**Exhibit 99.1**

** **

**Dyax-GenzymeLLC (A Development Stage Enterprise)**

**FinancialStatements**

 

**As ofDecember 31, 2005 and 2004 (Unaudited)****and For the Years Ended December 31, 2005 and 2004 (Unaudited), For thePeriod from July 1, 2003 (Commencement of Operations) to December 31, 2003(Unaudited) and For the Period from July 1, 2003 (Commencement of Operations)to December 31, 2005**

 

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**Dyax-Genzyme LLC**

**(A Development Stage Enterprise)**

**Index to Financial Statements**

 
| ** **                                                                                                                                                                                                                                                                | **Page(s)** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
|                                                                                                                                                                                                                                                                      |        |
| Report  of Independent Auditors                                                                                                                                                                                                                                           | 1           |
|                                                                                                                                                                                                                                                                      |        |
| Balance  Sheets as of December 31, 2005 and 2004 (Unaudited)                                                                                                                                                                                                              | 2           |
|                                                                                                                                                                                                                                                                      |        |
| Statements of Operations  for the Years Ended December 31, 2005 and 2004 (Unaudited), for the Period  July 1, 2003 (Commencement of Operations) to December 31, 2003 (Unaudited)  and for the Period July 1, 2003 (Commencement of Operations) through December  31, 2005 | 3           |
|                                                                                                                                                                                                                                                                      |        |
| Statements of Cash Flows for the Years Ended  December 31, 2005 and 2004 (Unaudited), for the Period July 1, 2003  (Commencement of Operations) to December 31, 2003 (Unaudited) and for the  Period July 1, 2003 (Commencement of Operations) through December 31, 2005  | 4           |
|                                                                                                                                                                                                                                                                      |        |
| Statements of Changes in  Venturers’ Capital for the Period July 1, 2003 (Commencement of Operations)  to December 31, 2003 (Unaudited) and for each of the Years Ended December 31,  2004 (Unaudited) and 2005                                                      | 5           |
|                                                                                                                                                                                                                                                                      |        |
| Notes  to Financial Statements                                                                                                                                                                                                                                            | 6-9         |

 

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**Report of Independent Auditors**

 

Tothe Steering Committee of Dyax-Genzyme LLC:

 

 In our opinion, theaccompanying balance sheet and the related statements of operations, of cashflows and of changes in Venturers’ capital present fairly, in all materialrespects, the financial position of Dyax-Genzyme LLC (a development stageenterprise) (the “LLC”) at December 31, 2005, and the results of itsoperations and its cash flows for the year then ended and, cumulatively, forthe period from July 1, 2003 (commencement of operations) to December 31, 2005in conformity with accounting principles generally accepted in the UnitedStates of America. These financial statements are the responsibility of the LLC’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits. We conducted our audits of these statements inaccordance with auditing standards generally accepted in the United States of America,which require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements, assessing the accounting principlesused and significant estimates made by the LLC’s management, and evaluating theoverall financial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 
| /s/  PricewaterhouseCoopers LLP |   |
|---------------------------------|--------|
|                            |
| Boston,  Massachusetts          |
| March  3, 2006                  |

 

1

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**Dyax-Genzyme LLC**

**(A Development Stage Enterprise)**

###### **Balance Sheets**

### **(Amountsin thousands)**

 
| ** **                                          | ** ** | **December 31,** | ** ** |
|-----------------------------------------------------|------------|------------------|------------|
| ** **                                          | ** ** | **2005**         | ** ** | **2004** | ** ** |
| ** **                                          | ** ** | ** **       | ** ** | **(Unaudited)** | ** ** |
|                                                |       |             |       |   |   |
| **ASSETS**                                          |       |             |       |   |   |
| Current assets:                                     |       |             |       |   |   |
| Cash and cash  equivalents                          |       | $                | 1          |   | $ | 7 |   |
| Due from Genzyme  Corporation                       |       | —           |       | 47 |   |
| Funding  receivable - Dyax Corp.                    |       | 1,721            |       | — |   |
| Funding  receivable - Genzyme Corporation           |       | 1,720            |       | — |   |
| Total current assets                                |       | 3,442            |       | 54 |   |
| Lab equipment,  net                                 |       | 615              |       | 708 |   |
| Total assets                                        |       | $                | 4,057      |   | $ | 762 |   |
| ** **                                          | ** ** | ** **       | ** ** | ** ** | ** ** |
| **LIABILITIES  AND VENTURERS’ CAPITAL**        | ** ** | ** **       | ** ** | ** ** | ** ** |
|                                                |       |             |       |   |   |
| Current liabilities:                                |       |             |       |   |   |
| Due to Dyax  Corp.                                  |       | $                | 1,508      |   | $ | 255 |   |
| Due to Genzyme  Corporation                         |       | 953              |       | — |   |
| Accrued audit  fees                                 |       | 32               |       | — |   |
| Total  liabilities                                  |       | 2,493            |       | 255 |   |
|                                                |       |             |       |   |   |
| Commitments and contingencies (Note F)              |       | —           |       | — |   |
|                                                |       |             |       |   |   |
| Venturers’ capital:                            |       |             |       |   |   |
| Venturers’  capital – Dyax Corp.          |       | 782              |       | 254 |   |
| Venturers’  capital – Genzyme Corporation |       | 782              |       | 253 |   |
| Total Venturers’  capital                      |       | 1,564            |       | 507 |   |
| Total  liabilities and Venturers’ capital      |       | $                | 4,057      |   | $ | 762 |   |

 

*The accompanying notes are an integral part of these financialstatements.*

 

2

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**Dyax-Genzyme LLC**

**(A Development Stage Enterprise)**

**Statements of Operations**

**(Amounts in thousands)**

 
| ** **                               | ** ** | ** **              | ** ** | ** **              | ** ** | **For the Period**      | ** ** | **For the Period**    | ** ** |
|------------------------------------------|------------|-------------------------|------------|-------------------------|------------|-------------------------|------------|-----------------------|------------|
| ** **                               | ** ** | ** **              | ** ** | ** **              | ** ** | **July 1, 2003**        | ** ** | **July 1, 2003**      | ** ** |
| ** **                               | ** ** | **For the Years Ended** | ** ** | **(commencement of**    | ** ** | **(commencement of**    | ** ** |
| ** **                               | ** ** | **December 31,**        | ** ** | **operations) through** | ** ** | **operations) through** | ** ** |
| ** **                               | ** ** | **2005**                | ** ** | **2004**                | ** ** | **December 31, 2003**   | ** ** | **December 31, 2005** | ** ** |
| ** **                               | ** ** | ** **              | ** ** | **(Unaudited)**         | ** ** | **(Unaudited)**         | ** ** | ** **            | ** ** |
|                                     |       |                    |       |                    |       |                    |       |                  |       |
| Operating costs and expenses:            |       |                    |       |                    |       |                    |       |                  |       |
| Selling, general and administrative      |       | $                       | 791        |                    | $          | 225                     |       | $                     | 203        |   | $ | 1,219 |   |
| Research and development                 |       | 23,111                  |       | 11,779                  |       | 4,260                   |       | 39,150                |       |
| Total operating costs and expenses       |       | 23,902                  |       | 12,004                  |       | 4,463                   |       | 40,369                |       |
| Loss from operations                     |       | (23,902                 | )          | (12,004                 | )          | (4,463                  | )          | (40,369               | )          |
|                                     |       |                    |       |                    |       |                    |       |                  |       |
| Interest income                          |       | 2                       |       | 8                       |       | —                  |       | 10                    |       |
| Net loss                                 |       | $                       | (23,900    | )                       | $          | (11,996                 | )          | $                     | (4,463     | ) | $ | (40,359 | ) |
|                                     |       |                    |       |                    |       |                    |       |                  |       |
| Net loss  attributable to each Venturer: |       |                    |       |                    |       |                    |       |                  |       |
| Dyax Corp.                               |       | $                       | (11,953    | )                       | $          | (5,999                  | )          | $                     | (2,232     | ) | $ | (20,184 | ) |
|                                     |       |                    |       |                    |       |                    |       |                  |       |
| Genzyme  Corporation                     |       | $                       | (11,947    | )                       | $          | (5,997                  | )          | $                     | (2,231     | ) | $ | (20,175 | ) |

 

*The accompanying notes are an integral part of these financialstatements.*

 

3

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**Dyax-Genzyme LLC**

**(A Development Stage Enterprise)**

**Statements of Cash Flows**

**(Amounts in thousands)**

 
| ** **                                                            | ** ** | ** **                             | ** ** | ** **                | ** ** | **For the Period**    | ** ** | **For the Period**    | ** ** |
|-----------------------------------------------------------------------|------------|----------------------------------------|------------|---------------------------|------------|---------------------------------|------------|---------------------------------|------------|
| ** **                                                            | ** ** | ** **                             | ** ** | ** **                | ** ** | **July 1, 2003**      | ** ** | **July 1, 2003**      | ** ** |
| ** **                                                            | ** ** | **For the Years Ended** | ** ** | **(commencement of** | ** ** | **(commencement of**       | ** ** |
| ** **                                                            | ** ** | **December 31,**                  | ** ** | **operations) to**   | ** ** | **operations) to**         | ** ** |
| ** **                                                            | ** ** | **2005**                               | ** ** | **2004**                  | ** ** | **December 31, 2003** | ** ** | **December 31, 2005** | ** ** |
| ** **                                                            | ** ** | ** **                             | ** ** | **(Unaudited)**           | ** ** | **(Unaudited)**                 | ** ** | ** **                      | ** ** |
|                                                                  |       |                                   |       |                      |       |                            |       |                            |       |
| **Cash Flows from Operating Activities:**                             |       |                                   |       |                      |       |                            |       |                            |       |
| Net loss                                                              |       | $                                      | (23,900    | )                         | $          | (11,996                         | )          | $                               | (4,463     | ) | $ | (40,359 | ) |
| Reconciliation  of net loss to net cash used in operating activities: |       |                                   |       |                      |       |                            |       |                            |       |
| Depreciation  expense                                                 |       | 93                                     |       | —                    |       | —                          |       | 93                              |       |
| Increase  (decrease) in cash from working capital changes:            |       |                                   |       |                      |       |                            |       |                            |       |
| Due from (to)  Dyax Corp.                                             |       | 1,253                                  |       | 1,692                     |       | (1,437                          | )          | 1,508                           |       |
| Due from (to)  Genzyme Corporation                                    |       | 1,000                                  |       | 170                       |       | (217                            | )          | 953                             |       |
| Accrued expenses                                                      |       | 32                                     |       | —                    |       | —                          |       | 32                              |       |
| Cash flows from  operating activities                                 |       | (21,522                                | )          | (10,134                   | )          | (6,117                          | )          | (37,773                         | )          |
| ** **                                                            |       |                                   |       |                      |       |                            |       |                            |       |
| **Cash  Flows from Investing Activities:**                            |       |                                   |       |                      |       |                            |       |                            |       |
| Purchase of lab  equipment                                            |       | —                                 |       | (708                      | )          | —                          |       | (708                            | )          |
| Cash flows from  investing activities                                 |       | —                                 |       | (708                      | )          | —                          |       | (708                            | )          |
| ** **                                                            |       |                                   |       |                      |       |                            |       |                            |       |
| **Cash  Flows from Financing Activities:**                            |       |                                   |       |                      |       |                            |       |                            |       |
| Capital  contributed by Dyax Corp.                                    |       | 10,760                                 |       | 5,425                     |       | 3,060                           |       | 19,245                          |       |
| Capital  contributed by Genzyme Corporation                           |       | 10,756                                 |       | 5,423                     |       | 3,058                           |       | 19,237                          |       |
| Cash flows from  financing activities                                 |       | 21,516                                 |       | 10,848                    |       | 6,118                           |       | 38,482                          |       |
|                                                                  |       |                                   |       |                      |       |                            |       |                            |       |
| (Decrease)  increase in cash and cash equivalents                     |       | (6                                     | )          | 6                         |       | 1                               |       | 1                               |       |
| Cash and cash  equivalents at beginning of period                     |       | 7                                      |       | 1                         |       | —                          |       | —                          |       |
| Cash and cash  equivalents at end of period                           |       | $                                      | 1          |                      | $          | 7                               |       | $                               | 1          |   | $ | 1 |   |

 

Supplementaldisclosure of noncash transaction:

FundingReceivable – Note C.

 

*The accompanying notes are an integral part of these financialstatements.*

 

4

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**Dyax-Genzyme LLC**

**(A Development Stage Enterprise)**

### **Statementsof Changes in Venturers’ Capital**

#### **(Amountsin Thousands)**

#### ** **

| ** **                                                                                                         | ** ** | **Venturers’ Capital** | ** ** | **Total**       | ** ** |
|--------------------------------------------------------------------------------------------------------------------|------------|-----------------------------|------------|-----------------|------------|
| ** **                                                                                                         | ** ** | **Dyax**                    | ** ** | **Genzyme**     | ** ** | **Venturers’** | ** ** |
| ** **                                                                                                         | ** ** | **Corp.**                   | ** ** | **Corporation** | ** ** | **Capital** | ** ** |
|                                                                                                               |       |                        |       |            |       |   |   |
| Balance at July  1, 2003 (commencement of operations)(unaudited)                                                   |       | $                           | —     |            | $          | — |   | $ | — |   |
| 2003 capital  contributions (unaudited)                                                                            |       | 3,060                       |       | 3,058           |       | 6,118 |   |
| Net loss for the  period from July 1, 2003 (commencement of operations) to December 31, 2003  net loss (unaudited) |       | (2,232                      | )          | (2,231          | )          | (4,463 | ) |
| Balance at  December 31, 2003 (unaudited)                                                                          |       | 828                         |       | 827             |       | 1,655 |   |
|                                                                                                               |       |                        |       |            |       |   |   |
| 2004 capital  contributions (unaudited)                                                                            |       | 5,425                       |       | 5,423           |       | 10,848 |   |
| 2004 net loss  (unaudited)                                                                                         |       | (5,999                      | )          | (5,997          | )          | (11,996 | ) |
| Balance at  December 31, 2004 (unaudited)                                                                          |       | 254                         |       | 253             |       | 507 |   |
|                                                                                                               |       |                        |       |            |       |   |   |
| 2005 capital  contributions                                                                                        |       | 12,481                      |       | 12,476          |       | 24,957 |   |
| 2005 net loss                                                                                                      |       | (11,953                     | )          | (11,947         | )          | (23,900 | ) |
| Balance at  December 31, 2005                                                                                      |       | $                           | 782        |            | $          | 782 |   | $ | 1,564 |   |

 

*The accompanying notes are an integral part of these financialstatements.*

 

5

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**Dyax-GenzymeLLC**

**(ADevelopment Stage Enterprise)**

### **Notesto Financial Statements**

### ** **

**A.****   ****Nature of Business and Organization**

 

Dyax-GenzymeLLC, or the Joint Venture, is a limited liability company organized under thelaws of the State of Delaware. The Joint Venture is owned:

 

•      50.01% by Dyax Corp., which is referred to asDyax; and

 

•      49.99% by Genzyme Corporation, which isreferred to as Genzyme.

 

Dyaxand Genzyme are collectively referred to as the Venturers and individually as aVenturer. The Joint Venture was organized in June 2003 to develop andcommercialize DX-88, one of Dyax’s proprietary compounds for the treatment ofchronic inflammatory diseases. The Joint Venture commenced operations as of July1, 2003.

 

InOctober 1998, the Venturers entered into a collaboration agreement to developand commercialize DX-88 for the treatment of chronic inflammatory diseases. Underthis agreement, which was amended on May 31, 2002, and again effective asof September 30, 2003, Dyax was initially responsible for all expensesincurred in connection with the development of DX-88 for the treatment ofhereditary angioedema, or HAE, through the completion of the first Phase IIclinical trial for HAE, which occurred in the second quarter of 2003. In June2003, Dyax formed Kallikrein LLC, for the development and commercialization ofDX-88 for HAE, and Genzyme exercised its option under the collaborationagreement to join Dyax in the development and commercialization of DX-88 forHAE by acquiring a 49.99% interest in Kallikrein LLC, which then became knownas Dyax-Genzyme LLC. The Venturers now jointly own the rights to DX-88 for the treatmentof HAE and other chronic inflammatory diseases. Dyax is responsible for 50.01%and Genzyme is responsible for 49.99% of all costs incurred in connection withthe development of DX-88 for HAE after completion of the first Phase IIclinical trial. In December 2005, Genzyme paid Dyax a $3.0 million milestonepayment after dosing the first patient in a pivotal clinical trial of DX-88 forHAE. In addition, Genzyme will also be obligated to pay Dyax:

 

•      potential milestone payments of $10.0 millionfor the first product derived from DX-88 that is approved by the U.S. Food andDrug Administration, commonly referred to as the FDA; and

 

•      up to $15.0 million for additional therapeuticindications developed under the collaboration .

 

Contingentupon successful development and receipt of regulatory approvals, Genzyme willmarket the product worldwide.

 

Dyaxand Genzyme are required to make monthly capital contributions to the JointVenture to fund budgeted operating costs.

If either Dyax or Genzyme fails to make all or two or more of themonthly capital contribution, and the other party does not exercise its rightto terminate the collaboration agreement or compel performance of the fundingobligation, the defaulting party’s percentage interest in the Joint Venture andfuture funding responsibility will be adjusted proportionately.

 

The Steering Committee of the Joint Venture serves as the governing bodyof the Joint Venture and is responsible for determining the overall strategyfor the program, coordinating activities of the Venturers as well as performingother such functions as appropriate. The Steering Committee is comprised of anequal number of representatives of each Venturer.

 

InMarch 2003, Dyax paid Genzyme $1.0 million in connection with exercising itsoption under the collaboration agreement, as amended, to purchase Genzyme’sinterest in the application of DX-88 for all surgical indications, includingthe prevention of blood loss during certain on-pump heart procedures,specifically coronary artery bypass graft surgery.

 

**B.****   ****Summary of Significant Accounting Policies**

 

**Basis of presentation**

 

The Joint Venture is considered a partnershipfor federal and state income tax purposes. As such, items of income, loss,deductions and credits flow through to the Venturers. The Venturers haveresponsibility for the payment of any income taxes on their proportionate shareof taxable income of the Joint Venture.

 

Asof December 31, 2005, for the year ended December 31, 2005 and for theperiod from July 1, 2003 (commencement of operations) through December 31, 2005,the Joint Venture qualified as a significant subsidiary to Dyax and, as aresult, audited financial statements are presented for those periods. As ofDecember 31, 2004, for the year ended December 31, 2004 and for the periodfrom July 1, 2003 (commencement of operations) to December 31, 2003, the JointVenture does not meet the criteria of a significant subsidiary to either Dyaxor Genzyme and, as a result, the financial statements for those periods havenot been audited.

 

6

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# **Basisof presentation (continued)**

# ** **

The Venturers have eachevaluated the collaboration agreement to determine if the Joint Venturequalifies as a variable interest entity under Financial Accounting StandardsBoard, or FASB,  Interpretation No., orFIN, 46R, “Consolidation ofVariable Interest Entities,” (FIN 46R). Both Venturers fund theoperations of the Joint Venture on a monthly basis and therefore underParagraph 5a of FIN 46R, the Joint Venture qualifies as a variable interestentity because each Venturer’s equity investment at risk is not sufficient tofinance the Joint Venture’s activities without additional subordinatedfinancial support. Both Venturers have a financial interest in the JointVenture. However, based on Dyax’s analysis of the agreement, Dyax believes thatits exposure to the expected losses of the Joint Venture are less than Genzyme’sand therefore Dyax is not the primary beneficiary of the Joint Venture underParagraph 17 of FIN 46R. Accordingly, Dyax does not consolidate the JointVenture. Genzyme, as the primary beneficiary, consolidates the results of theJoint Venture and records Dyax’s portion of the Joint Venture’s losses asminority interest.

 

# **Accountingmethod**

# ** **

Thefinancial statements have been prepared under the accrual method of accountingin conformity with accounting principles generally accepted in the UnitedStates of America.

 

# **Fiscalyear-end**

# ** **

# **The Venturers have determinedthat the fiscal year-end of the Joint Venture is December 31.**

# ** **

## **Uncertainties**

## ** **

The Joint Venture is subject to risks common to companies in thebiotechnology industry, including:

 

•      the Joint Venture’s ability to successfullycomplete preclinical and clinical development of its products and services;

 

•      the Joint Venture’s ability to manufacturesufficient amounts of its products for development and commercializationactivities and to do so in a timely and cost-effective manner;

 

•      the Joint Venture’s ability to obtain andmaintain adequate patent and other proprietary rights protection of itsproducts and services and successfully enforce its proprietary rights;

 

•      the scope, validity and enforceability ofpatents and other proprietary rights held by third parties and their impact onthe Joint Venture’s ability to commercialize its products and services;

 

•      the accuracy of the Joint Venture’s estimatesof the size and characteristics of the markets to be addressed by its productsand services, including growth projections;

 

•      market acceptance of the Joint Venture’sproducts and services;

 

•      the accuracy of the Joint Venture’sinformation regarding the products and resources of its competitors andpotential competitors;

 

•      the content and timing of submissions anddecisions made by the FDA, the European Agency for the Evaluation of MedicinalProducts and other regulatory agencies; and

 

•      the availability of reimbursement for theJoint Venture’s products and services from third-party payors, whereappropriate, and the extent of such coverage.

 

7

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# **Useof estimates**

# ** **

Underaccounting principles generally accepted in the United States of America, theJoint Venture is required to make certain estimates and assumptions that affectreported amounts of assets, liabilities, revenues, expenses, and disclosure of contingentassets and liabilities in its financial statements. The Joint Venture’s actual resultscould differ from these estimates.

 

# **Cashand cash equivalents**

# ** **

Allof the Joint Venture’s cash is held on deposit at one financial institution.

 

**Equipment**

 

TheJoint Venture records equipment at cost. When the Joint Venture disposes ofthese assets, it removes the related cost and accumulated depreciation andamortization from the related accounts on its balance sheet and includes anyresulting gain or loss in its statement of operations.

 

TheJoint Venture generally computes depreciation for its equipment using thestraight-line method over the estimated useful lives of the equipment, whichrange from 3 to 10 years.

 

**ComprehensiveLoss**

 

The Joint Venture reports comprehensive income(loss) in accordance with FASB Statement No. 130, “Reporting ComprehensiveIncome.”  The comprehensive net loss forthe years ended December 31, 2005 and 2004 (unaudited), for the period fromJuly 1, 2003 (commencement of operations) to December 31, 2003 (unaudited) andfor the period from July 1, 2003 (commencement of operations) to December 31,2005 does not differ from the reported net loss in each such period.

 

**Transactionswith affiliates**

 

Themajority of the Joint Venture’s operating expenses consist of project expensesincurred by the Venturers, either for internal operating costs or forthird-party obligations incurred by the Venturers on behalf of the JointVenture which are then charged to the Joint Venture. All charges to the JointVenture are subject to approval by the Steering Committee. The determination ofthe amount of internal operating costs incurred by each Venturer on behalf ofthe Joint Venture requires significant judgment by each Venturer. As a result,the financial statements for the Joint Venture may not be indicative of theresults that would have occurred had the Joint Venture obtained all of itsresearch and development and operating services from third-party entities. TheJoint Venture owed Dyax $1.5 million and Genzyme $1.0 million as of December31, 2005 and owed Dyax $0.3 million as of December 31, 2004 (unaudited)primarily for project expenses incurred on behalf of the Joint Venture. Genzymeowed the Joint Venture $47,000 as of December 31, 2004 (unaudited), which waspaid in 2005.

 

**Research and development**

 

Research and development costs are expensed in the period incurred.These costs are primarily comprised of development efforts performed by the Venturersor payments to third parties made by the Venturers, both on behalf of the JointVenture, during the respective periods.

 

**Income taxes**

 

The Joint Venture is organized as a pass-throughentity; accordingly, the financial statements do not include a provision forincome taxes. Taxes, if any, are the liability of Dyax and Genzyme, asVenturers.

 

**C.****   ****Funding Receivable**

 

At December 31, 2005, both Venturer’s had not provided their funding commitments for December 2005 and, as a result, the Joint Venture recorded funding receivable from each venturer of $1.7 million. Both Venturers paid their December 2005 funding commitments in January 2006. There were no funding amounts receivable from the Venturers at December 31, 2004 (unaudited) or December 31, 2003 (unaudited).

 

8

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**D.****   ****Lab Equipment (amounts in thousands)**

 
| ** **               | ** ** | **December 31,** | ** ** |
|--------------------------|------------|------------------|------------|
| ** **               | ** ** | **2005**         | ** ** | **2004** | ** ** |
| ** **               | ** ** | ** **       | ** ** | **(Unaudited)** | ** ** |
|                     |       |             |       |   |   |
| Lab equipment            |       | $                | 708        |   | $ | 708 |   |
| Accumulated depreciation |       | (93              | )          | — |   |
| Lab equipment, net       |       | $                | 615        |   | $ | 708 |   |

 

In2004, the Joint Venture acquired lab equipment that was placed in service in2005. The Joint Venture’s depreciation expense was $93,000 in 2005. There wasno depreciation expense in 2004 (unaudited) or for the period from July 1, 2003(commencement of operations) to December 31, 2003 (unaudited).

 

**E.****   ****Venturers’ Capital**

 

Asof December 31, 2005, Venturers’ capital is comprised of capital contributionsmade by the Venturers to fund budgeted costs and expenses of the Joint Venturein accordance with the collaboration agreement, net of losses allocated to theVenturers. All funding is provided 50.01% by Dyax and 49.99% by Genzyme. As of December31, 2005, Dyax provided a total of $21.0 million of funding and Genzymeprovided a total of $21.0 million of funding to the Joint Venture.

 

**F.****   ****Commitments and Contingencies**

 

TheJoint Venture may become subject to legal proceedings and claims arising inconnection with its business. There were no asserted claims against the JointVenture as of December 31, 2005 or 2004 (unaudited).

 

**G.****  ****Segment Information**

 

The Joint Ventureoperates in one business segment—human therapeutics.

 

9

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