U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-KSB
(Mark One)
[X] Annual  Report Under Section 13 or 15(d) of the  Securities  Exchange Act of
    1934 For the fiscal year ended December 31, 1999

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934
                         Commission File Number: 0-21994

                              GLYKO BIOMEDICAL LTD.
        (Exact name of small business issuer as specified in its charter)

      Canada                                          98-0195569
   (State of other jurisdiction of        (I.R.S. Employer Identification No.)
    incorporation or organization)

371 Bel Marin Keys Blvd., #210, Novato, California         94949
 (Address of principal executive offices)                (Zip Code)

                  Registrant's telephone number: (415) 382-3500



         Securities registered under Section 12(g) of the Exchange Act:
                           Common Stock, no par value
                                (Title of Class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference  in Part III to the Form 10-KSB or any  amendment to
this Form 10-KSB. __X____

State issuer's revenues for its most recent fiscal year: $0.00.

State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates  computed  by  reference  to the price at which the stock was
sold,  or the average bid and asked  prices of such equity:  $158,475,655  as of
February 29, 2000.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:  33,999,341common  shares outstanding
as of February 29, 2000.

Transitional small business disclosure format (check one)
Yes_______  ;  No__X____

The  document   incorporated   by   reference   is  as  follows:
(1)  BioMarin Pharmaceutical  Inc. Proxy Statement of the Annual Meeting of
     Stockholders to be held on June 16, 2000 incorporated into Part III,
     Item 10. 5

<PAGE>

                              GLYKO BIOMEDICAL LTD.

                                     Part I

This Form  10-KSB  contains  ''forward-looking  statements''  as  defined  under
securities  laws.  Many of  these  statements  can be  identified  by the use of
terminology  such  as  ''believes,''  ''expects,''  ''anticipates,''  ''plans,''
''may,'' ''will,'' ''projects,''  ''continues,''  ''estimates,''  ''potential,''
''opportunity'' and so on. These forward-looking  statements may be found in the
''Risk Factors,'' ''Description of Business,'' and other sections of this Annual
Report  on  Form  10-KSB.   Our  actual  results  or  experience   could  differ
significantly from the forward-looking  statements.  Factors that could cause or
contribute to these differences include those discussed in ''Additional  Factors
That Might Affect Future Results,'' as well as those discussed elsewhere in this
Form 10-KSB.  You should carefully  consider that information before you make an
investment decision.

You should not place undue reliance on these statements,  which speak only as of
the date that they were made. These cautionary  statements  should be considered
in connection  with any written or oral  forward-looking  statements that we may
issue in the future.  We do not undertake any obligation to release publicly any
revisions to these forward-looking  statements after completion of the filing of
this Form  10-KSB to reflect  later  events or  circumstances  or to reflect the
occurrence of unanticipated events.

Item 1.   Description of Business

Glyko  Biomedical Ltd. ("GBL" or the "Company") was  incorporated by Certificate
and  Articles of  Incorporation  under the laws of Canada on June 26,  1992.  On
December 21,  1992,  simultaneously  with  an  initial  public  offering  of the
Company's Common Shares on The Toronto Stock Exchange,  the Company acquired, in
a stock for stock exchange, 100 percent of the outstanding shares of Glyko, Inc.
incorporated on October 15, 1990,  under the laws of Delaware,  upon an exchange
of shares with the stockholders of Glyko, Inc. GBL was incorporated for the sole
purpose of acquiring Glyko, Inc. Both entities were under common control and the
share  exchange  was  accounted  for  in a  manner  similar  to a  pooling.  The
registered  office of the Company is Scotia  Plaza,  Suite 2100,  40 King Street
West,  Toronto,  Canada M5H 3C2. The principal office of Glyko,  Inc. is 371 Bel
Marin Keys Blvd.,  #210,  Novato, CA 94949.  Glyko, Inc. was established in 1990
under  a  joint  venture  agreement,  ("the  Joint  Venture  Agreement"),  dated
December 18,   1990  among   Millipore   Corporation   ("Millipore"),   Glycomed
Incorporated  ("Glycomed"),  Gwynn R. Williams ("Williams"),  and John C. Klock,
M.D.  (collectively,  the  "Founders"),  Astroscan,  Ltd.  and  Astromed,  Ltd.,
corporations  controlled  by  Williams,  and Glyko,  Inc.  to  conduct  original
scientific   research   aimed  at   developing   novel   analytic  and  research
instrumentation for carbohydrate research and for human medical diagnosis.

On  October  25,  1996,  the  Company  formed   BioMarin   Pharmaceutical   Inc.
("BioMarin"),  a corporation incorporated under the laws of Delaware, to develop
the Company's  pharmaceutical  products.  The registered and principal office of
BioMarin is 371 Bel Marin Keys Blvd., #210, Novato, California 94949.

BioMarin first began business on March 21, 1997 and issued 1.5 million shares of
common  stock to GBL for  $1.5  million.  As  consideration  for the  grant of a
license to certain of Glyko, Inc.'s intellectual  property pursuant to a license
agreement  dated June 26,  1997,  BioMarin  issued GBL an  additional  7 million
shares of BioMarin  common  stock.  Beginning in October 1997,  BioMarin  raised
capital from third  parties  with the result that at December  31,  1997,  GBL's
ownership  interest in BioMarin had been  reduced to 41.3 percent of  BioMarin's
outstanding  capital stock. As of December 31, 1997, the Company began recording
its share of BioMarin's net loss  utilizing the equity method of accounting.  On
June 30, 1998,  BioMarin  raised net proceeds of $3.3 million  (598,535  shares)
including a $1.0 million  investment from GBL. On August 3, 1998 BioMarin raised
an  additional  net  proceeds  of $8.1  million  (1,416,800  shares)  from third
parties.  On September 4, 1998,  BioMarin received $8 million from Genzyme Corp.
("Genzyme")  upon  execution  of a joint  venture  agreement  pursuant  to which
BioMarin issued 1,333,333 shares of common stock to Genzyme. As a result of this
joint  venture  agreement,  BioMarin has a 50 percent  interest in the income or
loss of the joint venture, BioMarin/Genzyme LLC.

On October 7,  1998,  BioMarin acquired Glyko,  Inc., in a transaction valued at
$14.5 million.  As  consideration  for the acquisition of all of the outstanding
shares of Glyko, Inc., BioMarin issued  2,259,039 shares of common stock to GBL,
assumed Glyko,  Inc.'s employee stock options  exercisable for 255,540 shares of
BioMarin common stock, and paid $500 in cash.

While GBL was not  obligated to provide  this  capital,  on April 13, 1999,  the
Company entered into a convertible  note arrangement with BioMarin in the amount
of $4.3 million as part of a $26 million convertible note.

BioMarin  completed its initial public offering ("IPO") of 4.5 million shares of
common  stock  at $13 per  share on July  23,  1999,  raising  net  proceeds  of
approximately  $51.8 million.  In a private  placement  concurrent with the IPO,
Genzyme  invested in BioMarin $10 million  (769,230 shares of common stock).  In
addition,  the $26  million of  convertible  notes sold by BioMarin on April 13,
1999,  plus accrued  interest,  were converted  into 2,672,020  shares of common
stock at $10 per share. GBL's $4.3 million convertible note from BioMarin,  plus
accrued  interest were converted  into 441,911 shares of BioMarin  common stock.
The exercise of the  underwriters'  over-allotment  option in August 1999 raised
additional  net  proceeds of $8.1  million at the IPO price  (675,000  shares of
common  stock).  As a result of the IPO,  concurrent  with the conversion of the
note from GBL and the  investment  by Genzyme , GBL's  ownership  of  BioMarin's
outstanding common stock on December 31, 1999, was 32.6 percent.

While BioMarin has an accumulated  deficit of $43.1 million at December 31, 1999
and is  expected  to incur  significant  losses  during  2000 and into 2001 at a
minimum,  management of GBL does not believe that there has been any  impairment
of its investment in BioMarin.

Since its  inception,  the Company has  incurred a  cumulative  deficit of $29.1
million and GBL expects to continue to incur losses during 2000 due to its share
of BioMarin's net loss resulting  from the ongoing  research and  development of
BioMarin's  pharmaceutical  product  candidates.  As a result  of GBL's  sale of
Glyko,  Inc.  on  October  7,  1998,  GBL has no  operating  activities  or paid
employees and its principal  asset is its investment in BioMarin.  Since October
8,  1998,  GBL has  agreed  to pay  BioMarin  a monthly  management  fee for its
services  to GBL  primarily  relating  to  management,  accounting,  finance and
government  reporting.  BioMarin  had  accrued  receivables  relating  to  these
services  for GBL of $27,152 and $37,500 for the years ended  December  31, 1998
and  1999,  respectively.  Accordingly,  without  further  investment  in  other
companies or technologies,  management  believes that GBL has sufficient cash to
sustain planned operations for the foreseeable future.

BioMarin's  business comprises two segments.  BioMarin's Analytic and Diagnostic
Products  segment  represents the business  conducted on a stand-alone  basis by
Glyko,  Inc. while the  Pharmaceutical  Products segment  represents  BioMarin's
pharmaceutical development activities.

Pharmaceutical Products

BioMarin  is  currently  developing  pharmaceutical  products  through  its  own
internal  operations  and through  research  grants with  various  universities.
BioMarin has completed its initial clinical trial of its lead enzyme replacement
product  (Aldurazyme(TM))  for  Mucopolysaccharidosis  (MPS-I),  a crippling and
fatal disease that  afflicts  young  children.  The initial  clinical  trial was
conducted  under a  Company  Investigational  New Drug  (IND)  application  that
encompassed  ten patients  with all levels of severity of MPS-I.  In April 1999,
BioMarin  completed a twelve-month  evaluation period for their initial clinical
trial of  AldurazymeTM.  Initiated in December 1997, this clinical trial treated
ten patients with MPS-I at five medical  centers in the United States.  BioMarin
is treating and monitoring these patients for an additional  12-month  follow-up
period and, in collaboration  with BioMarin's  joint venture  partner,  Genzyme,
plans to initiate a Phase III  Confirmatory  Clinical  Trial in  mid-year  2000.
BioMarin  intends to complete the filing of the  biologics  license  application
("BLA") with the FDA in mid-year 2001. BioMarin received orphan drug designation
for  Aldurazyme(TM)  in September 1997,  allowing BioMarin to market the product
exclusively for seven years following U.S. Food and Drug Administration  ("FDA")
approval  if it is the  first to gain such  approval.  BioMarin  focuses  on the
development of products in four therapeutic  areas:  genetic diseases,  burn and
wound care,  fungal  infections and  inflammation  (initially  psoriasis).  This
development  process will require funding and BioMarin plans to raise additional
cash to fund these projects.  BioMarin cannot assure you that such funds will be
available or that this development process will be successful.

Analytic and Diagnostic Products

Analytic

BioMarin manufactures and sells the following products:

o       A series of kits with  chemicals,  enzymes,  pre-cast  gels, and
        standards for performing analyses of carbohydrates.
o       A carbohydrate  analytical system based on  electrophoresis  including
        computer  controlled  imaging  system for sample analysis and report
        preparation.
o       Research  products  including  carbohydrate
        enzymes,  standards and related materials.
o       Copyrighted,  proprietary software for image analysis and data
        manipulation.

Products are marketed directly and through  authorized  distributors.  Customers
include  distributors of research products,  university  research  laboratories,
biotechnology companies and pharmaceutical companies.
Diagnostic

BioMarin's  FACE(R)  diagnostic  technology  gives  clinicians the capability to
detect the presence of specific  carbohydrate markers indicating certain disease
states.

In November 1995, Glyko, Inc.,  currently  BioMarin's  wholly-owned  subsidiary,
received  approval  from the FDA to market  its  diagnostic  test for  Lysosomal
Storage Diseases, the Urinary Carbohydrate Analysis Test Kit.

A second-year SBIR II Grant in the amount of $290,234 was awarded for the period
from June 1, 1998, to May 31, 1999 to develop a  second-generation  confirmatory
test of Lysosomal Storage diseases.
<PAGE>

Patents and Trade Secrets

BioMarin and GBL entered into a License Agreement dated June 26,  1997, pursuant
to which GBL granted BioMarin an exclusive, worldwide,  perpetual,  irrevocable,
royalty-free  right and license to certain of Glyko,  Inc.'s worldwide  patents,
trade  secrets,  copyrights,  and  other  proprietary  rights  to all  know-how,
processes,  formulae,  concepts,  data,  and other such  intellectual  property,
whether patented or not, owned or licensed by Glyko,  Inc. as of the date of the
license  agreement  for  application  in  therapeutic  uses,  including  without
limitation,  drug discovery and genomics. As consideration for the grant of this
license, BioMarin issued to GBL 7 million shares of BioMarin common stock. Under
the  same  License  Agreement,   BioMarin  granted  Glyko,  Inc.  an  exclusive,
worldwide,   perpetual,   irrevocable,   royalty-free   cross-license   to   all
improvements BioMarin may make upon the licensed intellectual property.

Competition

Pharmaceutical Products. The biopharmaceutical  industry is rapidly evolving and
highly  competitive.  We face  significant  competition from  biotechnology  and
pharmaceutical  companies.  Many of these companies have  significantly  greater
financial,  manufacturing,   marketing  and  product  research  and  development
resources  and  experience  than we  have.  Large  pharmaceutical  companies  in
particular  have  extensive  experience  in clinical  testing  and in  obtaining
regulatory   approvals,   including  orphan  drug   designations.   Accordingly,
competitors may obtain regulatory approvals for and commercialize their products
faster than we will.  In  addition,  these  companies  will  compete  with us to
attract  qualified  personnel,  and to attract parties for  acquisitions,  joint
ventures  or other  collaborations.  Several  pharmaceutical  and  biotechnology
companies  have  established  themselves  in the field of  enzyme  therapeutics,
including Genzyme, our joint venture partner.

Universities and public and private research  institutions are also competitors.
While  these  organizations  primarily  have  educational  objectives,  they may
develop  proprietary  technology  and acquire  patents  that we may need for the
commercial  development  of our drug  products.  We will attempt to license this
proprietary technology, if available.  These licenses may not be available to us
on acceptable  terms, if at all. We also directly compete with a number of these
organizations to recruit personnel, especially scientists and technicians.

We believe  that the primary  competitive  factors in the market for  biological
drug products are:

         o     Product safety

         o     Effectiveness of these products

         o     Ability to obtain orphan drug exclusivity

         o     Distribution channels

         o     Price

         o     Patents and proprietary know-how

         o     Time required to develop new products

         o     Time required to obtain regulatory and reimbursement approval

         o     Ability to respond quickly to medical and technological changes

         o     Ability to develop new products


<PAGE>

We believe, based on our progress developing  AldurazymeTM,  that we can compete
successfully  with  regard  to  those   competitive   factors  requiring  timely
execution.  With regard to other  competitive  factors including those regarding
distribution channels and low prices, we are at a competitive  disadvantage.  We
do not yet have established distribution channels and because our target patient
populations  are  small we  expect  that our drug  products  will be  relatively
expensive.  We do not intend to compete with others who have already established
successful  treatments for specific genetic  disorders,  which should ameliorate
some of our competitive disadvantages.

Carbohydrate Analysis Products and Services.   The FACE(R)Imaging System's
primary competitors are alternative carbohydrate analytical technologies
including:

         o     Capillary electrophoresis

         o     High-pressure liquid chromatography

         o     Mass spectrometry

         o     Nuclear magnetic resonance spectrometry

The major advantages of FACE(R) are:

        o     Low cost

        o     Quantification of carbohydrates present

        o     Easy application to samples of unknown composition

        o     User friendly procedures and software

        o     Provides versatility for other non-carbohydrate applications

The major disadvantages of FACE(R) are:

        o    FACE(R)  requires  single-use  specialized gels which give FACE(R)
             systems a higher  disposable cost than some  competitive  products
             which have reusable components.

        o    Some competitive  products may provide a more precise  measurement
             ofthe molecular weight of a sample.

        o    One competitive  technology  can provide  more  complete structural
             information about the sample.

The  competition  in  the  carbohydrate-active  enzymes  business  is  comprised
primarily of  distributors  of broad lines of research  products  and  supplies,
particularly  fine chemicals and reagents.  Glyko, Inc. competes on the basis of
the catalog of products it offers and the number of carbohydrate-active  enzymes
it offers  and their  proprietary  nature.  Glyko,  Inc.  believes  that it also
provides  superior service because it provides  customers with sales information
and assistance based on scientific  understanding of carbohydrate  chemistry and
function.  However,  it  does  not  offer  as  many  products  as  some  of  its
competitors.  Glyko,  Inc. plans to expand its enzyme product offerings over the
next several  years to compete with the broadest  product lines offered today by
competitors. However, neither we nor Glyko, Inc. can assure you that Glyko, Inc.
will  successfully  broaden  its product  offerings  or will  otherwise  compete
successfully.

Glyko,  Inc.'s  diagnostic  product line  competes  primarily  with  alternative
technologies and laboratory  services.  Glyko, Inc. believes that its diagnostic
approaches are novel. Glyko, Inc. has the only urinary screening test cleared by
the FDA for certain lysosomal  storage  diseases.  Glyko, Inc. believes that the
test  may be used as a  screening  tool  for  early  detection  of a  number  of
lysosomal  storage  diseases  and that  success of the  product  will  depend on
whether it becomes  widely  adopted.  See "Risk  Factors--If  we fail to compete
successfully, our revenues and operating results will be adversely affected."
<PAGE>


Government Regulation

The following  government  regulations  pertain to BioMarin and its wholly-owned
subsidiaries,  Glyko, Inc. and BioMarin Genetics,  Inc. Reference to "we", "our"
and "the Company" in the following government regulations represent BioMarin and
its wholly-owned subsidiaries.

Our pharmaceutical  products are subject to extensive  government  regulation in
the United  States.  If we distribute our products  abroad,  these products will
also be  subject  to  extensive  foreign  government  regulation.  In the United
States,  pharmaceutical  and  biological  products are regulated by the FDA. FDA
regulations govern the testing, manufacturing, advertising, promotion, labeling,
sale and distribution of our products.  Currently,  we believe that AldurazymeTM
and other enzyme drug  products that we may develop will be regulated by the FDA
as biologics  rather than as drugs because they are  manufactured  by biological
processes.

The FDA approval process for a biologic includes:

        o    Preclinical studies

        o    Submission of an investigational new drug application for clinical
             trials

        o    Adequate and well-controlled human clinical trials to establish
             the safety and effectiveness of the product

        o    Submission of a biologics license application

        o    Review of the biologics license application

        o    Inspection  of the  facilities  used in the  manufacturing  of the
             biologic to assess compliance with the Current Good  Manufacturing
             Processes, or cGMP regulations

The biologics license application includes comprehensive,  complete descriptions
of the pre-clinical  testing,  clinical trials, and the chemical,  manufacturing
and control  requirements of a drug which enable the FDA to determine the drug's
safety and  efficacy.  A biologics  license  application  must be filed and then
approved by the FDA before a biologic can be marketed commercially.

The FDA testing and  approval  process  requires  substantial  time,  effort and
money. We cannot assure you that any approval will ever be granted.

Preclinical  studies include  laboratory  evaluation of the product,  as well as
animal studies to assess the potential safety and  effectiveness of the product.
These  studies must be performed  according to good  laboratory  practices.  The
results of the preclinical studies,  together with manufacturing information and
analytical  data,  are submitted to the FDA as part of the  investigational  new
drug  application.  Clinical trials may begin 30 days after the  investigational
new drug  application is received,  unless the FDA raises  concerns or questions
about the conduct of the clinical  trials.  If concerns or questions are raised,
the  investigational  new drug application  sponsor and the FDA must resolve any
outstanding  concerns before  clinical trials can proceed.  We cannot assure you
that  submission  of an  investigational  new drug  application  will  result in
authorization  to  commence  clinical  trials.  Nor can we  assure  you  that if
clinical trials are approved, that data will result in marketing approval.


<PAGE>

Clinical trials involve the administration of the product that is the subject of
the trial to  volunteers  or  patients  under  the  supervision  of a  qualified
principal  investigator.  Furthermore,  each clinical trial must be reviewed and
approved by an  independent  institutional  review board at each  institution at
which the study will be conducted. The institutional review board will consider,
among  other  things,  ethical  factors,  the safety of human  subjects  and the
possible liability of the institution.  Also,  clinical trials must be performed
according to good clinical practices.  Good clinical practices are enumerated in
FDA regulations and guidance documents.

Clinical trials typically are conducted in three sequential phases, Phases I, II
and III, with Phase IV studies  conducted after approval and generally  required
for fast track designated drugs.  These phases may overlap.  In Phase I clinical
trials, the drug is usually tested on healthy volunteers to determine:

         o     Safety

         o     Any adverse effects

         o     Dosage tolerance

         o     Absorption

         o     Metabolism

         o     Distribution

         o     Excretion

         o     Other drug effects

In Phase II clinical  trials,  the drug is usually tested on a limited number of
afflicted patients to:

        o     Evaluate the efficacy of the drug for specific, targeted
              indications

        o     Determine dosage tolerance and optimal dosage

        o     Identify possible adverse effects and safety risks

In Phase III clinical  trials,  the drug is usually tested on a larger number of
afflicted  patients,  an expanded  patient  population and at multiple  clinical
sites.  The FDA may  require  that we  suspend  clinical  trials  at any time on
various  grounds,  including a finding that the subjects are being exposed to an
unacceptable health risk. In addition, FDA approval may be conditioned and limit
the indicated uses for our products.

Phase IV  clinical  trials are  defined as  studies  performed  after a drug has
received FDA approval. These additional studies are conducted to gain experience
from the treatment of afflicted patients in the intended therapeutic  indication
and are required if a drug is approved based on surrogate endpoints. In clinical
trials,  surrogate  endpoints are alternative  measurements of the symptoms of a
disease or condition,  often by biochemical or other tests, that are substituted
for measurements of observable  clinical  symptoms.  Failure to promptly conduct
Phase IV clinical  trials could result in expedited  withdrawal  of approval for
products approved under fast track designation.

We will also be subject to a variety of foreign  regulations  governing clinical
trials,  manufacture and sales of our products.  Whether or not FDA approval has
been obtained, approval of a product by the comparable regulatory authorities of
foreign  countries must still be obtained prior to marketing in those countries.
The  approval  process  varies  from  country to country  and the time needed to
secure approval may be longer or shorter than that required for FDA approval.

Food  and  Drug  Administration  Modernization  Act of  1997.  The Food and Drug
Administration  Modernization  Act of 1997 was enacted,  in part,  to ensure the
availability  of safe and  effective  drugs,  biologics  and medical  devices by
expediting  the FDA review  process  for new  products.  The  Modernization  Act
establishes  a  statutory  program  for the  approval  of fast  track  products,
including  biologics.  The fast track  provisions  essentially  codify the FDA's
accelerated approval  regulations for drugs and biologics.  A fast track product
is defined as a new drug or biologic  intended for the treatment of a serious or
life-threatening  condition  that  demonstrates  the  potential to address unmet
medical needs for this condition.  Under the new fast track program, the sponsor
of a new drug or biologic may request the FDA  designate the drug or biologic as
a fast track product at any time during the clinical development of the product.
The  Modernization  Act  specifies  that the FDA must  determine  if the product
qualifies for fast track designation  within 60 days of receipt of the sponsor's
request.


<PAGE>

Approval of a license  application  for a fast track  product can be based on an
effect on a clinical  endpoint or on a  surrogate  endpoint  that is  reasonably
likely to predict clinical benefit. Approval of a license application for a fast
track product based on a surrogate endpoint may be subject to:

        o     Post-approval studies to validate the surrogate endpoint or
              confirm the effect on the clinical endpoint

        o     Prior review of all promotional materials

If a  preliminary  review of the  clinical  data  suggests  that the  product is
effective,  the FDA may initiate review of sections of a license application for
a fast track product before the application is complete.  This rolling review is
available  if the  applicant  provides a schedule  for  submission  of remaining
information and pays applicable user fees. However, the time period specified in
the Prescription Drug User Fees Act, which governs the time period goals the FDA
has  committed  to  reviewing  a license  application,  does not begin until the
complete application is submitted.

In September 1998, the FDA designated  AldurazymeTM a fast track product for the
more severe forms of MPS-I.  We cannot predict the ultimate  impact,  if any, of
the  fast  track  process  on  the  timing  or  likelihood  of FDA  approval  of
AldurazymeTM or any of our other potential products.

Orphan Drug Designation.  In September 1997,  AldurazymeTM  received orphan drug
designation  from  the  FDA.  In  February  1999,  BM102  received  orphan  drug
designation from the FDA. Orphan drug designation is granted by the FDA to drugs
intended to treat a rare  disease or  condition.  A rare disease or condition is
one which generally affects fewer than 200,000 individuals in the United States.
Orphan drug designation must be requested before  submitting a biologics license
application.  After the FDA grants orphan drug designation, the generic identity
of the therapeutic agent and its potential orphan use are disclosed  publicly by
the FDA.

Orphan drug designation does not shorten the FDA regulatory  review and approval
process for an orphan drug,  nor does it give that drug any advantage in the FDA
regulatory  review and approval  process.  If an orphan drug later  receives FDA
approval  for the  indication  for  which  it has  designation,  the FDA may not
approve any other  applications to market the same drug for the same indication,
except in very limited  circumstances,  for seven years.  Although obtaining FDA
approval to market a product with orphan drug  exclusivity may be  advantageous,
we cannot be certain  that we will be the first to obtain FDA  approval  for any
drug for which we obtain  orphan drug  designation.  Nor can we be certain  that
orphan  drug  designation  will  result in any  commercial  advantage  or reduce
competition.  Nor  can  we be  certain  that  the  limited  exceptions  to  this
exclusivity will not be invoked by the FDA.

Regulation of Glyko, Inc.'s Diagnostic Tests as Medical Devices. Our subsidiary,
Glyko,  Inc.,  develops  diagnostic  tests  that  screen  for  diseases  such as
lysosomal  storage  diseases.  The FDA regulates these tests as medical devices.
The FDA requires  companies that desire to market new medical  devices to obtain
either 510(k)  clearance or approval of a Pre-market  Approval  Application,  or
PMA,  before they are sold.  Regulation  under a PMA can be  significantly  more
costly and time  consuming than clearance  under a 510(k)  notification.  Glyko,
Inc.  has  received  510(k)  clearance  from the FDA for a urinary  carbohydrate
analysis test and is developing other diagnostic tests, which we believe qualify
for 510(k) clearance.

Glyko, Inc.'s diagnostic tests may be regulated as medical devices by the FDA as
Class I, Class II or Class III devices. The degree of regulation, as well as the
cost and time required to obtain regulatory  approvals or clearances,  generally
increases  from Class I to Class III.  Most  diagnostic  tests are  regulated as
Class  I or  Class  II  devices.  Glyko,  Inc.'s  diagnostic  test  for  urinary
carbohydrate  analysis has been  classified as a Class I device.  Under the Food
and Drug  Administration  Modernization  Act of 1997,  most Class I devices  are
exempt  from  the  510(k)  clearance  requirement.  Based on the  advice  of our
regulatory  consultants  and the experience  with our first test, we expect that
all of our currently planned diagnostic tests will require a 510(k) notification
and clearance process.


<PAGE>

A  510(k)  notification  is  sufficient  for a  device  that  is  "substantially
equivalent"  to a legally  marketed  Class I or Class II device,  or a Class III
"predicate"  device for which the FDA has not yet required  submission  of PMAs.
Following  submission  of a 510(k)  notification,  a company  may not market the
device  for  clinical  use until the FDA finds  that  product  is  substantially
equivalent to a legally marketed predicate device. It generally takes four to 12
months  from  the  date  of   submission   of  a  510(k)  to  obtain  the  FDA's
determination,  but it may take longer. The FDA may determine that the device is
not  substantially  equivalent  and require  submission  and  approval of a PMA.
Alternatively,   the  FDA  may  require  further  information  before  making  a
determination regarding substantial  equivalence.  The FDA requires a new 510(k)
submission and a separate FDA  determination of substantial  equivalence for any
devices  cleared  through  the 510(k)  process  that have had  modifications  or
enhancements that could significantly  affect their safety or effectiveness,  or
that change their intended use.

If a device does not qualify for the 510(k) premarket notification  procedure, a
company must file a PMA application.  The PMA review and approval process can be
expensive,  uncertain  and  lengthy.  A PMA  application  must be  supported  by
extensive data,  including  laboratory and clinical trial data  establishing the
safety and  effectiveness  of the  device,  as well as  extensive  manufacturing
information.  After a preliminary review, the FDA makes an initial determination
about whether a PMA application is sufficiently complete to permit a substantive
review.  If the FDA finds the PMA  application  sufficiently  complete,  the FDA
accepts the  application  for filing.  Once the PMA  application is accepted for
filing, the FDA begins a more in-depth review, which likely includes review by a
scientific advisory panel.  During the PMA review process,  the FDA will conduct
an inspection of the  manufacturer's  facilities to ensure  compliance  with the
applicable Quality System Regulation or QSR requirements.  The FDA may determine
that additional  clinical data is necessary or request other information,  which
may delay the regulatory review process.

Modifications  to a device that is the subject of an approved PMA, its labeling,
manufacturing or clinical use may require approval by the FDA of PMA supplements
or new  PMAs.  PMA  supplements  often  require  submission  of the same type of
information required for the initial PMA except that the supplement generally is
limited  to that  data  needed  to  support  the  proposed  changes.  Regulatory
approval,  if granted,  may limit the uses for which the device may be marketed.
Approvals,  once  granted,  may be  withdrawn  if problems  occur after  initial
marketing.

Sales of medical  devices outside of the United States are subject to regulatory
requirements  that vary from  country to  country.  The time  required to obtain
international  regulatory  clearance or approval for international  sales may be
longer  or  shorter  than  that  required  for  FDA  clearance   approval.   The
requirements  may differ as well.  We cannot  assure you that we will be able to
obtain the required regulatory approval in a timely manner, if at all.

Regulation of Glyko,  Inc.'s  Manufacturing.  Glyko,  Inc. is required to comply
with the FDA's quality system  regulation  requirements  when  manufacturing its
diagnostic  tests. The quality system  regulation  requirements  incorporate the
FDA's  former  current  Good   Manufacturing   Processes  into  medical  devices
regulations.   Quality  system  regulation   requirements  address  the  design,
controls,   methods,   facilities  and  quality   assurance   controls  used  in
manufacturing,  packing,  storing and installing  medical devices.  In addition,
certain   international   markets  have  quality   assurance  and  manufacturing
requirements  that may be more or less rigorous than those in the United States.
A failure by us to comply with quality system  regulation  requirements or other
requirements could have a serious impact on our business and services.

Regulation of Clinical Laboratories. Laboratories using Glyko, Inc.'s diagnostic
tests for  clinical  use in the  United  States  are  regulated  under  Clinical
Laboratory   Improvement   Amendments  of  1998,  or  CLIA.   CLIA   establishes
requirements for laboratories and laboratory personnel governing:

         o     Administration of laboratories

         o     Participation and proficiency testing

         o     Patient test management

         o     Quality control

         o     Personnel

         o     Quality assurance

         o     Inspection


<PAGE>

The  complexity of the tests being  performed by the  laboratory  will determine
which  CLIA  requirements  apply.  Under  CLIA  regulations,   all  laboratories
performing moderately complex or highly complex tests will be required to obtain
either a  registration  certificate or  certificate  of  accreditation  from the
Health Care Financing Administration. A laboratory using our diagnostic tests is
required to be qualified to perform  moderately or highly complex tests.  All of
the laboratories known to us that are performing the diagnostic procedures which
might use our test are qualified at the appropriate levels. If, in the future, a
competitor  develops a simpler  diagnostic  test that can be  performed  in less
qualified  laboratories  and if  medical  institutions  begin to use these  less
qualified  laboratories to perform the competitive  test, then CLIA requirements
will prevent the less qualified  laboratories from performing the current Glyko,
Inc.  test.  The  development  of a  simpler  competitive  diagnostic  test by a
competitor may have a negative  financial  impact on our revenues and results of
operations. Glyko, Inc. has CLIA certification and a California state laboratory
license  to  perform  urinary   carbohydrate   analysis  tests.  The  California
laboratory  license only allows  testing for patients in  California.  We may be
required to obtain other  licenses to perform our  laboratory  services in other
states or to provide  services  to patients  or health  care  professionals  who
reside or practice medicine in other states.

See "Risk  Factors--If  we fail to obtain  regulatory  approval to  commercially
manufacture or sell any of our future drug products,  or if approval is delayed,
we will be unable to generate revenue from the sale of our products."

<PAGE>

                                  RISK FACTORS

                  RISKS RELATED TO GLYKO BIOMEDICAL LTD.

Dependence on Investment in BioMarin

As of December 31, 1999, GBL's principal asset was its 32.6 percent ownership of
BioMarin's  outstanding  capital  stock.  GBL's  success  is  dependent  on  the
successful  operations  of BioMarin  including,  but not limited to,  BioMarin's
ability to receive FDA  approval of existing and future  pharmaceutical  product
candidates,  BioMarin's  ability to retain key personnel,  BioMarin's ability to
manufacture and market  products  effectively  and  successfully  and BioMarin's
ability  to raise  additional  cash to fund  future  operations.  BioMarin  is a
development  stage company,  with its only revenues  currently being earned from
the sale of its analytic and diagnostic  products resulting from the acquisition
of Glyko, Inc. and cost  reimbursement  revenues for services performed from its
joint   venture  with  Genzyme  for   development   and   commercialization   of
Aldurazyme(TM).

History of Operating Losses - Uncertainty of Future Profitability

The Company's  share of BioMarin's net loss resulted in the Company  reporting a
net loss for the year ended December 31, 1999 of $10.0  million.  GBL expects to
continue to incur  losses  during 2000 due to its share of  BioMarin's  net loss
resulting from BioMarin's  ongoing  research and  development of  pharmaceutical
product  candidates.  As a result of GBL's sale of Glyko, Inc., as of October 7,
1998, GBL has no operating  activities and its principal asset is its investment
in BioMarin.  Accordingly,  without  further  investments in other  companies or
technologies,  management  believes  that  GBL has  sufficient  cash to  sustain
planned  operations.  BioMarin has an  accumulated  deficit of $43.1  million at
December 31, 1999 and is expected to incur  significant  losses  throughout 2000
and  beyond.  Management  of  BioMarin  believes  that  the  proceeds  from  the
convertible  note  financing and the net proceeds of  approximately  $70 million
from  the IPO  (including  underwriters'  exercise  of  over-allotment)  and the
concurrent  Genzyme closing will be sufficient to meet its  obligations  through
2000.  Management  of GBL believes  that at December 31, 1999 there has not been
any impairment of its investment in BioMarin.

RISKS RELATED TO BIOMARIN PHARMACEUTICAL INC.

The   following   risk  factors   pertain  to  BioMarin  and  its   wholly-owned
subsidiaries,  Glyko, Inc. and BioMarin Genetics, Inc. References to "we", "our"
and "the  Company" in the  following  risk  factors  represent  BioMarin and its
wholly-owned subsidiaries.

If we continue to incur operating  losses for a period longer than  anticipated,
we may be unable to continue our operations.

We are in an early stage of development and have operated at a net loss since we
were  formed.  Since we began  operations  in March 1997,  we have been  engaged
primarily in research and development. We have no sales revenues from any of our
drug  products.  As of  December  31,  1999,  we had an  accumulated  deficit of
approximately  $43.1 million.  We expect to continue to operate at a net loss at
least through 2002. Our future profitability depends on our receiving regulatory
approval of our drug candidates and our ability to successfully  manufacture and
market any approved  drugs,  either by  ourselves  or jointly  with others.  The
extent  of our  future  losses  and  the  timing  of  profitability  are  highly
uncertain.   If  we  fail  to  become   profitable  or  are  unable  to  sustain
profitability on a quarterly or annual basis,  then we may be unable to continue
our operations.

Because of the  relative  small size and scale of our  wholly-owned  subsidiary,
Glyko,  Inc.,  profits  from  products  and  services  offered  by  it  will  be
insufficient to offset the expenses associated with our pharmaceutical business.
As a result,  we expect that operating losses will continue and increase for the
foreseeable future.

If we fail to obtain the capital  necessary  to fund our  operations  we will be
unable to complete our product development programs.

In the  future,  we may need to raise  substantial  additional  capital  to fund
operations.  We cannot be certain  that any  financing  will be  available  when
needed. If we fail to raise additional  financing as we need it, we will have to
delay or terminate our product development programs.

We expect to continue to spend substantial amounts of capital for our operations
for  the  foreseeable   future.   Activities   which  will  require   additional
expenditures include:

        o     Research and development programs

        o     Preclinical studies and clinical trials

        o     Regulatory processes

        o     Establishment of commercial scale manufacturing capabilities and

        o     Expansion of sales and marketing activities.

The amount of capital we may need depends on many factors, including:

        o     The progress, timing and scope of our research and development
              programs

        o     The progress, timing and scope of our preclinical studies and
              clinical trials

        o     The time and cost necessary to obtain regulatory approvals

         o    The time and cost necessary to build our manufacturing  facilities
              and obtain the necessary regulatory approvals for those facilities

        o     The time and cost necessary to respond to technological and market
              developments

        o     Any changes made or new developments in our existing collaborative
              licensing and other commercial relationships

        o     Any new collaborative, licensing and other commercial
              relationships that we may establish


<PAGE>

Moreover,   our  fixed  expenses  such  as  rent,  license  payments  and  other
contractual  commitments are substantial and will increase in the future.  These
fixed expenses will increase because we may enter into:

        o     Additional leases for new facilities and capital equipment

        o     Additional licenses and collaborative agreements

        o     Additional contracts for consulting, maintenance and
              administrative services

        o     Additional expenses associated with being a public company.

We believe that the cash, cash  equivalents,  short-term  investment  securities
balances  at December  31, 1999 will be  sufficient  to meet our  operating  and
capital   requirements   through  mid-year  2001.  This  estimate  is  based  on
assumptions and estimates, which may prove to be wrong. As a result, we may need
or choose to obtain additional financing during that time.

If we fail to obtain regulatory approval to commercially manufacture or sell any
of our future drug  products,  or if  approval is delayed,  we will be unable to
generate revenue from the sale of our products.

We must obtain regulatory approval to market our products in the U.S. and
foreign jurisdictions.

We must obtain  regulatory  approval before marketing or selling our future drug
products.  In the United States,  we must obtain FDA approval for each drug that
we intend to  commercialize.  The FDA approval process is typically  lengthy and
expensive,  and approval is never certain.  Products distributed abroad are also
subject to foreign government regulation. None of our drug products has received
regulatory  approval to be commercially  marketed and sold. If we fail to obtain
regulatory  approval  we will be  unable  to  market  and sell our  future  drug
products.   Because  of  the  risks  and   uncertainties  in   biopharmaceutical
development,  our drug candidates could take a significantly longer time to gain
regulatory  approval  than we expect or may never gain  approval.  If regulatory
approval is delayed our management's  credibility,  the value of our company and
our operating results may be adversely affected.

To obtain regulatory  approval to market our products,  preclinical  studies and
costly and  lengthy  clinical  trials  may be  required  and the  results of the
studies and trials are highly uncertain.

As part of the FDA  approval  process,  we  must  conduct,  at our own  expense,
preclinical  studies  on  animals  and  clinical  trials  on humans on each drug
candidate.  We expect the number of preclinical studies and clinical trials that
the FDA will require will vary  depending  on the drug  product,  the disease or
condition the drug is being developed to address and  regulations  applicable to
the particular drug. We may need to perform multiple  preclinical  studies using
various doses and formulations before we can begin clinical trials,  which could
result in delays in our ability to market any of our drug products. Furthermore,
even if we obtain  favorable  results in  preclinical  studies on  animals,  the
results in humans may be different.

After we have conducted  preclinical studies in animals we must demonstrate that
our drug products are safe and effective for use on the target human patients in
order  to  receive   regulatory   approval  for  commercial  sale.   Adverse  or
inconclusive  clinical results would stop us from filing for regulatory approval
of our products.  Additional  factors that can cause delay or termination of our
clinical trials include:

        o     Slow patient enrollment

        o     Longer treatment time required to demonstrate efficacy

        o     Lack of sufficient supplies of the drug candidate

        o     Adverse medical events or side effects in treated patients

        o     Lack of effectiveness of the drug candidate being tested

Typically,  if a drug product is intended to treat a chronic  disease safety and
efficacy data must be gathered over an extended period of time which ranges from
six months to three years. In addition,  clinical trials on humans are typically
conducted in three  phases.  The FDA  generally  requires  two pivotal  clinical
trials  that  demonstrate  substantial  evidence  of  safety  and  efficacy  and
appropriate dosing in a broad patient population at multiple sites to support an
application for regulatory approval.  If a drug is intended for the treatment of
a serious or life-threatening  condition and the drug demonstrates the potential
to  address  unmet  medical  needs  for this  condition,  a single  trial may be
sufficient  to prove safety and efficacy  under the FDA's  Modernization  Act of
1997.


<PAGE>

The fast track  designation for  AldurazymeTM  may not actually lead to a faster
review process.

Although AldurazymeTM has obtained a fast track designation, we cannot guarantee
a  faster  review  process  or  faster  approval  compared  to  the  normal  FDA
procedures.

We will not be able to sell our products if we fail to comply with manufacturing
regulations.

Before we can begin  commercially  manufacturing  our  products  we must  obtain
regulatory  approval of our  manufacturing  facility and  process.  In addition,
manufacture  of our drug  products  must  comply  with the  FDA's  current  Good
Manufacturing   Practices   regulations,   commonly  known  as  cGMP.  The  cGMP
regulations  govern quality control and  documentation  policies and procedures.
Our manufacturing  facilities are continuously subject to inspection by the FDA,
the State of California  and foreign  regulatory  authorities,  before and after
product  approval.  Because we are  currently in the process of  developing  the
manufacturing site and process for commercial  manufacture of AldurazymeTM,  our
facility  has not yet been  inspected  by any  governmental  entity.  We  cannot
guarantee that BioMarin, or any potential  third-party  manufacturer of our drug
products, will be able to comply with cGMP regulations.  Material changes to the
manufacturing  processes  after  approvals have been granted are also subject to
review and approval by the FDA or other regulatory agencies.

We  must  pass  FDA  and  state   inspections  and  manufacture   three  process
qualification  batches to final  specifications  under cGMP controls  before the
AldurazymeTM  BLA can be  approved.  We cannot  assure you that we will pass the
inspections in a timely manner, if at all.

If we fail to obtain orphan drug  exclusivity for our products,  our competitors
may sell products to treat the same conditions and our revenues may be reduced.

As part of our  business  strategy,  we  intend  to  develop  drugs  that may be
eligible for FDA orphan drug designation. Under the Orphan Drug Act, the FDA may
designate a product as an orphan  drug if it is a drug  intended to treat a rare
disease or condition,  defined as a patient population of less than 200,000. The
company that  obtains the first FDA approval for a designated  orphan drug for a
given rare disease receives  marketing  exclusivity for use of that drug for the
stated  condition for a period of seven years.  However,  different drugs can be
approved for the same condition.

Because  the  extent and scope of patent  protection  for our drug  products  is
limited, orphan drug designation is particularly important for our products that
are eligible  for orphan drug  designation.  We plan to rely on the  exclusivity
period under the orphan drug designation to maintain a competitive  position. If
we do not obtain orphan drug  exclusivity for any one of our drug products,  our
competitors may then sell the same drug to treat the same condition.

We received orphan drug  designation  from the FDA for AldurazymeTM in September
1997. In February  1999, we received  orphan drug  designation  from the FDA for
BM102.  Even though we have obtained orphan drug designation for these drugs and
even if we obtain  orphan drug  designation  for other  products we develop,  we
cannot guarantee that we will be the first to obtain marketing  approval for any
orphan indication or that exclusivity would effectively protect the product from
competition.  Orphan drug  designation  does not shorten the  development or FDA
review time of a drug so  designated  nor give the drug any advantage in the FDA
review or approval process.

Because  the  target  patient  populations  for our  products  are small we must
achieve  significant  market  share and obtain high per  patient  prices for our
products to achieve profitability.

Our initial drug candidates target disorders with small patient populations.  As
a result,  our prices must be high enough to recover our  development  costs and
achieve profitability.  For example, two of our initial drug products in genetic
disorders,  AldurazymeTM  and BM102,  target  patients  with  MPS-I and  MPS-VI,
respectively. We estimate that there are approximately 3,400 patients with MPS-I
and 1,100 patients with MPS-VI in the developed  world.  We believe that we will
need to market worldwide to achieve  significant  market share. In addition,  we
are developing other drug candidates to treat conditions,  such as other genetic
diseases and serious burns, with small patient populations. We cannot be certain
that we will be able to obtain  sufficient market share for our drug products at
a price high enough to justify our product development efforts.


<PAGE>

If we fail to obtain an adequate level of reimbursement for our drug products by
third-party  payors  there  would  be no  commercially  viable  markets  for our
products.

The course of treatment for patients with MPS-I using  AldurazymeTM  is expected
to  be  expensive.  We  expect  patients  to  need  treatment  throughout  their
lifetimes. We expect that families of patients will not be capable of paying for
this  treatment  themselves.  There will be no  commercially  viable  market for
AldurazymeTM without reimbursement from third-party payors.

Third-party  payors,  such  as  government  or  private  health  care  insurers,
carefully  review  and  increasingly  challenge  the price  charged  for  drugs.
Reimbursement  rates from private  companies vary  depending on the  third-party
payor,  the  insurance  plan  and  other  factors.   Reimbursement   systems  in
international   markets  vary  significantly  by  country  and  by  region,  and
reimbursement  approvals  must be obtained  on a  country-by-country  basis.  We
cannot be certain  that  third-party  payors will pay for the costs of our drugs
and the courses of treatment.  Even if we are able to obtain  reimbursement from
third-party payors, we cannot be certain that reimbursement rates will be enough
to allow us to profit from sales of our drugs.

We currently have no expertise obtaining reimbursement. We expect to rely on the
expertise of our partner Genzyme to obtain  reimbursement for  AldurazymeTM.  We
cannot predict what the reimbursement  rates will be. In addition,  we will need
to develop our own reimbursement  expertise for future drug candidates unless we
enter into collaborations with other companies with the necessary expertise.

We expect that in the future reimbursement will be increasingly  restricted both
in the United States and internationally. The escalating cost of health care has
led  to  increased  pressure  on the  health  care  industry  to  reduce  costs.
Governmental  and private  third-party  payors have proposed health care reforms
and cost reductions. A number of federal and state proposals to control the cost
of health  care,  including  the cost of drug  treatments  have been made in the
United States.  In some foreign  markets,  the  government  controls the pricing
which would affect the profitability of drugs.  Current  government  regulations
and  possible  future  legislation  regarding  health care may affect our future
revenues  from  sales of our drugs and may  adversely  affect our  business  and
prospects.

If we are unable to protect  our  proprietary  technology  we may not be able to
compete as effectively.

Where  appropriate,  we  seek  patent  protection  for  certain  aspects  of our
technology.  Meaningful  patent  protection may not be available for some of the
enzymes we are developing,  including  AldurazymeTM  and BM102. If we must spend
significant time and money protecting our patents, designing around patents held
by others or licensing, for excessively large fees, patents or other proprietary
rights held by others, our business and prospects may be harmed.

The patent  positions  of  biotechnology  companies  are  extremely  complex and
uncertain.  The scope and extent of patent  protection  for some of our products
are particularly uncertain because key information on some of the enzymes we are
developing  has existed in the public domain for many years.  Other parties have
published the  structure of the enzymes,  the methods for purifying or producing
the enzymes or the methods of treatment.  The composition and genetic  sequences
of animal  and/or  human  versions of many of our enzymes,  including  those for
AldurazymeTM  and BM102,  have been published and are in the public domain.  The
composition  and  genetic  sequences  of other  MPS  enzymes  which we intend to
develop as products have also been  published.  Publication of this  information
may prevent us from obtaining composition of matter patents, which are generally
believed to offer the strongest patent protection.  For enzymes with no prospect
of composition of matter patents, we will depend on orphan drug status.

In  addition,  our owned and  licensed  patents and patent  applications  do not
ensure  the  protection  of our  intellectual  property  for a  number  of other
reasons:

         o    We do not know  whether  our patent  applications  will  result in
              actual  patents.  For example,  we may not have developed a method
              for treating a disease before others developed similar methods.


<PAGE>

         o    Competitors  may interfere with our patent process in a variety of
              ways.  Competitors  may  claim  that  they  invented  the  claimed
              invention  prior to us.  Competitors  may also  claim  that we are
              infringing  on their  patents and  therefore  cannot  practice our
              technology  as  claimed  under our  patent.  Competitors  may also
              contest  our  patents by  showing  the  patent  examiner  that the
              invention was not original, novel or was obvious. As a Company, we
              have no meaningful  experience with  competitors  interfering with
              our patents or patent applications.

         o    Even if we receive a patent,  it may not  provide  much  practical
              protection.  If we receive a patent with a narrow  scope,  then it
              will be easier  for  competitors  to design  products  that do not
              infringe on our patent.

         o    Enforcing patents is expensive and may absorb  significant time by
              our management.  In litigation,  a competitor could claim that our
              issued patents are not valid for a number of reasons. If the court
              agrees, we would lose that patent.

In addition, competitors also seek patent protection for their technology. There
are many patents in our field of technology,  and we cannot guarantee that we do
not infringe on those patents or that we will not infringe on patents granted in
the future.  If a patent holder believes our product  infringes on their patent,
the patent holder may sue us even if we have received patent  protection for our
technology.  If someone  else claims we infringe on their  technology,  we would
face a number of issues, including:

         o    Defending a lawsuit takes significant time and can be very
              expensive.

         o    If  the  court   decides   that  our  product   infringes  on  the
              competitor's  patent,  we may have to pay substantial  damages for
              past infringement.

         o    The court may prohibit us from  selling or  licensing  the product
              unless the  patent  holder  licenses  the patent to us. The patent
              holder is not  required  to grant us a  license.  If a license  is
              available,  we may  have to pay  substantial  royalties  or  grant
              cross-licenses to our patents.

         o    Redesigning  our product so it does not infringe may not be
              possible and could require substantial funds and time.

It is also unclear  whether our trade  secrets will provide  useful  protection.
While we use reasonable  efforts to protect our trade secrets,  our employees or
consultants  may  unintentionally  or  willfully  disclose  our  information  to
competitors. Enforcing a claim that someone else illegally obtained and is using
our trade secrets, like patent litigation,  is expensive and time consuming, and
the outcome is unpredictable.  In addition, courts outside the United States are
sometimes  less  willing  to  protect  trade  secrets.   Our   competitors   may
independently develop equivalent knowledge, methods and know-how.

We may  also  support  and  collaborate  in  research  conducted  by  government
organizations  or by  universities.  We cannot guarantee that we will be able to
acquire  any  exclusive  rights to  technology  or products  derived  from these
collaborations.  If we do not  obtain  required  licenses  or  rights,  we could
encounter delays in product  development while we attempt to design around other
patents or even be prohibited from developing, manufacturing or selling products
requiring these licenses. There is also a risk that disputes may arise as to the
rights to technology or products developed in collaboration with other parties.

If our joint  venture  with  Genzyme  were  terminated,  we could be barred from
commercializing  AldurazymeTM or our ability to commercialize AldurazymeTM would
be delayed.

We are relying on Genzyme to apply the  expertise it has  developed  through the
launch and sale of Ceredase(R) and Cerezyme(R)  enzymes for Gaucher  disease,  a
rare  genetic   disorder,   to  the  marketing  of  our  initial  drug  product,
AldurazymeTM.   Because  it  is  our  initial   product,   our   operations  are
substantially  dependent  upon  the  development  of  AldurazymeTM.  We  have no
experience  selling,  marketing or obtaining  reimbursement  for  pharmaceutical
products.  In addition,  without  Genzyme we would be required to pursue foreign
regulatory  approvals.  We have no  experience  in  seeking  foreign  regulatory
approvals.


<PAGE>

We cannot  guarantee  that  Genzyme  will  devote  the  resources  necessary  to
successfully market  AldurazymeTM.  In addition,  either party may terminate the
joint venture for specified reasons, including if the other party is in material
breach of the  agreement or has  experienced a change of control or has declared
bankruptcy  and  also is in  breach  of the  agreement.  Either  party  may also
terminate the agreement  upon one year prior written notice for any reason after
the earlier of December  31, 2000 or after the joint  venture has  received  the
FDA's  approval  of  the  biologics   license   application  for   AldurazymeTM.
Furthermore,  we may terminate the joint venture if Genzyme fails to fulfill its
contractual  obligation to pay us  $12.1million in cash upon the approval of the
biologics license application for AldurazymeTM.

Upon  termination  of the joint venture one party must buy out the other party's
interest in the joint  venture.  The party who buys out the other will then also
obtain,  exclusively,  all rights to AldurazymeTM  and any related  intellectual
property and regulatory approvals. For a more detailed analysis of the economics
of  this  buy  out  obligation  see  "Business--Corporate  Collaborations--Joint
Venture with Genzyme Corporation."

If the joint venture is terminated by Genzyme for a breach on our part,  Genzyme
would be granted, exclusively, all of the rights to AldurazymeTM and any related
intellectual property and regulatory approvals and would be obligated to buy out
our  interest  in the joint  venture.  We would  then  effectively  be unable to
develop and commercialize AldurazymeTM. If we terminated the joint venture for a
breach by Genzyme,  we would be obligated to buy out  Genzyme's  interest in the
joint venture and, we would then be granted all of these rights to  AldurazymeTM
exclusively.  While  we  could  then  continue  to  develop  AldurazymeTM,  that
development would be slowed because we would have to divert substantial  capital
to buy out Genzyme's interest in the joint venture and would then have to search
for a new partner to commercialize the product and to obtain foreign  regulatory
approvals or to develop these capabilities ourselves.

If the joint venture is terminated by us without  cause,  Genzyme would have the
option,  exercisable  for one year, to  immediately  buy out our interest in the
joint  venture  and  obtain  all  rights  to  AldurazymeTM  exclusively.  If the
agreement is  terminated  by Genzyme  without  cause,  we would have the option,
exercisable for one year, to immediately buy out Genzyme's interest in the joint
venture and obtain these  exclusive  rights.  In event of termination of the buy
out option without exercise by the non-terminating party as described above, all
right and title to AldurazymeTM  is to be sold to the highest  bidder,  with the
proceeds to be split equally between Genzyme and us.

If the joint venture is terminated by us because Genzyme fails to make the $12.1
million payment to us upon FDA approval of the biologics license application for
AldurazymeTM,  we would be  obligated  to buy  Genzyme's  interest  in the joint
venture and would obtain all rights to  AldurazymeTM  exclusively.  If the joint
venture is terminated by either party because the other declared  bankruptcy and
is also in breach of the agreement,  the terminating party would be obligated to
buy out the other and would obtain all rights to  AldurazymeTM  exclusively.  If
the joint venture is terminated by a party because the other party experienced a
change of control,  the  terminating  party shall  notify the other  party,  the
offeree,  of its intent to buy out the  offeree's  interest in the joint venture
for a stated amount set by the terminating party at its discretion.  The offeree
must then  either  accept  this  offer or agree to buy the  terminating  party's
interest in the joint  venture on those same  terms.  The party who buys out the
other would then have exclusive rights to AldurazymeTM.

We cannot  assure you that if the joint venture were  terminated  and if we were
obligated,  or given the  option,  to buy out  Genzyme's  interest  in the joint
venture, and gain exclusive rights to AldurazymeTM, that we will have sufficient
funds to do so or that we will be able to obtain the  financing  to do so. If we
fail to buy out Genzyme's interest we may be held in breach of the agreement and
may lose any claim to the rights to  AldurazymeTM  and the related  intellectual
property and regulatory approvals.  We would then effectively be prohibited from
developing and commercializing the product.

Termination  of the joint  venture  where we retain the  rights to  AldurazymeTM
could  cause us  significant  delays in  product  launch in the  United  States,
difficulties  in obtaining  third-party  reimbursement  and delays or failure to
obtain  foreign  regulatory  approval,  any of which could hurt our business and
results of operations.  Since Genzyme funds 50% of the joint venture's operating
expenses, the termination of the joint venture would double our financial burden
and reduce the funds available to us for other product programs.

If we are unable to manufacture  our drug products in sufficient  quantities and
at  acceptable  cost,  we may be unable to meet demand for our products and lose
potential revenues.

We have no  experience  manufacturing  drug  products  in  volumes  that will be
necessary to support  commercial sales. Our unproven  manufacturing  process may
not meet initial expectations as to schedule,  reproducibility,  yields, purity,
costs,   quality,  and  other  measurements  of  performance.   Improvements  in
manufacturing  processes  typically are very  difficult to achieve and are often
very expensive. We cannot know with any certainty how long it might take to make
improvements if it became  necessary to do so. If we contract for  manufacturing
services  with an  unproven  process,  our  contractor  is  subject  to the same
uncertainties, high standards and regulatory controls.


<PAGE>

If we are unable to establish and maintain commercial scale manufacturing within
our planned time and cost  parameters,  sales of our products and our  financial
performance will be adversely affected.

We may  encounter  problems  with any of the following if we attempt to increase
the scale or size of manufacturing:

        o     Design, construction and qualification of manufacturing facilities
              that meet regulatory requirements

        o     Production yields

        o     Purity

        o     Quality control and assurance

        o     Shortages of qualified personnel

        o     Compliance with FDA regulations

We are  developing a total of 31,000 square feet at our Novato  facility for the
manufacture of AldurazymeTM. The construction and qualification of this facility
may  take  longer  than  planned  and the  actual  construction  costs  of these
facilities may be higher than those which we have  budgeted.  We expect that the
manufacturing  process of all of our new products,  including  BM102,  will also
require  lengthy  development  time  before we can begin  manufacturing  them in
commercial  quantity.  Even if we can  establish  this  capacity,  we  cannot be
certain that manufacturing costs will be commercially reasonable,  especially if
reimbursement is substantially lower than expected.

In  order  to  achieve  our  product  cost  targets  we must  develop  efficient
manufacturing processes either by

        o     Improving the colonies of cells which have a common genetic
              make-up, or cell lines,

        o     Improving the processes licensed from others, or

        o     Developing a recombinant cell line and production processes.

A recombinant  cell line is a cell line with foreign DNA inserted  which is used
to produce a protein that it would not have otherwise produced.  The development
of a stable, high production cell line for any given enzyme is risky,  expensive
and  unpredictable  and  may  not  yield  adequate  results.  In  addition,  the
development of protein  purification  processes is difficult and may not produce
the high purity required with acceptable  yield and costs. If we are not able to
develop  efficient  manufacturing  processes,  the  investment in  manufacturing
capacity sufficient to satisfy market demand will be much greater and will place
heavy  financial  demands upon us. If we do not achieve our  manufacturing  cost
targets,  we will have lower  margins and reduced  profitability  in  commercial
production and greater losses in manufacturing start-up phases.

If we are unable to increase our marketing and  distribution  capabilities or to
enter into  agreements  with third  parties  to do so, our  ability to  generate
revenues will be diminished.

If we cannot increase our marketing  capabilities either by developing our sales
and marketing organization or by entering into agreements with others, we may be
unable to successfully  sell our products.  If we are unable to effectively sell
our drug products, our ability to generate revenues will be diminished.

To increase our  distribution and marketing for both our drug candidates and our
Glyko,  Inc.  products,  we will have to increase our current sales force and/or
enter  into  third-party  marketing  and  distribution  agreements.   We  cannot
guarantee that we will be able to hire in a timely manner,  the qualified  sales
and marketing  personnel we need if at all. Nor can we guarantee that we will be
able to enter into any marketing or distribution agreements on acceptable terms,
if at all. If we cannot increase our marketing capabilities as we intend, either
by increasing  our sales force or entering into  agreements  with third parties,
sales of our products may be adversely affected.


<PAGE>

We  have  entered  into a joint  venture  with  Genzyme  where  Genzyme  will be
responsible for marketing and distributing  Aldurazyme(TM).  We cannot guarantee
that we will be able to establish  sales and  distribution  capabilities or that
BioMarin,  the joint venture or any future  collaborators will successfully sell
any of our drug candidates.

If we fail to compete  successfully,  our revenues and operating results will be
adversely affected.

Our  competitors  may develop,  manufacture  and market  products  that are more
effective or less expensive than ours. They may also obtain regulatory approvals
for their  products  faster  than we can  obtain  them,  including  orphan  drug
designation,  or  commercialize  their products before we do. If our competitors
successfully  commercialize  a product which treats a given rare genetic disease
before we do, we will  effectively  be  precluded  from  developing a product to
treat that disease because the patient  populations of the rare genetic diseases
are so  small.  These  companies  also  compete  with  us to  attract  qualified
personnel and parties for acquisitions,  joint ventures or other collaborations.
They also compete with us to attract academic research  institutions as partners
and to license these institution's  proprietary  technology.  If our competitors
successfully  enter into  partnering  arrangements  or license  agreements  with
academic  research  institutions,  we will then be precluded from pursuing those
specific opportunities.  Since each of these opportunities is unique, we may not
be able to find a substitute. Several pharmaceutical and biotechnology companies
have  already  established  themselves  in the  field  of  enzyme  therapeutics,
including Genzyme, our joint venture partner. These companies have already begun
many drug  development  programs,  some of which may target diseases that we are
also  targeting,   and  have  already  entered  into  partnering  and  licensing
arrangements with academic research institutions, reducing the pool of available
opportunities.

Universities and public and private research  institutions are also competitors.
While  these  organizations  primarily  have  educational  objectives,  they may
develop  proprietary  technology  and acquire  patents  that we may need for the
development  of our drug products.  We will attempt to license this  proprietary
technology,  if  available.  These  licenses  may  not  be  available  to  us on
acceptable  terms,  if at all. We also  directly  compete with a number of these
organizations to recruit personnel, especially scientists and technicians.

We believe that established  technologies  provided by other companies,  such as
laboratory  and testing  services  firms compete with Glyko Inc.'s  products and
services.  For example,  Glyko,  Inc.'s  FACE(R)  Imaging  System  competes with
alternative   carbohydrate   analytical   technologies,    including   capillary
electrophoresis,  high-pressure  liquid  chromatography,  mass  spectrometry and
nuclear magnetic  resonance  spectrometry.  These competitive  technologies have
established  customer  bases and are more widely used and accepted by scientific
and  technical   personnel  because  they  can  be  used  for   non-carbohydrate
applications.  Companies  competing with Glyko, Inc. may have greater financial,
manufacturing and marketing resources and experience.

If we fail to manage  our growth or fail to recruit  and retain  personnel,  our
product development programs may be delayed.

Our rapid growth has strained our managerial,  operational,  financial and other
resources.  We expect  this growth to  continue.  We have  entered  into a joint
venture with  Genzyme.  If we receive FDA approval to market  AldurazymeTM,  the
joint  venture  will be required to devote  additional  resources to support the
commercialization of AldurazymeTM.

To manage expansion effectively,  we need to continue to develop and improve our
research and development  capabilities,  manufacturing  and quality  capacities,
sales and marketing  capabilities and financial and administrative  systems.  We
cannot  guarantee  that our systems,  procedures or controls will be adequate to
support  our  operations  or  that  our  management   will  be  able  to  manage
successfully future market opportunities or our relationships with customers and
other third parties.

Our future growth and success depend on our ability to recruit,  retain,  manage
and motivate our employees. The loss of key scientific, technical and managerial
personnel may delay or otherwise harm our product development programs. Any harm
to our research and development programs would harm our business and prospects.


<PAGE>

Because of the specialized scientific nature of our business, we rely heavily on
our ability to attract and retain qualified scientific, technical and managerial
personnel. In particular,  the loss of Grant W. Denison, Jr., Chairman and Chief
Executive Officer,  John C. Klock, M.D.,  President and Secretary or Christopher
M.  Starr,   Ph.D.,  Vice  President  for  Research  and  Development  would  be
detrimental  to us. While each of these  individuals  is party to an  employment
agreement  with us,  which  includes  financial  incentives  for each of them to
remain  employed with us, these  agreements  each  terminate in June 2000 and we
cannot guarantee that any of them will remain employed with us beyond that time.
In addition,  these  agreements do not restrict their ability to compete with us
after their employment is terminated. The competition for qualified personnel in
the  biopharmaceutical  field is  intense.  We  cannot be  certain  that we will
continue to attract and retain qualified personnel necessary for the development
of our business.

If product liability lawsuits are successfully  brought against us, we may incur
substantial liabilities.

We are exposed to the potential product liability risks inherent in the testing,
manufacturing and marketing of human  pharmaceuticals.  The BioMarin/Genzyme LLC
maintains product  liability  insurance for our clinical trials of AldurazymeTM.
Although  we intend to  obtain  insurance  against  product  liability  lawsuits
shortly before initiating  clinical trials for BM102 and for our other products,
we cannot be certain that we will be able to obtain adequate  insurance coverage
at reasonable cost. In addition,  we may be subject to claims in connection with
our  current  clinical  trials for  AldurazymeTM  for which the joint  venture's
insurance  coverage is not adequate.  We cannot be certain that if  AldurazymeTM
receives FDA approval,  the product  liability  insurance the joint venture will
need to obtain in connection with the commercial  sales of AldurazymeTM  will be
available in meaningful amounts or at a reasonable cost. In addition,  we cannot
be certain that we can successfully defend any product liability lawsuit brought
against us. If we are the subject of a successful  product liability claim which
exceeds  the  limits  of any  insurance  coverage  we may  obtain,  we may incur
substantial  liabilities which would adversely affect our earnings and financial
condition.

Our stock price may be volatile  and an  investment  in our stock could suffer a
decline in value.

Our valuation and stock price since the IPO have had no meaningful  relationship
to  current  or  historical  earnings,  asset  values,  book value or many other
criteria  based on historical  value.  The market price of the common stock will
fluctuate due to factors including:

         o    Progress of AldurazymeTM  and our other lead drug products through
              the regulatory process, especially AldurazymeTM regulatory actions
              in the United States

        o     Results of clinical trials, announcements of technological
              innovations or new products by us or our competitors

        o     Government  regulatory action affecting our drug candidates or our
              competitors' drug candidates in both the United States and foreign
              countries

        o     Developments or disputes concerning patent or proprietary rights

        o     General market conditions for emerging growth and
              biopharmaceutical companies

        o     Economic conditions in the United States or abroad

        o     Actual or anticipated fluctuations in our operating results

        o     Broad market fluctuations may cause the market price of our common
              stock to fluctuate

        o     Changes in financial estimates by securities analysts

In addition, the value of our common stock may fluctuate because it is listed on
both the Nasdaq National Market and the Swiss Exchange's SWX New Market. Because
we have  accumulated  relatively  limited  experience  since July 23,  1999,  in
observing the trading of our stock on the two markets, we cannot be certain what
effect,  if any,  the dual listing will have on the future price of our stock in
either market. Listing on both exchanges may increase stock price volatility due
to:

        o     Trading in different time zones

        o     Different ability to buy or sell our stock

        o     Different trading volume


<PAGE>

In the past,  following  periods of large price  declines  in the public  market
price of a company's  securities,  securities class action  litigation has often
been  initiated  against that  company.  Litigation of this type could result in
substantial costs and diversion of management's  attention and resources,  which
would hurt our business.  Any adverse  determination  in  litigation  could also
subject us to significant liabilities.

If our officers,  directors and largest  stockholder  elect to act together they
may be able to  control  our  management  and  operations,  acting in their best
interests and not necessarily those of other stockholders.

Our directors and officers control approximately 13.4% of the outstanding shares
of our common stock.  Glyko Biomedical Ltd. or GBL owns 32.6% of the outstanding
shares of capital stock. Three of six GBL directors are officers or directors of
BioMarin. As a result, due to their concentration of stock ownership,  directors
and officers,  together with GBL if they act together,  may be able to otherwise
control our management and operations, and may be able to prevail on all matters
requiring a stockholder vote including:

        o     The election of all directors

        o     The amendment of charter documents or the approval of a merger,
              sale of assets or other major corporate transactions

        o     The  defeat  of  any  non-negotiated  takeover  attempt  that
              might otherwise benefit the public stockholders

Anti-takeover  provisions in our charter  documents  and under  Delaware law may
make an  acquisition  of us, which may be beneficial to our  stockholders,  more
difficult.

BioMarin is  incorporated  in  Delaware.  Certain  anti-takeover  provisions  of
Delaware law and our charter  documents as currently in effect may make a change
in control of  BioMarin  more  difficult,  even if a change in control  would be
beneficial to the stockholders.  Our anti-takeover provisions include provisions
in the certificate of incorporation  providing that  stockholders'  meetings may
only be called by the board of directors and a provision in the bylaws providing
that the stockholders may not take action by written consent.  Additionally, our
board of directors  have the  authority to issue  1,000,000  shares of preferred
stock and to determine  the terms of those  shares of stock  without any further
action by the  stockholders.  The  rights of  holders  of our  common  stock are
subject to the rights of the holders of any preferred  stock that may be issued.
The issuance of preferred stock,  could make it more difficult for a third party
to acquire a majority of the outstanding voting stock of BioMarin.  Delaware law
also prohibits  corporations  from engaging in a business  combination  with any
holders  of 15% or more of their  capital  stock  until the  holder has held the
stock for three years unless, among other possibilities,  the board of directors
approves the  transaction.  The board of directors  may use these  provisions to
prevent  changes in the  management  and  control of our  company.  Also,  under
applicable   Delaware  law,  our  board  of  directors   may  adopt   additional
anti-takeover measures in the future.




<PAGE>


Item 2.  Description of Property    None.

Item 3.  Legal Proceedings          None.

Item 4.  Submission of Matters to a Vote of Security-Holders   None.


                                     PART II

Item 5.  Market For Common Equity and Related Stockholder Matters

As of November  1993,  the  Company's  stock has been listed on the OTC Bulletin
Board under the symbol "GLYK".  The Company's Common Shares have been listed and
traded on The Toronto Stock Exchange (TSE) since December, 1992 under the symbol
"GBL." The following table sets forth the sales prices for the Common Shares for
the periods noted,  as reported by TSE.  Prices are the closing price on the TSE
during the periods indicated.
                                                               Prices
                                                      (In Canadian Dollars)*
 Year           Period                                   High             Low

1998          First Quarter                            $3.40           $1.20
1998          Second Quarter                           $4.30           $2.60
1998          Third Quarter                            $4.55           $3.05
1998          Fourth Quarter                           $6.75           $3.35
1999          First Quarter                            $7.05           $5.90
1999          Second Quarter                           $6.35           $5.60
1999          Third Quarter                            $7.95           $5.65
1999          Fourth Quarter                           $7.80           $4.40

*As of December 31, 1999, the Canadian  dollar to U.S.  dollar exchange rate was
$0.689026.

Holders

As of  February  29,  2000,  there  were 141  holders  of record  of  33,999,341
outstanding Common Shares of the Company.

Certain Canadian Federal Income Tax Considerations

The  following  is a  summary  of the  principal  Canadian  federal  income  tax
considerations  generally applicable to a person (a "United States holder") who,
for the purposes of the Income Tax Act (Canada) (the "Canadian Tax Act") and the
Convention  between Canada and the United States with respect to Taxes on Income
and Capital (the  "Convention")  and at all relevant  times,  is resident in the
United  States  and not  resident  in  Canada,  deals at arm's  length  with the
Company, holds Common Shares as capital property and does not use or hold and is
not deemed to use or hold the Common  Shares in  carrying on business in Canada.
Special  rules,  which are not discussed in this summary,  may apply to a United
States holder that is an insurer that carries on an insurance business in Canada
and elsewhere.

This summary is based on the current  provisions  of the  Convention  and of the
Canadian Tax Act and the regulations thereunder, all specific proposals to amend
the  Canadian Tax Act and the  regulations  announced by the Minister of Finance
(Canada) prior to the date hereof (the "Proposed  Amendments") and the published
administrative  practices of Revenue Canada,  Taxation. This summary assumes the
Proposed Amendments will be enacted in the form currently proposed. This summary
does not take into account or anticipate any changes in the governing law, other
than the Proposed  Amendments,  whether by federal,  governmental or legislative
decision  or  action,  nor does it take  into  account  the tax  legislation  or
considerations of any province, territory or foreign jurisdiction.

This  summary  is of a  general  nature  only  and is  not,  and  should  not be
interpreted  as, legal or tax advice to any particular  United States holder and
no  representation  is made with respect to the Canadian income tax consequences
to any  particular  person.  Accordingly,  United States  holders are advised to
consult their own tax advisors with respect to their particular circumstances.

Under the Canadian Tax Act and pursuant to the Convention,  Canadian withholding
tax will  apply to  dividends  on Common  Shares  paid or deemed to be paid to a
United  States  holder at the rate of 15  percent  of the  gross  amount of such
dividends, or, in the case of a United States holder that is a corporation which
owns at least 10 percent of the voting stock of the company,  six percent of the
gross  amount  of such  dividends  paid in 1996 and five  percent  of the  gross
dividends paid thereafter.

In general, a United States holder will not be subject to Canadian income tax on
capital gains arising on the disposition of Common Shares unless (i) at any time
in the five-year period  immediately  preceding the  disposition,  25 percent or
more of the issued shares of any class or series of the Company  belonged to the
United States holder, to persons with whom the United States holder did not deal
at arm's length, or to the United States holder and persons with whom he did not
deal at arm's length, and (ii) the value of the Common Shares at the time of the
disposition  is  derived  principally  from real  property  (as  defined  in the
Convention) situated in Canada.

A disposition of Common Shares to the Company  (unless the Company  acquires the
shares  in the open  market in the  manner in which  shares  would  normally  be
purchased by any member of the public)  will result in a deemed  dividend to the
United States holder equal to the amount by which the consideration  paid by the
Company to acquire the Common Shares exceeds the paid-up  capital of such shares
for purposes of the Canadian Tax Act. The amount of such deemed dividend will be
subject to the withholding tax described above.

Dividend Policy

No cash  dividends  were  paid on any  class of GBL  securities  in the last two
years.  The  Company  does  not  anticipate  the  payment  of  dividends  in the
foreseeable future. At present,  the Company's policy is to retain earnings,  if
any, to finance the development of its business. The payment of dividends in the
future will depend upon, among other factors,  the Company's  earnings,  capital
requirements and operating and financial condition.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

The  following  discussion  and analysis of financial  condition  and results of
operations  contains  certain forward looking  statements  within the meaning of
Section 27A of the U.S.  Securities Act of 1933, as amended,  and Section 21E of
the U.S.  Securities  Exchange Act of 1934,  as amended,  that involve risks and
uncertainties,  such  as  statements  regarding,  ongoing  liquidity  of  GBL as
discussed in "Liquidity  and Capital  Resources."  The Company's  actual results
could differ  materially from the results  anticipated in these  forward-looking
statements.  Risks are identified in "Overview," "Results of Operations,"  and
"Liquidity and Capital Resources."

Overview

Glyko Biomedical Ltd. (GBL or the Company) is a Canadian holding company that at
December  31,  1999  owned  32.6  percent  of  the  capital  stock  of  BioMarin
Pharmaceutical Inc.  (BioMarin).  BioMarin owns 100 percent of the capital stock
of Glyko,  Inc.  Glyko,  Inc.  and  BioMarin are  operating  companies  based in
California. On October 7,  1998, BioMarin acquired Glyko, Inc., in a transaction
valued at $14.5  million.  As  consideration  for the  acquisition of all of the
outstanding shares of Glyko, Inc.,  BioMarin issued  2,259,039 shares  of common
stock to the Company,  assumed Glyko,  Inc.'s employee stock options exercisable
for  255,540 shares  of  BioMarin  common  stock,  and paid  $500 in  cash.  GBL
consolidated the operations of Glyko,  Inc. through October 7, 1998.  Subsequent
to October 7, 1998, the accounts of GBL are presented on a stand-alone basis. In
this year, the results of operations of Glyko,  Inc. have been consolidated into
the results of operations  of BioMarin.  BioMarin's  results of  operations  are
recorded  by the  Company  using  the  equity  method of  accounting.  Numerical
references in the following discussion are rounded to the nearest thousand.

While GBL was not  obligated to provide  this  capital,  on April 13, 1999,  the
Company entered into a convertible  note arrangement with BioMarin in the amount
of $4.3 million as part of a $26 million convertible note financing.

On July 23, 1999,  BioMarin  completed its initial public  offering (IPO) of 4.5
million  shares of common stock at $13 per share  concurrent  with a $10 million
private  placement from Genzyme  (769,230 shares of common stock).  In addition,
the $26 million of  convertible  notes sold by BioMarin on April 13, 1999,  plus
accrued  interest,  were converted into 2,672,020  shares of common stock at $10
per share.  GBL's $4.3  million  convertible  note from  BioMarin  plus  accrued
interest  were  converted  into 441,911  shares of BioMarin  common  stock.  The
exercise  of the  underwriters'  over-allotment  option  in August  1999  raised
additional net proceeds of $8.1 million (675,000 shares of common stock).

The  Company's  net loss for the years  ended 1999 and 1998 was $10  million and
$4.1 million, respectively. The primary component of this loss was the Company's
share of the net loss of  BioMarin  accounted  for  under the  equity  method of
accounting.  The  losses of Glyko,  Inc.  for 1999 have been  consolidated  into
BioMarin's  loss for that year.  GBL expects to continue to incur losses  during
2000 due to its share of BioMarin's net loss resulting from  BioMarin's  ongoing
research and  development of  pharmaceutical  product  candidates.  The BioMarin
losses do not have an impact on the cash  position  of GBL. As a result of GBL's
sale of Glyko, Inc., as of October 7, 1998, GBL has no operating  activities and
its  principal  asset is its  investment  in  BioMarin.  While  BioMarin  has an
accumulated  deficit of $43.1  million at  December  31, 1999 and is expected to
incur significant  losses during 2000 and into 2001 at a minimum,  management of
GBL does not believe that there has been any  impairment  of its  investment  in
BioMarin.

Results of Operations

Years Ended December 31, 1998 and 1999

The principal  operations  of GBL were the  operations  of Glyko,  Inc.  through
October 7, 1998.  For the year ended  December 31, 1998, the operations of Glyko
are only  included  for the nine month and seven day period from January 1, 1998
through  October 7, 1998.  For the period  October 8, 1998 through  December 31,
1998 and for the year ended December 31, 1999, the operations of Glyko, Inc. are
reflected in the accompanying financials statements through the Company's equity
in the loss of BioMarin.

There  were no  revenues  for 1999 due to the  sale of the  Company's  operating
entity,  Glyko,  Inc. Revenues for 1998 were $1.2 million and consisted of sales
of products of  $750,000,  sales of services of $115,000  and other  revenues of
$295,000. Sales of products and services consisted of sales of chemical analysis
kits and imaging systems, and fees for custom analytic services.

There were no costs of sales for 1999 due to the Company's  sale of Glyko,  Inc.
Costs of sales of products and services was 33 percent of revenues from sales of
products and services for 1998.

There were no research and  development  expenses for 1999 due to the  Company's
sale of Glyko,  Inc.  Research and  development  expenses for 1998 were $680,000
representing research expenses for the development of future products, including
diagnostic software, new enzymes and improvements on the imaging system.

Selling, general and administrative expense was $199,000 for 1999, a decrease of
$492,000  from the  selling,  general  and  administrative  expense of  $691,000
incurred in 1998. The decrease is due to the sale of Glyko,  Inc. by the Company
and the subsequent reduction in administrative  requirements.  Selling,  general
and  administrative  expense  for 1999  represented  management  fees  billed by
BioMarin for management,  accounting, finance and government reporting, expenses
related to the Company's  special  meeting and annual  meeting on March 10, 1999
and June 24,  1999,  respectively,  and legal and other  outside  administrative
support expenses.

Other  operating  expenses  for  1998 of  $(165,880)  represent  the gain on the
settlement  of a claim at an amount less than was  provided  for by the Company,
which occurred in the second quarter of 1998.

Equity in loss of BioMarin for 1999 was $10 million compared to $3.8 million for
1998,  an increase of $6.2  million.  The increase was due to the  increased net
loss of BioMarin.

Interest  income earned in 1999 and 1998 of $159,000 and $43,000,  respectively,
resulted from earnings on cash invested in short term interest  bearing accounts
and, in 1999,  includes  interest earned on the Company's  convertible note from
BioMarin until its conversion on July 23, 1999, and a note from stockholder. The
increase in interest income in 1999 resulted from higher cash balances available
for  investment  due to the  exercise of stock  options and warrants in the last
three  quarters of 1998 and the first three quarters of 1999 and due to the loan
by the Company to a shareholder  and the  investment in a convertible  note from
BioMarin. Interest expense for 1999 and 1998 was immaterial.

Liquidity and Capital Resources

The  Company's  cash position  decreased by $2 million in 1999 to $575,000.  Net
cash  proceeds of $2.5 million  relating to,  primarily,  the issuance of common
stock from the  exercise of stock  options and  warrants,  proceeds  from a loan
repayment  advanced from a stock option  exercise and net cash used in operating
activities of $24,000 was offset by the convertible note purchased from BioMarin
of $4.3 million and interest income reinvested  totaling $119,000 in BioMarin as
a result of the conversion of the convertible notes.

Since its  inception,  the Company has  incurred a  cumulative  deficit of $29.1
million and GBL expects to continue to incur losses during 2000 due to its share
of  BioMarin's  net  loss  resulting  from  BioMarin's   ongoing   research  and
development of pharmaceutical  product candidates.  As a result of GBL's sale of
Glyko, Inc., as of October 7, 1998, GBL has limited operating activities and its
principal  asset is its  investment in BioMarin.  Accordingly,  without  further
investments in other companies or technologies, management believes that GBL has
sufficient cash to sustain planned operations for the foreseeable future.  While
BioMarin has an accumulated deficit of $43.2 million at December 31, 1999 and is
expected  to incur  significant  losses  during 2000 and into 2001 at a minimum,
management  of GBL does not believe  that there has been any  impairment  of its
investment  in  BioMarin.  See  "Risk  Factors -  Dependence  on  Investment  in
BioMarin," "-History of Operating Losses - Uncertainty of Future Profitability."

Item 7.  Financial Statements

The  information  required to be filed in this item appears on pages ___ to ____
and is incorporated herein by reference.

Item 8. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure.

Not applicable.

<PAGE>

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons

Directors and Executive Officers

The directors and executive officers of the company are as follows:

                                                                          Year
                                                                         Joined
Name                          Age     Position                          Company
R. William Anderson(1)(2)      58     Director                              1990
John H. Craig                  52     Secretary and Director                1992
John S. Glass                  63     Director                              1994
John C. Klock, M.D. (1)        55     President, Chief Executive Officer,   1990
Gwynn R. Williams(1)(2)        66     Director                              1990
Mark I. Young                  44     Assistant Secretary and Director      1997


(1)      Member of Audit Committee
(2)      Member of Compensation Committee

All directors hold office until the next annual meeting of stockholders or until
their successors are elected and qualified.  Officers are appointed by the Board
of  Directors  and serve at the  discretion  of the  Board.  There are no family
relationships among the officers and directors of the Company.

Mr. R.  William  Anderson has served as a Director since 1992. Mr.  Anderson has
served as Chief Financial Officer and Vice President, Finance and Administration
of BioMarin since June 1998. Mr. Anderson served as the Vice President,  Finance
and  Chief   Financial   Officer  at  Fusion  Medical   Technologies,   Inc.,  a
biotechnology  company in drug delivery systems,  from 1997 to 1998, as the Vice
President,  Finance and Chief  Financial  Officer at Fidus  Medical  Technology,
Inc., a medical technology company in cardiac arrhythmias, from 1996 to 1997, as
a Director of Recombinant  Capital, a consulting firm, from 1994 to 1996, and as
the  Vice   President,   Finance  and  Chief   Financial   Officer  of  Glycomed
Incorporated,  a  biotechnology  company,  from  1989 to 1994.  Previously,  Mr.
Anderson was the Chief Financial Officer at Chiron Corporation,  a biotechnology
company and a  Controller  and  Director of  Financial  Planning and Analysis at
Syntex Laboratories,  a pharmaceutical  company. Mr. Anderson received a B.S. in
Engineering from the United States Military  Academy,  an M.S. in Administration
from George Washington University and an M.B.A. from the Harvard Graduate School
of Business Administration.

Mr. John H.  Craig has served as a Director  and  Secretary  of the  Corporation
since 1992 and has been a solicitor and partner with Cassels Brock and Blackwell
LLP and previously  with Holden Day Wilson,  Toronto law firms,  since 1973. Mr.
Craig is a director of a number of public  companies listed on the Toronto Stock
Exchange.

Mr.  John S.  Glass  has  served as a  Director  since  August  1994 and is Vice
President and Chief Financial Officer of Milkhaus  Laboratory,  Inc., a clinical
stage biopharmaceutical company. In 1995 he was an independent consultant.  From
1968 to 1994 he served in various  capacities  at  Millipore  Corporation,  most
recently as Director of Investor  Relations and Vice  President of Millicorp,  a
venture capital subsidiary.  Previously Mr. Glass was a research and development
manager at Polaroid Corporation.  Mr. Glass holds a Masters degree in management
from the Massachusetts Institute of Technology.

Dr. John C.  Klock  has  served as a  director,  President  and Chief  Executive
Officer of the Company since  December  1992 and has served as Chief  Accounting
Officer  since  October  1996.  Dr.  Klock is a  founder  and has  served as the
President  of Glyko,  Inc.  from 1989 to  present.  Dr.  Klock was a founder  of
Glycomed Incorporated at which he served as Vice President, Medical Affairs from
1987 to 1990.  Dr.  Klock was a scientific  director at the  Institute of Cancer
Research at California  Pacific  Medical Center from 1981 to 1987. Dr. Klock was
formerly an academic physician and carbohydrate  researcher at the University of
California at San Francisco from 1982 to 1986, a researcher at Murex Corporation
from 1984 to 1985.  Dr. Klock  received a B.S. in Zoology from  Louisiana  State
University, Baton Rouge and received an M.D. from Tulane University.

Mr. Gwynn R.  Williams  has served as a director  since  December  1992 and is a
founder of Glyko,  Inc.  (established in 1990).  In 1984, Mr.  Williams  founded
AstroMed  Limited  and  Astroscan   Limited,   UK  manufacturers  of  scientific
equipment, which entities have since merged into Life Science Resources Ltd. Mr.
Williams was a partner in Arthur  Andersen & Co. from 1971 to 1982.  Previously,
Mr. Williams was a mathematician with General Motors Research from 1961 to 1970,
and with British Steel from 1958 to 1960. Mr. Williams also served as a director
of Life Science  Resources,  Ltd.  from June 1986 to August 1998.  Mr.  Williams
received a B.S. in Theoretical Physics from the University of Wales in 1955.

Mr. Mark I. Young has served a Director of the Corporation  since March 1997 and
has been the Assistant  Secretary of the Corporation  since 1992. Mr. Young is a
solicitor and partner with Cassels  Brock and  Blackwell  LLP  practicing in the
areas of corporate  commercial  and  securities  law. Mr. Young is an officer or
director of a number of public companies listed on The Toronto Stock Exchange.
Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company's officers and directors,
as well as  persons  who own ten  percent or more of a  registered  class of the
Company's equity  securities,  to file with the SEC initial reports of ownership
and reports of changes in ownership of Common Stock and other equity  securities
of the Company  Officers,  directors  and ten percent or more  stockholders  are
required by SEC  regulations  to furnish the Company  with copies of all Section
16(a) forms they file.

To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company or written  representations  that no other reports were
required,  during the  fiscal  year  ended  December  31,  1998,  all  officers,
directors,  and ten percent stockholders  complied with all Section 16(a) filing
requirements.

Item 10. Executive Compensation

Executive Compensation

The  information  required by this item is  incorporated  by reference  from the
discussion in BioMarin's Proxy Statement captioned "Executive Compensation".

Option Grants in 1999

Pursuant to the  Company's  stock  option  plan (the  Expiration  Date  "Plan"),
options  under  the  Plan  may be  granted  for any  term up to ten  years,  are
non-assignable,  and are subject to earlier  termination upon the termination of
an  optionee's  employment  for  any  cause  including   retirement,   permanent
disability but not death.  In the event of death of an optionee,  his estate may
be entitled for a period of six months thereafter to exercise any option which a
deceased  optionee would have been entitled to exercise if then alive but in any
event not after the date of  expiration of the option.  No  individual  may hold
options  to  purchase  more  than 5  percent  of the  number  of  Common  Shares
outstanding from time to time.

                          Number of    % of Total
                          Securities    Options         Exercise
                          Underlying   Granted to        Price
                          Options      Employees in     (Cdn.$/      Expiration
Name                      Granted (1)  Fiancial Year    Security)        Date
------------------------- ----------- ---------------- ------------ ------------
R. William Anderson           4,000          N/A             6.00       12/31/03
------------------------- ----------- ---------------- ----------- -------------
John H. Craig                 4,000          N/A             6.00       12/31/03
------------------------- ---------------------------- ----------- -------------
John S. Glass                 4,000          N/A             6.00       12/31/03
------------------------- ----------- ---------------- ----------- -------------
John C. Klock                 4,000          N/A             6.00       12/31/03
------------------------- ----------- ---------------- ----------- -------------
Gwynn R. Williams             4,000          N/A             6.00       12/31/03
------------------------- ----------- ---------------- ----------- -------------
Mark I. Young                 4,000          N/A             6.00       12/31/03
========================= =========== ================ =========== =============

(1)      Securities Under Options Granted refers to Common Shares.



Aggregate Option Exercises and Fiscal Year End Option Value Table

<PAGE>

<TABLE>

                                                                 Number of Securities
                                                                      Underlying                     Value of Unexercised
                                                                Unexercised Options at              in-the-money Options at
                                                                  December 31, 1999                  December 31, 1999(1)
                                                          ------------------------------------ ---------------------------------
                               Shares
                               Acquired       Value
                                  on          Realized                                            Exercisable     Unexercisable
           Name                Exercise       (Cdn.$)      Exercisable      Unexercisable          (Cdn.$)           (Cdn.$)
---------------------------- ------------- -------------- --------------- ------------------- ------------------ -----------------
<S>                             <C>           <C>             <C>                 <C>             <C>                   <C>
R. William Anderson             27,520        $26,320         67,000              --              $328,650              --
---------------------------- ------------- -------------- --------------- ------------------- ------------------ -----------------
John H. Craig                   27,520        $26,320         67,000              --              $328,650              --
---------------------------- ------------- -------------- --------------- ------------------- ------------------ -----------------
John S. Glass                   48,000        $37,200         43,000              --              $199,050              --
---------------------------- ------------- -------------- --------------- ------------------- ------------------ -----------------
John C. Klock                     --            --             4,000              --                 --                 --
---------------------------- ------------- -------------- --------------- ------------------- ------------------ -----------------
Gwynn R. Williams               27,520        $26,320         67,000              --              $328,650              --
---------------------------- ------------- -------------- --------------- ------------------- ------------------ -----------------
Mark I. Young                     --            --            43,000              --              $199,050              --
---------------------------- ------------- -------------- --------------- ------------------- ------------------ -----------------

============================ ============= ============== =============== =================== ================== =================

(1)      Based on the closing price of Common Shares on the Toronto Stock Exchange on December 31, 1999 of Cdn.$6.00.
</TABLE>


Compensation Of  Directors

On January  28,  1999,  each  director  of the  Company was granted an option to
purchase  4,000 common shares at an exercise  price of Cdn.$6.00  (which options
expire on December  31,  2003) in lieu of  monetary  compensation  for  services
rendered in their capacity as directors.

Stock Option Plan

The Company has a stock option plan (the "Plan") under which options to purchase
Common  Shares  may be granted by the board of  directors  of GBL to  directors,
officers,  consultants and key employees of GBL.  Options granted under the Plan
may either be "incentive  stock options" under  Section 422 of the United States
Internal Revenue Code, or non-statutory options. The Plan is administered by the
board of directors of GBL.  Options granted under the Plan will have an exercise
price  which  will  not be less  than the  market  price,  less any  permissible
discounts,  of the Common  Shares on the date prior to the date of grant,  which
market price is deemed to be the closing  sales price,  or the closing bid price
if no sales  were  reported,  of the  Common  Shares  on any  established  stock
exchange or  national  market  system  upon which the Common  Shares are listed,
including The Toronto Stock Exchange,  or, if listed upon more than one exchange
or system,  the exchange or system with the greatest volume of trading in Common
Shares on the date  prior to the date of grant,  or, if there is no  established
market for the Common  Shares,  the fair  market  value of the Common  Shares as
determined by the board of directors.  Options will be exercisable over a number
of years  specified at the time of the grant which cannot exceed ten years.  The
aggregate  number of Common  Shares  subject to options  granted  under the Plan
cannot  exceed three  million  Common  Shares and no one optionee is entitled to
hold options exceeding five percent of the Common Shares outstanding at the time
of the grant.  Also,  the maximum  number of shares  which may be  reserved  for
issuance to insiders under the Plan shall not exceed 10 percent of common shares
outstanding at the time of the grant.

Incentive stock options  granted under the Plan terminate  within 90 days of the
termination of an optionee's employment. Non-statutory options granted under the
Plan  terminate  within  a  period  of time  following  the  termination  of the
optionee's  employment,  consulting or officer or director relationship which is
determined by the board of directors. Options also terminate within 12 months of
the death or total and permanent  disability of the  optionee.  Options  granted
under the Plan are not  transferable.  As of February 29, 2000  320,000  options
(net of exercised options) had been approved by the board of directors.

Options  will  only  be  granted  in  compliance  with   applicable   securities
legislation,  and the Plan will be operated in conformity with the  requirements
of any stock  exchange  upon which the Common  Shares of the  Company may become
listed.
<PAGE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management

The following table lists certain information  regarding beneficial ownership of
the GBL's Common  Shares as of February 29, 2000,  by (i) those  persons who own
more than 5 percent of the Company's  common  stock,  (ii) the  Company's  Chief
Executive  Officer,  (iii) each of the Company's  directors,  and (iv) the total
amount of Common Shares held by the Company's officers and directors as a group.

<TABLE>

                                    Name and Address of           Number of Shares Held     Percent of Class
       Title of Class                Beneficial Owner
------------------------------ ---------------------------------- ---------------------- -----------------------
<S>                            <C>                                       <C>                <C>
Common Shares                  LaMont Asset Management                   3,739,069              11.0%
                               Baarerstrasse 10
                               P.O. box 4639
                               6304 Zug, Switzerland
------------------------------ ---------------------------------- ---------------------- -----------------------
Common Shares                  New York Life Insurance                    3,686,900              10.8%
------------------------------ ---------------------------------- ---------------------- -----------------------
Common Shares                  Gwynn R. Williams                          2,981,488 (1)           8.7%
------------------------------ ---------------------------------- ---------------------- -----------------------
Common Shares                  John C. Klock                                632,317 (2)           1.9%
------------------------------ ---------------------------------- ---------------------- -----------------------
Common Shares                  John H. Craig                                 45,501 (3)            *
------------------------------ ---------------------------------- ---------------------- -----------------------
Common Shares                  R. William Anderson                           69,500 (4)            *
                               c/o  BioMarin Pharmaceutical
                               371 Bel Marin Keys Blvd. #210
                               Novato, CA  94949
------------------------------ ---------------------------------- ---------------------- -----------------------
Common Shares                  John S. Glass                                152,500 (5)            *
                               Milkhaus Laboratory, Inc.
                               48 Main Street
                               Boxford, MA  01921
------------------------------ ---------------------------------- ---------------------- -----------------------
Common Shares                  Mark I. Young                                  8,500 (6)            *
------------------------------ ---------------------------------- ---------------------- -----------------------
Common Shares                  All Officers and Directors                 3,889,806 (7)          11.3%
============================== ================================== ====================== =======================

* Less than 1%
(1) Includes 69,500 Common Shares issuable upon exercise of options within 60 days of February 29, 2000.
(2) Includes 6,500 Common Shares issuable upon exercise of options within 60 days of February 29, 2000.
(3) Includes 45,500 Common Shares issuable upon exercise of options within 60 days of February 29, 2000.
(4) Includes 69,500 Common Shares issuable upon exercise of options within 60 days of February 29, 2000.
(5) Includes 45,500 Common Shares issuable upon exercise of options within 60 days of February 29, 2000.
(6) Includes 8,500 Common Shares issuable upon exercise of options within 60 days of February 29, 2000.
(7) Includes 245,000 Common Shares issuable upon exercise of options within 60 days of February 29, 2000.

</TABLE>

Item 12.  Certain Relationships and Related Transactions

On March 21, 1997,  the Company  closed a Cdn.$2.0  million  financing (the Q197
Financing) to fund the start-up of BioMarin Pharmaceutical Inc. which was formed
to develop the Company's pharmaceutical products. As a result of this financing,
the Company issued 4.0 million units at Cdn.$0.50 per unit, each unit consisting
of one common share and one common share purchase  warrant.  Each warrant can be
exercised  for one share of common  stock at  Cdn.$1.00  per share,  expiring on
March 21, 1999. An additional 280,000 units and 280,000 warrants together valued
at  approximately  $161,000  were  distributed  to the brokers in  exchange  for
services  rendered in connection with the Q197 Financing.  The Company  utilized
the  Black-Scholes  model to value all the warrants issued in the Q197 Financing
at approximately $496,000.

BioMarin and the Company  entered into a License  Agreement dated June 26, 1997,
pursuant  to  which  the  Company  granted  BioMarin  an  exclusive,  worldwide,
perpetual, irrevocable, royalty-free right and license to all current and future
worldwide patents, trade secrets, copyrights and other proprietary rights to all
know-how,  processes,  formulae,  concepts,  data and  other  such  intellectual
property,  whether  patented  or not,  owned or  licensed by the Company and its
subsidiaries  as of the date of the License  Agreement.  Under the same  License
Agreement,  BioMarin granted the Company a  cross-license,  similar in scope, to
all improvements BioMarin may make upon the licensed  intellectual  property. As
consideration for this license,  BioMarin issued the Company 7 million shares of
BioMarin common stock.

In June 1997,  the  Company  granted  options to purchase  23,000  shares of the
Company's common stock to Mr.  Anderson,  Mr. Craig, Mr. Glass, Mr. Williams and
Mr. Young for their services as directors,  granted  options to purchase  64,740
shares of the Company's common stock to Dr. John Klock as an incentive bonus and
granted options to purchase  40,350 shares of the Company's  common stock to Dr.
Starr as an incentive bonus. Each option was exercisable at Cdn.$0.65 per share.

In January 1998, the Company  granted  options to purchase  16,000 shares of the
Company's common stock to Mr.  Anderson,  Mr. Craig, Mr. Glass, Mr. Williams and
Mr. Young for their services as directors,  granted  options to purchase  11,290
shares of the Company's common stock to Dr. John Klock as an incentive bonus and
granted  options to purchase  6,920 shares of the Company's  common stock to Dr.
Chris Starr as an incentive bonus.  Each option was exercisable at Cdn.$1.25 per
share.

In May 1998,  the  Company  granted  options to purchase  150,000  shares of the
Company's  common stock at an exercise price of Cdn.$3.45 per share to Dr. Brian
Brandley as consideration for his acceptance of his employment with Glyko, Inc.

As previously  discussed,  BioMarin assumed Glyko, Inc.'s employee stock options
(previously  exercisable for shares of GBL stock) exercisable for 255,540 shares
of BioMarin common stock as part of the sale of Glyko, Inc. to BioMarin.

Prior to the sale of Glyko,  Inc. to BioMarin,  the Company subleased office and
lab space,  certain  administrative  and research and  development  functions to
BioMarin.  BioMarin  reimbursed  the  Company  for rent,  salaries  and  related
benefits and other  administrative costs and the Company reimburses BioMarin for
salaries and related benefits. BioMarin reimbursed the Company a net $183,000 in
1998 and a net $241,000 in 1997. Subsequent to the sale of Glyko, Inc., BioMarin
moved its corporate headquarters and laboratory to other buildings in Novato and
no longer  subleases  from the  Company.  The Company also  provided  analytical
services  and  products to  BioMarin at a 27 percent  discount in 1998 and 1997.
Total  receipts to the Company from sales to BioMarin  totaled  $113,000 in 1998
and $39,000 in 1997.  Glyko, Inc.  continues to reimburse  BioMarin for salaries
and other shared  expenses  and  continues  to provide  analytical  services and
products to BioMarin.

On October 7, 1998,  GBL sold 100 percent of the  outstanding  capital  stock of
Glyko,  Inc.  to  BioMarin.  As  consideration  for such sale,  BioMarin  issued
2,259,039 shares of common stock of BioMarin to GBL, agreed to assume options to
purchase  up to 585,969  shares of the GBL's  common  stock which  options  were
previously  issued to employees of Glyko,  Inc. (such  "assumption"  meaning the
transfer of the security  underlying  such options to be BioMarin  common stock)
and paid GBL $500 in cash.  The shares of BioMarin  common  stock were valued at
$6.00 per share, yielding a total value of $13,554,234,  and the options assumed
were valued  using the  Black-Scholes  pricing  model at $945,766,  which,  when
combined with the $500 in cash, resulted in total consideration of $14,500,500.

Dr.  John  Klock,  the  President  and a director  of the  Company,  is also the
President and a director of BioMarin.  In June 1997,  Dr. Klock was sold 800,000
shares of  BioMarin's  common stock for a purchase  price of $800,000,  paid for
with a full recourse note, secured by the underlying stock, due on September 30,
2000.  Mr.  Gwynn  Williams,  who is a director  of the Company and also a major
stockholder  of GBL, is also a director of  BioMarin,  and in such  capacity was
previously  granted an option to purchase  20,000  shares of  BioMarin's  common
stock at an  exercise  price of $1.00 per  share.  Mr.  Raymond W.  Anderson,  a
director of the  Company,  is also an officer of BioMarin  and on June 22, 1998,
was granted an option to purchase  200,000 shares of BioMarin's  common stock at
an exercise price of $4.00 per share.

In November  1998,  GBL loaned  $712,261 to Dr. John Klock to exercise  expiring
stock  options.  The loan is  secured by the  underlying  stock and is with full
recourse.

In January 1999,  the Company  granted  options to purchase  4,000 shares of the
Company's  common stock to Mr.  Anderson,  Mr. Craig,  Mr. Glass, Dr. Klock, Mr.
Williams  and Mr. Young for their  services as  directors  at an exercise  price
Cdn.$6.00 per share.

While GBL was not  obligated to provide  this  capital,  on April 13, 1999,  the
Company entered into a convertible  note arrangement with BioMarin in the amount
of $4.3 million, as part of a $26 million convertible note financing.

BioMarin  completed its initial  public  offering (IPO) of 4.5 million shares of
common  stock  at $13 per  share on July  23,  1999,  raising  net  proceeds  of
approximately  $51.8 million.  In a private  placement  concurrent with the IPO,
Genzyme  invested in BioMarin  $10 million at the IPO price  (769,230  shares of
common  stock).  In  addition,  the $26  million  of  convertible  notes sold by
BioMarin on April 13, 1999, plus accrued interest, were converted into 2,672,020
shares of common  stock at $10 per share.  GBL's $4.3 million  convertible  note
from  BioMarin  plus accrued  interest  were  converted  into  441,911  share of
BioMarin common stock. The exercise of the underwriters'  over-allotment  option
in August 1999 raised  additional  net proceeds of $8.1 million at the IPO price
(675,000  shares of common stock).  As a result of the IPO,  concurrent with the
conversion  of the note from GBL , GBL's  ownership  of  BioMarin's  outstanding
common stock on December 31, 1999, was 32.6 percent.
<PAGE>


Item 13.  Exhibits, List and Reports on Form 8-K

(a)     Documents are filed as exhibits to this report as enumerated in the
        Index to Exhibits hereto, Part III Item I.
(b)     Reports on Form 8-K

No reports were filed on Form 8-K during the quarter ended December 31, 1999.


<PAGE>

                                    Part III

Item 1.           Index to Exhibits

Exhibit                             Description
Number
2.1  Share  Exchange  Agreement  between  Glyko  Biomedical,  Ltd.  and BioMarin
     Pharmaceutical Inc. dated September 15, 1998. (filed as exhibit 2.1 to Form
     10-QSB dated March 31, 1999).
3.1  Registrant's  Articles of Incorporation and Bylaws (filed as exhibit 3.1 to
     Form 10-SB  Registration  Statement  No.  0-21994  dated August 6, 1993 and
     incorporated herein by reference).
3.2  Restated  Certificate of  Incorporation  of BioMarin  Pharmaceutical,  Inc.
     (filed  as  exhibit  3.1 to Form  10-QSB  dated  September  30,  1997,  and
     incorporated herein by reference).
3.3  Bylaws of  BioMarin  Pharmaceutical,  inc.  (filed as  exhibit  3.2 to Form
     10-QSB dated September 30, 1997, and incorporated herein by reference).
4.1  Registrant's  Articles of Incorporation and Bylaws (filed as exhibit 3.1 to
     Form 10-SB  Registration  Statement  No.  0-21994  dated August 6, 1993 and
     incorporated herein by reference).
10.1 License Agreement  between  Registrant,  and Astroscan,  Ltd. and Astromed,
     Ltd.  (filed as  exhibit  10.4 to Form  10-SB  Registration  Statement  No.
     0-21994 dated August 6, 1993 and incorporated herein by reference).
10.2 License Agreement between  Registrant and Glycomed  Incorporated  (filed as
     exhibit 10.5 to Form 10-SB Registration  Statement No. 0-21994 dated August
     6, 1993 and incorporated herein by reference).
10.3 Glyko  Biomedical  Share  Option Plan - 1994 (filed as exhibit 10.1 to Form
     10-QSB dated June 30, 1994 and incorporated herein by reference).
10.4 Development   and  Supply   Agreement   between   Registrant   and  Bio-Rad
     Laboratories,  Inc., dated February 16, 1995 (filed as exhibit 10.1 to Form
     10-QSB dated June 30, 1994 and incorporated herein by reference).
10.5 International  Distribution  Agreement  between  Registrant and Toyobo Co.,
     Ltd. and MC Medical.  Inc. dated  September 12, 1995 (filed as exhibit 10.2
     to Form 10-KSB dated March 31, 1996 and incorporated herein by reference).
10.6 Commercial Lease between  Registrant and Douglas R. Kaye dated December 23,
     1996 (filed as exhibit 10.1 to Form  10-KSB/A  dated  December 31, 1996 and
     incorporated herein by reference).
10.7 Toyobo Distribution  Agreement  (confidential portions of exhibit have been
     omitted  pursuant  to  a  request  for  confidential  treatment  and  filed
     separtately  with the  Commission).  Filed as exhibit  10.1 to Form  10-QSB
     dated march 31, 1997, and incorporated herein by reference.
10.8 First  Amendment  to Bio-Rad  Laboratories,  Inc.  Agreement  (confidential
     portions  of  exhibit  have  been   omitted   pursuant  to  a  request  for
     confidential treatment and filed separately with the Commission).  Filed as
     exhibit 10.1 to Form 10-QSB dated June 30, 1997, and incorporated herein by
     reference.
10.9 License    Agreement   between   Glyko   Biomedical   Ltd.   and   BioMarin
     Pharmaceutical,  Inc.  (filed as exhibit 10 to Form 10-QSB dated  September
     30, 1997, and incorporated herein by refernce).
22.1 Notice of Annual Meeting of Shareholders, 1997 Annual Information Circular,
     Form of Proxy and Policy 41 Form.  Filed as Definitive 14A documents on May
     18, 1998, and incorporated herein by reference.
22.2 Notice of Special Meeting of Shareholders, 1998 Annual Information Circular
     and Form of Proxy.  Filed as Definitive  14A documents on February 4, 1999,
     and incorporated herein by reference.
27.1 Financial  Data Schedule (see Financial  Data Schedule  hereto  attached at
     page34).

<PAGE>


                                   SIGNATURES

Pursuant to the  requirements  of Section 13 or 15(d) of the  Exchange  Act, the
registrant  caused  this  Report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                           GLYKO BIOMEDICAL LTD.
Dated: March 30, 2000                 By:  \s\ John C. Klock, M.D.
---------------------------------    -----------------------------------
                                           John C. Klock, M.D.
                                           President , Chief Accounting Officer,
                                           Director and Chief Executive Officer

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature  appears below
constitutes and appoints John C. Klock, his attorney-in-fact,  with the power of
substitution,  for him in any and all capacities,  to sign any amendments to the
Report on Form  10-KSB and to file the same,  with  exhibits  thereto  and other
documents in connection therewith,  with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in  fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.


            Signature                  Title                            Date

\s\ John C. Klock, M.D.                                          March 30, 2000
-------------------------                                    -------------------
John C. Klock, M.D.        President, Chief Executive Officer, Director
                           and Chief Accounting Officer

\s\ R. William Anderson                                          March 30, 2000
--------------------------                                   -------------------
R. William Anderson         Director

\s\ John S. Craig                                                March 30, 2000
--------------------------                                   -------------------
John H. Craig               Secretary and Director

\s\ John S. Glass                                                March 30, 2000
---------------------------                                  -------------------
John S. Glass               Director

\s\ Gwynn R. Williams                                            March 30, 2000
---------------------------                                  -------------------
Gwynn R. Williams           Director

\s\ Mark I. Young                                                 March 30, 2000
---------------------------                                  -------------------
Mark I Young                Assistant Secretary and Director


<PAGE>




                          Index to Financial Statements


Glyko Biomedical Ltd.'s Consolidated Financial Statements
  Report of Independent Public Accountants                              33
  Consolidated Balance Sheets                                           34
  Consolidated Statements of Operations                                 35
  Consolidated Statements of Stockholders' Equity                       36
  Consolidated Statements of Cash                                       37
  Notes to Consolidated Financial Statements                            38
BioMarin Pharmaceutical, Inc.'s Consolidated Financial Statements
  Report of Independent Public Accountants                              43
  Consolidated Balance Sheets                                           44
  Consolidated Statements of Operations                                 45
  Consolidated Statements of Stockholders' Equity                       46-48
  Consolidated Statements of Cash                                       49
  Notes to Consolidated Financial Statements                            50


<PAGE>






                    Report of Independent Public Accountants



To the Stockholders of Glyko Biomedical Ltd.:



We have audited the accompanying consolidated balance sheets of Glyko Biomedical
Ltd.  and  subsidiaries  (the  Company) as of December 31, 1999 and 1998 and the
related  consolidated  statements of operations,  stockholders' equity (deficit)
and cash flows for the years then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Glyko  Biomedical  Ltd. and
subsidiaries  as of  December  31,  1999  and  1998,  and the  results  of their
operations  and their cash flows for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States.


                                       /s/ ARTHUR ANDERSEN LLP

San Francisco, California,
February 18, 2000
<PAGE>

                              Glyko Biomedical Ltd.
          Consolidated Balance Sheets as of December 31, 1999 and 1998
                                (In U.S. dollars)

                                                        December 31,
                                             --------------------------------
                                                    1999           1998
                                             --------------------------------
Assets
Current assets:
    Cash and cash equivalents                     $    574,648     $   2,567,824
    Note receivable                                        --            100,000
                                                  -----------      -------------
        Total current assets                           574,648         2,667,824


Investment in BioMarin Pharmaceutical Inc.          28,908,447         7,674,729
                                                  ------------     -------------
         Total assets                             $ 29,483,095     $  10,342,553
                                                  =============    =============

Liabilities and Stockholders' Equity
Current liabilities:
      Accrued liabilities                         $    365,569     $     411,109
                                                  -------------    -------------
         Total current liabilities                     365,569           411,109

Stockholders' equity:
 Common stock, no par value, unlimited
 sharesauthorized, 31,835,322 and
 28,020,234 shares issued and outstanding
 at December 31, 1999 and December 31,
 1998, respectively                                  20,772,469      17,963,167
    Additional paid in capital                       38,064,481      11,222,691
    Common stock warrants and options                   146,472         547,285
    Note receivable from stockholder                   (746,637)       (721,971)
    Accumulated deficit                             (29,119,259)    (19,079,728)
                                                  --------------   -------------
      Total stockholders' equity                     29,117,526       9,931,444

                                                  --------------   -------------
      Total liabilities and stockholders' equity   $ 29,483,095    $ 10,342,553
                                                  ==============   =============


 The accompanying financial statements are an integral part of these statements.
<PAGE>



                              Glyko Biomedical Ltd.
            Consolidated Statements of Operations for the Years Ended
                           December 31, 1999 and 1998
                                (In U.S. dollars)



                                                               December 31,
                                                   -----------------------------
                                                         1999            1998
                                                   -----------------------------
Revenues:
     Sales of products                              $      -        $   750,145
     Sales of services                                     -            115,019
     Other revenues                                        -            294,752
                                                   -----------------------------
     Total revenues:
                                                           -          1,159,916

Expenses:

    Cost of products                                       -            231,423
    Cost of services                                       -             53,437
    Research and development                               -            679,783
    Selling, general and administrative               199,302           690,650
    Other                                                  -           (165,880)
                                                   -----------------------------
    Total expenses:                                   199,302         1,489,713

                                                   -----------------------------

Loss from operations                                    (199,302)      (329,797)
Equity in loss of BioMarin Pharmaceutical Inc.        (9,999,581)    (3,803,058)
Interest income                                           159,352        42,822
                                                   -----------------------------
Net loss                                            $(10,039,531)   $(4,090,033)
                                                   =============================
Net loss per common share, basic and diluted        $      (0.32)   $     (0.17)
                                                   =============================

Weighted average number of shares
    used in computing per share amounts               31,065,575     23,873,798
                                                   =============================


 The accompanying financial statements are an integral part of these statements.
<PAGE>
<TABLE>

                              Glyko Biomedical Ltd.
 Consolidated Statement of Stockholders' Equity for the Year Ended December 31, 1999
                                (In U.S. dollars)


                                                                                            Note
                                             Common Stock                          Common   Receivable                   Total
                                     ---------------------------     Additional    Stock    From          Accumulated  Stockholders'
                                          Shares      Amount      Paid In Capital Warrants  Stockholder     Deficit      Equity
                                     --------------------------- ---------------- --------  -----------  ------------- -------------

<S>                                     <C>          <C>            <C>           <C>       <C>          <C>           <C>
Balance at December 31, 1998            28,020,234   $17,963,167    $11,222,691   $547,285  $(721,971)   $(19,079,728) $  9,931,444

Net loss for the year                          -             -              -           -        -        (10,039,531)  (10,039,531)


Exercise of stock options                  280,560       161,633            -           -        -                 -         161,633


Exercise of stock warrants               3,534,528     2,647,669            -     (397,879)      -                 -       2,249,790


Reclassification of interest on note           -              -          27,600               (27,600)                            -
    receivable from stockholder

Additional paid in capital from
     the sale of common stock by
    BioMarin Pharmaceutical, Inc.              -              -      26,814,190                                           26,814,190

                                     -------------     -----------  -----------   --------   ----------  ------------    -----------
Balance at December 31, 1999            31,835,322     $20,772,469  $38,064,481   $149,406   $(749,571)  $(29,119,259)   $29,117,526
                                     =============     ===========  ===========   ========   ==========  =============   ===========

                            The accompanying financial statements are an integral part of these statements.
</TABLE>

<PAGE>
<TABLE>

                              Glyko Biomedical Ltd.
 Consolidated Statements of Cash Flows for the Years Ended December 31, 1999 and 1998
                                (In U.S. dollars)


                                                                                December 31,
                                                                    -------------------------------------
                                                                           1999              1998
                                                                    -------------------------------------
<S>                                                                   <C>                 <C>
Cash flows from operating activities:
       Net loss                                                       $ (10,039,531)      $(4,090,033)

Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:

      Depreciation and amortization                                             -                  -
      Equity in the loss of BioMarin Pharmaceutical Inc.                  9,999,581         3,803,058
      Amortization of deferred compensation                                     -              33,364
      Change in assets and liabilities:
            Other assets                                                        -              (9,710)
            Accrued liabilities                                              15,461            27,556
                                                                    -------------------------------------
           Total adjustments                                             10,015,042         3,854,268
                                                                    -------------------------------------
           Net cash used in operating activities                            (24,489)         (235,765)

Cash flows from investing activities:
      Investment in BioMarin Pharmaceutical Inc.                         (4,419,110)       (1,000,002)
      Deconsolidation of Glyko, Inc. assets                                     -            (267,347)
      Settlements of amounts due from Glyko, Inc.                               -           1,212,278
                                                                    -------------------------------------
              Net cash used in investing activities                      (4,419,110)          (55,071)

Cash flows from financing activities:

      Notes receivable issued for the exercise of stock options                 -            (100,000)
      Net proceeds from the issuance of common stock
              pursuant to a technology and license agreement                    -              70,740
      Proceeds from the exercise of stock options and
             common stock warrants                                        2,350,423         2,359,640
      Repayment of note receivable                                          100,000                -
                                                                    -------------------------------------
             Net cash provided by financing activities                    2,450,423         2,330,380
                                                                    -------------------------------------
Net increase (decrease) in cash                                          (1,993,176)        2,039,544

Cash and cash equivalents, beginning of period                            2,567,824           528,280
                                                                    -------------------------------------
                                                                     $      574,648        $2,567,824
Cash and cash equivalents, end of period
                                                                    =====================================


Supplemental disclosure of non-cash financing activities:
       Note receivable issued for the exercise of stock options      $          -          $  712,261



                               The accompanying financial statements are an integral part of these statements.
</TABLE>


<PAGE>

                              GLYKO BIOMEDICAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.      The Company and Description of the Business

Glyko  Biomedical  Ltd.  (the  Company or GBL) is a Canadian  company  which was
established  in 1992 to acquire all of the  outstanding  capital stock of Glyko,
Inc., a Delaware corporation.  The Company was incorporated for the sole purpose
of acquiring  Glyko,  Inc. Both entities were under common control and the share
exchange was accounted for in a manner similar to a pooling. Since its inception
in October  1990,  Glyko,  Inc. has engaged in research and  development  of new
techniques to analyze and manipulate carbohydrates for research,  diagnostic and
pharmaceutical   purposes.   Glyko,  Inc.  has  developed  a  line  of  analytic
instrumentation  laboratory  products that include an imaging  system,  analysis
software and chemical analysis kits.

In October 1996, GBL formed BioMarin Pharmaceutical Inc. (BioMarin),  a Delaware
corporation in the development  stage,  to develop the Company's  pharmaceutical
products. BioMarin began business on March 21, 1997 (inception) and subsequently
issued  1.5  million  shares  of  common  stock  to GBL  for  $1.5  million.  As
consideration for a certain license  agreement dated June 1997,  BioMarin issued
GBL 7 million  shares of  BioMarin  common  stock.  Beginning  in October  1997,
BioMarin raised capital from third parties. As of December 31, 1997, the Company
began  recording its share of BioMarin's net loss utilizing the equity method of
accounting.  On June 30,  1998,  BioMarin  raised net  proceeds of $3.3  million
(598,535 shares) including a $1.0 million investment from GBL. On August 3, 1998
BioMarin raised an additional  $8.1 million from third parties.  On September 4,
1998, BioMarin received $8 million from Genzyme Corp. ("Genzyme") upon execution
of a joint venture agreement in which BioMarin issued 1,333,333 shares of common
stock to Genzyme.  BioMarin  has a 50 percent  interest in the income or loss of
the joint venture, BioMarin/Genzyme, LLC.

On October 7, 1998, GBL sold to BioMarin 100 percent of the outstanding  capital
stock of Glyko,  Inc. in exchange  for  2,259,039  shares of  BioMarin's  common
stock.  In addition,  BioMarin agreed to assume  options,  previously  issued to
employees of Glyko, Inc., to purchase up to 585,969 shares of GBL's common stock
(exercisable  into 255,540  shares of BioMarin  common  stock) and BioMarin paid
$500 in cash.

While GBL was not  obligated to provide  this  capital,  on April 13, 1999,  the
Company entered into a convertible  note arrangement with BioMarin in the amount
of $4.3 million, as part of a $26 million convertible note financing.

BioMarin  completed its initial  public  offering (IPO) of 4.5 million shares of
common  stock  at $13 per  share on July  23,  1999,  raising  net  proceeds  of
approximately  $51.8 million.  In a private  placement  concurrent with the IPO,
Genzyme  invested in BioMarin  $10 million at the IPO price  (769,230  shares of
common  stock).  In  addition,  the $26  million  of  convertible  notes sold by
BioMarin on April 13, 1999, plus accrued interest, were converted into 2,672,020
shares of common  stock at $10 per share.  GBL's $4.3 million  convertible  note
from  BioMarin  plus accrued  interest  were  converted  into  441,911  share of
BioMarin common stock. The exercise of the underwriters'  over-allotment  option
in August 1999 raised  additional  net proceeds of $8.1 million at the IPO price
(675,000  shares of common stock).  As a result of the IPO,  concurrent with the
conversion  of the note from GBL,  GBL's  ownership  of  BioMarin's  outstanding
common stock on December 31, 1999, was 32.6 percent.

Since its inception,  GBL has incurred a cumulative deficit of $29.1 million and
the Company  expects to continue to incur losses during 2000 due to its share of
BioMarin's  net loss  resulting  from the ongoing  research and  development  of
BioMarin's  pharmaceutical  product  candidates.  As a result  of GBL's  sale of
Glyko,  Inc. on October 7, 1998,  GBL has limited  operating  activities and its
principal  asset is its  investment in BioMarin.  Accordingly,  without  further
investment in other companies or technologies,  management believes that GBL has
sufficient cash to sustain planned operations for the foreseeable future.  While
BioMarin has an accumulated deficit of $43.2 million at December 31, 1999 and is
expected  to incur  significant  losses  during 2000 and into 2001 at a minimum,
management  of GBL does not believe  that there has been any  impairment  of its
investment in BioMarin.



2.      Summary of Significant Accounting Policies

The accompanying  consolidated  financial  statements and related footnotes have
been prepared in conformity with U.S. generally accepted  accounting  principles
using U.S. dollars.  The consolidated  financial statements include the accounts
and operations of the Company and Glyko, Inc for the period from January 1, 1998
through  October 7, 1998,  the date of the sale of Glyko,  Inc.  The  results of
operations of BioMarin have been reported in the Company's financial  statements
for the years ended  December 31, 1999 and 1998,  based on the equity  method of
accounting.  Subsequent to October 7, 1998,  the results of operations of Glyko,
Inc. have been consolidated into the results of operations of BioMarin.

All significant  intercompany  accounts and  transactions  have been eliminated.
Certain  balances in the prior years have been  reclassified to conform with the
current year presentation.

Use of Estimates:

The preparation of the Company's consolidated financial statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
certain estimates and assumptions that effect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the dates
of the  consolidated  financial  statements and the reported amounts of revenues
and expenses  during the  reporting  periods.  Actual  results could differ from
those estimates.

Cash and Cash Equivalents:

Cash and cash  equivalents  consist  of amounts  held with banks and  short-term
investments with original maturities of 90 days or less.


Sale of Glyko, Inc. and Investment in BioMarin Pharmaceutical Inc.

BioMarin  acquired  Glyko,  Inc. from GBL through the exchange of BioMarin stock
for Glyko,  Inc.  stock and  accounted for the  acquisition  based upon the fair
market  value of the  BioMarin  stock  issued.  In  consolidating  Glyko,  Inc.,
BioMarin recorded intangible assets,  including goodwill, to the extent that the
fair market  value of the stock  issued  exceeded  the fair market  value of the
tangible  assets  of  Glyko,  Inc.  acquired.  However,  as  GBL  exchanged  one
investment  for  another,  it  recorded  the stock of  BioMarin  received at the
historical  cost basis of its  investment  in Glyko,  Inc.  GBL accounts for its
investment in BioMarin using the equity method of accounting. However, as it has
not recorded its investment in BioMarin at fair market value, it does not record
its  share of the  losses  recorded  by  BioMarin  related  to the  write off or
amortization of intangible assets recorded on acquisition of Glyko, Inc.

During the period from October 7, 1998, the date of acquisition of Glyko,  Inc.,
to December 31, 1998,  BioMarin  recorded a charge to operations of $2.6 million
in  connection  with the  write-off  of  in-process  technology  acquired in the
purchase of Glyko,  Inc. For the period October 7, 1998 to December 31, 1998 and
for the year ended  December 31, 1999,  BioMarin  recoded a charge to operations
for the  amortization  of goodwill and other  intangible  assets of $271,274 and
$1.1 million,  respectively.  In recording its share of BioMarin's loss for this
period,  GBL  reduced  this loss for its share of the  write-off  of  in-process
technology and the amortization of goodwill and other intangible assets.

In  addition,  to the extent  that the  issuance  of stock by  BioMarin to third
parties results in an increase in or decrease in the Company's  ownership of the
net assets of  BioMarin,  the  Company  reflects  this  increase  or decrease as
paid-in  capital as reflected in the  consolidated  statements of  stockholders'
equity and an  increase  or  decrease in its  investment  in  BioMarin.

Foreign Exchange:

As all of the Company's operations were located in the United States, the
Company  has  adopted  the  U.S.  dollar  as its  functional  currency.  In
accordance  with  Statement of Financial  Accounting  Standard No. 52,  "Foreign
Currency Translation",  assets and liabilities  denominated in foreign currency,
except for intercompany  accounts that are considered  permanent in nature,  are
translated  into U.S.  dollars at the current rate of exchange  existing at year
end and revenues and expenses are  translated  at the average  monthly  exchange
rates.  Transaction gains and losses included in the consolidated  statements of
operations are not material.

Net Loss per Share:

Potentially dilutive securities outstanding at December 31, 1999 and 1998,
respectively, include options for the purchase of 291,000  and 548,290  shares
of common  stock and  warrants  for the purchase of 2.2 million and 5.8 million
shares of common stock. These securities were not considered in the  computation
of dilutive loss per share because their effect would be  anti-dilutive  for the
years ended  December 31, 1999 and 1998.

New  Accounting  Standards

During the year ended  December  31,  1999,  the Company  adopted  SFAS No. 131,
"Disclosures  about  Segments of an  Enterprise  and Related  Information".  The
Company concluded that it has only one operating segment. In June 1998, the FASB
issued  SFAS  No. 133,   "Accounting  for  Derivative  Instruments  and  Hedging
Activities."  SFAS No. 133,  which is effective for fiscal years beginning after
June  15,  1999 is not  expected  to have a  material  impact  on the  Company's
financial position or results of operations.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB
101 provides guidance on applying  generally accepted  accounting  principles to
revenue recognition issues in financial  statements.  The Company will adopt SAB
101 as required in the first  quarter of 2000 and such  adoption is not expected
to have a material  effect on the Company's  results of operations and financial
position

4. Income Taxes

In connection with the sale of Glyko, Inc., the U.S. federal and
state net tax operating loss carryforwards and the related valuation  allowances
were  consolidated  into the financial  statements of BioMarin.  At December 31,
1999, the Company has net operating loss  carryforwards  for Canadian income tax
purposes of approximately $1.5 million,  which expire beginning in 2000.

5. Note Receivable

As part of its compensation for certain services,  GBL issued stock options to a
consulting  group.  GBL loaned $100,000 to the consulting  group in anticipation
that the Toronto Stock Exchange  would approve the stock options.  The excess of
the fair market  value of the GBL stock at December  31, 1998 over the  exercise
price of the options significantly  exceeded the amount of the loan. The options
were held as  security  for the loan.  This note was repaid in full in 1999.  In
November  1998,  GBL loaned  $712,261  to an officer of the  Company to exercise
expiring stock options.  The loan is secured by the stock and is a full recourse
note 6.  Stockholders'  Equity On March 21, 1997,  the Company closed a Cdn.$2.0
million (USD$1.4 million) financing (the Q197 Financing) to fund the start-up of
BioMarin   Pharmaceutical  Inc.  which  was  formed  to  develop  the  Company's
pharmaceutical  products. As a result of this financing,  the Company issued 4.0
million  units at Cdn.$0.50 per unit,  each unit  consisting of one common share
and one common share  purchase  warrant.  Each warrant can be exercised  for one
share of common stock at  Cdn.$1.00  per share,  expiring on March 21, 1999.  An
additional  280,000 units and 280,000 warrants valued at approximately  $161,000
were distributed to the brokers in exchange for services  rendered in connection
with the Q197 Financing.  The Company utilized the Black-Scholes  model to value
all the warrants  issued in the Q197 Financing at  approximately  $496,000.  The
Company used the proceeds of the  offering and  additional  cash to purchase 1.5
million common shares of BioMarin for $1.5 million.

BioMarin and the Company have  entered into a License  Agreement  dated June 26,
1997,  pursuant to which the Company granted  BioMarin an exclusive,  worldwide,
perpetual, irrevocable, royalty-free right and license to all current and future
worldwide patents, trade secrets, copyrights and other proprietary rights to all
know-how,  processes,  formulae,  concepts,  data and  other  such  intellectual
property,  whether  patented  or not,  owned or  licensed by the Company and its
subsidiaries as of the date of the License Agreement.  As consideration for this
license,  BioMarin issued the Company 7 million shares of BioMarin common stock.
Under the same License Agreement,  BioMarin granted the Company a cross-license,
similar  in scope,  to all  improvements  BioMarin  may make  upon the  licensed
intellectual property.

On October 7, 1998, GBL sold to BioMarin 100 percent of the outstanding  capital
stock of Glyko, Inc. in exchange for 2,259,039 shares of BioMarin's common stock
plus BioMarin agreed to assume options, previously issued to employees of Glyko,
Inc., to purchase up to 585,969 shares of GBL's common stock  (exercisable  into
255,540 shares of BioMarin  common stock) and BioMarin paid $500 in cash.  While
GBL is not  obligated to provide this  capital,  on April 13, 1999,  the Company
entered into a convertible  note arrangement with BioMarin in the amount of $4.3
million, as part of a $26 million convertible note financing. BioMarin completed
its initial  public  offering (IPO) of 4.5 million shares of common stock at $13
per share on July 23, 1999, raising net proceeds of approximately $51.8 million.
In a private placement concurrent with the IPO, Genzyme invested in BioMarin $10
million at the IPO price (769,230 shares of common stock). In addition,  the $26
million of  convertible  notes sold by BioMarin on April 13, 1999,  plus accrued
interest, were converted into 2,672,020 shares of common stock at $10 per share.
GBL's $4.3 million  convertible  note from BioMarin  plus accrued  interest were
converted  into 441,911  shares of BioMarin  common  stock.  The exercise of the
underwriters'  over-allotment  option  in  August  1999  raised  additional  net
proceeds of $8.1 million at the IPO price (675,000 shares of common stock). As a
result of the IPO,  concurrent  with the conversion of the note from GBL , GBL's
ownership of BioMarin's  outstanding common stock on December 31, 1999, was 32.6
percent.

The exercise of BioMarin options or warrants will result in a further  reduction
of GBL's  ownership  percentage and future  fundraising  efforts of BioMarin may
result in a similar reduction of GBL's ownership percentage.  To the extent that
the issuance of common  stock by BioMarin to third  parties at a per share price
greater than or less than the per share  carrying  value of GBL's  investment in
BioMarin,  the  resulting  gain or loss is reflected as an increase or decrease,
respectively,  in additional paid in capital in the consolidated  balance sheet.
At  December  31,  1999 and  1998,  the  Company  recorded  an  increase  to its
additional paid in capital by $26.8 million and $7.2 million, respectively, as a
result of the sale of common stock by BioMarin.

7. Stock Option Plan

The Company has a stock  option plan (the Plan) under which  options to purchase
common stock may be granted by the Board of Directors  to  directors,  officers,
consultants  and key  employees  at not less than fair  market  value,  less any
permissible discounts,  on the date of grant. Options granted under the Plan may
be incentive  stock options (as defined  under Section 422 of the U.S.  Internal
Revenue Code) or  non-statutory  stock options.  Options are exercisable  over a
number of years specified 1999 1998 at the time of the grant which cannot exceed
ten years. The maximum  aggregate number of shares which may be granted and sold
under the Plan is 3 million shares.

The  Company  accounts  for the Plan under APB  Opinion  No. 25,  under which no
compensation   cost  has  been   recognized,   except  for  options  granted  to
consultants,  because,  under the Option Plan, the option  exercise price equals
the market  value of stock on the date of grant.  In general,  the Plan  options
vest  over 48  months  and all  options  expire  after 5 years or 90 days  after
employee termination.

Had  compensation  cost  for the  Plan  been  determined  consistent  with  FASB
Statement  No. 123,  the  Company's  net loss would have been  increased  to the
following pro forma amounts:

                                             1999                 1998
                                         ------------          ------------
Net loss             As reported         $(10,039,531)         $(4,090,033)
                     Pro forma           $(10,324,435)         $(4,283,405)
Net loss per         As reported         $      (0.32)         $     (0.17)
                     Pro forma           $      (0.33)         $     (0.18)


Because the Statement  123 method of accounting  has not been applied to options
granted prior to January 1, 1995, the resulting pro forma  compensation cost may
not be representative of that to be expected in future years.

A summary of the status of the Company  stock  option plan at December  31, 1999
and 1998 and changes  during the years then ended is  presented in the table and
narrative below:

<TABLE>

                                                        1999                              1998
                                                Shares         Wtd avg ex         Shares        Wtd avg ex
                                                                price (1)                        price (1)
                                            ---------------- ---------------- ---------------- --------------
           <S>                                 <C>              <C>             <C>             <C>
           Outstanding beginning
              of year                               548,290     Cdn.$0.85           2,424,402   Cdn. $1.22
           Granted                                   24,000     Cdn.$6.00             314,550   Cdn. $2.40
           Exercised                              (280,560)     Cdn.$1.14         (1,467,516)   Cdn. $1.52
           Assumed (2)                                   --        --               (585,969)   Cdn. $1.51
           Canceled                                   (730)     Cdn.$1.14           (137,177)   Cdn. $1.38
                                            ----------------                  ----------------
           Outstanding at end of
               year                                 291,000     Cdn.$1.24             548,290   Cdn. $0.85
                                            ----------------                  ----------------
           Exercisable at end of year               291,000                           548,290
           Weighted average fair
               value of options granted           Cdn.$2.24                         Cdn $1.29

           (1) The US$ equivalent of Canadian $1.00 at December 31, 1999 was approximately $0.689026.

           (2) In connection with the sale of Glyko, Inc. to BioMarin, effective October 7, 1998, BioMarin agreed to assume 585,969
               options to purchase common stock of GBL (exercisable into 255,540 shares of common stock of BioMarin.

</TABLE>
<PAGE>


There are 2,089,126  options  available for grant under the plan at December 31,
1999.  The average  remaining  contractual  life of the options  outstanding  at
December 31, 1999 is 1 year.

The fair value of each option  granted is  estimated  on the date of grant using
the  Black-Scholes  option  pricing  model with the  following  weighted-average
assumptions used for grants in 1999 and 1998,  respectively:  risk-free weighted
average interest rates of 4.6 and 5.4 percent;  expected  dividend yield of zero
percent; expected life of 4 years for the Plans' options; expected volatility of
26 and 65 percent.

8.     Related Party Transactions

Prior to the sale of Glyko,  Inc. to BioMarin,  the Company subleased office and
lab space to, and performed certain  administrative and research and development
functions for BioMarin.  BioMarin  reimbursed the Company for rent, salaries and
related  benefits  and other  administrative  costs and the  Company  reimbursed
BioMarin for salaries and related  benefits.  BioMarin  reimbursed the Company a
net $0 in 1999 and a net $183,000 in 1998. The Company also provided  analytical
services  and  products to BioMarin at changing  discounts,  which  approximated
market conditions.  Total receipts to the Company from sales to BioMarin totaled
$0 in 1999 and $113,000 in 1998.

Since October 8, 1998,  GBL has agreed to pay BioMarin a monthly  management fee
for its services to GBL primarily  relating to management,  accounting,  finance
and government reporting. GBL had accrued payables to BioMarin relating to these
services of $27,152 and $37,500 for the years ended  December 31, 1998 and 1999,
respectively.

<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of
BioMarin Pharmaceutical Inc.:

We have  audited  the  accompanying  consolidated  balance  sheets  of  BioMarin
Pharmaceutical  Inc.  (a  Delaware  corporation  in the  development  stage) and
subsidiaries  as  of  December  31,  1997,   1998,  and  1999  and  the  related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the period from March 21, 1997  (inception)  to December 31, 1997, the
years  ended  December  31,  1998 and 1999 and the period  from  March 21,  1997
(inception) to December 31, 1999. These  consolidated  financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
BioMarin Pharmaceutical Inc. and subsidiaries as of December 31, 1997, 1998, and
1999 and the  results of its  operations  and its cash flows for the period from
March 21, 1997  (inception)  to December 31, 1997,  the years ended December 31,
1998 and 1999 and the period from March 21,  1997  (inception)  to December  31,
1999, in conformity with accounting  principles generally accepted in the United
States.

                                            /s/ ARTHUR ANDERSEN LLP


San Francisco, California,
February 18, 2000


<PAGE>

<TABLE>


                                             BioMarin Pharmaceutical Inc. and Subsidiaries
                                                     (a development-stage company)

                                     Consolidated Balance Sheets as of December 31, 1998 and 1999

                                          (In thousands, except for share and per share data)

                                                                    -----------------------------------
                                                                    -----------------------------------
                                                                         1998                1999
                                                                    ----------------    ---------------
<S>                                                                 ----------------    ---------------
Assets                                                                      <C>               <C>
Curret assets:
      Cash and cash equivalents                                             $ 9,413           $ 23,413
      Short-term investments                                                  1,976             39,573
      Accounts receivable, net                                                  148              1,047
      Due from Glyko Biomedical Ltd.                                            114                139
      Due from BioMarin/Genzyme LLC                                             419              1,280
      Inventories                                                                72                676
      Prepaid expenses                                                          677                294
                                                                    ----------------    ---------------
            Total current assets                                             12,819             66,422
Property and equipment, net                                                   6,223             25,093
Goodwill and other intangible assets                                         11,704             11,462
Investment inBioMarin/Genzyme LLC                                               685                421
Deposits                                                                         79                151
                                                                    ----------------    ---------------
            Total assets                                                   $ 31,510          $ 103,549
                                                                    ================    ===============

Liabilities and Stockholders' Equity
Current liabilities:
      Accounts payable                                                      $ 1,341            $ 3,095
      Accrued liabilities                                                       640              1,966
      Notes payable short-term                                                   24                 26
                                                                    ----------------    ---------------
             Total current liabilities                                        2,005              5,087
Long-term liabilities:
      Long term portion of notes                                                111                 85
                                                                    ----------------    ---------------
             Total liabilities                                                2,116              5,172
                                                                    ----------------    ---------------
Stockholders' equity:
      Common stock, $0.001 par value: 75,000,000 shares
         authorized,  26,176,180 and 34,832,578
         shares issued and outstanding at December 31,
         1998 and 1999, respectively                                             26                 35
      Additional paid-in capital                                             50,058            146,592
      Warrants                                                                  128                128
      Deferred compensation                                                  (3,253)            (2,591)
      Notes receivable from stockholders                                     (2,488)            (2,638)
      Deficit accumulated during the development stage                      (15,077)           (43,149)
                                                                    ----------------    ---------------
              Total stockholders' equity                                     29,394             98,377

                                                                    ----------------    ---------------
             Total liabilities and stockholders' equity                    $ 31,510          $ 103,549
                                                                    ================    ===============

                                         The  accompanying  notes are an integral part of these statements.

</TABLE>
<PAGE>
<TABLE>
                                             BioMarin Pharmaceutical Inc. and Subsidiaries
                                                     (a development-stage company)

                                            Consolidated Statements of Operations for
                                  the Period from March 21, 1997 (inception) to December 31,
                                        1997, the Years Ended December 31, 1998 and 1999
                                and for the Period from March 21, 1997 (inception) to December 31, 1999

                                               (In thousands, except for per share data)



                                                             Period from                                               Period from
                                                            March 21, 1997                                            March 21, 1997
                                                            (inception) to                                           (inception) to
                                                             December 31,               Year Ended December 31,        December 31,
                                                                1997               1998               1999                   1999
<S>                                                          -------------    -------------      -------------         -------------
Revenues                                                     <C>              <C>                <C>                   <C>
     Product sales                                           $          -    $         138      $       1,401         $       1,539
     Service revenue                                                    -              112                 85                   197
     BioMarin/Genzyme LLC                                               -              837              5,300                 6,137
     Other revenues                                                     -              103                190                   293
                                                             -------------    -------------      -------------         -------------
           Total revenues                                               -            1,190              6,976                 8,166

Operating costs and expenses:
     Cost of products                                                   -               49                362                   411
     Cost of services                                                   -               59                102                   161
     Research and development                                       1,914           10,502             27,206                39,622
     Selling, general and administrative                              914            3,532              6,805                11,251
                                                             -------------    -------------      -------------         -------------
           Total operating costs and expenses                       2,828           14,142             34,475                51,445
                                                             -------------    -------------      -------------         -------------
           Loss from operations                                    (2,828)         (12,952)           (27,499)              (43,279)

Interest income                                                        65              685              1,832                 2,582
Interest expense                                                        -                -               (732)                 (732)
Equity in loss of BioMarin/Genzyme LLC                                  -              (47)            (1,673)               (1,720)
                                                             -------------    -------------      -------------         -------------
           Net loss                                              $ (2,763)       $ (12,314)         $ (28,072)            $ (43,149)
                                                             =============    =============      =============         =============
Net loss per share, basic and diluted                             $ (0.34)         $ (0.55)           $ (0.94)              $ (2.04)
                                                             =============    =============      =============         =============
Weighted average common shares
     outstanding                                                    8,136           22,488             29,944                21,163
                                                             =============    =============      =============         =============


                                    The accompanying notes are an integral part of these statements.
</TABLE>


<PAGE>

<TABLE>

                                             BioMarin Pharmaceutical Inc. and Subsidiaries

                                                     (a development stage company)

                                        Consolidated  Statements of Changes in Stockholders'
                                Equity  for the  Period  from March 21,  1997  (inception)  to
                             December 31, 1997,  and for the Years ended  December 31, 1998 and 1999

                                                 (In thousands, except per share data)



                                                                                                            Deficit
                                                   Additional                                  Notes      Accumulated
                                   Common Stock     Paid-in      Warrants                    Receivable    During        Total
                                  --------------    Capital   ---------------   Deferred       from       Development  Stockholders'
                                 Shares    Amount    Shares   Shares  Amount  Compensation   Stockholders   Stage        Equity
                                 -------  -------  --------  -------  ------- -----------   -------------  ----------  ------------
<S>                              <C>      <C>       <C>      <C>      <C>      <C>            <C>            <C>        <C>
Balance, March 21, 1997....           --  $    --   $    --       --  $   --   $     --       $     --       $    --    $       --

Issuance of common stock to
Glyko Biomedical, Ltd.
on March 21, 1997, for cash,
$1.00 per share..............      1,500        1      1,499      --      --         --             --             --         1,500

Issuance of common stocktock
Glyko Biomedical, Ltd. in
June 1997 in exchange for
technology, $1.00 per share ..     7,000        7        (7)       --      --        --             --             --           --

Issuance of common stock to
Glyko  Issuance of common stock
in October 1997, $1.00 per share
(net of issuance costs of
$439,720, including the issu-
ance of 299,000 shares of common
stock, $1.00 per share and warrants
to purchase an additional 299,000
share of common stock for
brokerage services...............   4,039        4     3,595       299      48      --              --              --         3,647

Issuance of common stock to
employees in exchange for
notes in October 1997, $1.00
per share........................   2,500        3     2,497        --      --    (200)          (2,300)             --           --

Issuance of common stock and
warrants on December 31, 1997,
$1.00 per share (net of issuance
costs of $592,309, including the
issuance of 502,500 shares of common
stock, $1.00 per share, and
warrants to purchase an additional
502,500 shares of common stock
for brokerage services)...........  5,528       6     4,930       503      80       --             --               --        5,016

Common stock options granted in
exchange for services.............     --      --        35        --      --      (17)            --               --           18

Interest on notes receivable......     --      --        --        --      --       --            (38)              --         (38)

Net loss for the period from
March 21, 1997(inception), to
December 31, 1997.................     --      --        --        --      --       --             --            (2,763)    (2,763)

Balance, December  31, 1997.......  20,567    $ 21  $ 12,549       802   $ 128   $ (217)       $(2,338)          $(2,763)   $(7,380)
                                   =======    ====  ========    ======   ======  =======       ========          ========   ========

                                   The  accompanying  notes are an integral part of these statements.
</TABLE>


<PAGE>

<TABLE>
                                             BioMarin Pharmaceutical Inc. and Subsidiaries

                                                     (a development stage company)

                                           Consolidated Statements of Changes in Stockholders'
                                         Equity for the Period from March 21, 1997 (inception) to
                                   December 31, 1997, and for the Years ended December 31, 1998 and 1999

                                                 (In thousands, except per share data)



                                                                                                           Deficit
                                                   Additional                                  Notes      Accumulated
                                   Common Stock     Paid-in      Warrants                    Receivable    During        Total
                                  --------------    Capital   ---------------   Deferred       from       Development  Stockholders'
                                 Shares    Amount    Shares   Shares  Amount  Compensation   Stockholders   Stage        Equity
                                 -------  -------  --------  -------  ------- -----------   -------------  ----------  ------------
<S>                               <C>        <C>     <C>         <C>   <C>        <C>         <C>            <C>             <C>
Balance, January 1, 1998......... 20,567     $ 21    $ 12,549    802   $ 128      $ (217)     $ (2,338)      $ (2,763)       $ 7,380

Issuance of common stock on
June 30, 1998, for cash,
$6.00 per share (net of
issuance costs of $263,208,
including the issuance of
31,368 shares of common stock,
$6.00 per share, for
brokerage services)...............  599          1      3,327     --      --          --           --             --           3,328

Issuance of common  stock
on July 14, 1998, for cash,
$6.00 per share (net of
issuance costs of $387,474,
including the issuance of
64,579 shares of common stock,
$6.00 per share, for brokerage
services)......................... 1,385         1      7,924     --      --          --           --             --           7,925

Issuance  of common  stock on
August 3, 1998, for cash, $6.00
per share (net of issuance costs
of $12,318, including the issuance
of 2,053 shares of common stock,
$6.00 per share for brokerage
services).........................    31        --        176     --      --          --           --             --             176

Issuance of common stock to
Genzyme Corporation on
September 4, 1998,for cash,
$6.00 per share.................... 1,333        1      7,999     --      --          --           --             --           8,000

Issuance of common stock to Glyko
Biomedical, Ltd. for the purchase
of Glyko, Inc. on October 7, 1998,
for common shares $6.00 per share
and the assumption of options of
Glyko, Inc. employees (see Note 1)..2,259       2     14,859      --      --          --           --             --          14,861

Exercise of common stock options...     2      --          2      --      --          --           --             --               2

Interest on notes receivable.......    --      --        --       --      --          --         (150)            --           (150)

Deferred compensation on stock
options............................    --      --     3,222       --      --      (3,222)          --             --              --

Amortization of deferred
compensation.......................    --      --       --        --      --          186          --             --             186

Net loss...........................    --      --       --        --      --           --          --        (12,314)       (12,314)
                                    ------------------------------------------------------------------------------------------------
Balance, December 31, 1998......... 26,176   $ 26   $50,058      802      128    $(3,253)     $(2,488)      $(15,077)       $ 29,394



                                   The  accompanying  notes are an integral part of these statements.
</TABLE>


<PAGE>

<TABLE>
                                             BioMarin Pharmaceutical Inc. and Subsidiaries

                                                     (a development stage company)

                                      Consolidated  Statements of Changes in Stockholders'
                                  Equity  for the  Period  from March 21,  1997  (inception)  to
                           December 31, 1997,  and for the Years ended  December 31, 1998 and 1999

                                                 (In thousands, except per share data)



                                                                                                            Deficit
                                                   Additional                                  Notes      Accumulated
                                   Common Stock     Paid-in      Warrants                    Receivable    During        Total
                                  --------------    Capital   ---------------   Deferred       from       Development  Stockholders'
                                 Shares    Amount    Shares   Shares  Amount  Compensation   Stockholders   Stage        Equity
                                 -------  -------  --------  -------  ------- -----------   -------------  ----------  ------------
<S>                             <C>        <C>    <C>          <C>    <C>      <C>             <C>         <C>             <C>
Balance, January 1, 1999..      26,176     $ 26   $ 50,058     802    $ 128    $ (3,253)       $ (2,488)   $ (15,077)      $ 29,394

Issuance of common  stock on
July 23,  1999,  in an initial
public  offering (IPO) for cash
at $13.00 per share (net of
issuance costs of $6,690) .....   4,500         4    51,805      --       --          --              --            --        51,809

Issuance of common stock on
July 23, 1999 to Genzyme
Corporation in a private
placement concurrent with
the IPO for cash at $13.00
per share .....................     769        1     9,999      --        --         --              --            --        10,000

Issuance  of  common  stock
on July  23,  1999  concurrent
with the IPO upon conversion
of promissory  notes plus
accrued interest of $720,200
at $10.00 per share (net
of issuance costs of $1,150).      2,672        3    25,612      --        --        --                --            --       25,615

Issuance of common  stock on
August  3,  1999 and  August
25, 1999 from the over-allotment
exercise by underwriters at
$13.00 per share (net of issuance
costs of $633)..................     675        1     8,141      --        --        --                --            --        8,142

Exercise of common stock options...   40       --       148      --        --        --                --            --          148

Interest on notes receivable from
stockholders                          --       --       195      --        --        --              (195)           --           --

Deferred compensation related to
stock option .....................    --       --       634      --        --       (634)              --            --           --

Amortization of deferred compensation --       --        --      --        --      1,341               --            --        1,341

Net loss...........................   --       --        --      --        --        --                --       (28,072)    (28,072)
                                             ---------------------------------------------------------------------------------------
Balance, December 31, 1999....... 34,832     $ 35  $146,592     802      $ 128   $(2,546)          $(2,683)    $(43,149)    $ 98,377

                                   The  accompanying  notes are an integral part of these statements.
</TABLE>



<PAGE>

<TABLE>

                                             BioMarin Pharmaceutical Inc. and Subsidiaries
                                                     (a development-stage company)

                                                 Consolidated  Statement of Cash
                                          Flows  For  the  Period  from  March  21,  1997
                              (inception) to December 31, 1997, the Years ended  December 31, 1998 and 1999
                                and for the Period  from March 21, 1997 (inception) to December 31, 1999

                                                                (In thousands)


                                                             Period from                                               Period from
                                                            March 21, 1997                                            March 21, 1997
                                                            (inception) to                                           (inception) to
                                                             December 31,            Year Ended December 31,           December 31,
                                                                  1997              1998               1999                 1999
                                                             -------------    -------------      -------------         -------------
<S>                                                                                <C>              <C>                  <C>
Cash flows from operating activities:
      Net loss                                                   $ (2,763)         $ (12,314)       $ (28,072)           $ (43,149)
      Adjustments to reconcile net loss to net
         cash used in operating activities:
         Depreciation                                                   5                308            4,074                 4,387
         Amortization of deferred compensation                          -                185            1,341                 1,526
         Amortization of goodwill                                       -                271            1,143                 1,414
         Compensation in the form of common stock
            and common stock options                                   18                  -                -                    18
         Loss from BioMarin/Genzyme LLC                                 -                 47            6,973                 7,020
         Write-off of in-process technology                             -              2,625                -                 2,625
      Changes in operating assets and liabilities:
         Accounts receivable                                            -               (148)            (899)              (1,047)
         Due from Glyko Biomedical, Ltd.                              (79)               (34)             (25)                (138)
         Due from BioMarin/Genzyme LLC                                  -               (419)            (861)              (1,280)
         Inventories                                                    -                (72)              (5)                 (77)
         Prepaid expenses                                            (539)              (137)             383                 (293)
         Deposits                                                       -                (79)             (72)                (151)
         Accounts payable                                             168              1,172            1,754                 3,094
         Accrued liabilities                                           43                597            1,326                 1,966
         Due to Glyko, Inc.                                            61                (61)               -                     -
                                                          -------------------      -------------     ------------       ------------
            Net cash used in operating activities                  (3,086)            (8,059)         (12,940)             (24,085)
                                                          -------------------      -------------     ------------       ------------
Cash flows from investing activities:
      Purchase of property and equipment                             (150)            (6,385)         (22,944)             (29,479)
      Purchase of Biochemical Research Reagent
         Division of Oxford Glycosciences                               -                  -           (1,500)              (1,500)
      Investment in BioMarin/Genzyme LLC                                -               (732)          (6,709)              (7,441)
      Purchase of short-term investments                             (901)            (1,075)         (37,597)             (39,573)
                                                          -------------------      -------------     ------------       ------------
            Net cash used in investing activities                  (1,051)            (8,192)         (68,750)             (77,993)
                                                          -------------------      -------------     ------------       ------------
Cash flows from financing activities:
      Proceeds from note payable                                        -                134                -                   134
      Bridge loan                                                     880                  -                -                   880
      Proceeds from issuance of convertible notes
         payable                                                        -                  -           25,615                25,615
      Accrued interest on notes receivable from
         stockholders                                                 (38)              (150)               -                 (188)
      Proceeds from exercise of common
         stock options                                                  -                  -              148                   148
      Repayment of equipment loan                                       -                  -              (24)                 (24)
      Proceeds from sale of common stock, net of                                                                                   -
          issuance costs                                            9,283             19,692           69,951                98,926
                                                          -------------------      -------------     ------------        -----------
            Net cash provided by financing activities              10,125             19,676           95,690               125,491
                                                          -------------------      -------------     ------------        -----------
            Net increase equivalents                                5,988              3,425           14,000                 3,413

Cash and cash equivalents:
      Beginning of period                                               -              5,988            9,413                     -
                                                          -------------------      -------------     ------------       ------------
      End of period                                               $ 5,988            $ 9,413         $ 23,413              $ 23,413
                                                          ===================      =============     ============       ============

      The accompanying notes are an integral part of these statements.
</TABLE>


<PAGE>


                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

                   Notes to Consolidated Financial Statements

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:


Nature of Operations and Business Risks--BioMarin  Pharmaceutical Inc. (BioMarin
or the Company) is a biopharmaceutical  company  specializing in the development
of  carbohydrate  enzyme  therapies for  debilitating  life-threatening  chronic
genetic  disorders  and other  diseases and  conditions.  Since  inception,  the
Company has devoted substantially all of its efforts to research and development
activities, including preclinical studies and clinical trials, the establishment
of   laboratory   and  clinical   scale   manufacturing   facilities,   clinical
manufacturing,  and related administrative  activities.  With its acquisition of
Glyko, Inc.,  BioMarin added analytical and diagnostic  products and services in
the area of carbohydrate biology. BioMarin was incorporated on October 25, 1996,
in the state of  Delaware.  BioMarin  first  began  business  on March 21,  1997
(inception),  and issued 1.5 million shares of common stock to Glyko  Biomedical
Ltd. (GBL) for $1.5 million. Beginning in October 1997, BioMarin issued stock to
outside  investors in a series of transactions,  resulting in GBL's ownership of
BioMarin's  outstanding  common stock being  reduced to 32.6 percent at December
31, 1999.

On  September  4, 1998,  the Company  entered  into an  agreement  with  Genzyme
Corporation  (Genzyme)  to  establish  a joint  venture  (BioMarin/Genzyme  LLC)
dedicated to the development and commercialization of Aldurazyme(TM), alronidase
for   injection    (recombinant    human    (alpha)-L-iduronidase)    to   treat
mucopolysaccharidosis-I (MPS-I) (Note 8).

On October 7, 1998, the Company acquired Glyko, Inc., a wholly-owned  subsidiary
of GBL, in a transaction valued at $14.5 million.  The transaction was accounted
for as a purchase and resulted in Glyko, Inc. becoming a wholly owned subsidiary
of the  Company.  Glyko,  Inc.  provides  products  and  services  that  perform
sophisticated  carbohydrate  analysis for research  institutions  and commercial
laboratories.  As  consideration  for the  acquisition of all of the outstanding
shares of Glyko, Inc.,  BioMarin issued 2,259,039 shares of common stock to GBL,
assumed Glyko,  Inc.'s employee stock options  exercisable for 255,540 shares of
BioMarin common stock, and paid $500 in cash (see Note 11).

On April 13,  1999,  the  Company  entered  into a  convertible  note  financing
agreement  in the amount of $26  million.  Of this  amount,  GBL  invested  $4.3
million.

In May 1999, Glyko, Inc. acquired key assets of the Biochemical Research Reagent
Division of Oxford  GlycoSciences  Plc. (OGS). The acquisition  increased Glyko,
Inc.'s  product  offerings  and was valued  from $1.5  million to $2.1  million,
depending on the future sales of the acquired products.

The Company completed its initial public offering (IPO) of 4.5 million shares of
common  stock  at $13 per  share on July  23,  1999,  raising  net  proceeds  of
approximately  $51.8 million.  In a private  placement  concurrent with the IPO,
Genzyme  invested in the Company $10 million at the IPO price (769,230 shares of
common stock).  In addition,  the $26 million of  convertible  notes sold by the
Company on April 13, 1999, plus accrued interest,  were converted into 2,672,020
shares of common  stock at $10 per  share.  The  exercise  of the  underwriters'
over-allotment  option in August 1999  raised  additional  net  proceeds of $8.1
(675,000  shares of common  stock).  Through  December  31, 1999 the Company had
accumulated losses during its development stage of approximately  $43.1 million.
Based on current  plans,  management  expects to incur  further  losses at least
through  mid-year  2002.  Management  believes that the Company's  cash and cash
equivalents  and short-term  investment  balances at December  31,1999,  will be
sufficient to meet the Company's obligations through mid-year 2001.

The Company's lead product candidate,  Aldurazyme(TM), has completed its initial
clinical trials. The Company expects the BioMarin/Genzyme LLC to conduct a Phase
III  confirmatory  clinical  trial  of  Aldurazyme(TM)  beginning  approximately
mid-year  2000.  There  can be no  assurance  that the  Company's  research  and
development efforts will be successfully  completed or that its products will be
shown to be safe and effective. There can be no assurance that its products will
be approved for marketing by the


<PAGE>


                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)

U.S. Food and Drug  Administration  (FDA) or any equivalent  foreign  government
agency or that its products will be successfully  commercialized  or achieve any
significant degree of market acceptance.

BioMarin's  core   technology  is  based  on  the  biological   applications  of
carbohydrate-active  enzymes in therapeutic indications. In June 1997, rights to
certain related technology were transferred to BioMarin by GBL in exchange for 7
million  shares of BioMarin  common stock (see Note 3). Certain of the Company's
products  rely  on   proprietary   technology   and  patents  owned  by  certain
universities and other institutions and licensed to BioMarin. These universities
also provide research and development services.  Cessation of relationships with
these universities could significantly affect the Company's future operations.

In order to grow  significantly,  the Company must expand its efforts to develop
new  products in  pharmaceutical  applications.  The  Company  will also need to
establish  manufacturing  capabilities  and to  develop  marketing  capabilities
and/or  enter into  collaborative  arrangements  with third  parties  having the
capacity for such manufacturing or marketing.

BioMarin's  product   candidates  require  regulatory   approval  by  government
agencies.  This includes preclinical and clinical testing and approval processes
in the United States and other  countries.  Approvals can take several years and
can  require   substantial   expenditures.   There  can  be  no  assurance  that
difficulties  or excessive  costs will not be encountered by the Company in this
process,  which could delay or preclude the Company's marketing of its products.
There can be no  assurance  that any of  BioMarin's  current  or future  product
candidates  will be  successfully  developed,  prove to be effective in clinical
trials,  receive required regulatory approvals,  be capable of being produced in
commercial quantities at reasonable costs, gain reasonable reimbursement levels,
or be successfully marketed.

In addition, the Company is subject to a number of risks, including the need for
additional  financing,  dependence on key personnel,  small patient  population,
patent protection, significant competition from larger organizations, dependence
on corporate partners and collaborators,  and expected increased restrictions on
reimbursement, as well as other changes in the healthcare industry.

Basis of  Presentation--These  consolidated  financial  statements  include  the
accounts of BioMarin,  Glyko, Inc., a wholly-owned subsidiary of BioMarin (since
October 7, 1998),  and BioMarin  Genetics,  Inc., a  wholly-owned  subsidiary of
BioMarin  formed for the purpose of the joint  venture  discussed in Note 8. All
significant intercompany transactions have been eliminated.

Concentration of Credit Risk--Financial instruments that may potentially subject
the Company to  concentration  of credit risk consist  principally of cash, cash
equivalents,  and  short-term  investments.  All  cash,  cash  equivalents,  and
short-term  investments are placed in financial  institutions with strong credit
ratings, which minimizes the risk of loss due to nonpayment. The Company has not
experienced any losses due to credit  impairment or other factors related to its
financial instruments.

Use of  Estimates--The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles  requires  management to make certain
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosure of contingent  assets and liabilities at the dates of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ from those estimates.
Significant  estimates made by management  include  determination of progress to
date of research and development projects in-process and the amortization period
of goodwill and other intangibles.

Cash and Cash  Equivalents--For the statements of cash flows, the Company treats
liquid  investments  with original  maturities of less than three months as cash
and cash equivalents.

Short  Term  Investments--The  Company  records  its  investment  securities  as
available-for-sale  because the sale of such securities may be required prior to
maturity.  These  securities  are  recorded at cost at  December  31, 1999 which
approximates fair market value. These securities are comprised mainly of Federal
Home Loan bank discount notes and certificates of deposit.


<PAGE>


                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)

Inventories--Inventories  consist of analytic kits and instrument-based  systems
held for sale. Inventories are stated at the lower of cost (first-in,  first-out
method) or estimated market value. All inventories at December 31, 1998 and 1999
belonged to Glyko, Inc.

Investment in BioMarin/Genzyme  LLC and Related  Revenue--Under the terms of the
Company's  joint venture  agreement with Genzyme (Note 7 and 8), the Company and
Genzyme  have each  agreed to provide 50  percent of the  funding  for the joint
venture. All research and development, sales and marketing, and other activities
performed  by Genzyme and the Company on behalf of the joint  venture are billed
to the joint venture at cost. Any profits or losses of the joint venture will be
shared equally by the two parties. Losses of the joint venture ($1.8 million and
$14 million for the years ended  December 31, 1998 and 1999,  respectively)  are
allocated in proportion to the funding  provided by each joint venture  partner.
Through  December 31, 1999, each joint venture partner had provided $8.3 million
of funding to the joint venture.

During the years  ended  December  31, 1998 and 1999,  the  Company  billed $1.7
million and $10.6 million, respectively,  under the agreement, of which $837,457
and $5.3  million  respectively,  or 50 percent,  was  recognized  as revenue in
accordance with the Company's  policy of recognizing  revenue to the extent that
research and development  costs billed have been funded by Genzyme.  At December
31, 1998 and 1999 the  Company had  receivables  of $418,712  and $1.3  million,
respectively, related to these billings.

The  Company  accounts  for its  investment  in the joint  venture on the equity
method.  Accordingly,  the Company recorded a reduction in its investment in the
joint  venture of $884,628 and $7 million,  during the years ended  December 31,
1998 and 1999,  respectively,  representing  its 50 percent share of the loss of
the joint venture.  The percentage of the research and development  costs billed
to the joint venture that was funded by the Company (50 percent, or $837,457 and
$5.3 million for the years ended December 31, 1998 and 1999,  respectively)  was
recorded as a credit to the Company's equity in the loss of the joint venture.

At December 31, 1999 the summarized  assets and liabilities of the joint venture
and its results of operations from inception to December 31, 1999 are as follows
(in thousands):


          Assets                           $2,729
                                           ======
         Liabilities                        1,886
         Net Equity                           843
         -----------                       ------
                                           $2,729

        Cumulative Net loss               $15,714
                                          =======

Research and Development--Research and development expenses include the expenses
associated  with contract  research and  development  provided by third parties,
research and development provided in connection with the joint venture including
clinical and regulatory costs, and internal research and development  costs. All
research and development costs discussed above are expensed as incurred.

Property and  Equipment--Property and equipment are stated at cost. Depreciation
is computed using the straight-line method. Leasehold improvements are amortized
over the  life of the  asset or the term of the  lease,  whichever  is  shorter.
Significant  additions  and  improvements  are  capitalized,  while  repairs and
maintenance are charged to expense as incurred.

Property and equipment consisted of the following (in thousands):

                              December 31,
                   -------------------------------
Category                  1998           1999          Estimated Useful Lives
---------------    -------------------------------  ----------------------------
Computer hardware
   and software       $   162        $     426              3 years
Office furniture
   and equipment          372            1,017              5 years
Laboratory equipment    3,469            4,083              5 years
Manufacturing
   equipment              --             4,171              5 years

Leasehold improvements  2,532           19,768        Shorter of life of assets
                                                          or lease term
                    -------------------------------
                        6,535           29,465
Less:
Accumulated
depreciation             (312)          (4,372)
                    -------------------------------
Total, net             $ 6,223         $25,093
                    ===============================

                                       26
<PAGE>


                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

            Notes to Consolidated Financial Statements--(Continued)

Depreciation  expense for the period March 21, 1997  (inception) to December 31,
1997,  for the years ended  December 31, 1998, and 1999 and for the period March
21, 1997 (inception) to December 31, 1999, was $4,790, $307,645,  $4,074,000 and
$4,386,435, respectively.

Goodwill and Other  Intangible  Assets--In  connection  with the  acquisition of
Glyko, Inc., the Company acquired certain intangible assets including  developed
technology, customer relationships and goodwill.

The  purchase  price of $14.5  million was  allocated  to the net  tangible  and
intangible assets acquired, based on the relative fair value of these assets. In
connection  with this  allocation  $2.6 million was expensed as a charge for the
purchase of in-process research and

development.  Of the $11.7 million  designated  as intangible  assets (after the
write-off of in-process research and development), $1.2 million was allocated to
developed  technology  and  amortized  over six years,  $73,000 was allocated to
assembled  work force and  amortized  over seven  years,  and $10.4  million was
allocated  to  goodwill  (customer  relationships,  trade  name,  pure  business
goodwill) and amortized over twelve years.  In performing this  allocation,  the
Company considered,  among other factors,  Glyko, Inc.'s technology research and
development  projects in-process at the date of acquisition.  With regard to the
in-process  research and development  projects,  the Company  considered factors
such as the stage of development  of the technology at the time of  acquisition,
the  importance  of each project to the overall  development  plan,  alternative
future use of the technology and the projected  incremental  cash flows from the
projects when completed and any associated risks.

The Income Approach was the primary technique  utilized in valuing the purchased
research and development.  The assumptions  underlying the cash flow projections
used were derived primarily from investment banking reports, historical results,
company records and estimates of management.

Revenue  estimates for each in-process  project were developed by management and
based on an assessment of the industry.  Cost of goods sold for each project are
expected to be in line with historical results.

The  Capital  Asset  Pricing  Model was used to  determine  the cost of  capital
(discount rate) for Glyko, Inc.'s

in-process  projects.  Due to the  conservative  nature of the  forecast and the
risks associated with the projected growth and  profitability of the development
projects, a discount rate of 16 percent was used to discount cash flows from the
in-process products.

The Company  believes that the foregoing  assumptions used in the forecasts were
reasonable at the time of the acquisition.  No assurance can be given,  however,
that the underlying  assumptions  used to estimate sales,  development  costs or
profitability,  or the events  associated with such projects,  will transpire as
estimated. For these reasons, actual results may vary from projected results.
The most  significant  and  uncertain  assumptions  relating  to the  in-process
projects relate to the projected timing of completion and revenues  attributable
to each project.

Amortization  expense related to the acquisition of Glyko, Inc. was $271,274 and
$1.1  million  for the  period  October 7, 1998  (date of acquisition)  to
December 31, 1998, and the year ended December 31, 1999, respectively.

In connection  with the purchase of the key assets of the  biochemical  research
reagent  division of Oxford Glyko Sciences or OGS, the Company  acquired certain
intangible assets including  customer  relationships  and goodwill.  The initial
purchase  price of $1.5 million was allocated to the net tangible and intangible
assets acquired, based on the relative fair value of these assets. In connection
with this  allocation,  $608,549 was  allocated  to  inventory  and $891,451 was
allocated to goodwill and is being amortized over seven years.


Amortization expense related to the acquisition of OGS assets for the year ended
December 31, 1999, was $50,818.

Impairment of Long-Lived Assets--The Company regularly reviews long-lived assets
and identifiable intangibles. Whenever events or circumstances indicate that the
carrying  amount  of such  assets  may not be  fully  recoverable.  The  Company
evaluates  the  recoverability  of long lived assets by  measuring  the carrying
amount of the  assets  against  the  estimated  undiscounted  future  cash flows
associated  with them.  At the time such  evaluations  indicate  that the future
undiscounted  cash flows of certain  long-lived  assets  are not  sufficient  to
recover its carrying value of such assets, the assets are adjusted to their fair
values (based on discounted  cash s flows).  No such  adjustment  have been made
during any period presented.

The  Company's  long-lived  tangible  assets  consist  primarily of property and
equipment and its enzyme  investment in the BioMarin/G  LLC joint  venture.  The
Company  reviewed  all of these assets  together  for purposes of assessing  any
potential  impairment due to the fact that these assets will be used together to
generate joint cash flows.
<PAGE>

                 BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)


All of the  Company's  goodwill and other  intangible  assets were recorded as a
result n of the Company's  acquisitio of Glyko, Inc. and Glyko,  Inc.'s purchase
of the key l assets of the  biochemica  research  reagent  division of OGS.  The
Company  assessed  any  possible  impairment  taking into regard all future cash
flows to be generated from the intangible assets acquired,  including  developed
technology assembled work force, customer lists and goodwill.

Accrued  Liabilities:   accrued  liabilities  consisted  of  the  following  (in
thousands)

                                                 December 31,
                                        -----------------------------
                                            1998              1999
                                        -------------   -------------
          Vacation                         $     123        $    386
          Construction in progress                --             882
          Other                                  517             798
                                         -------------   ------------

                      Total                $     640        $  1,966
                                         =============   ============

Revenue  Recognition--The  Company recognizes Glyko, Inc.'s product revenues and
related cost of sales upon shipment of products.  Glyko, Inc.'s service revenues
are recognized upon  completion of services as evidenced by the  transmission of
reports  to  customers.  Other  Glyko,  Inc.  revenues,  principally  licensing,
distribution  and development  fees, are recognized upon our satisfaction of our
contractual obligations such as 1) execution of contract; 2) certain milestones;
and 3) certain anniversary dates from the effective date of the contract.

Revenue from the joint  venture is  recognized  to the extent that  research and
development costs billed by the Company have been funded by Genzyme.

Net Income (Loss) per  Share--Basic net income (loss) per share is calculated by
dividing net income (loss) by the weighted  average  common  shares  outstanding
during the period.  Diluted net income per share is  calculated  by dividing net
income by the weighted average of common stock  outstanding and potential common
shares  during the period.  Potential  common  shares  include  dilutive  shares
issuable upon the exercise of outstanding  common stock options,  warrants,  and
contingent  issuances  of common  stock.  For  periods in which the  Company has
losses,  such  potential  common  shares are excluded  from the  computation  of
diluted net loss per share, as their effect is antidilutive.

Potentially dilutive securities (in thousands):

                                                   December 31,
                                      ------------------------------------
                                          1997         1998         1999
                                      ------------ ------------ ----------
Options to purchase common stock
                                             297        2,801       5,450
Warrants to purchase common stock            802          802         802
                                      ------------ ------------ ----------
              Total                        1,099        3,603       6,252
                                      ============ ============ ==========

Segment Reporting--For the year ended December 31, 1998, the Company adopted the
provisions of SFAS No. 131,  "Disclosures  about  Segments of an Enterprise  and
Related  Information".  The Company  operates  two  segments.  The  Analytic and
Diagnostic  segment  represents the operations of Glyko,  Inc. which involve the
manufacture  and sale of analytic and diagnostic  products.  The  Pharmaceutical
segment  represents  the  research  and  development  activities  related to the
development  and   commercialization   of  carbohydrate   enzyme   therapeutics.
Management of the Company has concluded  that the operations of the Analytic and
Diagnostic  segment are, and will continue to be, immaterial with respect to the
Company's overall activities and, thus, disclosure of segment information is not
required.

New  Accounting   Standards--In  June  1998,  the  FASB  issued  SFAS  No.  133,
"Accounting for Derivative  Instruments and Hedging Activities." SFAS No. 133 is
not expected to have a material  impact on the Company's  financial  position or
results of operations.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB
101 provides guidance on applying  generally accepted  accounting  principles to
revenue recognition issues in financial  statements.  The Company will adopt SAB
101 as required in the first  quarter of 2000 and such  adoption is not expected
to have a material effect on the Company's consolidate results of operations and
financial position.
<PAGE>

                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)


2.   BRIDGE LOANS:

In the third  quarter of 1997,  the Company drew upon a bridge loan from certain
stockholders  in the amount of  $880,000.  This bridge loan was  converted  into
880,000 shares of common stock in the fourth quarter of 1997.

3.   STOCKHOLDERS' EQUITY:

Common Stock and Warrants--On  March 21, 1997,  BioMarin's parent company,  GBL,
provided initial equity funding by purchasing 1.5 million shares of common stock
for $1.5 million.

BioMarin  and GBL have  entered  into a License  Agreement  dated June 26, 1997,
pursuant  to which GBL  granted  BioMarin an  exclusive,  worldwide,  perpetual,
irrevocable, royalty-free right and license to certain of its worldwide patents,
trade  secrets,  copyrights,  and  other  proprietary  rights  to all  know-how,
processes,  formulae,  concepts,  data,  and other such  intellectual  property,
whether patented or not, owned or licensed by GBL and its subsidiaries as of the
date of the license  agreement for  application in therapeutic  uses,  including
without  limitation,  drug  discovery and genomics.  As  consideration  for this
license,  BioMarin  issued to GBL 7.0 million  shares of BioMarin  common stock.
Under the same License Agreement, BioMarin granted GBL an exclusive,  worldwide,
perpetual, irrevocable,  royalty-free cross-license to all improvements BioMarin
may make  upon the  licensed  intellectual  property.  As this  transaction  was
between  the Company and its  parent,  the Company  recorded  the license at its
historical cost on GBL's financial statements, which was zero.

In the fourth  quarter of 1997,  880,000  shares of common  stock were issued to
stockholders to retire an $880,000 bridge loan.

As disclosed in the accompanying statements of stockholders' equity, the Company
closed a number of private placements in 1997 and 1998. In connection with these
placements, an entity with which the chief executive officer and chairman of the
board is affiliated (see Note 7) was issued a total of 899,500 shares (valued at
$1,389,500) and warrants (valued at $128,240) to purchase an additional  801,500
shares of common  stock at an exercise  price of $1 per share.  These  issuances
were made for brokerage  services  rendered in connection with these  placements
and were  accounted  for as a cost of raising  capital.  The warrants  expire on
various dates in 2001.

The Company completed its initial public offering (IPO) of 4.5 million shares of
common  stock  at $13 per  share on July  23,  1999,  raising  net  proceeds  of
approximately  $51.8 million.  In a private  placement  concurrent with the IPO,
Genzyme  invested in the Company $10 million at the IPO price (769,230 shares of
common stock).  In addition,  the $26 million of  convertible  notes sold by the
Company on April 13, 1999, plus accrued interest,  were converted into 2,672,020
shares of common  stock at $10 per  share.  The  underwriters'  exercise  of its
over-allotment  option in August 1999  raised  additional  net  proceeds of $8.1
million (675,000 shares of common stock).

Notes Receivable from Stockholders--Notes receivable from stockholders relate to
2.5 million  shares of common stock  issued in October  1997 to three  executive
officers  under  the  terms  of the  Founder's  Stock  Purchase  Agreement  (the
Agreement).  These notes bear  interest  at 6 percent per annum,  and are due on
September 30, 2000, or on the date of the employee's  termination,  whichever is
earlier.  The  notes  are  secured  by the  underlying  stock  and are with full
recourse.  Interest  was  imputed  at nine  percent,  resulting  in an  interest
discount and related deferred compensation of $200,000, which is being amortized
over the life of the notes.  Amortization  expense for the period from March 21,
1997  (inception)  to December 31, 1997,  the years ended  December 31, 1998 and
1999, and for the period from March 21, 1997 (inception),  to December 31, 1999,
was $0, $66,667, $150,000, and $216,667,  respectively.  In the event that their
employment  is  terminated by the Company,  the Company has the  obligation,  if
requested by the officer,  to  repurchase  any or all of the shares issued under
the Agreement at the lower of the original  purchase price or the current market
value  of the  shares.  In the  event  one of  these  officers  ceases  to be an
employee,  the Company has the right, but not the obligation,  to repurchase the
unvested portion of the shares at their original purchase price. Pursuant to the
terms of the  Agreement,  50% of the shares vest after one year from the date of
employment, with the remainder vesting at a rate of 1/24th month thereafter.

Deferred Compensation--In connection with certain stock option grants during the
years  ended  December  31,  1998 and  1999,  the  Company  recognized  deferred
compensation  totaling  $3,222,816  and $633,944,  respectively,  which is being
amortized  over  the  four-year  estimated  service  periods  of  the  grantees.
Amortization  expense  recognized  during the years ended  December 31, 1998 and
1999, was $185,405 and $1,297,565, respectively.


<PAGE>


                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)

4.   INCOME TAXES:

The Company  utilizes the asset and liability  method of  accounting  for income
taxes. Under the asset and liability method, deferred taxes are determined based
on the  difference  between the financial  statement and tax bases of assets and
liabilities  using  enacted  tax  rates in  effect  in the  years  in which  the
differences are expected to reverse.

The  Company's  primary  temporary  differences  relate  to items  expensed  for
financial  reporting  purposes  but not  currently  deductible  for  income  tax
purposes consisting primarily of depreciable lives for property and equipment.

As of December 31, 1999,  net operating  loss  carryforwards  are  approximately
$49.6 million and $39.3 million for federal and California  income tax purposes,
respectively.  These net operating loss  carryforwards,  including net operating
losses of $12.5  million and $5.8 million for federal and  California  purposes,
respectively,  related to Glyko,  Inc.  These  federal  and state  carryforwards
expire beginning in the year 2011 and 2004, respectively.

The Company also has research and development credits available to reduce future
federal and California  income taxes, if any, of approximately  $2.2 million and
$1.3 million,  respectively, at December 31, 1999. These credits include credits
related to Glyko,  Inc. of  approximately  $548,000 and $266,000 for federal and
California purposes,  respectively. These federal and state carryforwards expire
beginning in 2012 and 2013, respectively.

The net  operating  loss  carryforwards  and  research and  development  credits
related to Glyko,  Inc.  as of October 7, 1998,  can only be  utilized to offset
future taxable income and tax, respectively, if any, of Glyko, Inc. In addition,
the Tax Reform Act of 1986 contains  provisions that may limit the net operating
loss carryforwards and research and development  credits available to be used in
any given year should certain events occur,  including sale of equity securities
and other changes in ownership.  The acquisition of Glyko,  Inc. and the related
issuance of stock  represented  a change of  ownership  under these  provisions.
There can be no assurance that the Company will be able to utilize net operating
loss carryforwards and credits before expiration.

Deferred  income  taxes are recorded to reflect the tax  consequences  on future
years of differences  between the tax basis of assets and  liabilities and their
financial reporting amounts at each period-end. The Company has a cumulative net
operating  loss  carryforward  since  inception,  resulting  in net deferred tax
assets. A valuation allowance is placed on the net deferred tax assets to reduce
them to an assumed net realizable value of zero.

5.   STOCK OPTION PLANS:

The  Company's  1997  Stock  Option  Plan (the Plan)  provides  for the grant of
incentive  common  stock  options  and  nonstatutory  common  stock  options  to
employees,  directors,  and  consultants of the Company.  The maximum  aggregate
number of  shares  that may be  optioned  and sold  under the Plan is  6,392,617
shares as of December 31, 1999.  Options  currently  outstanding  generally have
vesting  schedules of up to four years and options  terminate  after five to ten
years or 90 days after termination of employment or contract.

Had compensation cost for the Plan been determined  consistent with SFAS No. 123
for option grants to employees,  the effect on the Company's net loss would have
been as follwos (in thousands, except for per share data):

<TABLE>
                                     Period from                                               Period from
                                     March 21, 1997                                            March 21, 1997
                                    (inception) to                                           (inception) to
                                     December 31,               Year Ended December 31,        December 31,
                                         1997                  1998               1999              1999
                                   -----------------    ------------------ ------------------  ---------------
<S>                                      <C>                 <C>                <C>             <C>
Net loss as reported                     $ (2,763)           $ (12,314)         $ (28,072)      $   (43,149)

Pro forma effect of SFAS No. 123               (1)                (468)            (1,734)           (2,203)
                                   -----------------   ------------------- ------------------ ----------------
Pro forma net loss                       $ (2,764)           $ (12,782)         $ (29,806)      $   (45,352)

                                   =================   =================== ================== ================
                                         $  (0.34)           $   (0.55)         $   (0.94)      $     (2.04)
Net loss per common share
   as reported                     =================   =================== ================== ================

Pro forma loss per common share          $   (0.34)          $   (0.57)         $  (1.00)       $     (2.14)
                                   =================   =================== ================== ================
</TABLE>


<PAGE>
<TABLE>

                                             BioMarin Pharmaceutical Inc. and Subsidiaries
                                                     (a development-stage company)

                                        Notes to Consolidated Financial Statements--(Continued)


A summary of the status of the Company's stock option plan is as follows:

                                                                  Weighted
                                                                  Average         Exercisable  Weighted Average Fair
                                                                  Exercise         at End of      Value of Options
                                              Option Shares        Price            Year             Granted
                                           -------------------- -------------    ------------- ------------------------
       <S>                                      <C>               <C>            <C>                <C>
       Outstanding at March 21, 1997             --               $      --
               Granted                          297,000                 1.00                        $0.22
               Canceled                          --                      --
                                           --------------------
       Outstanding at December 31, 1997         297,000                   1.00        232,000
                                                                                 =============
               Granted                        2,507,660                   4.18                      $2.40
               Exercised                         (1,973)                  1.00
               Canceled                          (1,447)                  1.00
                                           --------------------
       Outstanding at December 31, 1998       2,801,240                   3.85        761,609
                                                                                 =============
               Granted                       2,877,430                    11.35                     $8.80
               Exercised                       (40,148)                    3.69
               Canceled                       (188,536)                    9.28
                                          --------------------    -------------
       Outstanding at December 31, 1999      5,449,986             $       7.59    1,922,041
                                                                                 =============
</TABLE>


There were 2,198,760 and 900,510  options  available for grant under the Plan at
December 31, 1998 and 1999, respectively.

As of December 31, 1999,  the  5,449,986  options  outstanding  consisted of the
following:

                                                                       Number of
         Number of Options       Exercise        Weighted Average       Options
            Outstanding           Price          Contractual Life    Exercisable
       ----------------------- ------------- -----------------------------------
          415,850                   1.00                    2.88         368,683
          237,313                   2.30                    2.25         188,094
        1,523,000                   4.00                    8.10         854,167
          587,555                   6.00                    3.75         194,115
          849,780                   7.00                    4.34         270,211
           36,750                   8.50                    4.16           7,500
          688,242                  12.75                    5.00             --
           30,500                  12.88                    4.93             --
          422,500                  13.00                    4.52          36,979
           15,000                  13.06                    4.92             --
           15,000                  13.38                    4.95             --
           78,000                  13.50                    4.94             --
           18,000                  13.56                    5.01             --
           12,500                  14.06                    4.86             --
           22,500                  14.78                    4.85             --
           12,500                  15.19                    4.84             --
          474,996                  15.38                    4.71           2,292
           10,000                  16.06                    4.80             --
       ----------                                                     ----------
       5,449,986                                                       1,922,041
       ==========                                                     ==========





<PAGE>
                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes  option  pricing  model with the  following  assumptions  used for
grants in 1997,  1998,  and through  July 22,  1999:  risk-free  interest  rates
ranging from 5.2 to 6.2 percent;  expected dividend yield of 0 percent; expected
life of four  years  for the  Plan's  options;  and  expected  volatility  of 38
percent.

6.   COMMITMENTS AND CONTINGENCIES:


Lease  Commitments--The  Company  leases  office  space and research and testing
laboratory space in various  facilities under operating  agreements  expiring at
various dates through 2009.  Future  minimum lease  payments for the years ended
December 31 are as follows (in thousands):


            2000.................               $1,307
            2001..................               1,151
            2002..................               1,037
            2003.................                  857
            2004..................                 485
            Thereafter...........                1,853
                                               -------
                      Total.....               $6,690
                                               =======

Rent  expense  for the period from March 21, 1997  (inception)  to December  31,
1997,  the years ended December 31, 1998 and 1999, and for the period from March
21, 1997 (inception),  to December 31, 1999, was $34,613,  $380,187,  $1,069,595
and $1,484,395, respectively.

Research  and  Development  Funding and  Technology  Licenses--The  Company uses
experts and  laboratories  at  universities  and other  institutions  to perform
research and development  activities.  Funding commitments to these institutions
for the year ended December 31 are as follows (in thousands):

            2000..................               $ 615
            2001..................                 100
            2002..................                 100
            2003..................                 100
            2004..................                 100
                                              ---------
                       Total.....              $ 1,015
                                              =========

The Company has also licensed technology from certain institutions, for which it
is  required  to pay a royalty  upon  future  sales,  subject to certain  annual
minimums.

Consulting  Agreements--BioMarin had agreements with two consultants whereby the
consultants  were paid cash and granted  common  stock  options in exchange  for
services.   Options  for  206,000   shares  of  common  stock  were  granted  in
satisfaction  for these services.  These options were valued at $35,020 and were
expensed during the period from March 21, 1997 (inception), through December 31,
1997.

Product Liability and Lack of  Insurance--The  Company is subject to the risk of
exposure to product liability claims in the event that the use of its technology
results  in  adverse   effects   during   testing  or   commercial   sale.   The
BioMarin/Genzyme  LLC does  carry  product  liability  insurance  to  cover  the
clinical trials of Aldurazyme(TM).  At December 31, 1999,  BioMarin had no other
product  candidate in human clinical trials.  There can be no assurance that the
Company  will  be  able  to  obtain  product  liability  insurance  coverage  at
economically  reasonable  rates or that such  insurance  will  provide  adequate
coverage against all possible claims.


<PAGE>
                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)

7.   RELATED-PARTY TRANSACTIONS:

BioMarin had contractual agreements for office space and certain administrative,
research,  and development  functions with Glyko,  Inc. prior to the acquisition
date of October 7, 1998.  BioMarin reimbursed Glyko, Inc. for rent, salaries and
related benefits,  and other  administrative  costs. Glyko, Inc. also reimbursed
BioMarin for salaries and related benefits.

Reimbursement of expenses (in thousands):


<TABLE>

                                                              Paid from         Paid from
                                                             Glyko, Inc. to    BioMarin to
                                                                BioMarin       Glyko, Inc.     Net, to Glyko, Inc.
                                                           ----------------  -------------  ---------------------
<S>                                                              <C>             <C>             <C>
March 21, 1997 (inception) to December 31, 1997                  $    133        $    374        $           241
Year ended December 31, 1998                                           75             298                    223
Year ended December 31, 1999                                           68             335                    267
                                                            ----------------  -------------   -------------------
March 21, 1997 (inception) to December 31, 1999                       276           1,007                    731
                                                            ================  =============   ===================
</TABLE>

BioMarin also  purchased  products and services  from Glyko,  Inc. at a changing
discount,  which approximated market conditions.  This is the same discount that
Glyko grants to any other company that it treats as a distributor.  Purchases of
products  and  services  from Glyko,  Inc.  from March 21, 1997  (inception)  to
October 8, 1998 (Glyko, Inc. acquisition), were $160,455.

In the fourth quarter of 1998 and during 1999,  BioMarin  loaned to Glyko,  Inc.
$200,000 and $401,493,  respectively, to fund its operations. As of December 31,
1999,  Glyko,  Inc.  owed  $2,855,434  to BioMarin and BioMarin  owed $52,528 to
Glyko, Inc. These amounts have been eliminated upon consolidation.

As discussed in Note 3, during August 1997,  the Company  entered into an agency
agreement with an entity with which the chief executive  officer/chairman of the
board is affiliated.  During June 1998, the Company entered into a second agency
agreement.  The  Company  issued a total of 899,500  shares of common  stock and
warrants to purchase  another  801,500 shares of common stock to this entity and
its affiliates for brokerage services pursuant to the terms of these agreements,
also discussed in Note 3.

On April 13,  1999,  the  Company  entered  into a  convertible  note  financing
agreement  in the amount of $26.0  million.  Of this amount GBL  purchased  $4.3
million worth of such notes and LaMont Asset  Management SA (LAM) purchased $9.7
million. A director of the Company is also the chairman of LAM. The Company also
entered into an agency  agreement  with LAM pursuant to which the Company agreed
to pay LAM a five percent cash  commission on sales to certain note  purchasers.
On July 23, 1999,  concurrent  with the Company's  IPO,  BioMarin's  convertible
notes payable  (including accrued interest) were converted into 2,672,020 shares
of BioMarin's common stock at $10 per share. GBL's $4.3 million convertible note
plus interest was converted to 441,911 shares and LAM's $9.7 million convertible
note plus interest was converted to 996,869 shares.

Since October 8, 1998,  GBL has agreed to pay BioMarin a monthly  management fee
for its services to GBL primarily  relating to management,  accounting,  finance
and government  reporting.  BioMarin had accrued  receivables  relating to these
services  for GBL of $27,152 and $37,500 for the years ended  December  31, 1998
and 1999, respectively.

At December 31, 1997,  1998 and 1999, the Company had recorded  amounts due from
GBL of $79,607,  $114,005  and  $139,571,  respectively  (including  the amounts
discussed above.)

Due to the terms of the collaborative agreement with Genzyme outlined in Note 8,
Genzyme  is  considered  a related  party.  See also  Notes 1 and 8 for  Genzyme
related party transactions.

8.   COLLABORATIVE AGREEMENTS:

Genzyme--Effective September 4, 1998, the Company entered into an agreement (the
Collaboration   Agreement)   with   Genzyme  to   establish   a  joint   venture
(BioMarin/Genzyme  LLC) for the worldwide  development and  commercialization of
Aldurazyme(TM)  to treat MPS-I.  In conjunction  with the formation of the joint
venture,  the Company established a wholly owned subsidiary,  BioMarin Genetics,
Inc.  The  Company  has a 49 percent  interest  in the joint  venture,  BioMarin
Genetics,  Inc.  has a 1 percent  interest,  and  Genzyme has the  remaining  50
percent interest.


<PAGE>
                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)

Under the  Collaboration  Agreement,  BioMarin and Genzyme are each  required to
make capital contributions to the joint venture in an amount equal to 50 percent
of costs and expenses associated with the development and  commercialization  of
Aldurazyme(TM).  The parties  also agree to share the profits  equally from such
commercialization.  In addition,  Genzyme purchased 1,333,333 shares of BioMarin
common stock at $6 per share in a private placement for proceeds of $8.0 million
and, concurrent with the IPO, purchased an additional 769,230 shares of BioMarin
common stock at the IPO price for an additional $10.0 million.  Genzyme has also
agreed to pay BioMarin  $12.1 million in cash upon FDA approval of the biologics
license application (BLA) for Aldurazyme(TM).

Other   Agreements--The   Company  is  engaged  in  research   and   development
collaborations with various academic  institutions,  commercial research groups,
and other  entities.  The  agreements  provide for  sponsorship  of research and
development  by the Company and may also provide for  exclusive  royalty-bearing
intellectual property licenses or rights of first negotiation regarding licenses
to intellectual property development under the collaborations.  Typically, these
agreements  are  terminable  for cause by  either  party  upon 90 days'  written
notice.

9.   COMPENSATION PLANS:

Employment  Agreements--The  Company has entered into employment agreements with
seven officers of the Company.  All of these  agreements are terminable  without
cause by the Company upon six months' prior notice, or by the officer upon three
months' prior written notice to the Company,  with the Company  obligated to pay
salary and  benefits  hereunder  until  such  termination.  The annual  salaries
committed  to under  these  agreements  total  approximately  $1.6  million.  In
addition,  three of the  agreements  provide  for the  payment of an annual cash
bonus of up to 100 percent of the base annual salary of the three officers based
upon the Company's market capitalization.

401(k) Plan--The Company  participates in the Glyko Retirement Savings Plan (the
401(k) Plan).  At January 1, 2000, the plan was renamed the BioMarin  Retirement
Savings  Plan.  Most  employees   (Participants)  are  eligible  to  participate
following the start of their  employment,  on the earlier of the next  occurring
January 1, April 1, July 1 or October 1.  Participants  may  contribute up to 15
percent of their  current  compensation  to the 401(k) Plan or an amount up to a
statutorily prescribed annual limit. The Company pays the direct expenses of the
401(k)  Plan but does not  currently  match or make  contributions  to  employee
accounts.

1997 Stock Plan--In  November  1997,  the Board adopted,  and in April 1998, the
stockholders  approved,  the 1997 Stock Plan (the 1997 Plan), which provided for
the  reservation  of a total of  3,000,000  shares of common  stock for issuance
under the 1997 Plan. In December 1998,  the Board adopted,  and in January 1999,
the stockholders  approved, an amendment to the 1997 Plan to increase the number
of shares reserved for issuance under it to an aggregate of 5,000,000 and to add
an  "evergreen  provision"  providing  for an annual  increase  in the number of
shares  which may be  optioned  or sold  under the 1997  Plan  without  need for
additional Board or stockholder  action to approve such increase (which increase
shall  be the  lesser  of 4  percent  of  the  then-outstanding  capital  stock,
2,000,000  shares, or a lower amount set by the Board). As of December 31, 1999,
the number of shares  reserved for issuance was an aggregate of 6,392,617  under
the 1997 Plan.  The 1997 Plan  provides  for the grant of stock  options and the
issuance of common stock by the Company to its employees,  officers,  directors,
and consultants.

During the year ended  December  31, 1999,  the Board  granted  2,877,430  stock
options  under the 1997 Plan to  employees  and  directors  of the Company at an
average exercise price of $11.35 per share. The Company's  management  estimates
that these stock option prices  reflected  current fair value at the time of the
grant.

1998 Employee Stock Purchase  Plan--In  December 1998 the Board adopted,  and in
January 1999 the  stockholders  approved,  the 1998 Employee Stock Purchase Plan
(the 1998 Purchase  Plan). A total of 250,000 shares of Company common stock has
been reserved for issuance under the 1998 Purchase Plan,  plus annual  increases
equal to the lesser of 0.5 percent of the  outstanding  capital  stock,  200,000
shares,  or a lesser amount set by the Board.  As of December 31, 1999,  $87,337
has been withheld from employees'  salaries and no shares have been issued under
the 1998 Purchase Plan.


<PAGE>
                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)


1998 Director Option Plan--The 1998 Director Option Plan (the Director Plan) was
adopted  by the  Board  of  Directors  in  December  1998  and  approved  by the
stockholders  in January  1999.  The  Director  Plan  provides  for the grant of
nonstatutory stock options to non-employee  directors. A total of 200,000 shares
of Company common stock,  plus an annual  increase equal to the number of shares
needed to restore  the maximum  aggregate  number of shares  available  for sale
under the Director Plan or the lesser of 0.5 percent of the outstanding  capital
stock,  200,000 shares,  or a lesser amount set by the Board, have been reserved
for issuance under the Director  Plan. As of December 1999,  options to purchase
90,000 shares were granted under the Director Plan.

10.   SUPPLEMENTAL CASH FLOW INFORMATION:

The  following  non-cash  transactions  took place in the periods  presented (in
thousands):
<TABLE>

                                                   Period from March                                        Period from March
                                                       21, 1997                                                 21, 1997
                                                    (Inception) to                                           (Inception) to
                                                     December 31,           Year Ended December 31,           December 31,
                                                                        --------------------------------
                                                         1997                1998             1999                1999
                                                  --------------------  ---------------   --------------   --------------------
<S>                                                <C>                    <C>              <C>               <C>
Common stock issued in exchange for notes          $          20,500      $           -     $        -       $       20,500
Compensation in the form of common stock
  and common stock options                                        18                  -              -                   18
Common stock and common stock warrants
  issued in exchange for brokerage services                      930                588              -                1,518
Bridge loan converted to common stock                            880                  -              -                  880
Common stock issued upon conversion of                             -
  convertible notes plus interest                                  -                  -         25,615               25,615

</TABLE>

11.   GLYKO, INC.:

On October 7, 1998, the Company  entered into an agreement to acquire all of the
outstanding   stock  of  its  affiliate,   Glyko,   Inc.  from  GBL.  The  total
consideration  for the  acquisition  was $14.5 million , comprising of 2,259,039
shares of common stock of the Company, valued at $6.00 per share, the assumption
of options held by certain  Glyko,  Inc.  employees to purchase  shares of GBL's
common stock,  which would require 255,540 shares of the Company's  common stock
to be issued if fully exercised, and $500 in cash. The acquisition was accounted
for as a purchase.

The unaudited pro forma results of operation for the periods presented below are
presented as if this  acquisition of Glyko,  Inc. had occurred on March 21, 1997
and January 1, 1998, respectively (in thousands):



                                          Period from
                                          March 21, 1997
                                          (Inception) to       Year ended
                                        December 31, 1997     December 31, 1998
                                       -------------------   -------------------
Revenues                                  $       1,996                $  2,530
Loss from operations                             (6,028)                (13,044)
Net loss                                         (5,954)                (12,380)
Net loss per share, basic and diluted             (0.57)                  (0.51)
Weighed average number of common
  shares outstandingn                            10,464                  24,214


In May 1999, Glyko, Inc. acquired key assets of the Biochemical Research Reagent
Division of Oxford  GlycoSciences  Plc. (OGS). The acquisition  increased Glyko,
Inc.'s  product  offerings  and was valued  from $1.5  million to $2.1  million,
depending  on the future sales of the acquired  products.  Had this  acquisition
been  made on  January  1,  1999,  the  impact on the  consolidated  net loss as
reported would have been insignificant.
<PAGE>

                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

             Notes to Consolidated Financial Statements--(Continued)

12. SUBSEQUENT EVENT

In the first quarter of 2000,  BioMarin made a provision of  approximately  $4.7
million  for the  suspension  of  production  operations  at its  Carson  Street
clinical  manufacturing   facility.  The  facility  was  not  required  for  the
production of Aldurazyme(TM), the initial purpose of the plant, after a decision
by the  BioMarin/Genzyme  LLC (joint  venture)  to use  BioMarin's  Galli  Drive
facility for the  manufacture  of clinical  material  both for the  confirmatory
Phase III trial and for the commercial launch of  Aldurazyme(TM).  This decision
was based in part on FDA guidance to use an improved production  process,  which
was installed in the Galli  facility,  for the clinical trial and BLA submission
and for  commercial  production.  The Carson  Street  facility  is  expected  to
complete  its final  production  lots in May. No  alternative  requirements  for
production in Carson Street have been identified for the near term. BioMarin has
made offers to a majority of the staff at the Carson Street  facility,  which is
in  Torrance,   California,  to  transfer  to  the  Galli  facility  in  Novato,
California, which has significantly greater manufacturing capacity.