**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM 10-K**

(Mark One)

**x**                               ANNUAL REPORTPURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

**For the fiscal year ended December 31, 2006**

**or**

**o**                                  TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

**For the transition period from _______ to_______**

**Commission File No. 0-14680**

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**GENZYME CORPORATION**

(Exactname of registrant as specified in its charter)

| **Massachusetts**                                |   | **06-1047163**                       |
|--------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of                  |   | (I.R.S. Employer Identification No.) |
| incorporation or organization)                   |   |                                 |
| **500 Kendall Street  Cambridge, Massachusetts** |   | **02142**                            |
| (Address of principal executive offices)         |   | (Zip Code)                           |

**(617) 252-7500**

**(Registrant’stelephone number, including area code)**

Securities registeredpursuant to Section 12(b) of the Act:

**None**

Securities registeredpursuant to Section 12(g) of the Act:

**GenzymeCommon Stock, $0.01 Par Value (“Genzyme Stock”)**

**Genzyme Stock Purchase Rights**

Indicateby check mark if the registrant is a well-known seasoned issuer, asdefined in Rule 405 of the Securities Act. Yes x No o

Indicateby check mark if the registrant is not required to file reports pursuant to Section 13or Section 15(d) of the Act. Yes o No x

Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes x No o

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained,to the best of registrant’s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer or a non-accelerated filer.See definition of “accelerated filer and large accelerated filer” in Rule 12b-2of the Exchange Act.

Largeaccelerated filer x   Acceleratedfiler o   Non-accelerated filer o

Indicateby check mark whether the registrant is a shell company (as defined by Rule 12b-2of the Exchange Act). Yes o No x

Aggregatemarket value of voting stock held by non-affiliates of the Registrant asof June 30, 2006: $15,863,517,409

Numberof shares of Genzyme Stock outstanding as of January 31, 2007: 263,453,092

**DOCUMENTSINCORPORATED BY REFERENCE**

Portionsof the Registrant’s 2006 Annual Report are incorporated by reference into PartsI, II and IV of this Form 10-K. Portions of the Registrant’sProxy Statement for the Annual Meeting of Shareholders to be held on May 24,2007, are incorporated by reference into Part III of this Form 10-K.

 

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**NOTE REGARDING REFERENCES TO OUR COMMON STOCK**

Throughout this Form 10-K,the words “we,” “us,” “our” and “Genzyme” refer to Genzyme Corporation as awhole, and “our board of directors” refers to the board of directors of GenzymeCorporation. Genzyme Corporation has one outstanding series of common stock,which we refer to as “Genzyme Stock.”

**NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Form 10-Kcontains forward-looking statements, including statements regarding:

·       projectedtimetables for the preclinical and clinical development of, regulatorysubmissions and approvals for, and market introduction of, our products andservices in various jurisdictions, including Renvela, tolevamer, GENZ-112638,TGF-beta antagonists, hylastan, tasidotin, and Mozobil and to seek marketingapprovals in additional jurisdictions, including Thyrogen, Myozyme,Thymoglobulin and Synvisc;

·       ourplans and our anticipated timing for pursuing additional indications and usesfor our products and services, including Thyrogen, Thymoglobulin, Sepraproducts, Synvisc and Campath;

·       thetiming of, and availability of data from, clinical trials;

·       estimatesof the potential markets for our products and services;

·       theanticipated drivers for future growth of our products, including Renagel,Myozyme, Hectorol and Thymoglobulin;

·       ourassessment of competitors and potential competitors and the anticipated impactof potentially competitive products on our revenues;

·       estimatesof the capacity of, and the projected timetable of approvals for, manufacturingand other facilities to support our products and services, including Cerezyme,Myozyme, Renvela, Hectorol and Thymoglobulin;

·       ourassessment of the outcome, timetables and financial impact of litigation andother governmental proceedings and the potential impact of unasserted claims;

·       thesufficiency of our cash, short-term investments and cash flows fromoperations;

·       U.S.and foreign income tax audits, including our provision for liabilities andassessment of the impact of settlement of the Internal Revenue Service,commonly referred to as the IRS, and foreign tax disputes;

·       estimatesof cost to complete and estimated commercialization dates for in-processresearch and development, or IPR&D, programs;

·       expectedfuture revenues, operations and expenditures;

·       projected future earningsand earnings per share;

·       ourassessment of the impact of recent accounting pronouncements, including FinancialAccounting Standards Board, or FASB, Statement of Financial AccountingStandards No., or FAS, 157, regarding fair value measurements and FASBInterpretation No., or FIN, 48, regarding accounting for uncertainty in incometaxes;

·       oursales and marketing plans;

·       expectedfuture contingent payment to Synpac; and

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·       expectedfuture payments related to our acquisitions, including milestone and royaltypayments to Avigen, Inc., or Avigen, the former shareholders of Surgi.BChirugie et Medicine SAS, or Surgi.B and Wyeth, milestone and contingentpayments to Verigen AG, or Verigen, contingent payments to Equal Diagnostics, Inc.,or Equal Diagnostics, and employee benefits and leased facilities acquired fromBone Care International, Inc., or Bone Care, and AnorMED Inc., or AnorMED,and the expected timing of these payments.

These statementsare subject to risks and uncertainties, and our actual results may differmaterially from those that are described in this report. These risks anduncertainties include:

·       ourability to successfully complete preclinical and clinical development of ourproducts and services;

·       ourability to secure regulatory approvals for our products and services and to doso on the anticipated timeframes;

·       thecontent and timing of submissions to and decisions made by the United StatesFood and Drug Administration, commonly referred to as the FDA, the EuropeanAgency for the Evaluation of Medicinal Products, or EMEA, and other regulatoryagencies;

·       ourability to satisfy the post-marketing commitments made as a condition of themarketing approvals of Fabrazyme, Aldurazyme and Myozyme;

·       ourability to manufacture sufficient amounts of our products for development andcommercialization activities and to do so in a timely and cost-effectivemanner;

·       ourreliance on third parties to provide us with materials and services inconnection with the manufacture of our products;

·       ourability to obtain and maintain adequate patent and other proprietary rightsprotection for our products and services and successfully enforce ourproprietary rights;

·       thescope, validity and enforceability of patents and other proprietary rights heldby third parties and their impact on our ability to commercialize our productsand services;

·       theaccuracy of our estimates of the size and characteristics of the markets to beaddressed by our products and services, including growth projections;

·       marketacceptance of our products and services in expanded areas of use and newmarkets;

·       ourability to identify new patients for our products and services;

·       ourability to increase market penetration both outside and within the UnitedStates for our products and services;

·       theaccuracy of our information regarding the products and resources of ourcompetitors and potential competitors;

·       theavailability of reimbursement for our products and services from third partypayors, the extent of such coverage and the accuracy of our estimates of thepayor mix for our products;

·       ourability to effectively manage wholesaler inventories of our products and thelevels of compliance with our inventory management programs;

·       ourability to establish and maintain strategic license, collaboration anddistribution arrangements and to manage our relationships with licensors,collaborators, distributors and partners;

·       thecontinued funding and operation of our joint ventures by our partners;

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·       ouruse of cash in business combinations or other strategic initiatives;

·       theresolution of litigation related to the consolidation of our tracking stocks;

·       theinitiation of legal proceedings by or against us;

·       theimpact of changes in the exchange rate for the Euro and other currencies on ourproduct and service revenues in future periods;

·       ourability to successfully integrate the business we acquired from AnorMED;

·       thenumber of diluted shares considered outstanding, which will depend on businesscombination activity, our stock price and any further changes in the accountingrules for the calculation of earnings per share;

·       theestimates and input variables used in accounting for stock options and therelated stock-based compensation expense;

·       theoutcome of our IRS and foreign tax audits; and

·       thepossible disruption of our operations due to terrorist activities, armedconflict, or outbreak of diseases such as severe acute respiratory syndrome(SARS) or avian influenza, including as a result of the disruption ofoperations of regulatory authorities, our subsidiaries, our manufacturingfacilities and our customers, suppliers, distributors, couriers, collaborativepartners, licensees and clinical trial sites.

We have included moredetailed descriptions of these and other risks and uncertainties in Item 1A,“Risk Factors,” of this report. We encourage you to read those descriptionscarefully. We caution investors not to place substantial reliance on theforward-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 orrevise the statements.

**NOTE REGARDINGINCORPORATION BY REFERENCE**

The U.S. Securities and ExchangeCommission, commonly referred to as the SEC, allows us to disclose importantinformation to you by referring you to other documents we have filed or willfile with them. The information that we refer you to is “incorporated byreference” into this Form 10-K. Please read that information.

**NOTE REGARDINGTRADEMARKS**

Genzyme®, Cerezyme®, Ceredase® , Fabrazyme®, Thyrogen®, Myozyme®, Renagel®, Campath®,, Clolar®, Synvisc®, Carticel®, Seprafilm®, Sepramesh® , Hylaform®, MACI®, GlucaMesh®,GlucaTex®, Epicel® and Hectorol® areregistered trademarks, and LymphoglobulineTM, ThymoglobulinTM, SepraTM, MozobilTM andRenvelaTM are trademarks, of Genzyme or its subsidiaries. WelChol® isa registered trademark of Sankyo Pharma, Inc. Aldurazyme® isa registered trademark of BioMarin/Genzyme LLC. All rights reserved.

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**TABLEOF CONTENTS**

|               | ** ** | ** **                                                                                                         | ** ** | PAGE   |
|---------------|------------|--------------------------------------------------------------------------------------------------------------------|------------|--------|
| PART I   |       |                                                                                                               |       |   |   |
| ITEM 1.       |       | BUSINESS                                                                                                           |       | 6      |   |
|          |       | Introduction                                                                                                       |       | 6      |   |
|          |       | Products  and Services                                                                                             |       | 6      |   |
|          |       | Competition                                                                                                        |       | 11     |   |
|          |       | Patents, License Agreements and Trademarks                                                                         |       | 14     |   |
|          |       | Government  Regulation                                                                                             |       | 16     |   |
|          |       | Employees                                                                                                          |       | 20     |   |
|          |       | Financial Information Regarding Segment Reporting                                                                  |       | 20     |   |
|          |       | Research  and Development Costs                                                                                    |       | 20     |   |
|          |       | Sales by Geographic Area, Significant Customers and  Products                                                      |       | 20     |   |
|          |       | Available  Information                                                                                             |       | 21     |   |
| ITEM 1A.      |       | RISK FACTORS                                                                                                       |       | 21     |   |
| ITEM 1B.      |       | UNRESOLVED STAFF COMMENTS                                                                                          |       | 21     |   |
| ITEM 2.       |       | PROPERTIES                                                                                                         |       | 21     |   |
| ITEM 3.       |       | LEGAL  PROCEEDINGS                                                                                                 |       | 23     |   |
| ITEM 4.       |       | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                |       | 24     |   |
|          |       | Executive  Officers of the Registrant                                                                              |       | 24     |   |
| PART II  |       |                                                                                                               |       |   |   |
| ITEM 5.       |       | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED  STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |       | 27     |   |
|          |       | Issuer Purchases of Equity Securities                                                                              |       | 27     |   |
|          |       | Stock  Performance Graph                                                                                           |       | 28     |   |
| ITEM 6.       |       | SELECTED  FINANCIAL DATA                                                                                           |       | 28     |   |
| ITEM 7.       |       | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS                        |       | 28     |   |
| ITEM 7A.      |       | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET  RISK                                                        |       | 28     |   |
| ITEM 8.       |       | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                        |       | 29     |   |
| ITEM 9.       |       | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING AND FINANCIAL DISCLOSURE                         |       | 29     |   |
| ITEM 9A.      |       | CONTROLS AND PROCEDURES                                                                                            |       | 29     |   |
|          |       | Evaluation of Disclosure Controls and Procedures                                                                   |       | 29     |   |
|          |       | Management’s Report on Internal Control Over Financial  Reporting                                             |       | 29     |   |
|          |       | Attestation Report of Independent Registered Public  Accounting Firm                                               |       | 29     |   |
| ITEM 9B.      |       | OTHER  INFORMATION                                                                                                 |       | 29     |   |
| PART III |       |                                                                                                               |       |   |   |
| ITEM 10.      |       | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                             |       | 29     |   |
| ITEM 11.      |       | EXECUTIVE COMPENSATION                                                                                             |       | 30     |   |
| ITEM 12.      |       | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT AND RELATED STOCKHOLDER MATTERS               |       | 30     |   |
| ITEM 13.      |       | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR  INDEPENDENCE                                         |       | 30     |   |
| ITEM 14.      |       | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                             |       | 30     |   |
| PART IV  |       |                                                                                                               |       |   |   |
| ITEM 15.      |       | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                                            |       | 31     |   |
|          |       | 15(a)(1) Financial  Statements                                                                                |       | 31     |   |
|          |       | 15(a)(2) Financial Statement Schedules                                                                        |       | 32     |   |
|          |       | 15(a)(3) Exhibits                                                                                             |       | 32     |   |
|          |       | 15(b) Exhibits                                                                                                |       | 32     |   |

 

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**PART I**

**ITEM 1.**                     BUSINESS

**Introduction**

We area global biotechnology company dedicated to making a major impact on the livesof people with serious diseases. Our broad product and service portfolio isfocused on rare disorders, renal diseases, orthopaedics, organ transplant, anddiagnostic and predictive testing. We are organized into five financialreporting units, which we also consider to be our reporting segments:

·       Renal,which develops, manufactures and distributes products that treat patientssuffering from renal diseases, including chronic renal failure. The unitderives substantially all of its revenue from sales of Renagel (including salesof bulk sevelamer) and Hectorol;

·       Therapeutics,which develops, manufactures and distributes therapeutic products, with anexpanding focus on products to treat patients suffering from genetic diseasesand other chronic debilitating diseases, including a family of diseases knownas lysosomal storage disorders, or LSDs, and other specialty therapeutics, suchas Thyrogen. The unit derives substantially all of its revenue from sales ofCerezyme, Fabrazyme, Myozyme and Thyrogen;

·       Transplant,which develops, manufactures and distributes therapeutic products that address thepre-transplantation, prevention and treatment of acute rejection in organtransplantation, as well as other auto-immune disorders. The unit derivessubstantially all of its revenue from sales of Thymoglobulin andLymphoglobuline;

·       Biosurgery,which develops, manufactures and distributes biotherapeutics and biomaterial-basedproducts, with an emphasis on products that meet medical needs in the orthopaedicsand broader surgical areas. The unit derives substantially all of its revenuefrom sales of Synvisc, the Sepra line of products, Carticel, and MACI; and

·       Genetics,which provides testing services for the oncology, prenatal and reproductivemarkets.

We report the activitiesof our diagnostic products, oncology, bulk pharmaceuticals and cardiovascularbusiness units under the caption “Other.” We report our corporate, general andadministrative operations and corporate science activities under the caption “Corporate.”

**Products and Services**

***Renal***

*Renagel (sevelamerhydrochloride).**  *Renagelis a non-absorbed, calcium-free, metal-free phosphate binderindicated for the control of serum phosphorus in patients with chronic kidneydisease (CKD) on hemodialysis. Three formulations of the product have beenapproved for sale in the U.S.—the 403 mg. capsules were launched in the fourthquarter of 1998, and the 400 and 800 mg. tablets were launched in September 2000.We ceased marketing the 403 mg. capsules in 2004. Renagel was approved for salein Israel in 1999, the European Union and Canada in 2000, Brazil in 2002, Japanin 2003, Argentina and Australia in 2005, and Chile and Peru in 2006. In theU.S., there are an estimated 371,000 end-stage renal disease patients,approximately 95% of whom receive a phosphate control product. There are alsoan estimated 324,000 end-stage renal disease patients in Europe, 65,000in Brazil, 30,000 in Canada and 238,000 in Japan. We are now marketing theproduct in over 50 countries.

We market Renagel tabletsin the U.S., the European Union and Brazil directly to nephrologists through adedicated sales force. In the U.S., approximately 85%–90% of our Renagel salesare made to three large wholesalers. These wholesalers distribute Renagel toretail pharmacies, hospitals and other providers of medication to patients.Chugai Pharmaceutical Co., Ltd. and its partner, Kirin BreweryCo., Ltd., have rights to develop and market Renagel in Japan, China andother Pacific Rim countries. Our 

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sales ofRenagel (including sales of bulk sevelamer), totaled $515.1 million or 18%of our consolidated product revenues in 2006, $417.5 million, or 17% ofour consolidated product revenues in 2005, and $363.7 million, or 18% ofour consolidated product revenues in 2004.

We conducted the largestprospective dialysis outcomes study, a 2,100-patient post-marketingstudy of Renagel to evaluate the ability of the product to improve patientmorbidity and mortality. The Dialysis Clinical Outcomes Revisited, or DCOR,trial compared Renagel to calcium-based phosphate binders with respect tooverall morbidity and mortality. We presented the data from this trial at theAmerican Society of Nephrology (ASN) meeting in November 2005. The studydid not meet its primary end point of a statistically significant reduction inall cause mortality. However, in a pre-specified sub-groupanalysis, Renagel demonstrated a significant reduction in all cause mortalityin patients 65 years of age or older. The DCOR study included morbiditydata from the Centers for Medicare and Medicaid Services (CMS), which werepresented at the 2006 ASN meeting. This data showed patients receiving Renagelexperienced lower rates of hospitalization, fewer days in the hospital, andreduced overall health care expenditures compared to patients treated withcalcium-based phosphate binders. In early 2007, Kidney International publishedfindings from the Renagel in New Dialysis, or RIND, study that show asignificantly lower rate of death among patients treated with Renagel from thetime they began dialysis compared with those using calcium-based phosphatebinders.

On December 21, 2006,we filed a New Drug Application (NDA) with the FDA seeking approval ofsevelamer carbonate for the control of serum phosphorus in patients with CKD ondialysis. If approved, we expect sevelamer carbonate will be marketed under thetrade name RenvelaTM.In addition, we are advancing a clinical program investigating the use ofRenvela for hyperphosphatemic patients with CKD who have not progressed todialysis. Enrollment is also complete in a study comparing a powder form ofsevelamer carbonate dosed once a day to Renagel tablets dosed three times a day.We believe development of the powder form of the product would offer a moreconvenient option to patients, thereby improving compliance.

*Hectorol (doxercalciferol).**  *We added Hectorol to our product portfolio in July 2005through our acquisition of Bone Care. Hectorol is a line of vitamin D2 pro-hormone products that are indicatedfor the treatment of secondary hyperparathyroidism in patients with stages 3and 4 CKD (0.5 mcg and 2.5 mcg capsules) and in patients with stage 5 CKD ondialysis (2.5 mcg capsules and injection). Hectorol provides significantparathyroid hormone (PTH) reductions with minimal impact on calcium andphosphorus levels. Three formulations of the product have been approved forcommercial sale in the U.S.—the 2.5 mcg capsules were approved in 1999, the 0.5mcg capsules were approved in 2004 and the intravenous formulation was approvedin 2000. The 2.5 mcg formulation also is approved in Canada, where it ismarketed and sold by Shire BioChem, a Canadian subsidiary of Shire plc, orShire.

We market Hectorol in theU.S. through a direct sales force focused on nephrologists. Approximately 85%–90%of our U.S. Hectorol capsule sales are made to three large wholesalers, whothen sell and distribute the product to retail pharmacies, hospitals and otherproviders of medication to patients. For Hectorol IV, approximately 85%–90% ofour sales are made to three primary wholesalers who then sell and distributethe product to dialysis chains and hospitals. In the U.S., approximately 65% ofend-stage renal disease patients receive Vitamin D. We estimate thatthere are more than 2.5 million patients in the U.S. with stage 3 andstage 4 CKD who have elevated PTH levels, although only a much smallernumber of patients are being treated for the condition. In December 2006, Dr. FrancescaTentori *et al* published data in *Kidney International* distinguishing vitamin D analogs. Thesefindings suggest that treatment with vitamin D analogs provides a significantadvantage for dialysis patients and that the newer generation of D2 analogs, such as Hectorol, appear to havesurvival advantages over older analogs such as calcitriol.

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***Therapeutics***

OurTherapeutics segment currently has five therapeutic products on the market andseveral other therapeutic products in varying stages of development. The chartset forth below provides summary information on these five products, one ofwhich we sell on behalf of a joint venture, as of February 28, 2007.

| Product           | ** ** | ** **                                                                                         | ** ** | **Indication**                                                                                                                                                                                                                                                                                                                                                                                                                                        | ** ** | ** ** | ** ** | **Status** | ** ** | ** ** |
|-------------------|------------|----------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|------------|------------|------------|
| Cerezyme/Ceredase |       | Type 1 Gaucher disease;  Type 3 Gaucher disease (Cerezyme/European Union only)                     |       | Ceredase sold  commercially since 1991; Cerezyme marketed since 1994; marketing approval  received and commercial sales in 55 countries                                                                                                                                                                                                                                                                                                          |
| Fabrazyme         |       | Fabry disease                                                                                      |       | Marketed in the European  Union since 2001, the U.S. since 2003, and Japan since 2004; marketing  approval received in 45 countries and commercial sales in 35 countries;  several post-marketing commitments ongoing                                                                                                                                                                                                                                 |
| Thyrogen          |       | Adjunctive diagnostic  agent in the follow-up of patients with well-differentiated  thyroid cancer |       | Marketed in the U.S.  since 1998, Brazil since 2000 and the European Union since 2001; marketing  approval received and commercial sales in 44 countries                                                                                                                                                                                                                                                                                         |
|              |       | Combination therapy in  ablation of remnant thyroid tissue                                         |       | Marketing approval  received in the European Union and Australia in March 2005 and Brazil in  December 2006                                                                                                                                                                                                                                                                                                                                 |
| Myozyme           |       | Pompe disease                                                                                      |       | Received marketing  approval in the European Union in March 2006, in the U.S. in  April 2006 and in Canada in August 2006; marketing approval  received in 28 countries and commercial sales in 23 countries; several  post-marketing commitments to be initiated in 2007; regulatory submissions  filed and under review in Japan, Switzerland, Brazil, Argentina and Colombia  with several more planned for submission in 2007 |
| Aldurazyme        |       | MPS I                                                                                              |       | Marketed in the U.S. and the European Union since  2003; marketing approval received in 50 countries and commercial sales in 36  countries; several post-marketing commitments on-going                                                                                                                                                                                                                                                               |

 

Cerezyme, Fabrazyme,Myozyme and Aldurazyme are each aimed at treating LSDs with patient populationsof less than 10,000 worldwide. Additional details on our Therapeutic productsare set forth below.

*Cerezyme (imiglucerase).**  *We are marketing Cerezyme as an enzyme replacementtherapy for the treatment of Gaucher disease, an LSD that is caused by adeficiency in the enzyme glucocerebrosidase, which causes fatty deposits tobuild up in certain organs and bones leading to a wide variety of symptoms,including anemia, spleen and liver enlargement and bone deterioration. Treatment with Cerezyme enzyme replacement therapycurrently represents the only safe and effective enzyme replacement therapyapproved for treatment of Type 1 Gaucher disease. In the European Union, Cerezyme is also approved for the 

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treatmentof patients who exhibit clinically significant, non-neurologicalmanifestations of the disease (Type 3 Gaucher disease).

We market Cerezymedirectly to physicians, hospitals and treatment centers worldwide through ahighly specialized sales force. Our results of operations are highly dependenton sales of this product, although our dependence is lessening as we diversifyour product portfolio. Sales of Cerezyme totaled $1.0 billion, or 35% ofour consolidated product revenues in 2006, $932.3 million, or 38% of ourconsolidated product revenues in 2005, and $839.4 million, or 42% of ourconsolidated product revenues in 2004.

*Fabrazyme (agalsidasebeta).**  *We havedeveloped Fabrazyme, a recombinant form of the human enzyme alpha-galactosidase,as a treatment for Fabry disease. Fabry disease is an LSD that is caused by adeficiency of the enzyme alpha-galactosidase A, which leads to theprogressive accumulation of lipids within cells of the kidneys, heart and otherorgans. In agreement with the FDA, we undertook a number of post-marketingcommitments, and have completed a phase 4, multi-national, multi-center,double-blind placebo-controlled study. In January 2007, theresults of this trial were published in the Annals of Internal Medicine. In mid-2005,the EMEA approved new labeling for Fabrazyme based largely on the results fromthe phase 4 study. Because kidney failure is associated with Fabry disease,Fabrazyme is sold by our existing LSD and Renal sales forces.

*Thyrogen (thyrotropinalfa).**  *Thyrogenis an adjunctive diagnostic agent used in the follow-up of patients withwell-differentiated thyroid cancer. We developed this product to allowpatients to continue taking their thyroid hormone supplements while they arebeing screened for residual or recurring thyroid cancer. This helps patientsavoid the debilitating effects of hypothyroidism, increasing the likelihoodthat they will seek follow-up treatment, and ultimately improve thelikelihood of early detection of any recurrent disease, which can improve thesuccess rate of subsequent treatment. In the U.S. and the European Union,physicians order over 200,000 thyroid cancer screening tests per year. Thyrogenis promoted by a dedicated sales force, and sold to hospitals and doctors’offices through distributors in the U.S., Brazil and the European Union.

We currently are pursuingadditional indications for Thyrogen. In March 2005, we received EuropeanUnion approval for use of Thyrogen in combination with radioiodine in ablationof thyroid tissue. We received an approvable letter for this indication fromthe FDA in August 2005 and completed a clinical study to fulfill one ofthe requirements in the approvable letter in the fourth quarter 2006. We expectto file the amended supplemental New Drug Application (NDA) in 2007 andanticipate approval in the U.S., Brazil and Canada in 2008. Approximately35,000 ablation procedures are performed annually in the U.S. and EuropeanUnion combined, and we believe that Thyrogen has the potential to be used in upto 80% of these procedures. We also plan to begin a phase 2 trial in 2007 ofTSH, the active ingredient in Thyrogen, for use in patients with nontoxicmultinodular goiter.

*Myozyme (alglucosidasealfa).**  *We aremarketing Myozyme as a therapy for Pompe disease, a progressive and often fatalmuscle disease resulting from an inherited enzyme deficiency. Pompe diseasemanifests as a broad spectrum of clinical symptoms, with variable rates ofprogression ranging from rapidly progressive and often fatal within the firstyear of life from severe cardiac and skeletal muscle involvement torelentlessly progressive resulting in significant morbidity and prematuremortality from skeletal and respiratory muscle involvement. Myozyme is thefirst and only treatment approved for Pompe disease and is indicated for allpatients with the disorder. We are currently conducting a clinical trial oflate onset patients and expect to have results in late 2007.

*Aldurazyme (laronidase).**  *We formed a joint venture with BioMarinPharmaceutical Inc., or BioMarin, and BioMarin Genetics, Inc. to developand market Aldurazyme, a recombinant form of the human enzyme alpha-L-iduronidase,to treat an LSD known as mucopolysaccharidosis I, or MPS I. MPS I is aprogressive, debilitating, and often life-threatening disease, whichencompasses a wide and continuous 

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spectrum of clinicalpresentations, historically classified as “Hurler,” “Hurler-Scheie” and “Scheie”syndromes. We market Aldurazyme directly to physicians in the U.S. through ourLSD sales force. In Europe, Latin America and Asia, sales of Aldurazyme areundertaken by the local sales and marketing teams and are being realized on acountry-by-country basis as pricing and reimbursement approvals areobtained. The joint venture’s applications for marketing approval are currentlypending in several countries in Latin America, Central and Eastern Europe, andthe Asia-Pacific rim. We also completed a post-marketing clinicalstudy investigating alternative dosing regimens in 2006. Aldurazyme revenuesare recorded by the joint venture. We include our portion of the net income (loss)of BioMarin/Genzyme LLC in equity in income (loss) of equity method investmentsin our consolidated statements of operations.

***Transplant***

This business segmentincludes three marketed products, as well as product candidates in the researchand development stages that we acquired through our acquisition of SangStat MedicalCorporation, or SangStat, in the third quarter of 2003 and our acquisition ofAnorMED in the fourth quarter of 2006. Set forth below is a discussion of thetwo marketed products that are the primary revenue drivers for the Transplantsegment. 

*Thymoglobulin (anti-thymocyteglobulin, rabbit).*   Thymoglobulin is animmunosuppressive polyclonal antibody that suppresses certain types of immunecells responsible for acute organ rejection in transplant patients.Thymoglobulin was approved in the U.S. in December 1998 and we marketThymoglobulin in the U.S. for the treatment of acute rejection of renaltransplants. In Canada, we have marketed Thymoglobulin since 2003 for both theprevention and treatment of acute rejection of renal transplants. More kidneytransplants are performed in the U.S. than any other organ transplant, withover 17,000 transplants performed in 2006. Of this number of renal transplants,the United Network for Organ Sharing estimates that acute immunosuppressanttherapies such as Thymoglobulin were used in greater than 70% of suchprocedures. 

In the European Union,Thymoglobulin has a broader approved label which allows us to market it for awider variety of approved uses including the prevention and treatment ofrejection in solid organ transplants, the prevention and treatment of graftversus host disease, and the treatment of aplastic anemia, a disease thataffects the production of mature, functional blood cells. Thymoglobulin alsohas a similarly broad label in several Asian and Latin American countries. Wehave filed for marketing approval of Thymoglobulin in Japan and the UK. We sellThymoglobulin in 47 countries through a direct sales force or throughdistributors to transplant centers for use by transplant surgeons,nephrologists, hematologists and oncologists. 

We completed enrollment ina phase 2 trial of Thymoglobulin in liver transplantation to prevent rejectionand delay of the introduction of calcineurin inhibitors in patients with renaldysfunction prior to liver transplant. We plan to conduct phase 2 clinicaltrials beginning in 2007 in North America and Europe for the treatment ofimmune mediated bone marrow failure associated with myelodysplastic syndromes. 

*Lymphoglobuline (anti-thymocyte-globuline,equine).*   We market Lymphoglobuline, anotherimmunosuppressive polyclonal antibody, in Latin America, the European Union,and certain Asia Pacific countries for the treatment of aplastic anemia and forthe prevention and treatment of graft rejection. This product is sold throughour sales force in Europe and through distributors elsewhere.

***Biosurgery***

*Synvisc (hylan G-F20).*   Synvisc is a biomaterial derived fromhyaluronan used to treat the pain associated with osteoarthritis of the knee.An estimated 8 to 9 million of the approximately 14 million people inthe U.S. with osteoarthritis of the knee may be candidates for treatment withSynvisc. Synvisc is sold commercially in over 60 countries, both directly andthrough marketing and distribution arrangements. 

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We are investing inresearch and clinical trials to expand the use of Synvisc to additional jointsand through next-generation approaches. In the European Union and Canada,Synvisc is approved for the treatment of pain associated with osteoarthritis ofthe hip, and in the European Union, we launched Synvisc for the treatment ofpain associated with osteoarthritis of the ankle and shoulder inDecember 2006. 

In December 2006 wecompleted a pivotal trial evaluating a single-injection regimen of Synvisc. Weanticipate filing for approval of single-injection Synvisc in the EuropeanUnion and in the U.S. in the first half of 2007, and we expect to launch thisproduct in the European Union by the end of 2007 and in the United States inthe first half of 2008.

*Sepra Products.*   TheSepra family of products is aimed primarily at preventing adhesions (internalscar tissue) following various surgical procedures in areas of the body such asthe abdomen and pelvis. These products are produced from biomaterials derivedfrom hyaluronan. We market the Sepra products primarily through a direct salesforce in the U.S., France and Australia, and primarily through distributionarrangements in Japan and the rest of the world.

Seprafilm, the firstmarketed product and largest by sales volume of the Sepra family, is the onlyFDA-approved product clinically proven to reduce the incidence, extentand severity of postsurgical adhesions in both the abdomen and pelvis. Thereare approximately 2 million applicable abdominal and pelvic proceduresperformed annually in the U.S., including 1.1 million Caesarean sections,a largely untapped market. During 2005, we launched Sepramesh IP, a secondgeneration product for hernia repair to replace Sepramesh, which has been onthe market since 2000.

***Genetics***

We develop and providehigh quality, sophisticated and complex reproductive testing services primarilyin the U.S. and Japan. In the U.S., we also offer diagnostic services foroncology and genetic counseling services focused on pre-natal and post-natalcare, reproductive and fertility medicine. We offer several types oftesting—the most significant are cytogenetic testing, molecular genetic (DNA)testing, immunohistochemistry testing, flow cytometry testing and biochemicaltesting. These services are promoted through a direct sales force in the U.S.,with testing performed in our nine clinical laboratories located throughout theU.S. We service the Japanese market through a direct sales force anddistributors, with testing primarily performed in our clinical laboratory inSanta Fe, New Mexico.

**Competition**

We are engaged in segmentsof the human healthcare products and services industry that are extremelycompetitive. Our competitors in the U.S. and elsewhere include majorpharmaceutical, biotechnology, diagnostic testing and medical device companies.Some of these competitors may have more extensive research and development,regulatory, manufacturing, production, and sales and marketing capabilities.Some competitors may have greater financial resources. These companies maysucceed in developing products and services that are more effective than anythat we have or may develop and may also prove to be more successful than weare in manufacturing, marketing and selling products and services. In addition,technological advances or different approaches developed by one or more of ourcompetitors may render our products and services obsolete, less effective oruneconomical. Each of our products and services faces different competitivechallenges, and we describe many of them below.

***Renal***

*Renagel.*   Renagelis a phosphate binder for the treatment of hyperphosphatemia and is the mostprescribed phosphate binder in the U.S. Phosphate binders, such as Renagel, arecurrently the only available treatment for hyperphosphatemia, or elevated serumphosphorus levels in CKD patients on dialysis. There are several phosphatebinders options available, including PhosLo®, a prescription calcium 

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acetate preparation soldby Fresenius Medical Care, and Fosrenol® (lanthanum carbonate), a prescriptionlanthanum carbonate sold by Shire. Other products used as phosphate bindersinclude over-the-counter calcium-based antacids such as TUMS®  andmetal-based options such as aluminum and magnesium. The doses necessary forcalcium products to achieve adequate reductions in phosphate absorption canlead to harmful side effects such as hypercalcemia. Evidence suggests thatincreasing doses of calcium-based binders may lead to cardiaccalcification. Aluminum hydroxide, a metal-based treatment option, is moreeffective at lowering phosphorus, but it is infrequently used because aluminumabsorbed from the intestinal tract accumulates in the tissues of patients withchronic kidney failure, causing aluminum-related osteomalacia, anemia anddementia. Another metal-based option, Shire’s Fosrenol, marketed in the U.S.and some European countries, is an effective phosphate binder but with limitedlong-term safety data. Several animal studies suggest lanthanum absorption maylead to harmful toxicities. 

*Hectorol.*   Dialysisproviders typically select which therapy a CKD patient receives to treatsecondary hyperparathyroidism based on safety, efficacy and cost. AbbottLaboratories, Inc., or Abbott, markets intravenous calcitriol (brand nameCalcijex®) andintravenous paricalcitol (brand name Zemplar® )for end-stage renal disease patients. Current intravenous versions ofthese drugs are approved to manage secondary hyperparathyroidism in end-stagerenal disease patients in the U.S. and in European countries. A number ofcompanies have launched or are planning to launch generic intravenouscalcitriol in the U.S. In 2005, Abbott received approval to market oralparicalcitol (Zemplar) in the U.S. for patients with stages 3 and 4 CKD. Since2004, Amgen, Inc. has been marketing in the U.S. an oral calcimimeticagent for the treatment of secondary hyperparathyroidism in patients with CKDon dialysis. The majority of patients studied on this calcimimetic agent werealso taking vitamin D hormone to treat secondary hyperparathyroidism. RochePharmaceuticals, a division of F. Hoffman-LaRoche Ltd. (Roche), markets oralcalcitriol (brand name Rocaltrol®)and Teva Pharmaceuticals Industries Ltd., or Teva, markets generic oralcalcitriol in the U.S. to manage secondary hyperparathyroidism in CKD patients.These two products are approved in the U.S. for the treatment of elevatedparathyroid hormone in both end-stage renal disease and pre-dialysisCKD.

***Therapeutics***

*Cerezyme.*   Zavesca® is currently the only other marketed productaimed at treating Gaucher disease, however, we are aware of other on-goingdevelopment efforts directed towards the treatment of the disease. Zavesca is asmall molecule oral therapy developed by CellTech Group plc, which was acquiredby UCB S.A. in 2004, and marketed by Teva in Israel and Actelion Ltd. inthe U.S. and the European Union. Zavesca has been approved for use in patientswith mild to moderate Type 1 Gaucher disease for whom enzyme replacementtherapy is unsuitable. To date, virtually all Gaucher disease patients who havereceived enzyme therapy have experienced strong clinical benefits with few sideeffects, so we do not expect the competition from Zavesca to have a significantimpact on our sales of Cerezyme. Shire has conducted a phase 1/2 clinical trialfor its gene-activated human glucocerebrosidase (GA-GCB) product.Shire reported top-line data from this study and announced the initiationof a phase 3 study in the first quarter of 2007. In addition, ProtalixBiotherapeutics Ltd. reported that a phase 1 trial with their plant-derivedhuman glucocerebrosidase (prGCB) therapy (expressed and purified in abioreactor system from transformed carrot cells) indicated its short termsafety in healthy normal volunteers. A phase 3 trial is expected to begin in2007. Amicus Therapeutics, Inc. also has announced plans to begin aphase 1 trial using an experimental pharmacological chaperone (AT-2101)in the first half of 2007. Other competitors could develop competitive productsbased on protein replacement therapy, small molecule or gene therapyapproaches. Orphan drug status for Cerezyme, which provided us with exclusivemarketing rights for Cerezyme in the U.S. for seven years, expired in 2001.However, we continue to have patents protecting our method of manufacturingCerezyme until 2010 and the composition of Cerezyme as made by that processuntil 2013.

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*Fabrazyme.*   Fabrazymehas marketing exclusivity in the U.S. until 2010 due to its orphan drug status.Replagal®, Shire’senzyme replacement therapy for Fabry disease, competes with Fabrazyme in theEuropean Union, Australia, Canada, Iceland, Israel, New Zealand, Norway,Romania, Switzerland, Brazil and Taiwan. Transkaryotic Therapies, Inc.,prior to its acquisition by Shire, publicly announced that it had abandoned itsefforts to obtain marketing approval in the U.S. In addition, AmicusTherapeutics is conducting two phase 2 studies of a small molecule treatmentfor Fabry disease, one in males and another in females.

*Thyrogen.*   Thyrogenhas no competitive product in the market. The medical alternative to Thyrogenis to withdraw the patient from thyroid hormone replacement therapy, whichmakes the patient hypothyroid and may cause many of the co-morbiditiesassociated with hypothyroidism.

*Myozyme.*   Myozymehas marketing exclusivity in the U.S. until 2013 and in the European Unionuntil 2016 due to its orphan drug status. Amicus Therapeutics is conducting aphase 1 study of a small molecule treatment for Pompe disease.

*Aldurazyme.*   Aldurazymehas marketing exclusivity in the U.S. until 2010 and in the European Unionuntil 2013 due to its orphan drug status.

***Transplant***

*Thymoglobulin andLymphoglobuline.**  *Severalcompanies market products used for the prevention and treatment of acute rejectionin renal transplant. These products include Novartis AG’s Simulect®, Pfizer Inc.’s ATGAM® ,Ortho Biotech’s Orthoclone OKT®3,Fresenius Biotech GmbH’s ATG-Fresenius S® andthe Roche Group’s Zenapax®.Competition in the acute transplant rejection market is largely driven byproduct efficacy due to the potential for decreased long term survival oftransplanted organs as the result of an acute organ rejection episode.

***Biosurgery***

*Synvisc.**  *Current competition for Synvisc includes Supartz®, a product manufactured bySeikagaku Kogyo that is sold in the U.S. by Smith & NephewOrthopaedics and in Japan by Kaken Pharmaceutical Co. under the name Artz®; Hyalgan®, produced by Fidia S.p.A. and marketed inthe U.S. by Sanofi-Aventis; Orthovisc®, produced by Anika Therapeutics, Inc., marketed inthe U.S. by Johnson & Johnson and marketed outside the U.S. throughdistributors; EuflexxaTM, a product manufactured and sold by FerringPharmaceuticals in the U.S. and Europe; and Durolane®, manufactured by Q-Med AB andmarketed outside the U.S. by Smith & Nephew Orthopedics. Durolane andEuflexxa, the most recently approved products in Europe and the U.S.,respectively, are produced by bacterial fermentation, as opposed to Synvisc,which is avian-sourced. In addition, the treatment protocol for Durolaneis a single-injection, as compared to Synvisc’s current three injection regimen(although it offers a shorter duration of pain relief). Production via bacterialfermentation and treatment with a reduced number of injections may representcompetitive advantages for these products. We are aware of variousviscosupplementation products on the market or in development, but are unawareof any products that have physical properties of viscosity, elasticity ormolecular weight comparable to those of Synvisc. We are also unaware of anyproducts that achieve our duration of efficacy with only three injections.

*Sepra Products.**  *The Sepra products face competition from otheradhesion prevention technologies. Another competitive factor affecting theadoption of Sepra products is the extent to which surgeons continue to treatpatient conditions using procedures for which the Sepra products are indicated.For example, Seprafilm adhesion barrier is not indicated for use inlaparoscopic procedures so adoption by surgeons of new laparoscopic procedurescould have the effect of limiting Seprafilm adhesion barrier adoption.

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Seprafilm does not havesignificant direct competition in the area of abdominal surgery in the U.S.,but does compete with other products in other indications. Innovata plc hasreceived FDA approval of Adept®, a liquid solution for adhesionreduction, in the U.S. for gynecologic laparoscopic adhesiolysis indicationsand has begun marketing the product through a global distribution agreementwith Baxter. The labeled indications for Seprafilm and Adept are mutuallyexclusive, though off-label use of each may result in limited competition. GynecareWorldwide, a division of Ethicon, Inc., a Johnson & Johnsoncompany, markets Interceed®, asheet adhesion barrier similar in intended use to Seprafilm, but is indicatedonly for selected open gynecological indications. In Japan, Seprafilm competesonly with Interceed. Outside the U.S. and Japan, Seprafilm competes withseveral adhesion prevention products. Innovata’s Adept solution is approved inthe European Union for abdominal and gynecological surgeries. FzioMed, Inc.has received CE Mark approval in the European Union for Oxiplex®/AP Gel, an adhesion barrier forabdominal/pelvic surgery and is conducting a pivotal clinical trial in the U.S.Fziomed has announced a global distribution agreement with Ethicon for distributionof Oxiplex/AP Gel. Confluent Surgical, Inc.’s SpraygelTM, an adhesionbarrier used in abdominopelvic procedures, is approved for sale in Europe. MASTBiosurgery AG’s bioresorbable film product, SurgiWrapTM, is also CE marked withan indication for abdominal and pelvic adhesion prevention, but holds an FDAclearance as a surgical mesh in the U.S. Life Medical Sciences, Inc. isdeveloping several adhesion prevention products, including REPELTM forgynecologic surgery and REPEL-CVTM for cardiovascular surgery.  In addition, FzioMed’s Oxiplex®/SP Gel, an adhesion barrier for spinesurgery, is approved for sale in the European Union and in other countriesoutside the U.S.

***Genetics***

The U.S. market forgenetic and complex testing is highly competitive and is divided among manylaboratories, the largest of which are Quest Diagnostics and LaboratoryCorporation of America Holdings (LabCorp). In addition, many hospitals providesome or all of these services through in-house laboratories. Competitivefactors in the genetic and complex testing and diagnostic services businessgenerally include reputation of the laboratory, range of services offered,pricing, managed care contracts, convenience of sample collection and pick-up,quality of analysis and reporting, timeliness of delivery of completed reportsand levels of automation and information technology solutions.

**Patents, License Agreements and Trademarks**

In general, we pursue apolicy of obtaining patent protection both in the U.S. and in selectedcountries outside the U.S. for subject matter we consider patentable andimportant to our business. Patents owned by us that we consider materialinclude the following:

*Renal*

Renagel is protected byU.S. Patent Nos. 5,667,775 which expires on September 16, 2014;5,496,545, 6,509,013 and 7,014,846 which expire August 11, 2013;6,733,780, which expires on October 18, 2020; and correspondinginternational counterparts. Hectorol is protected by U.S. PatentNos. 6,903,083 which expires on July 18, 2021; 5,602,116 whichexpires on February 11, 2014; 5,707,980 which expires on August 17,2010; 5,869,473 which expires on August 2, 2008; 5,869,472 which expireson July 18, 2014, and corresponding international counterparts.

*Therapeutics*

Cerezyme is protected byU.S. Patent Nos. 5,236,838 which expires August 17, 2010; 5,549,892 whichexpires August 27, 2013; 6,451,600 which expires September 17, 2019;and corresponding international counterparts. Myozyme is protected by U.S.Patent No. 6,118,045 which expires July 31, 2016; and correspondinginternational counterparts. Thyrogen is protected by U.S. Patent Nos. 5,240,832and 5,674,711 which expire on August 31, 2010; 5,602,006 which expires onAugust 19, 2014; and corresponding international counterparts.

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*Biosurgery*

Synvisc is protected byU.S. Patent Nos. 5,143,724 which expires August 8, 2011; 5,399,351 whichexpires March 21, 2012; and corresponding international counterparts.Seprafilm is protected by U.S. Patent Nos. 5,017,229 which expires May 21,2008; 5,527,893 which expires June 18, 2013; 6,235,726 which expires September 18,2007; and corresponding international counterparts.

*Genetics*

Genetic testing services, e.g. for Cystic Fibrosis,are protected by U.S. Patent Nos. 5,585,330 and 5,834,181 which expire July 28,2014; 5,849,483 which expires December 15, 2015; 5,882,856 which expires March 16,2016; 6,207,372 which expires June 6, 2016; and correspondinginternational counterparts.

In addition, aportion of our proprietary position is based upon patents that we have licensedfrom others either through collaboration or traditional license agreements,including patents relating to:

·       Fabrazyme;

·       Thyrogen;

·       Aldurazyme;

·       Myozyme;and

·       genetictesting.

These collaboration and license agreements generallyrequire us to share profits with our collaborative partners or pay royalties toour licensors upon commercialization of products covered by the licensedtechnology.

Generally, patentsissued in the U.S. are effective for:

·       thelonger of 17 years from the date of issue or 20 years from theearliest effective filing date of the corresponding patent application if filedprior to June 8, 1995; and

·       20 yearsfrom the earliest filing date for patent applications filed on or after June 8,1995.

In some cases, the patent term can be extended torecapture a portion of the term lost during FDA regulatory review. The durationof foreign patents varies in accordance with local law.

We also rely on trade secrets, proprietary know-howand continuing technological innovation to develop and maintain a competitiveposition in our product areas. We require our employees, consultants andcorporate partners who have access to our proprietary information to signconfidentiality agreements.

Our patent position and proprietary technology aresubject to certain risks and uncertainties. We have included information aboutthese risks and uncertainties in Item 1A., “Risk Factors,” of this report.We encourage you to read that discussion, which we are incorporating into thissection by reference.

Our products and servicesare sold around the world under brand-name trademarks and service-marks.Trademark protection continues in some countries as long as the mark is used;in other countries, as long as it’s registered. Registrations generally are forfixed, but renewable, terms. We consider our registered trademarks Genzyme®, Cerezyme®, Ceredase®, Fabrazyme®, Thyrogen®, Myozyme®, Renagel®, Campath®, MabCampath®, Clolar®, Synvisc®, Carticel®, MACI®, GlucaMesh®,GlucaTex®, Seprafilm®, Sepragel®, Seprapack®, Sepramesh®, Hylaform®, Hylashield®, Hylasome®, Captique®, Epicel®, OSOM®, N-geneous®, GlyPro®,InSight®, AFP3®, AFP4®, and Hectorol®, together with our trademarks, VERIGENTM, ThymoglobulinTM,LymphoglobulineTM,  MozobilTM, CholestagelTM,RenvelaTM, 

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CF87TM,SepraTM, Hylashield NiteTM, SAGETM, LongSAGETM and SPHERETM, and BioMarin/GenzymeLLC’s registered trademark, Aldurazyme®, in the aggregate, to be of material importance to our business.

**Government Regulation**

Regulation by governmentalauthorities in the U.S. and other countries is a significant factor in thedevelopment, manufacture, commercialization, pricing and reimbursement of ourproducts and services.

***FDA Regulation***

Mostof our products and services require approval from the FDA and correspondingagencies in other countries before they can be marketed. In the U.S., we marketproducts that the FDA classifies as either “drugs,” “biologics” or “devices.”The activities required before drugs or biologics may be marketed in the U.S.include:

·       preclinicallaboratory tests, *in vitro* and *in vivo* preclinical studies andformulation and stability studies;

·       thesubmission to the FDA of an application for human clinical testing, which isknown as an Investigational New Drug (IND) application;

·       adequateand well controlled human clinical trials to demonstrate the safety andeffectiveness of the drug or biologic;

·       thesubmission of an NDA for a drug or a Biologics License Application (BLA) for abiologic; and

·       theapproval by the FDA of the NDA or BLA.

As part of productapproval, the manufacturer of the product must undergo a pre-approvalGood Manufacturing Practices inspection (for a drug or biologic) from the FDA.Since any approval granted by the FDA is both site and process specific, anymaterial change by a company in the manufacturing process, equipment orlocation may necessitate additional FDA review and approval.

In addition, the FDA maygrant accelerated approval for drugs and biologics on the basis of a surrogateendpoint reasonably likely to predict clinical benefit. In such cases, we arerequired to conduct post-approval clinical studies to confirm theclinical benefit of the surrogate endpoint that was the basis of theaccelerated approval. These clinical studies require the collection ofadditional data before full approval will be given and can often be long-termcommitments. Although the FDA has not historically invoked its authority to withdrawan accelerated approval, it may do so. We currently have a number of productsapproved under the accelerated approval mechanism.

Productsthat are classified as devices also require some form of FDA approval prior tomarketing. Devices are classified as Class I, II or III, dependingupon the information available to assure their safety and effectiveness. Ingeneral, Class I and Class II devices are devices whose safety andeffectiveness can reasonably be assured through general or specific controls,respectively. Class III devices are life sustaining, life supporting, areof substantial importance in preventing impairment to health or pose anunreasonable risk of adverse effect. They are implantable devices or newdevices which have been found not to be substantially equivalent to legallymarketed devices. The steps required for approval of a Class III deviceinclude:

·       preclinicallaboratory tests and *in vitro* and*in vivo* preclinical studies;

·       thesubmission to the FDA and approval of an Investigational Device Exemption (IDE)application to allow initiation of clinical testing;

·       humanclinical studies to prove safety and effectiveness of the device;

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·       thesubmission of a Pre-Marketing Approval application (PMA); and

·       theapproval by the FDA of the PMA.

Typically, clinical testing of devices involvesinitial testing to evaluate safety and feasibility and expanded trials tocollect sufficient data to prove safety and effectiveness. In addition, theprocedures and the facilities used to manufacture the device are subject toreview and approval by the FDA.

A device (other than a Class III device) that isproven to be substantially equivalent to a device marketed prior to May 28,1976, when government regulations for devices were first introduced, can be marketedafter clearance of a 510(k) application rather than the filing of an IDEapplication and a PMA. The 510(k) application must contain a descriptionof the device, its methods of manufacture and quality control procedures andthe results of testing to demonstrate that the device is substantiallyequivalent to the device already marketed.

The time and expenserequired to perform the clinical testing necessary to obtain FDA approval forregulated products can frequently exceed the time and expense of the researchand development initially required to create the product. Even after initialFDA approval has been obtained, we could be required to conduct further studiesto provide additional data on safety or efficacy or, should we desire, to gainapproval for the use of a product as a treatment for additional clinicalindications. In addition, use of these products during testing and aftermarketing approval has been obtained could reveal side effects which, ifserious, could limit uses, or in the most serious cases, result in a marketwithdrawal of the product or expose us to product liability claims.

***Regulation Outside of the U.S.***

For marketing outside the U.S., we are subject toforeign regulatory requirements governing human clinical testing and marketingapproval for our products. These requirements vary by jurisdiction, differ fromthose in the U.S. and may require us to perform additional pre-clinicalor clinical testing regardless of whether FDA approval has been obtained. Theamount of time required to obtain necessary approvals may be longer or shorterthan that required for FDA approval. In many countries outside of the U.S.,coverage, pricing and reimbursement approvals are also required.

Our initial focus for obtaining marketing approvaloutside the U.S. is typically the European Union. European Union regulationsand directives generally classify health care products either as medicinalproducts, medical devices or *in vitro*diagnostics. For medicinal products, marketing approval may be sought usingeither the centralized procedure of the EMEA or the decentralized, mutualrecognition process. The centralized procedure, which is mandatory forbiotechnology derived products, results in a recommendation in all memberstates, while the European Union mutual recognition process involvescountry-by-country approval.

European Union regulationsfor products classified as medical devices have been implemented. Devices, suchas our Sepra products, must receive market approval through a centralizedprocedure in which the device receives a CE Mark allowing distribution to allmember states of the European Union. The CE Mark certification requires us toreceive International Standards Organization certification for each facilityinvolved in the manufacture or distribution of the device. This certificationcomes only after the development of an all inclusive quality system, which isreviewed for compliance to International Quality Standards by a licensed “NotifiedBody” working within the European Union. After certification is received, aproduct dossier is reviewed that attests to the product’s compliance withEuropean Union directive 93/42 EEC for medical devices. Only after this pointis a CE Mark granted.

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***Other Government Regulation***

*GoodManufacturing Practices.**  *Allfacilities and manufacturing techniques used for the manufacture of Genzyme’sproducts must comply with applicable FDA regulations governing the productionof pharmaceutical products known as “Good Manufacturing Practices.”

*OrphanDrug Act.**  *TheOrphan Drug Act provides incentives to manufacturers to develop and marketdrugs for rare diseases and conditions affecting fewer than 200,000 persons inthe U.S. at the time of application for orphan drug designation. The firstdeveloper to receive FDA marketing approval for an orphan drug is entitled to aseven year exclusive marketing period in the U.S. for that product. However, adrug that the FDA considers to be clinically superior to, or different from,another approved orphan drug, even though for the same indication, may alsoobtain approval in the U.S. during the seven year exclusive marketing period.We believe that the commercial success of our orphan drug products depends moresignificantly on the associated safety and efficacy profile and on the pricerelative to competitive or alternative treatments and other marketingcharacteristics of each product than on the exclusivity afforded by the OrphanDrug Act. Additionally, these products may be protected by patents and othermeans.

Legislation similar to the Orphan Drug Act has beenenacted in other countries outside of the U.S., including the European Union.The orphan legislation in the European Union is available for therapiesaddressing conditions that affect five or fewer out of 10,000 persons. The marketexclusivity period is for ten years, although that period can be reduced to sixyears if, at the end of the fifth year, available evidence establishes that theproduct is sufficiently profitable not to justify maintenance of marketexclusivity.

*Regulationof Diagnostic Testing Services.**  *TheClinical Laboratories Improvement Act of 1967, as amended in 1988 (CLIA)provides for the regulation of clinical laboratories by the U.S. Department ofHealth and Human Services (HHS). All of our clinical laboratories are CLIAapproved, licensed by the College of American Pathologists and certified by theappropriate state agencies. CLIA regulates virtually all clinical laboratoriesby requiring they be certified by the federal government and comply withvarious operational, personnel and quality requirements intended to ensure thattheir clinical laboratory testing services are accurate, reliable and timely.CLIA does not preempt state laws that are more stringent than federal law. Forexample, state laws may require additional personnel qualifications, qualitycontrol, record maintenance and/or proficiency testing.

In the past, the FDA has claimed regulatory authorityover laboratory-developed tests, but has exercised enforcement discretionin not regulating most laboratory-developed tests performed by highcomplexity CLIA-certified laboratories. In December 2000, the HHS’sSecretary’s Advisory Committee on Genetic Testing recommended that the FDA bethe lead federal agency to regulate genetic testing. In late 2002, a new HHSSecretary’s Advisory Committee on Genetics, Health and Society was appointed toreplace the prior Advisory Committee, but it has not yet made any finalrecommendations. In the meantime, the FDA is considering revising itsregulations on analyte specific reagents, which are used in laboratory-developedtests, including laboratory-developed genetic testing, and establishingnew regulatory guidelines for certain laboratory-developed tests. The latterpotentially could bring under the scope of FDA regulation some tests thatcurrently can be used without FDA approval. Increased FDA regulation of thereagents used in laboratory-developed testing could lead to increasedcosts and delays in introducing new tests, including genetic tests. Inaddition, the Medicare and Medicaid programs provide a substantial portion ofreimbursement for our diagnostic products. Whether these programs pay for anyparticular test, and the amounts that they pay, may be unilaterally changed atany time.

*Regulationof Diagnostic Products.**  *TheFDA has regulatory responsibility over instruments, test kits, reagents andother devices used to perform diagnostic testing by clinical laboratories. Likeother medical devices*, in vitro*diagnostic (IVD) products are divided into three classes according to the levelof regulatory control needed to assure safety and effectiveness. Genzyme’scurrent IVD products are either Class I or Class II, and are eitherexempt from pre-market notification or require a 510(k) submission.

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*Regulationof Gene Therapy Products.**  *Inaddition to FDA requirements, the National Institutes of Health haveestablished guidelines providing that transfers of recombinant DNA into humansubjects at NIH laboratories or with NIH funds must be approved by the NIHDirector. The NIH has established the Recombinant DNA Advisory Committee toreview gene therapy protocols. We expect that many of our gene therapyprotocols will be subject to review by the Recombinant DNA Advisory Committee.In the United Kingdom, our gene therapy protocols will be subject to review bythe Gene Therapy Advisory Committee and in Germany, these protocols will besubject to review by the Commission for Somatic Cell Therapy. Greatergovernment regulation of gene therapy products may lead to regulatory delays,increased development costs, and negative public perception of the gene therapyproducts we are developing.

*Other Laws and Regulations.**  *Our operations are or may be subject to variousfederal, state and local laws, regulations and recommendations relating to themarketing of products and relationships with treating physicians, dataprotection, safe working conditions, laboratory and manufacturing practices,the export of products to certain countries, and the purchase, storage,movement, use and disposal of hazardous or potentially hazardous substancesused in connection with our research work and manufacturing operations,including radioactive compounds and infectious disease agents. Although webelieve that our safety procedures comply with the standards prescribed by federal,state and local regulations, the risk of contamination, injury or otheraccidental harm cannot be eliminated completely. In the event of an accident,we could be held liable for any damages that result and any liabilities couldexceed our resources.

*Sales, Marketingand Product Pricing*

We are subject to various federal and state lawspertaining to health care “fraud and abuse,” including anti-kickback andfalse claims statutes. Anti-kickback laws make it illegal for aprescription drug manufacturer to solicit, offer, receive, or pay anyremuneration in exchange for, or to induce, the referral of business, includingthe purchase or prescription of a particular drug. The federal government haspublished regulations that identify “safe harbors” or exemptions for certainpayment arrangements that do not violate the anti-kickback statutes.Genzyme seeks to comply with the safe harbors where possible. Due to thebreadth of the statutory provisions, and the lack of guidance in the form ofregulations or court decisions addressing some industry activities, it ispossible that our practices might be challenged under anti-kickback orrelated laws. False claims laws prohibit anyone from knowingly and willinglypresenting, or causing to be presented for payment to third-party payors,including Medicare and Medicaid, claims for reimbursed drugs or services thatare false or fraudulent, claims for items or services not provided as claimed,or claims for medically unnecessary items or services. Promotion of drugs foruses outside their labeled indications, so called “off-label” promotion,recently has led to several financially significant settlement agreements underthe False Claims Act.

Our activities relating to the sale and marketing of,and price reporting for, our products are subject to scrutiny under these fraudand abuse laws. Violations of these laws may result in criminal and/or civilsanctions, including fines and civil monetary penalties, as well as possibleexclusion from federal health care programs, including Medicare and Medicaid.Federal and state authorities are paying increased attention to thepharmaceutical and biotechnology industries in enforcement of these laws, andwe have been named in several legal proceedings alleging violations.

We participate in theMedicaid rebate program. Participation in this program has included extendingcomparable discounts under the Public Health Service (PHS) pharmaceuticalpricing program. Under the Medicaid rebate program, we pay a rebate for eachunit of drug product that is reimbursed by Medicaid. The amount of the rebatefor each product is set by law as a minimum 15.1% of the average manufacturerprice (AMP) of that product, or if it is greater, the difference between AMPand the best price available from Genzyme to any customer. The rebate amountalso includes an inflation adjustment if AMP increases greater than inflation.The PHS pricing program extends discounts comparable to the Medicaid rebate toa variety of community health clinics and other entities that receive healthservices grants from the PHS, as 

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well ashospitals that serve a disproportionate share of poor Medicare and Medicaidbeneficiaries. The rebate amount is recomputed each quarter based on ourreports of our current AMP and best price for each of our products. The termsof our participation in the Medicaid program impose an obligation to correctthe prices reported in previous quarters, if necessary. Any such correctionscould result in an overage or underage in our rebate liability for past quarters,depending on the nature of the correction. In addition to retroactive rebates(and interest, if any), if we were found to have knowingly submitted falseinformation to the government, in addition to other penalties available to thegovernment, the statute provides for civil monetary penalties for each claimcontaining false information. In addition, the minimum discount of 15.1% couldbe increased in the future, thereby increasing our discounts to the Medicaidprogram and to other entities that receive discounts comparable to the Medicaidrebate.

Part Dof the Medicaid Prescription Drug, Improvement and Modernization Act, or MedicarePart D, also has made Medicare coverage available for the first time for anumber of drugs, including Renagel and oral Hectorol beginning in 2006. MedicarePart D is administered by private vendors under contract with the U.S.government. Each vendor establishes its own Medicare Part D formulary forprescription drug coverage and pricing, which the vendor may modify from time-to-time.Renagel and Hectorol currently are well-positioned on the majority offormularies of nation-wide prescription drug plans participating in theMedicare Part D program as well as many of the large regional plans. TheU.S. Congress could also significantly change the Medicare Part D programin the future, including requiring the federal government to negotiatediscounts for our drugs or matching mandatory discounts to those required inother federal programs.

**Employees**

As of December 31,2006, we, together with all of our consolidated subsidiaries, had approximately9,000 employees worldwide.

**Financial Information Regarding Segment Reporting**

We have provided theinformation required by Item 101(b) of Regulation S-K inNote Q., “Segment Information,” to our Consolidated Financial Statementsin the 2006 Genzyme Corporation Annual Report set forth in Exhibit 13 tothis Annual Report on Form 10-K. We are incorporating thatinformation into this section by reference.

**Research and Development Costs**

We have provided theinformation required by Item 101(c)(1)(xi) of Regulation S-K inPart II, Item 8, “Financial Statements and Supplementary Data,” andspecifically in the Genzyme Corporation and Subsidiaries ConsolidatedStatements of Operations and Comprehensive Income and in Note I.,“Investments in Marketable Securities and Strategic Equity Investments” to ourConsolidated Financial Statements in the 2006 Genzyme Corporation Annual Reportset forth in Exhibit 13 to this Annual Report on Form 10-K. Weare incorporating that information into this section by reference.

**Sales by Geographic Area, Significant Customers andProducts**

We have provided theinformation required by Items 101(c)(1)(i) and (vii) and101(d) of Regulation S-K in the 2006 Genzyme Corporation AnnualReport under the heading “Management’s Discussion and Analysis of GenzymeCorporation and Subsidiaries’ Financial Condition and Results of Operations” andin Note Q., “Segment Information,” to our Consolidated FinancialStatements set forth in Exhibit 13 to this Annual Report on Form 10-K.We are incorporating that information into this section by reference.

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**Available Information**

We file electronicallywith the SEC our annual report on Form 10-K, our quarterly reportson Form 10-Q, and current reports on Form 8-K pursuant toSection 13(a) or 15(d) of the Securities Exchange Act of 1934.You may read or copy any materials we file with the SEC at the SEC’s PublicReference Room at 100 F Street, N.E., Washington, D.C. 20549. You mayobtain information on the operation of the Public Reference Room bycalling the SEC at 1-800-SEC-0330. The SEC also maintains anInternet site that contains reports, proxy and information statements, andother information about issuers that file reports electronically with the SEC.The address of that site is http://www.sec.gov.

You may obtain a free copyof our annual report on Form 10-K, our quarterly reports on Form 10-Qand current reports on Form 8-K, and amendments to those reports, assoon as reasonably practicable after we file them with the SEC, on our websiteat http://www.genzyme.com or by contacting our Investor Relations department at1-617-252-7570. The reference to our website is not intendedto incorporate information on our website into this document by reference.

**ITEM 1A. RISKFACTORS**

We incorporate ourdisclosure related to risk factors into this section by reference from the 2006Genzyme Corporation Annual Report under the heading “Management’s Discussionand Analysis of Genzyme Corporation and Subsidiaries’ Financial Condition andResults of Operations—Risk Factors,” which is included in Exhibit 13 tothis Annual Report on Form 10-K.

**ITEM 1B. UNRESOLVEDSTAFF COMMENTS**

None.

**ITEM 2. PROPERTIES**

Our operations areconducted in manufacturing, warehousing, development/clinical plant, clinicallaboratories, and research and office facilities that are located principallyin: the U.S.; the United Kingdom; the Republic of Ireland; The Netherlands;Belgium; France; Canada; Switzerland; Germany; and Australia.

Welease all of our facilities except for certain facilities in:

·       Geel, Belgium (land subjectto 99 year leasehold);

·       Haverhill and Maidstone,England;

·       Allston (land subject to65 year leasehold), Framingham and Waltham, Massachusetts; Ridgefield, NewJersey; and Santa Fe, New Mexico in the U.S.; and

·       Waterford, Ireland (landsubject to 999 year leasehold).

Our principalmanufacturing facilities are used for the large-scale production oftherapeutic proteins and enzymes, including Cerezyme, Fabrazyme, Myozyme andThyrogen; renal products, including Renagel; and immunosuppressive agents,including Thymoglobulin and Lymphoglobuline, biomaterials, including Synviscand the Sepra family of anti-adhesion products, bulk hyaluronic acid,cell processing services, including Carticel, MACI, and Epicel and genetictesting services. The facilities also are used for the receipt of contractmanufactured products and materials for Hectorol, Renagel, Campath, and Clolar.

Our administrativeactivities are concentrated at facilities we have leased in Cambridge andFramingham, Massachusetts and San Antonio, Texas in the U.S.; Naarden, TheNetherlands; and Tokyo, Japan. Our sales and marketing activities areprincipally located in Cambridge, Massachusetts and in sales offices located inmajor cities throughout the world. We conduct our product research anddevelopment activities primarily at our laboratory facilities in Framingham andWaltham, Massachusetts; San Antonio, Texas; and San Diego, California in theU.S. and at our Cambridge, U.K. facility. Leases for our facilities 

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containtypical commercial lease provisions, including renewal options, rent escalatorsand tenant responsibility for operating expenses. We believe that we have, orare in the process of developing or acquiring, adequate manufacturing capacityto support our requirements for the next several years.

*Renal*

We manufacture themajority of our supply requirements for sevelamer hydrochloride, the activeingredient in Renagel, at our facilities in Haverhill, England. We also operatea manufacturing facility in Waterford, Ireland for use in manufacturing thetablet formulation of Renagel. All of our Renagel manufacturing facilities areoperational, and have received all European and U.S. approvals material to suchoperations. A second tablet formulation facility is under construction inWaterford to provide additional capacity and security of supply. We arecurrently converting one of the bulk Renagel plants in Haverhill, England toenable it to also produce Renvela which is anticipated to receive approval in2008.

We contract out themanufacturing and fill-finish work for the capsule formulation ofHectorol. We are in the process of evaluating options to obtain regulatoryapproval and secure the supply of Hectorol filled in vials instead of ampules. Inaddition, we are in the process of constructing our own manufacturing capacityfor filling Hectorol in vials in Ridgefield, NJ.

*Therapeutics*

We manufacture Cerezyme,Fabrazyme and Myozyme at our multi-product manufacturing facility inAllston, Massachusetts. This facility, which we own and which containsextensive sterile filling capacity, is built on land that we hold under a 65-yearlease, which expires in May 2057. We manufacture Thyrogen, Fabrazyme andMyozyme in our small-scale manufacturing facility in Framingham,Massachusetts and final drug product at our Allston facility. In 2005, wecommenced the design and build-out of perfusion capacity at our Geel,Belgium facility to provide back-up and expansion to our Allston bulkcapacity and purification systems.

At our Waterford, Irelandfacility, we have installed new fill-finish capabilities for therapeuticproteins. We completed the qualification batches for the first product to bemanufactured at the facility and received approval for manufacture of the firstproduct, Thymoglobulin, from the FDA in 2006. We are in the process oftransferring and qualifying additional products with additional approvals forCerezyme and Myozyme anticipated in 2007.

*Transplant*

We manufacture Thymoglobulinand Lymphoglobuline at a leased facility in Lyon, France, and maintainadministrative offices nearby. The majority of our fill-finish of Thymoglobulinis done at our Waterford facility. We plan to shift the remaining fill-finishwork from Sanofi-Pasteur in France to our Waterford facility in 2007. We planto complete acquisition of land in Lyon and to seek governmental approval tocommence the construction of a new Thymoglobulin manufacturing facility withincreased capacity in 2007.

*Biosurgery*

We produce Synvisc andother hyaluronan-based products in a manufacturing facility located inRidgefield, New Jersey. We produce bulk hyaluronic acid and the Sepra family ofproducts at commercial scale in our manufacturing facility in Framingham,Massachusetts.

*Genetics*

Our genetic and oncologytesting business primarily conducts operations in clinical laboratory andadministrative facilities we own in Santa Fe, New Mexico and lease inWestborough, Massachusetts; New York, New York; Tampa, Florida; Phoenix,Arizona; and Los Angeles, Orange, and Monrovia, California.

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**ITEM 3. LEGALPROCEEDINGS**

We periodically becomesubject to legal proceedings and claims arising in connection with ourbusiness.

Four lawsuits have beenfiled against us regarding the exchange of all of the outstanding shares ofBiosurgery Stock for shares of Genzyme Stock in connection with the eliminationof our tracking stocks in July 2003. Each of the lawsuits is a purportedclass action on behalf of holders of Biosurgery Stock. The first case, filed inMassachusetts Superior Court (MSC) in May 2003, alleged a breach of theimplied covenant of good faith and fair dealing in our charter and a breach ofour board of directors’ fiduciary duties. The plaintiff in this case sought aninjunction to adjust the exchange ratio for the tracking stock exchange. TheMSC dismissed the complaint in its entirety in November 2003. Upon appeal,the Massachusetts Appeals Court upheld the dismissal by the MSC of thefiduciary duty claim, but reversed the earlier decision to dismiss the impliedcovenant claim. The Massachusetts Supreme Judicial Court (SJC) has granted ourpetition for further appellate review of the Appeals Court decision reversingthe dismissal of the implied covenant claim. The SJC heard oral arguments on December 4,2006. A ruling on the appeal is anticipated in the first half of 2007. Twosubstantially similar cases were filed in the MSC in August and October 2003.These cases were consolidated in January 2004, and in July 2004, theconsolidated case was stayed pending disposition of a fourth case, which wasfiled in the U.S. District Court for the Southern District of New York in June 2003.The complaint initially alleged violations of federal securities laws, commonlaw fraud, and a breach of the merger agreement with Biomatrix, Inc., orBiomatrix, in addition to the state law claims contained in the other cases.The plaintiffs initially sought an adjustment to the exchange ratio, therescission of the acquisition of Biomatrix, and unspecified compensatorydamages. In December 2005, the plaintiffs in this case filed an amendedcomplaint in which they dropped all of the claims alleged in the initialcomplaint relating to the initial issuance of Biosurgery Stock and the acquisitionof Biomatrix, and narrowed the putative class to include only those individualswho held Biosurgery Stock on May 8, 2003. We filed a motion to dismiss theamended complaint and to oppose the class certification. The Court denied ourmotion to dismiss the amended complaint and certified this case as a classaction on behalf of all shareholders who held Biosurgery Stock on May 8,2003. We filed a petition asking the U.S. Court of Appeals for the SecondCircuit to review the class certification decision, which has been denied.Discovery in this action is currently ongoing. We believe each of these casesis without merit and continue to defend against them vigorously.

On March 27, 2003,the Office of Fair Trading, or OFT, in the United Kingdom issued a decisionagainst our wholly-owned subsidiary, Genzyme Limited, finding thatGenzyme Limited held a dominant position and abused that dominant position withno objective justification by pricing Cerezyme in a way that excludes otherdelivery/homecare service providers from the market for the supply of homedelivery and homecare services to Gaucher patients being treated with Cerezyme.In conjunction with this decision, the OFT imposed a fine on Genzyme Limitedand required modification to its list price for Cerezyme in the United Kingdom.Genzyme Limited appealed this decision to the Competition Appeal Tribunal. On May 6,2003, the Tribunal issued an order that stayed the OFT’s decision, but requiredGenzyme Limited to provide a homecare distributor a discount of 3% per unitduring the appeal process. The Tribunal issued its judgment on Genzyme Limited’sappeal on March 11, 2004, rejecting portions of the OFT’s decision andupholding others. The Tribunal found that the list price of Cerezyme should notbe reduced, but that Genzyme Limited must negotiate a price for Cerezyme thatwill allow homecare distributors an appropriate margin. The Tribunal alsoreduced the fine imposed by the OFT. In response to the Tribunal’s decision, werecorded an initial liability of approximately $11 million in our 2003financial statements and additional liabilities totaling approximately$1 million during 2004 and 2005, of which approximately $6 millionwere paid in 2005. Genzyme Limited and the OFT were unable to negotiate a pricefor Cerezyme for homecare distributors and, as a result, on September 29,2005, the Tribunal issued a ruling establishing the discount to be provided byGenzyme Limited to homecare distributors at 7.2%, which approximates the figureused to calculate the initial liability of approximately $11 million werecorded in 

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2003,and the additional liabilities totaling approximately $1 million werecorded in 2004 and 2005. Genzyme Limited decided not to appeal this decision.Arising out of the OFT decision, on April 5, 2006, Genzyme Limitedreceived a damage claim from Genzyme Limited’s former distributor, Healthcareat Home. In the fourth quarter of 2006, Genzyme Limited paid Healthcare at Homeapproximately $14 million, inclusive of interest and legal costs in fulland final settlement of all claims, of which approximately $6 million hadbeen previously accrued and approximately $8 million was recorded as acharge to selling, general and administrative expenses, or SG&A, in ourconsolidated statements of operations in December 2006.

We are not able to predictthe outcome of the pending legal proceeding listed here, or other legalproceedings, to which we may become subject in the normal course of business orestimate the amount or range of any reasonably possible loss we might incur ifwe do not prevail in the final, non-appealable determinations of such matters.Therefore, we have no current accruals for these potential contingencies. We cannotprovide you with assurance that the legal proceedings listed here, or otherlegal proceedings, will not have a material adverse impact on our financialcondition or results of operations.

**ITEM 4. SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS**

None.

**Executive Officers of the Registrant**

Set forth below is a listof individuals that are currently serving as our executive officers, or whoserved in such capacity during the fiscal year ended December 31, 2006:

| **Name**                  | ** ** | ** ** | ** ** | **Age**                                                                                    | ** ** | **Title** | ** ** | ** ** |
|---------------------------|------------|------------|------------|--------------------------------------------------------------------------------------------|------------|-----------|------------|------------|
| Henri A. Termeer          |       | 61         |       | Chairman of the Board of  Directors; President and Chief Executive Officer                 |
| Earl M. Collier, Jr. |       | 59         |       | Executive Vice President, Cardiovascular and  Oncology                                     |
| Zoltan A. Csimma          |       | 65         |       | Chief Human Resources Officer; Senior Vice President                                       |
| Georges Gemayel, Ph.D.    |       | 46         |       | Executive Vice President, Therapeutics                                                     |
| Richard A. Moscicki, M.D. |       | 55         |       | Chief Medical Officer; Senior Vice President, Clinical,  Medical and Regulatory Affairs    |
| Alan E. Smith, Ph.D.      |       | 61         |       | Chief Scientific Officer; Senior Vice President,  Research                                 |
| Sandford D. Smith         |       | 59         |       | Executive Vice President; President, International  Group                                  |
| Peter Wirth               |       | 56         |       | Chief Legal Officer; Executive Vice President, Legal  and Corporate Development; Secretary |
| Michael S. Wyzga          |       | 51         |       | Chief Financial and Accounting Officer; Executive  Vice President, Finance                 |

 

*Mr. Termeer*has served as our President and a Director since October 1983, as ChiefExecutive Officer since December 1985 and as Chairman of the Board ofDirectors since May 1988. For ten years prior to joining Genzyme, Mr. Termeerworked for Baxter International Laboratories, Inc., a manufacturer ofhuman health care products. Mr. Termeer is a director of ABIOMED, Inc.and the Federal Reserve Bank of Boston and a trustee of Hambrecht &Quist Healthcare Investors and Hambrecht & Quist Life SciencesInvestors.

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*Mr. Collier*has served as Executive Vice President since July 1997, withresponsibility for our Oncology and Cardiovascular businesses since August 2003and our Genetics business since January 2007. He joined Genzyme in January 1997as Senior Vice President, Health Systems, and served as Executive VicePresident, Surgical Products and Health Systems from July 1997 until June 1999.He served as President of our former Genzyme Surgical Products division from June 1999until December 2000. Mr. Collier was also responsible for our formerGenzyme Tissue Repair division from December 1999 to December 2000.From December 2000 until August 2003, Mr. Collier served asPresident of our Genzyme Biosurgery business unit. Prior to joining us, Mr. Collierwas President of Vitas HealthCare Corporation (formerly Hospice CareIncorporated), a provider of health care services, from October 1991 untilAugust 1995. Prior to that, Mr. Collier was a partner in theWashington, D.C. law firm of Hogan & Hartson, which he joined in 1981.Mr. Collier is a director of Encorium Group, Inc., a contractresearch organization which provides independent clinical trial and productdevelopment services to the pharmaceutical, biotechnology and medical devicesindustries. He also serves on the board of deCODE genetics, a biotechnologycompany that applies gene discovery to the development of drugs and diagnosticsfor common diseases.

*Mr. Csimma*has held the title Senior Vice President and Chief Human Resources Officersince March 1, 2006. He joined us in July 2000 as Senior VicePresident, Human Resources. Prior to joining Genzyme, he served as VicePresident, Human Resources of Wyeth Ayerst Research, a pharmaceutical researchorganization, from August 1998 to July 2000. During that time, Mr. Csimmaalso served as Site Head, Genetics Institute, for Wyeth Ayerst. From May 1988to August 1998, he served as Vice President, Human Resources andOperations of Genetics Institute, Inc., a biotechnology company, which wasintegrated into Wyeth Ayerst in March 1998.

*Dr. Gemayel*serves as Executive Vice President with responsibility for our Renal, Therapeutics(excluding our lysosomal storage disorders business unit), Transplant andBiosurgery business units.  He joined us in August 2003 and serveduntil February 2007 as Executive Vice President with responsibility forour Renal, Therapeutics (including our lysosomal storage disorders businessunit) and Transplant business units. For sixteen years prior to joiningGenzyme, Dr. Gemayel worked for Hoffmann-LaRoche, a leadinghealthcare company, where he served most recently from July 2000 until August 2003as Vice President of the United States Specialty Care unit, and from January 1998until July 2000 as General Manager of Hoffmann-LaRoche Portugal.

*Dr. Moscicki*joined us in March 1992 as Medical Director, became Vice President,Medical Affairs in early 1993 and was named Vice President, Clinical, Medicaland Regulatory Affairs in December 1993. In September 1996 he becameSenior Vice President, Clinical, Medical and Regulatory Affairs and ChiefMedical Officer. Since 1979, he has also been a physician staff member at theMassachusetts General Hospital and a faculty member at the Harvard MedicalSchool.

*Dr. Alan Smith*joined us in August 1989 as Senior Vice President, Research and becameChief Scientific Officer in September 1996. Prior to joining Genzyme, heserved as Vice President—Scientific Director of Integrated Genetics, Inc.,from November 1984 until its acquisition by us in August 1989. From October 1980to October 1984, Dr. Smith was head of the Biochemistry Division ofthe National Institute for Medical Research, Mill Hill, London, England andfrom 1972 to October 1980, he was a member of the scientific staff at theImperial Cancer Research Fund in London, England.

*Mr. Sandford Smith*has held the title as Executive Vice President sinceJune 2006, Senior Vice President since January 2003 and President of ourInternational Group since January 2000, with responsibility for the commercialactivities for our lysosomal storage disorders, renal, transplant andbiosurgery products outside of the United States, including in the Europe,Middle East, Asia Pacific and Latin America regions, as well as Canada. Hejoined us in April 1996 and served as Vice President and General Manager of ourInternational Group and President of our Therapeutics business. Prior tojoining 

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*Genzyme,Mr. Smith served as President and Chief Executive Officer of RepligenCorporation. Before joining Repligen Corporation, Mr. Smith also served as VicePresident of Business Development and Strategic Planning for Bristol-MyersSquibb Company.*

*Mr. Wirth* joined us in January 1996 and has served asExecutive Vice President and Chief Legal Officer since September 1996 withresponsibility for our corporate development and legal activities. From 2001through October 2005, Mr. Wirth had responsibility for our drugdiscovery and development business. In addition, from September 1996 untilJune 2003, Mr. Wirth was responsible for our Oncology business.

*Mr. Wyzga* hasserved as Executive Vice President, Finance since May 2003, as ChiefAccounting Officer since January 1999 and as Chief Financial Officer sinceJuly 1999. He joined us in February 1998 as Vice President andCorporate Controller and served as Senior Vice President, Corporate Controllerfrom January 1999 until July 1999. He served as Senior VicePresident, Finance from July 1999 until May 2003. From February 1997to February 1998 Mr. Wyzga served as Chief Financial Officer ofSovereign Hill Software, Inc., a software company, and from 1991 to 1997held various senior management positions with CACHELINK Corporation and LotusDevelopment Corporation. Mr. Wyzga is also director of AltusPharmaceuticals Inc., a developer of protein therapeutics.

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**PART II**

**ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATEDSTOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**

Our common stock, which we refer to as Genzyme Stock,is traded on The Nasdaq Stock Market, Inc. (“NASDAQ®”) system under the symbol “GENZ”.

As of February 28, 2007, there were 3,474 stockholdersof record of Genzyme Stock.

Thefollowing table sets forth, for the periods indicated, the high and low saleprice of Genzyme Stock as reported by NASDAQ.

| ** **     | ** ** | **High** | ** ** | **Low** | ** ** |
|----------------|------------|----------|------------|---------|------------|
| **2006:**      |       |     |       |    |       |
| First Quarter  |       | $        | 75.34      |    | $          | 65.49 |   |
| Second Quarter |       | 68.47    |       | 54.64   |       |
| Third Quarter  |       | 70.31    |       | 57.74   |       |
| Fourth Quarter |       | 70.50    |       | 59.71   |       |
| **2005:**      |       |     |       |    |       |
| First Quarter  |       | $        | 61.40      |    | $          | 55.15 |   |
| Second Quarter |       | 65.13    |       | 55.51   |       |
| Third Quarter  |       | 76.17    |       | 58.61   |       |
| Fourth Quarter |       | 77.82    |       | 66.62   |       |

 

We have never paid any cash dividends on any series ofour common stock and we do not anticipate paying cash dividends in theforeseeable future.

We incorporate informationregarding the securities authorized for issuance under our equity compensationplans into this section by reference from the section entitled “Equity Plans”in the proxy statement for our 2007 annual meeting of shareholders.

**Issuer Purchases ofEquity Securities**

We did not make anypurchases of our common stock during the three months ended December 31,2006, which is the fourth quarter of our fiscal year.

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**Stock PerformanceGraph**

The graph below comparesthe five-year cumulative total shareholder returns for our common stock to thatof the S&P 500 Composite Index and the NASDAQ® Pharmaceutical Index. The cumulative returnsare based on a $100 investment on January 1, 2002, with all dividends beingreinvested. The comparisons shown in the graph are based upon historical dataand we caution that the stock price performance shown in the graph is notindicative of, nor intended to forecast, the potential future performance ofour stock. Prior to December 31, 2003, the Genzyme Stock prices used in thistable reflect Genzyme General Stock before the elimination of our trackingstock structure. Information used in the graph was obtained from Standard andPoor’s  and the Nasdaq Global SelectStock Market®, sources webelieve to be reliable, but we are not responsible for errors or omissions insuch information.

**Comparisonof 5 Year Cumulative Total Return**

**ITEM 6.   SELECTEDFINANCIAL DATA**

We incorporate our SelectedFinancial Data into this section by reference from the 2006 Genzyme CorporationAnnual Report under the heading “Genzyme Corporation and Subsidiaries—ConsolidatedSelected Financial Data,” which is included in Exhibit 13 to this AnnualReport.

**ITEM 7.**   MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We incorporate ourManagement’s Discussion and Analysis of Financial Condition and Results ofOperations into this section by reference from the 2006 Genzyme CorporationAnnual Report under the heading “Management’s Discussion and Analysis ofGenzyme Corporation and Subsidiaries’ Financial Condition and Results ofOperations,” which is included in Exhibit 13 to this Annual Report onForm 10-K. 

**ITEM 7A.**   QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We incorporate ourdisclosure related to market risk into this section by reference from the 2006Genzyme Corporation Annual Report under the headings “Management’s Discussionand Analysis of Genzyme Corporation and Subsidiaries’ Financial Condition andResults of Operations—Market Risk,” “—Interest Rate Risk,” “—Foreign ExchangeRisk” and “—Equity Price Risk,” which is included in Exhibit 13 to thisAnnual Report on Form 10-K.

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**ITEM 8.**   FINANCIALSTATEMENTS AND SUPPLEMENTARY DATA

We incorporate thefinancial statements filed as part of this Annual Report on Form 10-Kinto this section by reference from the Genzyme Corporation and SubsidiariesConsolidated Financial Statements and notes thereto included in Exhibit 13to this Annual Report on Form 10-K.

**ITEM 9.**   CHANGES IN ANDDISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

**ITEM 9A.**   CONTROLS ANDPROCEDURES

**Evaluation of Disclosure Controls and Procedures**

At the direction of ourChief Executive Officer and Chief Financial Officer, we evaluated ourdisclosure controls and procedures and internal control over financialreporting and concluded that: (1) our disclosure controls and procedureswere effective as of December 31, 2006; and (2) no change in internalcontrol over financial reporting occurred during the quarter ended December 31,2006 that has materially affected, or is reasonably likely to materiallyaffect, such internal control over financial reporting.

**Management’s Report on Internal Control Over FinancialReporting**

The full disclosure of ourmanagement’s assessment of the effectiveness of our internal controls overfinancial reporting as of December 31, 2006 is set forth in the 2006Genzyme Corporation Annual Report under the heading “Management’s Report onInternal Controls Over Financial Reporting,” which is included in Exhibit 13to this Annual Report on Form 10-K.

**Attestation Report of Independent Registered PublicAccounting Firm**

Our management’sassessment of the effectiveness of our internal controls over financialreporting as of December 31, 2006 has been audited byPricewaterhouseCoopers LLP, an independent registered public accounting firm.The attestation report of PricewaterhouseCoopers LLP is set forth in the 2006Genzyme Corporation Annual Report under the heading “Report of IndependentRegistered Public Accounting Firm,” which is included in Exhibit 13 tothis Annual Report on Form 10-K.

**ITEM 9B.**   OTHER INFORMATION

None.

**PART III**

**ITEM 10.**   DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We have adopted aCorporate Code of Conduct, which applies to our directors and all of ouremployees, including our principal executive officer, principal financialofficer and accounting officer, and controller. A copy is available to you,free of charge, upon written request to the legal department at our corporateoffices located at Genzyme Center, 500 Kendall Street, Cambridge, Massachusetts02142. We intend to make all required disclosures concerning amendments to, orwaivers from, this code on the governance page of our website,www.genzyme.com. Information contained on our website is not part of thisdocument or the documents incorporated by reference into this document.

We incorporate informationregarding our directors and executive officers into this section by referencefrom the section entitled “Executive Officers of the Registrant” in Part Iof this Annual Report on Form 10-K and the sections entitled “Electionof Directors,” “Board Meetings and Committees” and “Section 16(a) BeneficialOwnership Reporting Compliance” in the proxy statement for our 2007 annualmeeting of shareholders.

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**ITEM11.**   EXECUTIVE COMPENSATION

We incorporate informationregarding the compensation of our directors and executive officers into thissection by reference from the sections entitled “Election of Directors,”“Director Compensation,” “Compensation Discussion and Analysis” and relatedtables and narratives in the proxy statement for our 2007 annual meeting ofshareholders.

**ITEM 12.**   SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS

We incorporate informationregarding the ownership of our securities by our directors, executive officersand 5% stockholders into this section by reference from the sections entitled“Stock Ownership” and “Equity Plans” in the proxy statement for our 2007 annualmeeting of shareholders.

**ITEM13.**   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE

We incorporate informationregarding transactions with related parties into this section by reference fromthe section entitled “Certain Relationships and Related Transactions” in theproxy statement for our 2007 annual meeting of shareholders.

**ITEM14.**   PRINCIPAL ACCOUNTING FEES AND SERVICES

We incorporate informationregarding our audit committee’s pre-approval policies and procedures andthe fees paid to our auditors from the section entitled “Independent Auditors”in the proxy statement for our 2007 annual meeting of shareholders.

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**PART IV**

**ITEM15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES**

**(a)(1). FINANCIAL STATEMENTS**

We are incorporating the followingfinancial statements (and related notes) of Genzyme Corporation andSubsidiaries into this section by reference from the 2006 Genzyme CorporationAnnual Report:
|                                                                                                                            | ** ** | **Page*** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------|------------|-----------|------------|
| Report of Independent Registered Public Accounting  Firm                                                                   |       | F-69      |       |
| Consolidated Statements of Operations and  Comprehensive Income for the Years Ended December 31, 2006, 2005 and  2004 |       | F-71      |       |
| Consolidated Balance Sheets as of December 31,  2006 and 2005                                                         |       | F-72      |       |
| Consolidated Statements of Cash Flows for the Years  Ended December 31, 2006, 2005 and 2004                           |       | F-73      |       |
| Consolidated Statements of Stockholders’ Equity for  the Years Ended December 31, 2006, 2005 and 2004            |       | F-75      |       |
| Notes to Consolidated Financial Statements                                                                                 |       | F-76      |       |

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*                    References areto page numbers in the 2006 Genzyme Corporation Annual Report, which isincluded in Exhibit 13 to this Annual Report on Form 10-K.

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**(a)(2). FINANCIALSTATEMENT SCHEDULES**

Theschedule listed below for Genzyme Corporation and Subsidiaries is filed as partof Exhibit 13 to this Annual Report on Form 10-K and isincorporated into this section by reference:
|                                                          | ** ** | **Page*** |
|----------------------------------------------------------|------------|-----------|
| Report of Independent Registered Public Accounting  Firm |       | F-69      |
| Schedule II—Valuation and Qualifying Accounts       |       | F-141     |

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*                    References areto page numbers in the 2006 Genzyme Corporation Annual Report, which isincluded in Exhibit 13 to this Annual Report on Form 10-K.

All other schedules areomitted as the information required is inapplicable or the information ispresented in the Genzyme Corporation and Subsidiaries’ Consolidated FinancialStatements or notes thereto.

**(a)(3). EXHIBITS**

The exhibits are listedbelow under Part IV, Item 15(b) of this Annual Report on Form 10-K.

**(b). EXHIBITS**

Allother schedules are omitted as the information required is inapplicable or theinformation is presented in the Genzyme Corporation and Subsidiaries’Consolidated Financial Statements or notes thereto. The exhibits are listedbelow under Part IV, Item 15(b) of this Annual Report on Form 10-K.
| EXHIBIT NO. | ** ** | **DESCRIPTION**                                                                                                                                                                                                                                                                                                      |
|------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *3.1             |       | Restated Articles of Organization of Genzyme, as amended.  Filed as Exhibit 3.1 to Genzyme’s Form 10-Q for the quarter  ended June 30, 2006.                                                                                                                                                     |
| *3.2             |       | By-laws of Genzyme, as amended. Filed as  Exhibit 3.1 to Genzyme’s Form 8-K filed July 1, 2004.                                                                                                                                                                                                  |
| *4.1             |       | Fourth Amended and Restated Renewed Rights Agreement  dated May 28, 2004 between Genzyme and American Stock  Transfer & Trust Company, as Rights Agent. Filed as Exhibit 4.1  to Genzyme’s Registration Statement on Form 8-A/A filed on  May 28, 2004.                            |
| *4.2             |       | Securities Purchase Agreement, dated as of  April 17, 2001 and amended on September 26, 2001, by and among  Novazyme Pharmaceuticals, Inc. and several purchasers. Filed as  Exhibit 4.2 to Genzyme’s Form 10-Q for the quarter ended  September 30, 2001.                        |
| *4.3             |       | Indenture, dated December 9, 2003, between  Genzyme and U.S. Bank National Association. Filed as Exhibit 4.1 to  Genzyme’s Form 8-K filed December 10, 2003.                                                                                                                                |
| *4.3.1           |       | First Supplemental Indenture, dated as of  May 28, 2004, to Indenture relating to our 1.25% Senior Convertible  Notes, dated as of December 9, 2003, between Genzyme and U.S. Bank  National Association, as Trustee. Filed as Exhibit 4.1 to Genzyme’s  Form 8-K filed June 18, 2004. |
| *4.4             |       | Registration Rights Agreement, dated  December 9, 2003, between Genzyme and UBS Securities LLC on behalf of  itself and several other Initial Purchasers. Filed as Exhibit 10.1 to  Genzyme’s Form 8-K filed December 10, 2003.                                                             |
| *10.1            |       | Lease, dated April 30, 1990, for 64 Sidney  Street, Cambridge, Massachusetts between BioSurface Technology, Inc. and  Forest City 64 Sidney Street, Inc. Filed as Exhibit 10.22 to  BioSurface’s Registration Statement on Form S-1 (File No. 33-55874).                          |
| *10.1.1          |       | Amendment to Lease, dated September 11, 1995,  to the Lease Agreement dated April 30, 1990 by and between Forest City  64 Sidney Street, Inc. and Genzyme. Filed as Exhibit 10.1.1 to  Genzyme’s Form 10-K for 2003.                                                                   |

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| *10.1.2 |   | Second Amendment to Lease, dated March 1, 1996,  to the Lease Agreement dated April 30, 1990 by and between Forest City  64 Sidney Street, Inc. and Genzyme. Filed as Exhibit 10.1.2 to  Genzyme’s Form 10-K for 2003.                                                                                                                                                              |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *10.1.3 |   | Letter Amendment, dated December 30, 1999, to  the Lease Agreement dated April 30, 1990, by and between Forest City 64  Sidney Street, Inc. and Genzyme. Filed as Exhibit 10.1.3 to  Genzyme’s Form 10-K for 2003.                                                                                                                                                                  |
| *10.1.4 |   | Fourth Amendment to Lease, dated March 23,  2001, to the Lease Agreement dated April 30, 1990, by and between Forest  City 64 Sidney Street, Inc. and Genzyme. Filed as Exhibit 10.1.4 to  Genzyme’s Form 10-K for 2003.                                                                                                                                                            |
| 10.1.5  |   | Lease Agreement dated November 30, 2005, by and  between Forest City 64 Sidney Street, Inc. and Genzyme. Filed herewith.                                                                                                                                                                                                                                                                                          |
| *10.2   |   | Lease, dated June 1, 1992, for land at Allston  Landing, Allston, Massachusetts, between Allston Landing Limited Partnership  and the Massachusetts Turnpike Authority. Filed as Exhibit 10.9 to  Genzyme’s Form 10-K for 1993.                                                                                                                                                               |
| *10.2.1 |   | First Amendment to Lease, dated July 26, 1995,  to Lease dated June 1, 1992, between Allston Landing Limited Partnership  and the Massachusetts Turnpike Authority. Filed as Exhibit 10.1 to  Genzyme’s Form 10-Q for the quarter ended June 30, 2005.                                                                                                                              |
| *10.2.2 |   | Second Amendment to Lease, dated December 22,  1997, to Lease dated June 1, 1992, between Allston Landing Limited  Partnership and the Massachusetts Turnpike Authority. Filed as  Exhibit 10.2 to Genzyme’s Form 10-Q for the quarter ended  June 30, 2005.                                                                                                                        |
| *10.3   |   | Commercial Lease, dated December 24, 1998, by  and between Aventis Pasteur SA and Imtix-SangStat S.A.S. for Building  C5 located at Marcy L’Etoile, Lyon, France. Filed as Exhibit 10.4 to  Genzyme’s Form 10-K for 2003.                                                                                                                                                                |
| *10.3.1 |   | Amendment to Commercial Lease, dated  September 30, 2000, to the Lease dated December 24, 1998, by and  between Aventis Pasteur SA and Imtix-SangStat S.A.S. Filed as  Exhibit 10.4.1 to Genzyme’s Form 10-K for 2003.                                                                                                                                                                   |
| *10.4   |   | Lease, dated August 28, 2000, for Building D,  Cambridge Research Park, Cambridge, Massachusetts, between Genzyme and  Kendall Square LLC. Filed as Exhibit 10.4 to Genzyme’s Form 10-K  for 2005.                                                                                                                                                                                            |
| *10.4.1 |   | First Amendment to Lease, dated August 1, 2003,  to the Lease dated August 28, 2000, by and between Genzyme and Kendall  Square LLC. Filed as Exhibit 10.5.1 to Genzyme’s Form 10-K  for 2004.                                                                                                                                                                                           |
| *10.5   |   | Underlease of 50 Gibson Drive, Kings Hill Business  Park, West Malling, Kent, U.K., dated January 19, 2001, by and among  Genzyme Limited, Liberty Property Limited Partnership and Kings Hill Estate  Management Company Limited. Filed as Exhibit 10.1 to Genzyme’s  Form 10-Q for the quarter ended September 30, 2005.                                                               |
| *10.5.1 |   | Deed of Variation of Underlease dated  January 19, 2001, and Agreement for Lease, each dated August 22,  2005, by and between Genzyme Limited and Kent City Council (successors to  Liberty Property Limited Partnership). Filed as Exhibit 10.2 to  Genzyme’s Form 10-Q for the quarter ended September 30, 2005.                                                                  |
| *10.6   |   | Lease, dated September 3, 1990, for the land  located at the Industrial Development Authority Industrial Park, County  Waterford, Ireland (comprised in folio 4917 & 324IF County  Waterford), by and between the Industrial Development Authority and Bausch &  Lomb Ireland. Filed as Exhibit 10.2 to Genzyme’s Form 10-Q  for the quarter ended September 30, 2001. |

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| *10.7    |   | Contract for Sale, dated June 25, 2001, for the  premises located at the Industrial Development Authority Industrial Park,  County Waterford, Ireland, (comprised in folio 4141L County Waterford)  by and between Luxottica Ireland Limited and Genzyme Ireland Limited (f/k/a  Gosfend Limited). Filed as Exhibit 10.1 to Genzyme’s Form 10-Q  for the quarter ended September 30, 2001.             |
|----------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *10.8    |   | Deed of Transfer, dated July 2, 2001, between  Luxottica Ireland Limited and Genzyme Ireland Limited, related to the Lease  dated September 3, 1990 for the premises located at the Industrial  Development Authority Industrial Park, County Waterford, Ireland (comprised  in folio 4141L County Waterford). Filed as Exhibit 10.3 to Genzyme’s  Form 10-Q for the quarter ended September 30, 2001. |
| *10.9    |   | Contract for Sale, dated August 2, 2001, for  the land located at the Industrial Development Authority Industrial Park,  County Waterford, Ireland (comprised in folio 4917 County Waterford), by  and between the Industrial Development Authority and Genzyme Ireland Limited.  Filed as Exhibit 10.4 to Genzyme’s Form 10-Q for the quarter  ended September 30, 2001.                              |
| *10.10   |   | Lease, dated August 24, 2001, for the land  located at the Industrial Development Authority Industrial Park, County  Waterford, Ireland (comprised in folio 4917 County Waterford) by the  Industrial Development Authority and Genzyme Ireland Limited. Filed as  Exhibit 10.5 to Genzyme’s Form 10-Q for the quarter ended  September 30, 2001.                                                           |
| 10.11.1  |   | Amendment of Leases dated as of December 17,  2004, between One Kendall Square Associates, LLC and Genzyme. Filed herewith.                                                                                                                                                                                                                                                                                                     |
| 10.11.2  |   | Second Amendment of Leases dated as of July 25,  2005, between One Kendall Square Associates, LLC and Genzyme. Filed herewith.                                                                                                                                                                                                                                                                                                  |
| 10.11.3  |   | Third Amendment of Leases dated as of  January 4, 2007, between RB Kendall Fee, LLC, successor to One Kendall  Square Associates, LLC, and Genzyme. Filed herewith.                                                                                                                                                                                                                                                             |
| 10.12    |   | 1997 Equity Incentive Plan, as amended. Filed herewith.                                                                                                                                                                                                                                                                                                                                                                              |
| *10.13   |   | 1998 Director Stock Option Plan, as amended. Filed  as Exhibit 10.2 to Genzyme’s Form 10-Q for the quarter ended  June 30, 2006.                                                                                                                                                                                                                                                                                 |
| *10.13.1 |   | Form of Nonstatutory Stock Option for grants  under Genzyme’s 1998 Director Stock Option Plan. Filed as Exhibit 10.5 to  Genzyme’s Form 10-Q for the quarter ended June 30, 2005.                                                                                                                                                                                                                           |
| 10.14    |   | 2001 Equity Incentive Plan, as amended. Filed  herewith.                                                                                                                                                                                                                                                                                                                                                                             |
| 10.14.1  |   | Form of Incentive Stock Option for grants to  executive officers under Genzyme’s 2001 Equity Incentive Plan. Filed  herewith.                                                                                                                                                                                                                                                                                              |
| 10.14.2  |   | Form of Nonstatutory Stock Option for grants to  executive officers under Genzyme’s 2001 Equity Incentive Plan. Filed  herewith.                                                                                                                                                                                                                                                                                           |
| *10.15   |   | 2004 Equity Incentive Plan, as amended. Filed as  Exhibit 10.1 to Genzyme’s Form 10-Q for the quarter ended  June 30, 2006.                                                                                                                                                                                                                                                                                      |
| 10.15.1  |   | Form of Incentive Stock Option for grants to  executive officers under Genzyme’s 2004 Equity Incentive Plan. Filed  herewith.                                                                                                                                                                                                                                                                                              |
| 10.15.2  |   | Form of Nonstatutory Stock Option for grants to  executive officers under Genzyme’s 2004 Equity Incentive Plan. Filed  herewith.                                                                                                                                                                                                                                                                                           |
| *10.16   |   | 1999 Employee Stock Purchase Plan, as amended. Filed  as Exhibit 10.11 to Genzyme’s Form 10-Q for the quarter ended  June 30, 2005.                                                                                                                                                                                                                                                                              |
| *10.17   |   | 1996 Directors’ Deferred Compensation Plan, as  amended. Filed as Exhibit 10.20 to Genzyme’s Form 10-K for  2004.                                                                                                                                                                                                                                                                                                |
| *10.18   |   | Executive Employment Agreement, dated January 1,  1990, between Genzyme and Henri A. Termeer. Filed as Exhibit 10.32 to  Genzyme’s Form 10-K for 1990.                                                                                                                                                                                                                                                           |

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| *10.19   |   | Executive Employment Agreement, dated January 1,  1996, between Genzyme and Peter Wirth. Filed as Exhibit 10.1 to Genzyme’s  Form 10-Q for the quarter ended March 31, 1996.                                                                                                                                                                                                                                 |
|----------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *10.20   |   | Form of Indemnification Agreement between  Genzyme and its executive officers. Filed as Exhibit 10.1 to Genzyme’s  Form 10-Q for the quarter ended September 30, 2004.                                                                                                                                                                                                                                       |
| *10.21   |   | Form of Severance Agreement between Genzyme and  its executive officers. Filed as Exhibit 10.2 to Genzyme’s  Form 10-Q for the quarter ended June 30, 2002.                                                                                                                                                                                                                                                  |
| *10.22   |   | Information regarding certain executive compensation  matters, including 2007 salaries and incentive bonus targets for Genzyme’s  named executive officers. Filed with Genzyme’s  Form 8-K filed on December 8, 2006.                                                                                                                                                                                             |
| *10.22.1 |   | Information regarding certain executive compensation  matters, including actual 2006 salaries and incentive bonuses for Genzyme’s  named executive officers. Filed with Genzyme’s Form 8-K filed on February 28,  2007.                                                                                                                                                                                           |
| *10.23   |   | Collaboration Agreement, dated September 4,  1998, among Genzyme, BioMarin and BioMarin/Genzyme LLC. Filed as  Exhibit 10.24 to BioMarin’s Registration Statement on Form S-1  (File No. 333-77701).**                                                                                                                                                                                                       |
| *10.24   |   | Supply Agreement, dated January 24, 2006, by  and between Cambrex Charles City, Inc. and Genzyme. Filed as  Exhibit 10.1 to Genzyme’s Form 10-Q for the quarter ended  September 30, 2006.**                                                                                                                                                                                                            |
| *10.25   |   | Contract Manufacturing Agreement dated  September 14, 2001, as amended, between GelTex and The Dow Chemical  Company. Filed as Exhibit 10.35 to Genzyme’s Form 10-K for  2002.**                                                                                                                                                                                                                                  |
| *10.25.1 |   | Second Amendment, dated October 9, 2002, to  Contract Manufacturing Agreement dated September 14, 2001, between  GelTex and The Dow Chemical Company. Filed as Exhibit 10.34.1 to  Genzyme’s Form 10-K for 2003.**                                                                                                                                                                                           |
| *10.25.2 |   | Third Amendment, dated December 8, 2003, to  Contract Manufacturing Agreement dated September 14, 2001, between GelTex  and The Dow Chemical Company. Filed as Exhibit 10.34.2 to Genzyme’s  Form 10-K for 2003.**                                                                                                                                                                                           |
| *10.25.3 |   | Fourth Amendment, dated July 1, 2004, to  Contract Manufacturing Agreement dated September 14, 2001, between  GelTex and The Dow Chemical Company. Filed as Exhibit 10.29.3 to  Genzyme’s Form 10-K for 2004.**                                                                                                                                                                                              |
| *10.25.4 |   | Amended and Restated Contract Manufacturing  Agreement signed as of December 15, 2006, between Genzyme (as successor  to GelTex) and The Dow Chemical Company. Filed with Genzyme’s Form 8-K  filed on December 15, 2006.**                                                                                                                                                                                       |
| *10.26   |   | Credit Agreement, dated July 14, 2006, among  Genzyme and those of its subsidiaries party thereto, the lenders listed  therein, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America,  N.A., as syndication agent, ABN AMRO Bank N.V., Citizens Bank of  Massachusetts and Wachovia Bank, National Association, as co-documentation  agents. Filed with Genzyme’s Form 8-K filed on July 19, 2006. |
| *10.27   |   | North American Termination and Transition Agreement,  dated November 3, 2004, by and between Genzyme and Wyeth. Filed as  Exhibit 10.31 to Genzyme’s Form 10-K for 2004.**                                                                                                                                                                                                                                        |
| *10.28   |   | Purchase and Supply Agreement, effective as of  January 1, 2005, by and between Genzyme and Invitrogen Corporation.  Filed as Exhibit 10.3 to Genzyme’s Form 10-Q for the quarter  ended June 30, 2005.**                                                                                                                                                                                                    |
| 13       |   | Portions of the 2006 Genzyme Corporation Annual  Report incorporated by reference into Parts I, II and IV of this  Form 10-K. Furnished herewith.                                                                                                                                                                                                                                                                      |
| 21       |   | Subsidiaries of Genzyme. Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                              |
| 23       |   | Consent of PricewaterhouseCoopers LLP. Filed  herewith.                                                                                                                                                                                                                                                                                                                                                                               |

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| 31.1 |   | Certification of the Chief Executive Officer  pursuant to section 302 of the Sarbanes-Oxley Act of 2002. Filed  herewith.                                                                          |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.2 |   | Certification of the Chief Financial Officer  pursuant to section 302 of the Sarbanes-Oxley Act of 2002. Filed  herewith.                                                                          |
| 32.1 |   | Certification of the Chief Executive Officer  pursuant to section 906 of the Sarbanes-Oxley Act of 2002. Furnished  herewith.                                                                      |
| 32.2 |   | Certification of the Chief Financial Officer  pursuant to section 906 of the Sarbanes-Oxley Act of 2002. Furnished  herewith.                                                                      |
| 99   |   | Financial statements and notes thereto of  BioMarin/Genzyme LLC as of December 31, 2006 and 2005, and for the years  ended December 31, 2006, 2005 and 2004 (unaudited). Filed herewith. |

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*                    Indicatesexhibit previously filed with the SEC and incorporated herein by reference.Exhibits filed with Forms 10-K, 10-Q, 8-K, 8-A, 8-Bor Schedule 14A of Genzyme Corporation were filed under Commission File No. 0-14680.

**             Confidentialtreatment has been requested or granted for the deleted portions of Exhibits10.23 through 10.25.4, 10.27 and 10.28.

**EXECUTIVECOMPENSATION PLANS AND ARRANGEMENTS**

Exhibits 10.13 through 10.22.1 above are managementcontracts or compensatory plans or arrangements in which our executive officersor directors participate.

36

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**SIGNATURES**

Pursuantto the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.

|                            | GENZYME CORPORATION |
|----------------------------|---------------------|
| Dated: March 1,  2007 | By:                 | /s/  MICHAEL S. WYZGA |
|                       |                | Michael S. Wyzga*Executive Vice President, Finance, Chief   Financial Officer, and Chief Accounting Officer* |

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the Registrant and in thecapacities and on the date indicated.

|                            | **Name** | ** **                          | ** ** | ** **          | **Title** | ** ** | ** ** | ** ** | **Date** | ** ** |
|----------------------------|----------|-------------------------------------|------------|---------------------|-----------|------------|------------|------------|----------|------------|
| /s/ HENRI A.  TERMEER      |     | Director and  Principal Executive   |       | March 1,  2007 |
| Henri  A. Termeer          |     | Officer                             |       |                |
| /s/ MICHAEL S.  WYZGA      |     | Principal  Financial and Accounting |       | March 1,  2007 |
| Michael  S. Wyzga          |     | Officer                             |       |                |
| /s/ DOUGLAS A.  BERTHIAUME |     | Director                            |       | March 1,  2007 |
| Douglas  A. Berthiaume     |     |                                |       |                |
|                       |     | Director                            |       |                |
| Henry  E. Blair            |     |                                |       |                |
| /s/ GAIL K.  BOUDREAUX     |     | Director                            |       | March 1,  2007 |
| Gail  K. Boudreaux         |     |                                |       |                |
| /s/ ROBERT J.  CARPENTER   |     | Director                            |       | March 1,  2007 |
| Robert  J. Carpenter       |     |                                |       |                |
| /s/ CHARLES L.  COONEY     |     | Director                            |       | March 1,  2007 |
| Charles  L. Cooney         |     |                                |       |                |
| /s/ VICTOR J.  DZAU        |     | Director                            |       | March 1,  2007 |
| Victor  J. Dzau            |     |                                |       |                |
| /s/ CONNIE  MACK III       |     | Director                            |       | March 1,  2007 |
| Connie  Mack III           |     |                                |       |                |
| /s/ RICHARD F.  SYRON      |     | Director                            |       | March 1,  2007 |
| Richard F. Syron           |     |                                |       |                |

 

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