Exhibit 99.1

**REGULATORYRISKS**

***We May Not Be Able To Obtain Marketing Approval In TheFuture.***

             Wewill not be able to market any of our products in Europe, the United States orin any other jurisdiction without marketing approval from the EMEA, FDA or equivalentforeign regulatory agency. The regulatory approval process to obtain marketapproval for a new drug or biologic takes many years and requires theexpenditure of substantial resources. We have had only limited experience inpreparing applications and obtaining regulatory approvals.

             InEurope, the European Commission has approved our MAA for Replagal, and the EMEAhas accepted for review the MAA submitted by Aventis for Dynepo but has not yetscheduled a CPMP meeting. In the United States, the FDA issued a completereview letter with respect to our BLA for Replagal, stating that our BLA wasnot adequate for final approval action at the time of such letter, and did notaccept for filing Aventis' BLA for Dynepo, requesting additional manufacturing data.There can be no assurance as to whether or when any of these applications formarketing authorization relating to Replagal and Dynepo, or additionalapplications for marketing authorization that we may make in the future as tothese or other products, will be approved by the relevant regulatoryauthorities.

***If We Fail To Comply Wit The Extensive RegulatoryRequirements To Which Our Products Are Subject, We Could Be Subject To AdverseConsequences And Penalties.***

             Thetesting, manufacturing, labeling, advertising, promotion, export, andmarketing, among other things, of our products are subject to extensiveregulation by governmental authorities in Europe, the United States, andelsewhere throughout the world.

             Ingeneral, there can be no assurance that submission of materials requestingpermission to conduct clinical trials will result in authorization by the EMEA,the FDA or equivalent foreign regulatory agency to commence clinical trials, orthat once clinical trials have begun, testing will be completed successfullywithin any specific time period, if at all, with respect to any of ourproducts. Once trials are complete and an application has been submitted, theEMEA or the FDA may deny a MAA or a BLA if applicable regulatory criteria are notsatisfied or may require additional testing or information.

             Ifregulatory approval of a product is granted, such approval may be subject tolimitations on the indicated uses for which the product may be marketed orcontain requirements for costly post-marketing testing and surveillance tomonitor the safety or efficacy of the product. As to any product for which weobtain marketing approval, the product, the facilities at which the product ismanufactured, any post-approval clinical data and our promotional activitieswill be subject to continual review and periodic inspections by the EMEA, theFDA and other regulatory authorities.

             Bothbefore and after approval is obtained, violations of regulatory requirementsmay result in various adverse consequences, including the EMEA's or FDA's delayin approving or refusal to approve a product, suspension or withdrawal of anapproved product from the market, operating restrictions, or the imposition ofcivil or criminal penalties.

             Wewill also be subject to a variety of regulations outside the United States andEurope governing clinical trials and the sale of our products. Whether or notwe have obtained EMEA or FDA approval, the comparable regulatory authorities ofsuch foreign countries must also approve a product prior to the commencement ofmarketing of the product in those countries. The approval process varies fromcountry to country, and the time may be longer or shorter than that requiredfor EMEA or FDA approval.

***We May Not Be Able To Obtain Orphan Drug Exclusivity For OurNiche Protein Products. If Our Competitors Are Able To Obtain Orphan DrugExclusivity Before Us, We May Be Precluded From Marketing Our Niche ProteinProducts.***

             Some jurisdictions, includingEurope and the United States, may designate drugs for relatively small patientpopulations as "orphan drugs". Generally, if a product which has anorphan drug designation subsequently receives the first marketing approval forthe indication for which it has such designation, the product is entitled toorphan drug exclusivity. Orphan drug exclusivity means that applications tomarket the same product for the same use may not be approved, except in verylimited circumstances, for a period of up to 10 years in Europe and for aperiod of seven years in the United States. Obtaining orphan drug designationsand orphan drug exclusivity for our Niche Protein products may be critical toour success in this area. We have received orphan drug designation in Europeand the United States for Replagal, our alpha-galactosidase A product for thetreatment of Fabry disease. However, we may not be able to obtain or maintainorphan drug exclusivity for Replagal. We also may not be able to obtain orphandrug designation or exclusivity for any of our other potential products or beable to maintain such designation or exclusivity for any of these products. Forexample, if a competitive product is shown to be clinically superior to ourproduct, any orphan drug exclusivity we have obtained will not apply to suchcompetitive product.

             Our competitors may also seek andobtain orphan drug exclusivity for products competitive with our productsbefore we obtain marketing approval. Genzyme is seeking marketing authorizationin both Europe and the United States for an alpha-galactosidase A product forthe treatment of Fabry disease for which it has orphan drug designations.Concurrently with the approval of Replagal by the European Commission, theEurpoean Commission approved Genzyme's Fabry disease product and both drugsreceived co-orphan drug exclusivity in the European Union for a period of up to10 years.  Depending on whether Replagalor Genzyme's Fabry product receives marketing approval in Europe or the UnitedStates first, we or Genzyme could prevent the other from obtaining marketingapproval of the other's Fabry product through the orphan drug exclusivity. 

 

***Because Gene Therapy Is A Relatively New Technology And GeneTherapy Products Have Not Been Extensively Tested In Humans, We May Face DelaysAnd Incur Increased Costs In The Regulatory Process Related To Our Gene TherapyProducts.***

             We are developing gene therapyproducts. Because gene therapy is a relatively new technology and products forgene therapy have not been extensively tested in humans, the regulatoryrequirements governing gene therapy products may be more uncertain than forother types of products. This uncertainty may cause delays in the regulatoryprocess relating to our gene therapy products, including delays in ourinitiating clinical trials of these products. This uncertainty may alsoincrease the cost of obtaining regulatory approvals of our gene therapyproducts.

***If Our Clinical Trials Are Not Successful, We May Not BeAble To Develop And Commercialize Our Products.***

             In order to obtain regulatoryapprovals for the commercial sale of our potential products, we and ourcollaborators will be required to complete extensive clinical trials in humansto demonstrate the safety and efficacy of our products. We may not be able toobtain authority from the EMEA, the FDA or other regulatory agencies tocommence or complete these clinical trials.

             The results from preclinicaltesting of a product that is under development may not be predictive of resultsthat will be obtained in human clinical trials. In addition, the results ofearly human clinical trials may not be predictive of results that will beobtained in larger scale, advanced stage clinical trials. Furthermore, we, oneof our collaborators, or the EMEA or FDA, may suspend clinical trials at any timeif the subjects or patients participating in such trials are being exposed tounacceptable health risks, or for other reasons.

             The rate of completion of clinicaltrials is dependent in part upon the rate of enrollment of patients. Patientaccrual is a function of many factors, including the size of the patientpopulation, the proximity of patients to clinical sites, the eligibilitycriteria for the study, the existence of competitive clinical trials, and theavailability of alternative treatments. In particular, the patient populationsfor some of our Niche Protein products is small. Delays in planned patientenrollment may result in increased costs and prolonged clinical development.

             We and our collaborators may not beable to successfully complete any clinical trial of a potential product withinany specified time period. In some cases, we may not be able to complete thetrial at all. Moreover, clinical trials may not show our potential product tobe both safe and efficacious. Thus, the EMEA, the FDA and other regulatoryauthorities may not approve any of our potential products for any indication.

 

**PATENT LITIGATION ANDINTELLECTUAL PROPERTY RISKS**

***We Are Party To Litigation With Amgen And Kirin-AmgenInvolving Dynepo Which Could Preclude Us From Manufacturing Or Selling Dynepo.***

             We and Aventis are involved inpatent litigation relating to Dynepo with Amgen in the United States and withKirin-Amgen, an affiliate of Amgen, in the United Kingdom. In January 2001, theU.S. District Court for the District of Massachusetts concluded that Dynepoinfringed eight of the 18 claims of patents asserted by Amgen. In April 2001, the English High Court of Justiceruled that Dynepo infringed one of four claims of a patent asserted byKirin-Amgen. We and Aventis have filed appeals of both decisions. We canprovide no assurance as to the outcome of either litigation. If we and Aventisare not successful in connection with the appeals of these court decisions, weand Aventis may be precluded from manufacturing or selling Dynepo. In addition,this litigation is costly, and we are required to reimburse Aventis, which ispaying the litigation expenses, for our share of the expenses from futureroyalties and in certain other circumstances.

***We Are a Party To Litigation With Genzyme And Mount SinaiInvolving Replagal Which Could Preclude Us From Manufacturing Or SellingReplagal.***

             In July 2000, Genzyme and MountSinai filed a patent infringement suit against us in the U.S. District Courtfor the District of Delaware, alleging that the manufacture, use, intendedsale, and/or intended offer for sale of our Replagal product infringes one ormore claims of a U.S. patent held by Genzyme and Mount Sinai. Genzyme and MountSinai seek injunctive relief and an accounting for damages. The court hascurrently scheduled a jury trial in this action to begin in March 2002. If weare not successful in this litigation, we may be precluded from manufacturingor selling Replagal. We can provide no assurance as to the outcome of thislitigation.

***We Are Involved And May Become Involved In Further ExpensivePatent Litigation Or Other Intellectual Property Proceedings Related To OurTranskaryotic Therapy(TM) Technology Which Could Result In Liability ForDamages Or Stop Our Development And Commercialization Efforts.***

             We are a party to a proceedingbefore the U.S. Patent and Trademark Office to determine the patentability ofour gene therapy technology, known as Transkaryotic Therapy. The participantsin the interference are TKT, Genetic Therapy, Inc., which is a wholly-ownedsubsidiary of Novartis AG, Syntex (U.S.A.), which is a wholly-owned subsidiaryof Roche Holdings, Inc., and Cell Genesys, Inc. This proceeding will determinewhich of the parties first developed this technology. If the technology is patentable,the party that first developed the technology will be awarded the U.S. patentrights.

             The process to resolve aninterference can take many years. We may not prevail in this interference. Evenif we do prevail, the decision in this proceeding may not enable usmeaningfully to protect our proprietary position in the field of ex vivonon-viral gene therapy.

             If we do not prevail in this proceeding,a consent order issued by the Federal Trade Commission in March 1997 may berelevant to us. The Federal Trade Commission entered this consent order toresolve anti-competitive concerns raised by the merger of Ciba-Geigy Limitedand Sandoz Limited into Novartis AG. As part of the consent order, theconstituent entities of Novartis are required to provide all gene therapyresearchers and developers with nonexclusive, royalty-bearing licenses to theNovartis patent which is involved in the interference proceeding describedabove. In addition, we have entered into an agreement with Cell Genesys underwhich we would be permitted to market our non-viral gene therapy productspursuant to a royalty-free license agreement if Cell Genesys wins theinterference.

***We May Become Involved In Additional And Expensive PatentLitigation Or Other Proceedings.***

             The biotechnology industry has beencharacterized by significant litigation and interference and other proceedingsregarding patents, patent applications, and other intellectual property rights.We may become a party to additional patent litigation and other proceedingswith respect to our Niche Protein products, Gene-Activated proteins or GeneTherapy technology. Such litigation could result in liability for damages, stopour development and commercialization efforts, or divert management's attentionand resources.

             An adverse outcome in any patentlitigation or other proceeding involving patents could subject us tosignificant liabilities to third parties and require us to cease using thetechnology or product that is at issue or to license the technology or productfrom third parties. We may not be able to obtain any required licenses oncommercially acceptable terms or at all.

             The cost to us of any patentlitigation or other proceeding, even if resolved in our favor, could besubstantial. Some of our competitors may be able to sustain these costs moreeffectively than we can because of their substantially greater financialresources. Uncertainties resulting from the initiation and continuation ofpatent litigation or other proceedings could have a material adverse effect onour ability to compete in the marketplace.

***If We Are Unable To Obtain Patent Protection For OurDiscoveries, The Value Of Our Technology And Products May Be AdverselyAffected.***

             Our success will depend in largepart on our ability to obtain patent protection for our processes and productsin the United States and other countries. The patent situation in the field ofbiotechnology generally is highly uncertain and involves complex legal andscientific questions. We may not be issued patents relating to our technology.Even if issued, patents may be challenged, invalidated, or circumvented. Ourpatents also may not afford us protection against competitors with similartechnology. Because patent applications in the United States are maintained insecrecy until patents issue, third parties may have filed or maintained patentapplications for technology used by us or covered by our pending patentapplications without our being aware of these applications.

             We may not hold proprietary rightsto certain product patents, process patents, and use patents related to ourproducts or their methods of manufacture. In some cases, these patents may beowned or controlled by third parties. As a result, we may be required to obtainlicenses under third party patents to market certain of our potential products.If licenses are not available to us on acceptable terms, we may not be able tomarket these products.

 

***If  We Are Unable ToProtect The Confidentiality Of Our Proprietary Information And Know-How, TheValue Of Our Technology And Products Will Be Adversely Affected.***

             We rely upon unpatented proprietarytechnology, processes, and know-how. We seek to protect this information inpart by confidentiality agreements with our employees, consultants, and otherthird party contractors. These agreements may be breached, and we may not haveadequate remedies for any such breach. In addition, our trade secrets mayotherwise become known or be independently developed by competitors.

***If We Fail To Comply With Any Of Our Obligations Under AnyOf The Agreements Under Which We License Commercialization Rights To ProductsOr Technology From Third Parties, We Could Lose License Rights That AreImportant To Our Business.***

             We are a party to a number ofpatent licenses that are important to our business and expect to enter intoadditional patent licenses in the future. These licenses impose variouscommercialization, sublicensing, royalty, insurance, and other obligations onus. If we fail to comply with these obligations, the licensor may have theright to terminate the license and we may not be able to market products thatwere covered by the license.

**OURINDUSTRY AND BUSINESS RISKS**

***The Market May Not Be Receptive To Our Products Upon TheirIntroducation.***

             The commercial success of any of ourproducts for which we obtain marketing approval from the EMEA, the FDA, andother regulatory authorities will depend upon their acceptance by the medicalcommunity and third party payors as clinically useful, cost-effective, andsafe. It may be difficult for us to achieve market acceptance of our products.

             Other factors that we believe willmaterially affect market acceptance of our products include:

| • | the timing of the receipt of marketing  approvals;                                                             |
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| • | the countries in which such approvals are obtained;  and                                                       |
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| • | the safety, efficacy, convenience, and  cost-effectiveness of the product as compared to competitive products. |

***We Have Limited Experience And Resources In ManufacturingAnd Will Incur Significant Costs To Develop This Experience Or Rely On ThirdParties To Manufacture Our Products On Our Behalf.***

             We have limited manufacturingexperience and in order to continue to develop products, apply for regulatoryapprovals, and commercialize our products, we will need to develop, contractfor, or otherwise arrange for the necessary manufacturing capabilities.

             We expect to manufacture certain ofour products in our own manufacturing facilities. We will require substantialadditional funds and need to recruit qualified personnel in order to build orlease and operate any manufacturing facilities.

 

             We also rely upon third parties forthe production of certain of our products and we expect to continue to do so inthe future. To the extent that we enter into manufacturing arrangements withthird parties, we will be dependent upon these third parties to perform theirobligations in a timely manner and in accordance with applicable governmentregulations. There are a limited number of such third party manufacturerscapable of manufacturing our protein products with a limited amount ofproduction capacity. As a result, we may experience difficulty in obtainingadequate manufacturing capacity for our needs. If we are unable to obtain ormaintain contract manufacturing of these products, or to do so on commerciallyreasonable terms, we may not be able to complete development of these productsor market them.

***If We Fail To Obtain An Adequate Level Of Reimbursement ByThird Party Payors For Our Products, We May Not Have Commercially ViableMarkets For Our Products.***

             In certain countries, particularlythe countries of the European Union, the pricing of prescriptionpharmaceuticals is subject to governmental control. In the United States, theavailability of reimbursement by governmental and other third party payors affectsthe market for any pharmaceutical product. These third party payors continuallyattempt to contain or reduce the costs of health care by challenging the pricescharged for medical products and services.

             The Health Care FinancingAdministration of the U.S. Department of Health and Human Services hasconsidered proposals from time to time to reduce the reimbursement rate withrespect to erythropoietin. Adoption by the Health Care Financing Administrationof any such proposal might have an adverse effect on the pricing of Dynepo.

             If we or our collaborators obtainmarketing approvals for our products, we may experience pricing pressure due tothe trend toward managed health care, the increasing influence of healthmaintenance organizations, and additional legislative proposals. We may not beable to sell our products profitably if reimbursement is unavailable or limitedin scope or amount.

***We Face Significant Competition, Which May Result In OthersDiscovering, Developing or Commercializing Products Before Or More SuccessfullyThan We Do.***

             The biotechnology industry ishighly competitive and characterized by rapid and significant technologicalchange. Our competitors include pharmaceutical companies, biotechnology firms,universities, and other research institutions. Many of these competitors havesubstantially greater financial and other resources than we do and areconducting extensive research and development activities on technologies andproducts similar to or competitive with ours.

             We may be unable to developtechnologies and products that are more clinically efficacious orcost-effective than products developed by our competitors. Even if we obtainmarketing approval for our product candidates, many of our competitors havemore extensive and established sales, marketing, and distribution capabilitiesthan we do. Litigation with third parties, including our litigation with Amgenand Genzyme, could delay our time to market or preclude us from reaching themarket for certain products and enable our competitors to more quickly andeffectively penetrate certain markets.

 

             Niche Proteins.  We believe that the primary competition withrespect to our Niche Protein product program is from biotechnology and smallerpharmaceutical companies. Our competitors with respect to our Niche Proteinproduct program include BioMarin Pharmaceutical Inc., Genzyme, NovazymePharmaceuticals, Inc., Orphan Medical, Inc., Oxford GlycoSciences Plc, PharmingGroup, N.V., and Synpac Pharmaceuticals, Ltd. The markets for some of ourpotential Niche Protein products are quite small. As a result, if competitiveproducts exist, we may not be able to successfully commercialize our products.

             Gene-Activated Proteins.  Under our Gene-Activated protein program,some of the products we are developing are fully human versions of proteinsthat are currently marketed by third parties. For instance, in the case ofDynepo, erythropoietin is marketed by Amgen and Johnson & Johnson in theU.S.; Amgen, F. Hoffmann-La Roche Ltd. (Boehringer Mannheim GmbH) and Johnson& Johnson (Janssen-Cilag) in Europe; and Sankyo Company Ltd., ChugaiPharmaceutical Co., Ltd., and Kirin in Japan.

             Many of the protein productsagainst which our Gene-Activated proteins would compete have well-known brandnames, have been promoted extensively, and have achieved market acceptance bythird party payors, hospitals, physicians, and patients. Many of the companiesthat produce these protein products have patents covering the techniques usedto produce these products, which have served as effective barriers to entry inthe protein therapeutics market. As with Amgen and its erythropoietin product,these companies may seek to block our entry into the market by asserting thatour Gene-Activated proteins infringe their patents. Many of these companies arealso seeking to develop and commercialize new or potentially improved versionsof their proteins.

             Gene Therapy.  Our gene therapy system will have to competewith other gene therapy systems, as well as with conventional methods of treatingtargeted diseases and conditions. In addition, new non-gene therapy treatmentsmay be developed in the future. A number of companies, including majorbiotechnology and pharmaceutical companies, as well as development stagecompanies, are actively involved in this field.

***Competition For Technical, Commercial And AdministrativePersonnel Is Intense In Our Industry And We May Not Be Able To Sustain OurOperations or Grow If We Are Unable to Attract and Retain Key Personnel.***

             Our success is highly dependent onthe retention of principal members of our technical, commercial, andadministrative staff. Furthermore, our future growth will require hiring asignificant number of qualified technical, commercial and administrativepersonnel. Accordingly, recruiting and retaining such personnel in the futurewill be critical to our success. There is intense competition from othercompanies and research and academic institutions for qualified personnel in theareas of our activities. If we are not able to continue to attract and retain,on acceptable terms, the qualified personnel necessary for the continueddevelopment of our business, we may not be able to sustain our operations orgrow.

 

***We Have Limited Sales And Marketing Experience AndCapabilities And Will Need To Develop This Expertise Or Depend On Third PartiesTo Successfully Sell And Market Our Products On Our Behalf.***

             We have limited sales and marketingexperience and capabilities. In order to market our products, includingReplagal, we will need to develop this experience and these capabilities orrely upon third parties, such as our collaborators, to perform these functions.If we rely on third parties to sell, market, or distribute our products, oursuccess will be dependent upon the efforts of these third parties in performingthese functions. In many instances, we may have little or no control over theactivities of these third parties in selling, marketing, and distributing ourproducts. If we choose to conduct these activities directly, as we plan to dowith respect to some of our potential products, we may not be able to recruitand maintain an effective sales force.

***We Depend On Our Collaborators To Develop, Conduct ClinicalTrials, Obtain Regulatory Approvals For, And Manufacture, Market And Sell OurPrincipal Products On Our Behalf And None Of Their Efforts May BeScientifically Or Commercially Successful.***

             We are parties to collaborativeagreements with third parties relating to certain of our principal products. Weare relying on Aventis to develop, conduct clinical trials, obtain regulatoryapprovals for, and manufacture, market, and sell Dynepo; SumitomoPharmaceuticals Co., Ltd. to develop and commercialize Replagal for Fabrydisease in Japan and other Asian countries; and Genetics Institute, Inc. toco-develop and commercialize Factor VIII gene therapy for hemophilia A inEurope. Our collaborators may not devote the resources necessary or mayotherwise be unable to complete development and commercialization of thesepotential products. Our existing collaborations are subject to terminationwithout cause on short notice under specified circumstances.

             Our existing collaborations and anyfuture collaborative arrangements with third parties may not be scientificallyor commercially successful. Factors that may affect the success of ourcollaborations include the following:

| • | our collaborators may be pursuing alternative  technologies or developing alternative products, either on their own or in  collaboration with others, that may be competitive with the product as to  which they are collaborating with us or which could affect our collaborative  partners' commitment to the collaboration with us; |
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| • | reductions in marketing or sales efforts or a  discontinuation of marketing or sales of our products by our collaborators  would reduce our revenues, which will be based on a percentage of net sales  by the collaborator;                                                                                                           |
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| • | our collaborators may terminate their  collaborations with us, which could make it difficult for us to attract new  collaborators or adversely affect the perception of us in the business and  financial communities; and                                                                                                             |
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| • | our collaborators may pursue higher priority  programs or change the focus of their development programs, which could  affect the collaborator's commitment to us.                                                                                                                                                                     |

 

***Some Gene Therapy Clinical Trials Have Been Suspended AndEthical And Social Issues Relating To Genetic Testing May Cause RegulatoryAuthorities To Increase The Regulation Of Gene Therapy Clinical Trials.***

             Due to recent adverse events thathave occurred during gene therapy clinical trials conducted by otherbiotechnology and pharmaceutical companies and institutions, the Federalgovernment, the EMEA, the FDA, industry organizations, and institutionsconducting gene therapy clinical trials have grown increasingly concerned aboutthe safety of these clinical trials. An increased concern over gene therapytrials generally may lead the EMEA, the FDA or other regulatory agencies toimpose further regulation on gene therapy clinical trials. If furtherregulations are imposed on gene therapy research generally, the delays andcosts involved in complying with such regulations may impair our ability tocomplete clinical trials already in progress and to conduct gene therapyclinical trials in the future.

***We May Be Exposed To Product Liability Claims And May Not BeAble To Obtain Adequate Product Liability Insurance.***

             Our business exposes us to the riskof product liability claims that is inherent in the manufacturing, testing, andmarketing of human therapeutic products. Our clinical trial liability insuranceis subject to deductibles and coverage limitations. We do not currently haveany product liability insurance. We may not be able to obtain or maintaininsurance on acceptable terms or at all. Moreover, any insurance that we doobtain may not provide adequate protection against potential liabilities. If weare unable to obtain insurance at acceptable cost or otherwise protect againstpotential product liability claims, we will be exposed to significantliabilities, which may materially and adversely affect our business andfinancial position. These liabilities could prevent or interfere with ourproduct commercialization efforts.