CAMBRIDGE, Mass., Oct. 12 /PRNewswire-FirstCall/ -- Genzyme Corp.
(Nasdaq: GENZ) today reported third-quarter revenue of $808.6 million, 14
percent greater than revenue of $708.1 million in the same quarter a year
ago. The increase was driven by contributions from most product areas,
highlighting the impact of diversification on the company's ability to grow
in a consistent and sustainable way.
GAAP net income was $16.0 million, or $0.06 per diluted share, compared
with $115.7 million, or $0.43 per diluted share, in the third quarter last
year. GAAP net income includes the following items, net of tax: (1) a
charge of $149.4 million for the impairment of goodwill associated with the
company's genetic testing business; (2) an amortization expense of $31.9
million; (3) a stock-compensation expense of $30.3 million; and (4) a tax
benefit of $31.7 million from the conclusion of a U.S. federal tax audit
for the years 1996-99.
Non-GAAP net income for the third quarter increased 22 percent to
$195.9 million, and non-GAAP earnings increased 20 percent to $0.73 per
diluted share, driven by solid revenue growth and continued leverage from
Genzyme's global infrastructure. Non-GAAP net income for the third-quarter
last year was $160.5 million and non-GAAP earnings were $0.61 per diluted
share. Non- GAAP figures exclude one-time items, amortization,
stock-compensation expenses, dilution from contingent convertible debt, and
the consolidation of variable interest entities.
"Our products across the board have good traction and momentum, and
this gives us confidence that we can continue to grow the top line in a
significant way based on this mix of products alone," said Henri A.
Termeer, Genzyme's chairman and chief executive officer. "Behind these
products are late-stage programs that will drive our longer term growth,
and during the next six to twelve months many of these programs are
expected to reach key milestones."
The non-GAAP gross margin for the third quarter was 78 percent of
revenue, boosted by greater utilization of existing facilities, including
the new fill and finish facility at Genzyme's manufacturing site in
Waterford, Ireland.
Product Sales
A significant new contributor to Genzyme's top line is Myozyme(R)
(alglucosidase alfa). The product is off to a highly encouraging start
following its launch in the United States in mid-May and in Europe a month
earlier. Sales in the third quarter-the first full quarter of sales-were
$20.4 million. Myozyme was registered in Canada in August and will be
launched there next month.
Myozyme has been approved for the treatment of all patients with Pompe
disease, and Genzyme continues to make excellent progress in securing
reimbursement both for patients with the infantile and the late-onset forms
of Pompe disease. Reimbursement has been obtained in more than 20
countries, including several in which the product is being funded through
pre-approval reimbursement mechanisms.
Results from the pivotal clinical study of Myozyme have been accepted
for publication in Neurology. In September, Myozyme earned the 2006 UK Prix
Galien Gold Medal, a prestigious international award that honors
outstanding achievement in pharmaceutical research and development in the
United Kingdom. It is presented bi-annually to new products judged to be
the most innovative. Earlier this year, Duke University was issued a U.S.
patent relating to alpha-glucosidase. Genzyme holds an exclusive license to
this patent under a technology and patent license agreement with Synpac
(North Carolina) Inc. Genzyme began making milestone and royalty payments
to Synpac on October 1 under this agreement.
Sales of Fabrazyme(R) (agalsidase beta) enzyme replacement therapy for
Fabry disease continue to track with expectations, rising 18 percent to
$93.2 million from $79.1 million in the same quarter last year. Later this
month, Genzyme will sponsor the 7th Annual European Roundtable on Fabry
disease, at which more than 350 physicians from around the world will
discuss a range of issues focusing on the comprehensive management of Fabry
disease.
Sales of Aldurazyme(R) (laronidase) enzyme replacement therapy for
patients with MPS I also continue to track with expectations, rising to
$25.0 million in the third quarter, a 24 percent increase from sales of
$20.1 million in the same quarter last year. Aldurazyme is marketed through
a joint venture with BioMarin Pharmaceutical Inc., and product sales are
not included in Genzyme's revenue figures.
Sales of Cerezyme(R) (imiglucerase for injection) enzyme replacement
therapy for Type 1 Gaucher disease were $252.2 million, 6 percent greater
than sales of $238.3 million in the third quarter a year ago.
Within the Renal business, Genzyme markets Renagel(R) (sevelamer
hydrochloride), a phosphate binder for patients with end-stage renal
disease on hemodialysis, and Hectorol(R) (doxercalciferol), a line of
Vitamin D2 products for secondary hyperparathyroidism in dialysis patients
and those with earlier stages of chronic kidney disease.
Renagel had an excellent third quarter following a strong performance
in the second quarter of this year. Revenue grew 26 percent to $134.7
million, compared to $106.9 million in the same quarter last year. The
communication of data highlighting the clinical and economic benefits of
Renagel should continue to play an important role in the product's
adoption. Three-year hospitalization and health economic data from the DCOR
study will be presented at next month's meeting of the American Society of
Nephrology. Renagel's growth is being driven by a number of other factors,
including the Medicare Part D program, which has increased access to the
product in the United States. For patients facing the Medicare coverage gap
known as the "doughnut hole," Genzyme and the American Kidney Fund recently
launched a program to provide Renagel free of charge until coverage under
the Part D program resumes.
The development of sevelamer carbonate, a next-generation version of
Renagel, took a major step forward in the third quarter. The primary
efficacy analysis from the pivotal trial comparing sevelamer carbonate to
Renagel showed that the two are equivalent in controlling serum phosphorus
in hemodialysis patients, with similar safety and tolerability profiles.
Genzyme expects to file an NDA for sevelamer carbonate in the fourth
quarter and to launch the product commercially in early 2008 for dialysis
patients. The company plans to subsequently expand the product's label to
include hyperphosphatemic patients with chronic kidney disease who are not
on dialysis. Enrollment has been completed in the study evaluating
sevelamer carbonate for this indication. Enrollment is also complete in
another key study comparing a powder form of sevelamer carbonate dosed once
a day to Renagel tablets dosed three times a day. The powder form of the
product would offer a more convenient option for patients, thereby
improving compliance.
Hectorol sales increased to $25.5 million, compared to $14.1 million in
the third quarter last year. A study just published in Kidney International
confirms the benefits of Vitamin D2 analogs. It showed equally lower
mortality rates among patients treated for secondary hyperparathyroidism
with Vitamin D2 analogs Hectorol and Zemplar(R) (paricalcitriol), compared
with those treated with a Vitamin D3 therapy. This is the first study to
provide comparative data on the efficacy of Hectorol and Zemplar, its
primary competitor.
Sales of Thyrogen(R) (thyrotropin alfa for injection) rose to $22.4
million in the second quarter, a 21 percent increase from sales of $18.5
million during the same period a year earlier.
Within the Biosurgery area, sales of Synvisc(R) (hylan G-F 20) were
$55.9 million, compared with $57.7 million in third quarter last year,
primarily reflecting increased competition in the viscosupplementation
market. Synvisc is indicated for the treatment of knee pain caused by
osteoarthritis, and Genzyme is emphasizing the product's clinical
advantages to distinguish it from its competitors. Results from an
independent study showing that Synvisc patients experienced a greater
magnitude and duration of pain relief, better functional outcomes and
higher levels of satisfaction compared with patients taking a competing
product will be presented at next month's meeting of the American College
of Rheumatology. These findings were well received when they were presented
earlier this year at meetings of the European League Against Rheumatism and
the British Orthopaedic Association.
In addition, Genzyme hopes to significantly alter the competitive
landscape in this expanding market by introducing innovative
next-generation products in the near term that may decrease the treatment
burden for patients by reducing the number of injections required. Results
from the pivotal study of Synvisc 2 are expected in the fourth quarter, and
depending on the outcome, Genzyme expects to gain U.S. and European
marketing approval next year. The pivotal trial is comparing one injection
of Synvisc 2 with a placebo. Genzyme is also developing hylastan, which is
the subject of a pivotal study scheduled to conclude during the first half
of next year. Hylastan could reach the market in 2008.
Sales of Sepra(TM) products increased substantially again in the third
quarter, rising 24 percent to $21.1 million from $17.0 million in the third
quarter a year ago. Seprafilm(R) adhesion barrier continues to be a dynamic
product, and its growing use in gynecologic surgery is helping drive
overall sales.
Within the Transplant area, combined sales of Thymoglobulin(R)
(anti-thymocyte globulin, rabbit) and Lymphoglobuline(TM) (anti-thymocyte
globulin, equine) were $37.6 million, up 16 percent compared with $32.4
million in the third quarter last year. These products are used to treat
acute rejection in renal transplant procedures. During the quarter, Genzyme
began shipping Thymoglobulin from its facility in Waterford, Ireland,
following FDA approval in July allowing the product to be filled, finished,
packaged and labeled at the site.
Total revenue for the Diagnostics/Genetics business increased to $89.3
million in the third quarter, 5 percent greater than revenue of $84.7
million in the same period last year. During the quarter, Genzyme Genetics
launched a p53 mutation analysis, an important prognostic and predictive
test to help oncologists determine appropriate treatment options for their
patients with B-cell chronic lymphocytic leukemia (B-CLL). Earlier this
year, Genzyme launched a minimal residual disease test that is helping
oncologists detect very low levels of disease in B-CLL patients.
Other revenue -- including oncology revenue, sales of pharmaceutical
intermediates, and royalties from sales of WelChol(R) (colesevelam
hydrochloride) -- was $38.1 million compared with $37.6 million in the
third quarter last year.
Oncology revenue grew 35 percent to $16.5 million from $12.2 million in
the same quarter last year, driven by increased sales of Clolar(R)
(clofarabine), which is gaining traction in the market. Oncology revenue
includes profits and royalties from Campath(R) (alemtuzumab), which is
marketed by Schering AG and its U.S. affiliate Berlex; sales of Clolar; and
R&D revenue.
Genzyme is working to broaden the indications for Campath and Clolar to
benefit larger patient populations. Final results from the phase 3 trial
comparing Campath with chlorambucil in previously untreated patients with
progressive B-cell chronic lymphocytic leukemia will be presented at the
American Society of Hematology meeting in December. The trial is designed
to demonstrate the product's efficacy and safety as a first-line agent in
this disease. The data presented at the ASH meeting will focus on the
study's primary endpoint of progression-free survival. Encouraging interim
results from this study were presented at the Annual Meeting of the
American Society of Clinical Oncology in June. They showed that patients
who received Campath exhibited significantly higher overall and complete
response rates, with a manageable safety profile, compared with
chlorambucil patients. Genzyme and development partner Schering AG expect
to submit U.S. and European applications next year to expand the product's
current label to include first-line treatment of B-CLL patients.
Genzyme is seeking to expand Clolar's indication to include adult
patients with acute myelogenous leukemia (AML). The product is currently
indicated for the treatment of pediatric patients with relapsed or
refractory acute lymphoblastic leukemia after at least two prior regimens.
Enrollment began in September in a pivotal study evaluating Clolar's use
for adult patients with AML. An additional late-stage study is also planned
to support Clolar's use in older patients for whom standard induction
chemotherapy is not likely to be of benefit.
Expenses
Non-GAAP selling, general and administrative expenses were $214.9
million in the third quarter, compared to $201.8 million in the same
quarter last year. Non-GAAP SG&A spending was approximately 27 percent of
revenue, down from 29 percent in the same period a year ago, reflecting
greater operating efficiencies, particularly in the renal business unit.
As a result, the company was able to increase its investment in
research and development. Non-GAAP R&D spending rose to $143.0 million in
the quarter, or 18 percent of revenue, compared to $120.8 million, or 17
percent of revenue, in the third quarter a year ago.
The reconciliation from non-GAAP to GAAP expense figures is included on
the accompanying chart.
Genzyme is conducting more late-stage trials now than at any point in
its history. New products and new product indications are expected to
expand and further diversify the company's portfolio and contribute to its
long-term growth. Additional clinical development program highlights for
the third quarter include the following:
* The phase 3 trial of tolevamer is well advanced and is scheduled for
completion next year. The first commercial approval is anticipated in
2008, depending on the outcome of the pivotal study. Tolevamer is a
novel polymer therapy that could be the first non-antibiotic treatment
for Clostridium difficile-associated diarrhea, a widespread and growing
global problem primarily affecting patients in hospitals and nursing
homes. The prevalence and impact of Clostridium difficile are becoming
increasingly more visible as public health officials and others look for
new ways to manage this disease. Results from the phase 2 study of
tolevamer were published in Clinical Infectious Diseases in August.
* Preparations continue for the initiation of a phase 3 study of
alemtuzumab (Campath) for the treatment of relapsing/remitting multiple
sclerosis. Genzyme will meet with the FDA next month to discuss plans
for the study, which the company anticipates will begin in the first
half of next year. Two-year results from a pre-planned interim analysis
of the three-year phase 2 study were released in September and showed a
robust, statistically significant treatment effect for alemtuzumab
compared with Rebif(R) (interferon beta-1a). The phase 2 trial remains
on clinical hold in the United States, and Genzyme is working closely
with clinical investigators and regulatory agencies to complete the
study and ensure that the risk of immune thrombocytopenic purpura (ITP)
is well understood and managed. Genzyme has implemented a comprehensive
risk management plan to help physicians and patients participating in
the trial detect ITP early and minimize the risk of complications.
* The clinical study of Myozyme involving patients with late-onset Pompe
disease is fully enrolled and will continue throughout this year and
into next. The 90-patient trial is intended to provide further support
for Myozyme's use. Results are expected next year and will be submitted
to regulatory authorities.
* In the lysosomal storage disease area, enrollment has begun in an
international, multi-center phase 2 clinical trial evaluating the safety
and efficacy of the small molecule GENZ-112638 for the treatment of
Gaucher disease. The trial will help determine the potential of this
compound as an alternative or adjunct to enzyme replacement therapy.
GENZ-112638 also may be applicable to several other lysosomal storage
disorders in addition to Gaucher disease. Initiation of the phase 2
program follows completion of an extensive pre-clinical research effort
and a phase 1 program that involved more than 120 subjects in three
separate studies.
* The phase 3 study of DX-88, known as EDEMA3, is on track for completion
by the end of this year. DX-88 is being developed by Dyax Corp. with
Genzyme for the treatment of patients with hereditary angioedema.
About Genzyme
One of the world's leading biotechnology companies, Genzyme is
dedicated to making a major positive impact on the lives of people with
serious diseases. This year marks the 25th anniversary of Genzyme's
founding. Since 1981, the company has grown from a small start-up to a
diversified enterprise with more than 8,500 employees in locations spanning
the globe and 2005 revenues of $2.7 billion. Genzyme has been selected by
FORTUNE as one of the "100 Best Companies to Work for" in the United
States.
With many established products and services helping patients in more
than 80 countries, Genzyme is a leader in the effort to develop and apply
the most advanced technologies in the life sciences. The company's products
and services are focused on rare inherited disorders, kidney disease,
orthopaedics, cancer, transplant and immune diseases, and diagnostic
testing. Genzyme's commitment to innovation continues today with a
substantial development program focused on these fields, as well as heart
disease and other areas of unmet medical need.
This press release contains forward-looking statements, including
statements regarding 2006 earnings, revenues, EPS, and product sales
estimates; expected drivers of Genzyme's future growth, as well as the
growth drivers for certain products, including Myozyme, Renagel, Hectorol,
Synvisc, and Seprafilm; the timing of enrollment in clinical studies,
progress and estimated timetables for the release of clinical trial data;
our projected product development, regulatory filing and action,
manufacturing, commercialization and post-marketing time tables for our
products and product candidates, including sevelamer carbonate, hylastan,
tolevamer, alemtuzumab MS, and DX-88; the ability of our molecular tests to
help physicians better manage treatment for patients; the development of
new markets and seeking additional approved indications and uses for
Genzyme's products, including Hectorol, Myozyme, Synvisc, Campath and
Clolar, and timing thereof; and other statements regarding Genzyme's future
performance and strategy. These statements are subject to risks and
uncertainties that could cause actual results to differ materially from
those forecast in these forward-looking statements. These risks and
uncertainties include, among others, Genzyme's ability to successfully
complete preclinical and clinical development of its products and services;
Genzyme's ability to expand the use of current products in existing and new
indications; Genzyme's ability to maintain and obtain regulatory approvals
for products and services, and the timing of receipt of such approvals;
Genzyme's ability to successfully identify and market to new patients; the
scope of third-party reimbursement coverage for Genzyme's products and
services; Genzyme's ability to successfully expand its sales and marketing
teams in existing and new markets; Genzyme's ability to manufacture
products and product candidates in a timely and cost effective manner; the
ability to manage patient safety and the continued administration of
alemtuzumab to MS patients following clinical hold release; Genzyme's
ability to develop and obtain approval of a patient safety plan for
alemtuzumab MS; failure of Genzyme's molecular tests to produce diagnostic
results as anticipated; and the risks and uncertainties described in
Genzyme's SEC reports filed under the Securities Exchange Act of 1934,
including the factors discussed under the caption "Factors Affecting Future
Operating Results" in Genzyme's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2006. Genzyme cautions investors not to place
substantial reliance on the forward- looking statements contained in this
press release. These statements speak only as of October 12, 2006 and
Genzyme undertakes no obligation to update or revise the statements.
This press release includes certain non-GAAP financial measures that
involve adjustments to GAAP figures. Genzyme believes that these non-GAAP
financial measures, when considered together with the GAAP figures, can
enhance an overall understanding of Genzyme's past financial performance
and its prospects for the future. The non-GAAP financial measures are
included with the intent of providing both management and investors with a
more complete understanding of underlying operational results and trends.
In addition, these non-GAAP financial measures are among the primary
indicators Genzyme management uses for planning and forecasting purposes.
These non-GAAP financial measures are not intended to be considered in
isolation or as a substitute for GAAP figures.
Genzyme(R), Renagel(R), Hectorol(R), Fabrazyme(R), Cerezyme(R),
Thyrogen(R), Synvisc(R), Myozyme(R), Seprafilm(R), Thymoglobulin(R),
Clolar(R) and Campath(R) are registered trademarks and Sepra(TM) and
Lymphoglobuline(TM) are trademarks of Genzyme Corporation or its
subsidiaries. Zemplar(R) is a registered trademark of Abbott Laboratories.
WelChol(R) is a registered trademark of Sankyo Pharma Inc. Aldurazyme(R) is
a registered trademark of BioMarin/Genzyme LLC. Rebif(R) is a registered
trademark of Serono, Inc.
Conference Call Information
There will be a conference call today at 11:00 a.m. Eastern to discuss
Genzyme Corporation's financial results for the third quarter of 2006. If
you would like to participate in the call, please dial (706) 679-8722. This
call will also be Webcast on the investor events section of
http://www.genzyme.com. A replay of the Webcast call will be available from
2:15 p.m. Eastern today through midnight on October 19. For the replay,
please dial (706) 645-9291 and refer to reservation number 1650276.
Upcoming Events
Genzyme will announce its financial results for the fourth quarter of
2006 on February 14, 2007. There will be a conference call at 11:00 a.m.
Eastern to discuss these results. If you would like to participate in the
call, please dial (706) 679-8722. This call will also be Webcast on the
investor events section of http://www.genzyme.com. A replay of the Webcast
and call will be available from 2:15 p.m. Eastern through midnight on
February 21, 2007. For the replay, please dial (706) 645-9291 and refer to
reservation number 4245727.
Genzyme's press releases and other company information are available at
http://www.genzyme.com and by calling Genzyme's investor information line
at 1-800-905-4369 within the United States or 1-703-797-1866 outside the
United States.
Media Contact: Investor Contact:
Bo Piela Sally Curley
617-768-6579 617-768-6140
GENZYME CORPORATION (GENZ)
Consolidated Statements of
Operations Three Months Ended Nine Months Ended
(Unaudited, amounts in September 30, September 30,
thousands, except per share 2006 2005 2006 2005
amounts)
Total revenues $808,574 $708,063 $2,332,772 $2,006,151
Operating costs and
expenses:
Cost of products and
services sold (1) 184,676 152,708 536,959 444,051
Selling, general and
administrative (1) 239,700 202,002 743,849 580,226
Research and development (1) 162,293 128,000 483,557 364,471
Amortization of
intangibles 50,542 50,847 156,117 132,138
Purchase of in-process
research and development
(2) - 12,700 - 22,200
Charge for impaired
goodwill (3) 219,245 - 219,245 -
Total operating costs and
expenses 856,456 546,257 2,139,727 1,543,086
Operating income (loss) (47,882) 161,806 193,045 463,065
Other income (expenses):
Equity in income (loss) of
equity method investments 4,530 940 10,630 (1,195)
Minority interest 2,545 3,670 7,741 9,221
Gain on investments in
equity securities (4) 128 214 75,037 5,172
Other (873) (1,021) (1,331) (828)
Investment income 16,760 8,073 39,401 22,235
Interest expense (3,772) (6,749) (12,245) (15,023)
Total other income
(expenses) 19,318 5,127 119,233 19,582
Income (loss) before
income taxes (1) (28,564) 166,933 312,278 482,647
(Provision for) benefit
from income taxes (1) 44,530 (51,279) (60,841) (147,804)
Net income (1) $15,966 $115,654 $251,437 $334,843
Net income per share of
Genzyme Stock:
Basic $0.06 $0.45 $0.96 $1.32
Diluted (1,5) $0.06 $0.43 $0.93 $1.26
Weighted average shares
outstanding:
Basic 261,541 256,490 260,565 253,499
Diluted (1,5) 278,271 274,492 277,130 270,823
(1) Reflects the adoption of Financial Accounting Standards Board, or
FASB, Statement of Financial Accounting Standards No., or FAS, 123R,
"Share-Based Payment, an amendment of FASB Statement Nos. 123 and 95,"
using the modified prospective basis effective January 1, 2006. For
the three months ended September 30, 2006, in accordance with the
provisions of FAS 123R, we recorded pre-tax charges for stock
compensation expense totaling $(44,640)K, of which $(5,663)K were
charged to cost of products and services sold, $(24,421)K were charged
to selling, general and administrative expense and $(14,556)K were
charged to research and development expense. In addition, we recorded
$14,312K of related tax benefits. For the nine months ended September
30, 2006, in accordance with the provisions of FAS 123R, we recorded
pre-tax charges for stock compensation expense totaling $(160,135)K,
of which $(12,893)K were charged to cost of products and services
sold, $(96,560)K were charged to selling, general and administrative
expense and $(50,682)K were charged to research and development
expense. In addition, we recorded $52,237K of related tax benefits.
Diluted earnings per share and diluted weighted average shares
outstanding for the three and nine months ended September 30, 2006
were computed in accordance with the provisions of FAS 123R.
(2) Includes charges for the purchase of in-process research and
development of $(12,700)K related to our acquisition of Bone Care
International, Inc. in July 2005 and $(9,500)K related to our
acquisition of Verigen AG in February 2005.
(3) Represents the write off of the goodwill related to our Genetics
reporting unit. In accordance with FAS 142, "Goodwill and Other
Intangible Assets," we completed the annual impairment tests for our
$1.3 billion of net goodwill in the third quarter of 2006 and
determined that the fair value of the net assets of our Genetics
reporting unit was lower than the carrying value, indicating potential
impairment. Based on our analysis, we concluded that the goodwill
assigned to our Genetics reporting unit is fully impaired.
(4) For the nine months ended September 30, 2006, includes pre-tax gains
of $69,359K related to the liquidation of our investment in the common
stock of Cambridge Antibody Technology Group plc in May and June 2006.
(5) Reflects the adoption of Emerging Issues Task Force Issue No. 04-8,
"The Effect of Contingently Convertible Debt on Diluted Earnings Per
Share," or EITF 04-8. As a result of the adoption of EITF 04-8, the
9,686K shares issuable upon conversion of our $690.0 million in
principal of 1.25% convertible senior notes, which were issued in
December 2003, are now included in diluted weighted average shares for
purposes of computing diluted earnings per share, unless the effect
would be anti-dilutive. In accordance with EITF 04-8, interest and
debt fees related to the notes of $1.9 million, net of tax, for the
three months ended September 30, 2006 and 2005, and $5.6 million, net
of tax, for the nine months ended September 30, 2006 and 2005, have
been added back to net income and 9,686K shares have been added to
diluted weighted average shares outstanding for each of those periods
for purposes of computing diluted earnings per share.
GENZYME CORPORATION (GENZ)
Condensed Consolidated Balance Sheets September 30, December 31,
(Unaudited, amounts in thousands) 2006 2005
Cash and all marketable
securities $1,680,733 $1,089,102
Other current assets 1,319,235 1,179,093
Property, plant and
equipment, net 1,513,632 1,320,813
Intangibles, net (1) 2,773,653 3,078,461
Other assets 142,919 211,396
Total assets $7,430,172 $6,878,865
Current liabilities $557,226 $550,023
Noncurrent liabilities 1,088,114 1,178,975
Stockholders' equity 5,784,832 5,149,867
Total liabilities and
stockholders' equity $7,430,172 $6,878,865
(1) As of September 30, 2006, reflects a charge for impairment of goodwill
of $(219,245)K recorded in the third quarter of 2006 to write off the
goodwill related to our Genetics reporting unit.
GENZYME CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Three Months Ending September 30, 2006
(Amounts in thousands, except per share data)
NON-GAAP
Before
FIN 46, FAS 123R,
Amortization, Impairment
of Goodwill, Settlement of
Tax Audits & EITF 04-8
Income Statement
Classification:
Total revenues $808,574
Cost of products
and services sold $(179,013)
Selling, general
and administrative $(214,944)
Research and
development $(142,981)
Amortization of
intangibles $-
Charge for impaired
goodwill $-
Equity in income of
equity method
investments $1,985
Minority interest $-
Gain on investments
in equity
securities $128
Other $(873)
Investment income $16,759
Interest expense $(3,772)
Summary:
Income (loss)
before income
taxes $285,863
(Provision for)
benefit from
income taxes (89,952)
Net income (loss) $195,911
Net income (loss)
per share of
Genzyme Stock:
Basic $0.75
Diluted (1) $0.73
Weighted average
shares
outstanding:
Basic 261,541
Diluted (1) 268,585
GENZYME CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Three Months Ending September 30, 2006
(Amounts in thousands, except per share data)
Dilution
Due to
Contingently
Convertible Settlement Impairment
Debt of of FAS 123R
(EITF 04-8) Tax Audits Goodwill Amortization Expense
Income Statement
Classification:
Total revenues
Cost of products
and services sold $(5,663)
Selling, general
and administrative $(24,421)
Research and
development $(14,556)
Amortization of
intangibles $(50,542)
Charge for impaired
goodwill $(219,245)
Equity in income of
equity method
investments
Minority interest
Gain on investments
in equity
securities
Other
Investment income
Interest expense
Summary:
Income (loss)
before income
taxes $- $- $(219,245) $(50,542) $(44,640)
(Provision for)
benefit from
income taxes - 31,748 69,823 18,599 14,312
Net income (loss) $- $31,748 $(149,422) $(31,943) (30,328)
Net income (loss)
per share of
Genzyme Stock:
Basic $- $0.121 $(0.571) $(0.122) $(0.116)
Diluted (1) $(0.019) $0.114 $(0.537) $(0.115) $(0.109)
Weighted average
shares
outstanding:
Basic -
Diluted (1) 9,686
GENZYME CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
For the Three Months Ending September 30, 2006
(Amounts in thousands, except per share data)
NON-GAAP
Before
Effect Effect of GAAP
of FIN 46 FIN 46 As Reported
Income Statement
Classification:
Total revenues $808,574 $808,574
Cost of products
and services sold $(184,676) $(184,676)
Selling, general
and administrative $(239,365) $(335) $(239,700)
Research and
development $(157,537) $(4,756) $(162,293)
Amortization of
intangibles $(50,542) $(50,542)
Charge for impaired
goodwill $(219,245) $(219,245)
Equity in income of
equity method
investments $1,985 $2,545 $4,530
Minority interest $- $2,545 $2,545
Gain on investments
in equity
securities $128 $128
Other $(873) $(873)
Investment income $16,759 $1 $16,760
Interest expense $(3,772) $(3,772)
Summary:
Income (loss)
before income
taxes $(28,564) $- $(28,564)
(Provision for)
benefit from
income taxes 44,530 - 44,530
Net income (loss) $15,966 $- $15,966
Net income (loss)
per share of
Genzyme Stock:
Basic $0.06 $- $0.06
Diluted (1) $0.06 $- $0.06
Weighted average
shares
outstanding:
Basic 261,541 261,541
Diluted (1) 278,271 278,271
(1) GAAP As-Reported diluted earnings per share and diluted weighted
average shares outstanding reflect the adoption of EITF 04-8. In
accordance with the provisions of EITF 04-8, interest and debt fees
related to our 1.25% convertible senior notes of $1,875K, net of tax,
have been added back to net income and approximately 9.7 million
shares have been added to diluted weighted average shares for purposes
of computing GAAP As-Reported diluted earnings per share.
SOURCE Genzyme Corporation
 back to top
Related links:
http://www.genzyme.com/
http://www.prnewswire.com/comp/104284.html/
CONTACT:
Media Contact: Bo Piela, +1-617-768-6579, or
Investor Contact: Sally Curley, +1-617-768-6140, both of Genzyme
|
