it. Lastly, let me mention the Campath-MS program. For the first time in this press release, we did talk about two Phase IIIs in this area. We expect to start these two Phase IIIs this year. We are working with EMEA and FDA on the protocol development and definitions. And we clearly have a very high expectation that we will be able to materially change the treatment of MS. Of course, these are longer trials, but they are very important in the outlook for the corporation, as we go beyond the next few years. This is not an exhaustive list that I just went through, but this is extremely exciting list. Some of them are very clear, they are very manageable, they are ongoing, and we know the time when we these results, and they fit into the momentum that we have that was shown so very well during last year of all the new programs that are still developing market share, and developing new markets for the products that are in the market itself. The financial performance is very solid. We have known this is easy. We work very hard to make sure that the manufacturing stage of rest of these product introductions. We had quite a lot of work going on in that regard, Ireland and Belgium and here in the Boston Area. And we expect the investments in manufacturing to continue. We have philosophy of manufacturing in pretty much all the products that we sell and that has been of great benefit to us to manage the gross margin, which you can see in our continuously improving gross margin picture over now many years. So, our strategy has been and continues to be to deliver sustainable growth. This I am saying not for one year, not for one quarter, but over long periods of time. And we think that 2006 and 2007 are prime examples of the execution of the strategy, and I much look forward to reporting to you the results during this year. Michael Wyzga, our CFO, will go through the results in more detail and the financial results. And then, we will have a Q&A. I have with me all the Presidents of the different business units. So, we can talk about any particular question that you may have in our programs, Mike?

Thank you, Henri. As Henri mentioned, we exited 2006 on a very strong note. Both our top and bottom line performance really gained momentum as we went throughout the year. As we previously announced, our full year revenue increased to about $3.2 billion during the year and that's about a 17% year-on-year growth. And while our revenue growth and continued operating spends leverage really drove our bottom line, it's just as important sort of to look at our cash generation, which remained strong during this year. The cash generation this year allowed us to fund the capital infrastructure growth and the AnorMED acquisition, exclusively from cash that was generated through our operations. We did all this while still increasing our cash balances over the last year. So it's a very strong point. As you can see from our attached earnings per share crosswalk, during the fourth quarter we recorded a net GAAP loss of $268 million. That was due to the impact of the AnorMED purchase accounting. On a pre-tax basis, the impact of the in-process R&D write-off associated with this transaction was $553 million. During the quarter, we also settled a lawsuit that was related to the competitive appeal Tribunal case back in UK. The expense associated with this settlement was about $8 million. Expenses associated with stock options in the fourth quarter were $48 million. Amortization remained relatively flat at $53 million. Our non-GAAP net income was $209 million or $0.77 per diluted share on the basis of 269.7 million shares outstanding. Now just as a reminder, Genzyme had a GAAP net loss for the quarter and the common stock equivalents were excluded from calculation as they were anti-dilutive. On a non-GAAP basis, we produced a net profit and the common stock equivalents were included in the non-GAAP EPS calculation. So, you will see that showing up on the crosswalk. For the full year, our non-GAAP income was $743 million or $2.77 per diluted share. So, with that as an overview, let me talk about some of the key business drivers in 2006. The increase in revenue was really driven by two areas, by the growth in the Renagel area as well as the increased revenue in the LSD therapeutic area. Myozyme continue to ramp up nicely following the second quarter launch with revenue coming in for the full year at $59 million. Renagel increased to $135 million in the fourth quarter and $515 million for the year. This is due to the increased market penetration, which is really driven by the data that would highlight both the clinical and economic benefit of Renagel. Fabrazyme increased to $97million for the quarter and $359 million for the full year. That reflects both the patient accruals as well as the continued market expansion. Synvisc, despite some uncertainty towards the end of the year associated with the CMS pricing, increased to $61 million for the quarter and $234 million for the year. For the year, I should note that the impact of foreign exchange rate was relatively immaterial. It's less than $3 million, as I recall. The non-GAAP gross margin for the fourth quarter and the full year was approximately $0.78 of revenue -- 78% of revenue rather. Within our operating expense, our non-GAAP Q4 R&D expenses were $147 million or 17% of revenues. For the year, our non-GAAP R&D expenses were $565 million or 18% of revenue. The year-to-year spending increased by about $85 million and that was mainly due to the full year impact that we are seeing in Hectorol as well as the increased spending associated with Tolevamer, Renvela and Myozyme. Our non-GAAP SG&A expenses were $233 million for the quarter and the full year spending was $879 million. This year, our SG&A reflects the scale of cost associated with Myozyme launch as well as the full year impact of Hectorol. We also showed increased sales and marketing investment, particularly outside of the United States. Now, what's key here is despite these investments, our SG&A actually decreased as a percentage of revenue by one full percentage point to about 28% of revenue. Our tax rate before one-time events and amortization was 31% and that was for the year. Our capital expenditures for the fourth quarter were $97 million or $334 million for the full year. Now, as I mentioned in my opening comments, our cash generation was very robust during the year, in the course of 2006. We entered 2006 with approximately $1.1 billion in cash and marketable securities. During the year, we funded our capital expenditures of $334 million and the AnorMED acquisition, which came in at approximately $600 million. And yet, we exited the year with $1.3 billion in cash and cash equivalents. Cash from operations net of one-time events was approximately $240 million in the fourth quarter, and for the year that came in about $820 million. So that's the backdrop of 2006. Let me now update you on the guidance for 2007. As Henri mentioned in our remarks and as you can see from our press release, we are changing our 2007 base guidance prior to the impact of the AnorMED acquisition. Last quarter we gave a non-GAAP EPS guidance of $3.10 to $3.20 for 2007. As we exited 2006, we noticed that we have a strong exit and strong ramp rate. So, we increased our base by $0.10 and that would bring your base number to $3.20 to $3.30, again on a non-GAAP basis and again excluding the AnorMED acquisition. With regard to the AnorMED acquisition, let me break that out. There is actually two components to consider. The first is the impact on our interest income line. And then, AnorMED, as you'll recall, is an all-cash transaction of approximately $600 million. Our long and short-term cash portfolio usually generate somewhere between 4% and 5% annually. So, the lost interest income associated with the lower cash balances during the course of this year is about $0.07. The second impact is the impact to our P&L with regard to the full year impact of the AnorMED operating expenses. We estimate dilutive impact of these operating expenses to our EPS to be about $0.08. So, the total AnorMED acquisition impact, including both factors, is dilutive by about $0.15 during 2007. With the increase of our base guidance of $0.10 and the impact of AnorMED, which is dilutive by $0.15, our revised 2007 non-GAAP earnings per share guidance is $3.05 to $3.15. Let me now talk about some of the key drivers in 2007. We expect our worldwide revenue to increase to approximately $3.6 billion to $3.8 billion in 2007. Our top line again will be drawn from multiple product lines. Building on our strong launch, we expect Myozyme revenue to increase to $155 million to $180 million due to the full year impact of that, as well as geographic expansion. Fabrazyme is expected to increase to a range of $415 million to $425 million due to continued market penetration worldwide. And we expect Fabrazyme to reflect single-digit growth increasing to about $1.1 billion for the full year. Renagel also continues to be a key element of our revenue growth. Finishing up 2006 on a strong revenue base, we are expecting the top line to increase to between $580 million and $590 million. Within the Biosurgery area, Synvisc sales are expected to increase to $250 million to $265 million. Diagnostics products and diagnostics services revenues are expected to increase to approximately $385 million to $405 million. Our non-GAAP gross margin is expected to remain fairly consistent with 2006 at approximately 77% to 78% revenue. Now, while our non-GAAP SG&A expenses would be somewhat impacted by the associated expenses with the full year of Myozyme product launch, as well as the increased expenditures for the Biosurgery sales and marketing efforts. We expect our SG&A to remain relative flat as a percentage of our revenue, and coming on somewhere between 27% and 28% of revenue. Our non-GAAP R&D is expected to increase to about $640 million to $650 million in 2007. That includes a couple of factors and includes the full year impact of the AnorMED expenses, as well as the impact of multiple late-stage program such as Tolevamer, Renvela, and MS. And as Henri sort of alluded to during his opening comment, this will be a very busy as we expect data from about 10 trials in the course of this year. Our net interest income in other line is expected to come in at $55 million to $60 million. And again, it is made up of two factors, reflects the less interest income associated with the AnorMED transaction, somewhat offset by the increased profitability that we're expecting with a joint venture that we have with BioMarin. Our non-GAAP tax rate is expected to remain relatively flat with 2006 and come in about 32%. Our weighted average shares outstanding excluding the impact of the contingent convertible is expected to come in at 272 million to 275 million shares. Our capital expenditures are expected to come in the range of $325 million to $375 million. Bunch of factors here, we expect to continue to build out additional R&D offices mostly here in United States, in Massachusetts, in Framingham and Waltham, as well as continue our manufacturing capacity build-out in Belgium and Ireland. Again, our non-GAAP earnings per share guidance is $3.05 to $3.15. In the first quarter, our non-GAAP EPS guidance is expected to be in the low $0.17 range. Now, I will caution you on a couple of things. First of all, our Q1 tends to be a big seasonal, as we begin many of our sales and marketing programs in the beginning portion of the year predominantly in Q1. In addition, Q1 will be the first full quarter of AnorMED operating expenses. So, before tuning over to Henri, I would like to remind you that you can find our line item detail on both revenue and expense on the attached press release that we issued, as well as on our website. So, with that, let me stop and turn it back to Henri and open up to questions and answers.

Operator, Jodie, we can turn to Q&A now.

Yes, sir. (Operator Instructions). Your first question comes from David Witzke with Banc of America Securities. Mr. Witzke, your line is now open. Again, Mr. Witzke your line is open.

You may go to the next question.

Our next question comes from Ian Somaiya with Thomas Weisel. Ian Somaiya - Thomas Weisel: Thanks for taking my question. I wanted to follow-up on your guidance, specifically related to two products. First Renagel, what impact do expect from Part D heading into '07? And the second question just relates to Myozyme the late-onset data. Should we expect any contribution of that data in '07 or is that just a basically driver heading into '08?

On the Myozyme, may be David can respond. Myozyme currently is being used in late-onset. I think the importance here is to really complete the picture around late-onset use of the product, so it's very, very supportive. But David, any as a comment on that before John can comment on Renagel?

No, that's the message. This is a trial that we will reinforce what the community is very much understanding, as that this product works across the spectrum of disease for Pompe disease. So, it will be very important in that sense, but not a driver in '07.

John?

Yes, Part D continues to be an opportunity for us, a significant opportunity. I think the larger driver for us this year will be the publication of the [outcomes] data, particularly the R&D data that was published in KI in January, and Dr. Block's data that would be globally the most significant driver for us.

Next question?

Your next question comes from Yaron Werber with Citigroup. Yaron Werber - Citigroup: Yeah, how are you doing there? Good morning. I had two questions. Number one, on Synvisc II, can you give us a little bit of a sense, the press release noted that you showed a significant improvement over placebo. But if you were to compare that single dose to the original three doses in the separate studies and I understand I am asking you to extrapolate data from one trial to another. Can you give us a sense was the magnitude similar or do you see a little bit of a reduction in efficacy over time with the single injection?

This is Ann Merrifield.

Ann, could you respond to that question?

Surely. Although it's very difficult to compare a very small trial for the initial registration of Synvisc to this very wide, well-controlled trial of Synvisc II, the response was comparable and as much as we look at it. And we think of this as being one injection which gives you the same pain relief and function improvement that three injections have provided here before. Yaron Werber - Citigroup: And do you need to be on new J-code or is it because it's just a different dose, so you can be covered under the previous code?

We believe it will operate within the existing code. Three doses in one. Yaron Werber - Citigroup: Okay. So BHB plus six is basically based on the higher dose which is a combination of the three.

The way that Synvisc II works is redeliver all three doses in one injection. And in that sense, it would fit within the same code, three injections in one. Yaron Werber - Citigroup: And just a question on Renvela timing, I am just trying to understand the powder formulation which you are dosing once a day. When do you expect data from that study and when do you think you will be able to actually file and launch that product?

John?

Yeah, all of our Renvela studies that we are doing now are fully enrolled. So, we expect data late in the second half of the year. We have to have approval of the original NDA before we file for the CKD indication and the once-a-day dosing indication, so after approval of the original NDA which we filed, as was mentioned towards the end of last year. Yaron Werber - Citigroup: So, it's now that you are going to be filing that in 2008, is that a six months review at that point?

I believe that that's a 12 months review. And at the end of '08, that's when we receive the original Renvela approval. Yaron Werber - Citigroup: Okay, great. Thank you.

Your next question comes from Geoff Meacham with JP Morgan. Geoff Meacham - JP Morgan: Hi, just a couple of questions on Renagel, can you give us an update of the DCOR study? Are we in review there now? And then, I guess kind of the third quarter to fourth quarter trends for Renagel looks a little flattish. Can you talk about some of the trends there? And then, what you are assuming in terms of price increases for 2007?

John?

The DCOR trial is currently under review. So, there is really no other update to give around that. I feel quite positive that with the RAND trial published now and I have already said that, having that clinical study in the hands of our representatives, sales representatives is what really will drive adoption. They have that now. So, waiting a while longer for DCOR should be actually fine because we have a very, very strong study in new dialysis patients. And so, your second question was? Geoff Meacham - JP Morgan: Just with respect to the sequential trends in the fourth quarter for Renagel and then kind of your guidance by way of price increase?

Yes, we did do a price increase of 9.5% towards the end of last year. So again, as always that will roll in over the course of the year. We did have volume increases every quarter throughout the year, and again in the fourth quarter. We had a little lower pricing in the fourth quarter. Again, this moves around a bit depending on Part D versus Medicaid versus government payors. And that's what made it look a little flatter. But we did have volume increases, steady increases throughout. We've got January prescriptions this morning and they were at an all time high. So, I think that momentum we have in the market is continuing. Geoff Meacham - JP Morgan: And just a real quick follow-up, if I can on the AnorMED acquisition. Can you give us a status of the divestiture of the HIV assets? And then, remind us if you've applied for a fast- track status for Mozobil?

It's very difficulty to give you a precise status what happens with different assets not related to AnorMED. But George Gemayel, you can give us an update on the Mozobil?

Yeah. With regard to Mozobil, yes, it is going to be fast track. And we are looking forward to be able to have that from the two major studies sometime around mid-year, and filing the NDA as soon as possible after that.

Next question?

Your next question comes from Chris Raymond with Robert W. Baird & Company. Chris Raymond - Robert W. Baird & Company: Hi, thanks. Maybe a little bit more on Renagel, if possible. John, you made some comments about January scripts being at an all time high. I am wondering if you could give some indication is some of that from maybe bolus of patients who were experiencing the doughnut hole possibly coming back in a bolus form this quarter. And also maybe sort of a follow-on question, what sort of impact do you think doughnut hole affects might have and maybe the timing in 2007?

Sure, it's very, very hard to say, and we just received these prescriptions data this morning. So, it's very difficult, but even with more time to know where the patients came from. But as we looked at the utilization in 2006 from Part D, it really did seem like a lot of the patients that came on, and again this is our analysis is that, they came over from states where we had Medicaid plans that were prior offering Renagel, it is more difficult for them to get the product. And we saw an influx from those states as we look at those individual state prescribing. So, I think a lot of the patient we got on Part D in 2006, really were patients that didn't experience a doughnut hole or never Medicaid patients who came on to Part D had low income assistance and didn't experience a doughnut hole. That's why I say, there is still a lot of opportunity in Part D left, as we try to get more and more of these patients who have Part D, but do have the doughnut hole. There is more programs being put in place to help patients through the doughnut hole. We have our Part D Assistance Program, through the AKF, which we are continuing. We are also looking at other programs through the AKF to help with co-pay assistance etcetera to gain access to those patients. So, obviously we want to get patients on Renagel and keep them on throughout the year and we are committed to doing that. So, I still think there is a lot of opportunity left in Part D. Chris Raymond - Robert W. Baird & Company: And then may be a follow up. You mentioned in your prepared comments that you started a Niemann-Pick program. Can you maybe put a little bit more detail around this program? Specifically, is this a situation where you might be able go right into a registrational trial after the Phase I study? Is this in both severe and non-severe patients, stuffs like that?

Yeah, let me ask David Meeker, the President of Therapeutics Division, to give a response to that. This is early days of course. David?

Yeah. So, this is a program we've worked on for a while and it actually is a bit more challenging than some of the other enzyme replacement therapies we've developed. So, we've initiated a trial that's a single-dose administration trial, which is currently being run in Mount Sinai, and we will be needing to do at least one more pivotal trial and possibly two. In other words, we might have to do an additional trail related to dosing and then go on to a pivotal trial. So, we are very early, as Henri said. We are very committed to this program and this population, but we are still a ways away. Chris Raymond - Robert W. Baird & Company: So, it is also in severe and non-severe, right?

Yes. There is an entry criteria for this initial single-dose trial, but this is very much about safety in the first trial. Chris Raymond - Robert W. Baird & Company: Thank you.

Your next question comes from John Sonnier with William Blair. John Sonnier - William Blair: Hey, Mike. It's John Sonnier. Just a question on the guidance. I am trying to understand if there is going to be any of the cohorts from the lost trial that will become paying patients and whether or not that from the Myozyme guidance? Number one. And I guess, secondly, I am trying to reconcile where the growth is coming from in Biosurgery?

Okay. Let me ask David Meeker to make the comments first. And then Ann, if you can follow on the Synvisc?

Yeah. I think the way to look at the Pompe, so to answer to your question specifically around the last trial that does not finish in a timeframe where there would be a material impact in terms of revenues for this year in those patients coming over, so they are not in guidance. Again, this is like the other enzyme replacement therapies, the product that seems to have good efficacy and good safety, and that's appreciated. And the growth has been very good in the early markets meaning the US and Europe. And as with the other products, we'll over time begin to see increasing growth in the Americas and Asia Pacific. So, it's going to rollout not similarly from the other products. John Sonnier - William Blair: Okay.

And the growth in Biosurgery, Ann?

Yeah, certainly on the Biosurgery front, aside from Synvisc, single largest driver of growth would be our Sepra franchise, which grew in excess of 20% this past year and we continue to expect to grow at strong rates going forward. We've kind of been able to start penetrating the OB/GYN oncology segment as well as the OB/GYN segment in C-sections, and of course those are both very, very large market opportunities. So, ways to go on Sepra and we hope to see it come on the screen with its own guidance another year. John Sonnier - William Blair: Perfect. Thanks.

Your next question comes from Phil Nadeau with Cowen. Phil Nadeau - Cowen: Good morning. Congratulations on the good quarter.

Thank you. Phil Nadeau - Cowen: I had one question for David and one for Mike. David, first for you. You recently announced that the late-onset Pompe trial was going to continue dosing patients for an additional six months beyond what was in the original design in the trial. Could you talk a little bit about that decision? How much was known about the 12-month data when that decision was made and on what was that decision based? And then Mike for you, on the SG&A guidance for the year, could you spend a little bit more time on that? When I incorporated AnorMED into my P&L, I came out with about $100 million less in SG&A than you had. So, could you go over what factors might be increasing that number? Thanks.

This is, David, taking the first question on the last trial. We, as you would know, have a lot of experience now doing trials in the small patient population. And we have learned that the challenges of having new trial adequately powered and knowing that based on the work that is done to design the trial is more limited. So, we put in place an adapted trial design which meant that the data was reviewed by an independent Data Safety Monitoring Board. So, Genzyme is totally obliging to that data. But this group didn't see the blinded data. Their only instructions were to obviously be sure that the product remain safe and the trial was wanted to go forward on that basis. But with regard to the length in the trial, their instructions were to make sure that this trial had the optimal chance of being able to demonstrate safety and efficacy. And it was based on their analysis that they felt the longer term follow-up would increase that likelihood.

On the second question with regard to the SG&A, SG&A went from $879 to our guidance 1020 to 1040, about $1 billion, represents about 15% to 16% growth rate. And it shouldn't include much of AnorMED at all. As a matter of fact, to the extent that most of the expenditures are taking place in the operating expense on the R&D line. Phil Nadeau - Cowen: Great, thank you.

Next question?

Your next question comes from Meg Malloy with Goldman Sachs. Meg Malloy - Goldman Sachs: Thanks very much. Two quick questions. One is, could you breakout the US data currently and international contributions? And then secondly, on Synvisc II, what would be the expectations around potential (inaudible)? Thanks.

Okay. Meg, can you repeat your first question because we had a little noise in the room here. Meg Malloy - Goldman Sachs: Oh, my apologies. I wanted to get the international and US breakout of Renagel and also what your estimate of current share is with Renagel in the US? Thanks.

John, can you take a stab at that?

Yes. US Renagel for the year was about 51%, really third to fourth quarter. It didn't shift much, that's been fairly stable, 51% to 52% in that range. And the market share in January was 48.5% for Renagel versus 42.7% and 8.8% for PhosLo and Phosrenol respectively.

On Synvisc II, we would hope to gain approvals such that we launch in the EU countries in the fourth quarter of this year. And gain approval by year-end for the US, but with a launch with any power probably early next year. Meg Malloy - Goldman Sachs: Great, thanks very much. And I am sorry, could we get the international sales for Renagel?

You mean that the total number? Meg Malloy - Goldman Sachs: Yes, please.

Including the Japanese sales that, the docks of Sevelamer, international sales are $225.5 million and domestic sales are $279.6.

That's correct. Meg Malloy - Goldman Sachs: Thank you very much.

Your next question comes from Adam Walsh with Jefferies. Adam Walsh - Jefferies: Hey, good morning. Thanks. Henri, you talked a little bit about your high hopes for Tolevamer. And in talking to physicians, some of them have expressed interest in potentially using that drug as a primary preventative of prophylactic upon approval. I am just wondering whether or not you have plans to study Tolevamer in that setting and what the timing would look like? Would you begin those trials perhaps before approval or perhaps wait until approval and then run them? Thanks.

We clearly have the same thoughts here. We'd like to see the results of the current trial and trials to make that judgment to move it forward. But it is clearly extremely seductive to protect vulnerable patients before they get into trouble and we clearly want to go in that direction. At this time, I don't have timing when we would start. We clearly couldn't really make much judgment on this until we have seen the result of the current Phase III trials. But very, very important question and like the physicians you spoke to, we are extremely interested to go in that direction. Next question?

Your next question comes from Bill Tanner with Leerink Swann. Bill Tanner - Leerink Swann: Thanks. Couple of questions, may be first for you, Mike, mentioned that the revised guidance was attributable to some trends that I guess emerged at the year. Is there anything if you would like to point out to us specifically, do fall into that category?

I didn't understand. Can you speak a little louder? I did not quite get your question. Bill Tanner - Leerink Swann: Okay. Sorry Henri. It's mainly maybe for Mike. I know there is a comment made early on that the upward EPS revision was attributable to sort of some changes in some of the business, I guess at the end of the year. And I am just wondering if Mike or you Henri would like to maybe highlight what some of those components may have been? And then I actually have a follow-up.

It's not a scientific issue, you may think it is. You make a judgment and the judgment on the initial guidance that was used early in January was based on where we were, blind to the fourth quarter. We were in the middle of fourth quarter or early in fourth quarter as we developed budgets for 2007. So at that time too, we couldn't talk about AnorMED because we haven't done all the reviews of that situation. So we made a judgment, and the judgment was the one that we disclosed in early January once all the data had come in, in terms of what the run rates were, what the burn rates were in different programs, the timing of the programs. The cost in these businesses often very much depends on when certain programs start and when clinical trials start and when production system startup and has started hitting the P&L. So, we knew just no more at this juncture than we knew at the time we made the judgment of what we were going to say in the early January preliminary disclosure. And we have got lot confidence as well and all of these things come together and this is what we express. As you know us, we are quite conservative. We try to not to get ahead of ourselves and that all was displayed in these events. Bill Tanner - Leerink Swann: Okay. And then maybe just, Henri, you mentioned that there is obviously lot of trial readouts and there is some of these new programs there's going to be market expansion what obviously would suggest there is potentially a lot of leverage to be gained from the business model. And then, you also talked about new markets. Just trying to understand philosophically how you guys are looking at the new market opportunities? To what extent would they be leveraged off the existing business or would you need to increase spending so on and so forth?

No, in some cases in the new markets we don't have any presence in that market segment; like in the hospital-infection market, we would have created that presence. We are not fearful of that because we have done it for businesses, different types of businesses, number of times in the past. Always the critical element is does something work and getting organized to present it, we feel of a high level of confidence. We have a pretty good track record. And on market expansion, expansion like moving from hemodialysis patients to Phase IV CKD patients, chronic kidney disease patients, ultimately treated by nephrologists, they get more leverage because you're still are dealing with the same physicians with the same co-point. In the case of Synvisc, going from one to two injections, you get full leverage because that is just a better way to present the treatment. In the case of going to once-a-day dosing with Renvela, you get full leverage because that's just a better way to present the therapy to patients. So, we look at the mix, our drivers are to make sure that we have a good mix of truly significant new innovative therapies for patients that are currently not being treated. And Campath-MS is in that category in one broad base and Niemann-Pick B is in that category. And also much more narrow patient population these are very important new diseases that we are attacking and where we have some confidence that we can get there. And make absolute sure that those products are in the market, they are optimized. That they optimized from a manufacturing point of view, from a clinical development point of view, from every point of view so that we can reach the maximum potential and reach all the patients that can benefit by these therapies. And that involves always and in kind of clinical development on those products. Clolar going from pediatric to adult, third line COL for Campath going to first line COL, goiter disease for Thyrogen. These are expansions of the markets for the products that we already have and clearly, they are the ones where the risk profile is extremely beneficial. Bill Tanner - Leerink Swann: Great, thanks.

Your next question comes from Eric Ende with Merrill Lynch. Eric Ende - Merrill Lynch: Thanks. I know you guys don't like talking about pricing before drug gets on the market, but I do want to get a sense on Mozobil. How are you thinking about it? Are you thinking in terms of pricing of Neupogen? And if so, how is Neupogen priced in this setting? And then, the second question had to do with something you said before. You said that you would build out a hospital-based infectious disease business if Tolevamer works. I was just curious to know whether or not we should think about you guys doing an acquisition in that space or you'd build it out on your own?

You want to know too much. And I think these are very reasonable questions, it is nice to talk about these questions, but they are speculative. And you are quite correct. Talking about price before you know the Phase III results is an inappropriate place to go. We valued of course Mozobil in an important way. That's how we based our thinking around the AnorMED transaction. But I would much prefer to talk about the value we have created once we know what that value is as a result of the Phase III. And how we create the infrastructure needed to reach the marketplace. You are quite correct. There are different ways to go about that. And we have always looked at these different ways to go about that and in the future for everything we do. But it is speculative to talk about any particular way, because I can't pinpoint any particular way at this moment. Eric Ende - Merrill Lynch: All right. So, since you won't answer my questions, can you just tell us what the price of Neupogen is in that market?

George, can you respond to that?

Yes, Neupogen is used for several days, may be five to six or seven while, and the price could be couple of thousand dollars. Eric Ende - Merrill Lynch: Thank you.

Your next question comes from Shiv Kapoor with Montgomery & Company. Shiv Kapoor - Montgomery & Company: Thanks for taking my question. Actually one of them was asked by Eric. But I still want to probe you a little bit more on the Tolevamer question. And my question is, how do you decide what you will do to win acquisition or a building of the sales force, both of which what you've done before? How do you compare the cost and benefits of these strategies? And my second question is, on your Transplant business, your guidance indicates that Thymoglobulin sales could potentially accelerate this year. My question is what's your current sales force and are you starting to increase your plant sales force this year?

Let me ask George to respond to the Thymoglobulin question first. George?

I think that the guidance we have given was a Transplant guidance. So, included all the services and products we have in Transplant. We did not give specific a Thymoglobulin guidance. However, Thymoglobulin sales have been increasing. And as you have seen, the increase in '06 over '05 was about 17% and we expect these trends to continue both in Europe and in the United States.

Thymoglobulin just a product that still has a lot of legs left. And internationally, we often commented that this was an important opportunity for us once we took over Thymoglobulin to get organized and to really get this product in a marketing place where it really could benefit from its potential. It was very much below its potential. And there we see good results. There are some pricing differentials that still need to be resolved and we are reckoning on those. We think Thymoglobulin has a long future ahead it and a nice publication doing the journal late last year that they supported particularly internationally. So, we look forward and we make appropriate global sales and marketing investments to accomplish these things. In terms of Tolevamer, how would we make a decision or in terms of generally, how do we make by decision in terms of infrastructure building it or buying it. It's again not slightly mysterious. We are looking at it. We have a very active group looking at all the opportunities that are available to us in terms of programs, products, R&D that's going on outside of the company or what infrastructure may be available outside of the company. And we have a continuous internal building goal in all of our infrastructure. We built factories and we have looked at transactions like this transaction where we acquired a factory. It's not that reading things causally and it does not let's us decide what the growth we do kind of. But this is a continuous process of deciding, what are the appropriate ways to move forward. The characteristic of this industry is that there is an incredible amount of work going on in the companies now around the world. And transactions are very much part of our world. And anybody that ignores what happens to the value that's created outside their own programs is probably missing a great deal of opportunity. So, we will be very diligent in this regard. And since, it is entirely possible to build the sales force from scratch, we have that as a choice as we've done with Renagel when we started. Next question.

Your next question comes from Alex Silverstein with Bear Stearns. Alex Silverstein - Bear Stearns: Hi, thanks for taking my question. Just trying to reconcile something in the guidance, it looks like the '07 EPS guidance excludes the impact of convertible debt, which is about 10 million shares. And given that your stock currently within about 5% or so including the shares in your dilutive share count, how much of your guidance be impacted by the inclusion of the shares? And is your guidance actually using the less conservative way to think about this?

Michael?

Yeah. It would be on as-converted basis. It would be 9.6 million additional of shares. That has been excluded for non-GAAP purposes because we can't pick the stock price going forward obviously. So, we have excluded that from our guidance. As we go through the core business as a part of the year, if it is dilutive in nature, it will be included both in our GAAP and our non-GAAP guidance. If we haven't exceeded the stock price, which I believe is 71.56, if I am not mistaken. If we've not exceeded that price, it will be carved out as part of our non-GAAP numbers. Alex Silverstein - Bear Stearns: And would you be changing your guidance based on that?

No. Alex Silverstein - Bear Stearns: Okay, thank you.

We do have a follow-up question from Meg Malloy with Goldman Sachs. Meg Malloy - Goldman Sachs: Yes, thanks very much. Just staying with the guidance, Mike, the expense guidance that you gave is on a non-GAAP basis. Can you give us any indication of what the FAS 123R expense might be for 2007?

Yes, we have that broken out as part of a guidance script. If you look at the guidance package, it actually represents approximately $0.58 to the GAAP to non-GAAP numbers. What we didn't do? We didn't break it out specifically into the cost to goods sold, sales and marketing, and in SG&A, and R&D numbers, because we simply don't know how those shares will be bifurcated by organizational -- Meg Malloy - Goldman Sachs: Yeah, okay. And I guess it's a little difficult to compare year-over-year because you didn't have AnorMED last year, but would a rough percent be a reasonable way to look at it?

I am not sure that would be a reasonable way of looking at that. Because you have to always keep in mind that no one in the company even moves in regard to the market employing to each individual in about functional area any amount of options that would be of the period that would be same to each of those functions because of those function areas. So, I think it would be very difficult, that's why we have broken down in a bit more detail. Meg Malloy - Goldman Sachs: All right, fair enough. Thank you.

Next question.

(Operator Instructions). Your next question comes from [Lavina Talukdar] with MFS Investment Management. Lavina Talukdar - MFS Investment Management: Hi everyone. Just generally speaking, how large and how costly would it be to build a hospital sales force for Tolevamer?

I think you are focusing on something that is really not very complex. Sales forces are being created all the time. A sales person would cost X amount. Let's say 200,000. If you need 100 of this 200,000 times a 100 and you need to hire them, you need to find them. There is a very large market of sales representatives in the country because we go for people that are very, very, very good and we feel very good about the people that we have in the longevity of the sales force that we have. So, we are pretty critical about whom we bring on Board. But it is not a mysterious effort, and I would not consider it to be in any way material to the ability of an organization to act or certainly Genzyme to execute on the potential of these programs. The critical item is does it work? Lavina Talukdar - MFS Investment Management: Right.

And if we needed a sales force of 5,000 people then we would have a different situation for a company like Genzyme. But we talk here about hundreds, larger than thousands. And we have a sales force in the hundreds in the orthopedic fields and in the renal fields and etcetera. So, lot of different activities that we do. So, this is not very, very mysterious. And therefore, to say we are forced into a transaction because of the hospital product - the driving of product, we clearly don't feel that way at all. Lavina Talukdar - MFS Investment Management: Right. That's what I wanted to get you, that it shouldn't be a massive effort. And so, the building it, versus buying it isn't really a big question versus what the opportunity in Tolevamer could be if it does work, is that the right way to think about it?

You got it right. Lavina Talukdar - MFS Investment Management: Okay. Thank you.

(Operator Instructions).

Operator, we probably should take no more than two more questions.

(Operator Instructions). There are no further questions, sir, at this time. Are there any closing remarks?

Thank you very much everybody for participating this morning. We look forward to communicating with you soon in April, Kristen gave April month --

25th.

25th. And then the analyst meeting is when?

May 16th.

May 16th. We will communicate this to most of you on both of these events. In the meantime, as we get results we will very much like the opportunity to get back together. Thank you very much for participating this morning. We will talk to you soon.

Thank you. This concludes today's Genzyme quarter four for 2006 results and 2007 financial guidance conference call. You may now disconnect.

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