Welcome to the Genzyme Corporation's Third Quarter Financial Results Conference Call. All participants will be in a listen-only mode until the question-and-answer session. (Operator Instruction) I would now like to turn the call over to Ms. Sally Curley, Vice President of Investor Relations.

Thank you, Dory. Thank you, and welcome to Genzyme Corporation's third quarter 2007 Earnings Call. I would like to remind everyone that the earnings release in this call are available on the investors page of our website at genzyme.com. On this call we will discuss Genzyme's future financial outlook and business plans and strategies. We will be making forward-looking statements, including our non-GAAP earnings estimates and growth rates for the next five years. Our product development plans and regulatory action estimates, including for Renvela, Clolar, Campath, Mozobil, Genz-112638, Myozyme our manufacturing. These forward-looking statements are subject to a number of risks and uncertainties and our actual results may differ materially. Please refer to our June 30th, Form 10-Q on file with the SEC for more information. If during this call we use any non-GAAP financial measure, you will find on our website a reconciliation to the most directly comparable GAAP financial measure. We have several analysts and investor events coming up during the next few months. So, I would encourage you to please check our website as well under Investor Relation events for more information on these. Finally, I would remind everyone that our fourth quarter earnings conference call will take place on February 14, 2008 at 11:00 am Eastern Time. I would now like to turn the call over to Genzyme's Chairman and CEO, Mr. Henri Termeer.

Thank you very much, Sally and thank you for everybody participating this morning. I have with me as usual Mike Wyzga, our Chief Financial Officer, he will go through the financial details of the quarter, and also business unit leaders that will make some comments before the Q&A about the individuals businesses that they are running. Third quarter again was a very, very robust quarter. It's very consistent with what we saw in the second quarter, what we saw in the first quarter, and despite the summer softness that generally we do experience particularly in lysosomal storage disease area, revenues were up $906 million to $960 million, up $27 million from the second quarter, up 19%, $158 million from the same quarter last year, beat the consensus, which was $952 million. Non-GAAP earnings were $0.90 a share, 23% up from last year and beat the consensus by $0.03. Genzyme business and financial performance is in very robust phase, and we now project solid performance through 2011. As we indicated in the press release, we expect 20% non-GAAP compound earnings growth from our base of 2006 through 2011, and we are tracking very well against that projection. On this basis we should expect non-GAAP earnings per share next year 2008 of approximately $4, and it raises the current consensus of about $3.89. By 2011 we are projecting non-GAAP earnings of $7 per share. We went through these projections very carefully. We understand these businesses, what we included in these projections are the businesses that we today have that have products that are introduced and products that are shortly before introduction that will impact this period of time for 2011. We do not include any kind of transaction that is not yet in the picture. We were in lot of events in…

Great. Thank you very much, Henri. Good morning everyone. Henri summarized Q2 is a very good quarter yet again. Our revenue increased by over 19% over last year, while our profits increased by 23%. We had a combination of revenue growth and continued SG&A leverage that really drove our bottom line. So let me focus a little bit on the earnings per share crosswalk and then I can talk about the businesses a little bit. During the third quarter, on a pre-tax basis, the expenses that were associated with our stock options came in about $44 million. These expenses were less than last year due to a decision that we made earlier in the year to shift from all option base to a combination of options and restricted shares. Amortization expenses were about $50 million for the quarter. Now at the completion of our tender offer on July 10, we acquired a little over 15% of the common stock of our Bioenvision. Our common stock ownership and other factors provided Genzyme with significant influence. Under equity method accounting, we were required to allocate our purchase price proportionately to the net assets of Bioenvision at a fair market value. And in the third quarter, we recorded the charge of IP R&D approximately $19 million. With the Bioenvision shareholder approval, we are effectively acquiring the remaining 85% of that company and we will allocate the remaining purchase price accordingly over the fourth quarter, so you should keep an eye for that. Finally, we wrote off about $12 million of out-of-specification Thymoglobulin finished goods. Our non-GAAP net income was $241 million or $0.90 per diluted share. That's on a basis of 270 million shares outstanding. So that is the summary, let me now turn to some of the key business factors that really…

All right. Thank you very much. Before we do open up for Q&A, let me just go around the business leaders and let them make a brief comment and then we'll have Q&A. John Butler, President of the Renal Division. John?

Thanks Henri. The Renal business continued to show strong growth, particularly in the US. US Renagel growth, as Mike pointed out, was driven by a combination of continued pricing power and share gains. In Q3, US Renagel share topped 50% for the first time since the launch of lanthanum. International sales continued to grow versus last year albeit at a slower pace than in the past. This is generally consistent with what we saw when lanthanum launched in US. The US represented about 58% of Renagel sales, including bulk sevelamer sales and royalties for Japan, which are booked into the US. I would also like to address two recent events that affected the Renal franchise. First is the Cardiovascular and Renal Drug Advisory Committee held last week. We are pleased that the majority of the committee agreed that the indication for phosphate binder should be expanded to include patients with CKD not yet on dialysis. While they voted that phosphorus is not a validated surrogate their subsequent vote demonstrated that it is a valid surrogate that an elevated phosphorus level in these patients has a negative clinical consequence. The second event was our announcement on Monday that the FDA had approved Renvela, sevelamer carbonate, to control phosphorus in CKD patients not on dialysis. We plan to launch Renvela in the US in the first quarter of next year, and as previously communicated; we plan to file an NDA for a powder formulation and a supplemental NDA for the use of Renvela in CKD patients not on dialysis in the first half of 2008. Additionally, we'll begin our international filings, including filing Renvela for CKD patients both on and not on dialysis, as well as the powder formulation for European audience in the first half of 2008.

John, thank you very much. [Jim Geraghty], President of Cardiac Division.

Thank you, Henri. We were indeed, as you mentioned, very pleased to receive last week the final EMEA authorization for the launch of Cholestagel in Europe. As you may recall, this product was initially approved subject to a number of post-approval commitments a few years ago. It has a broad label in primary hypercholesterolemia and we've now worked with the EMEA to develop a strategy focused on FH, familial hypercholesterolemia, another very high risk patients. We are particularly focusing on FH patients who are not able to get to goal despite being on both maximum statin dosages and Ezetimibe. So, we are now looking forward to bring Cholestagel to these patients who have extremely high LDL levels and are high risk of cardiovascular disease and indeed often suffer a first heart attack as young adults. 55% to 80% of all men with this disease will experience first cardiovascular event before age 60. Now 75% to 80% of these patients cannot reach target LDL levels even with existing therapies, both optimal statin and Ezetimibe, and Cholestagel has the highly attractive [add-on] therapy option as a non-absorb, non-systemic and very safe agents. So, we will be approaching this market in a very cost effective and Genzyme like way. The majority of these patients are following a highly specialized lipid clinics numbering about 20 to 30 in major markets in Europe. We'll be starting our launch in Northern Europe in Q4 and expanding throughout year of during 2008, covering these markets initially with a small and highly focused sales force, heavily leveraging Genzyme's significant infrastructure in this countries. Overtime, we see significant growth potential from increased diagnose of FH and from usage of this product in broader non-FH high-risk population and longer-term interesting opportunities in other indications, which we hope to discuss further at some point in the future.

Thank you, Jim. Ann Merrifield, President of the Biosurgery Division.

Thank you, Henri. We were very pleased with our third quarter results Synvisc revenue growth at 9% represents our strongest year-over-year comparisons since we took pricing action at the end of last year and belies even stronger unit growth. In US, for example, we were up 14% in kit volume third quarter over a year ago. So, we are maintaining our lead market position. Our key objective as we put all our energies toward the launch of Synvisc-One early next year in US and Europe. As we dive into our strategies for that launch, we become even more excited about the prospects for that product both in expanding the patient population that we opt to viscosupplementation as a treatment modality for convenience sake, but also when patients have comorbidities, which counter indicate multiple injections. So, we become more excited about the expanded reach and actually more excited about the positioning, if you will, to payers and the costs, and economics of reducing the number of injections, the number of hospital visits. So, again, as we dive into that we've become more excited about the prospects of Synvisc-One in the market for next year. And are also heartened, of course, by the continued progress of our Sepra product line, 25% year-over-year growth shows the quick payback, frankly, on the increased sales and marketing investment in US, which we made in the first quarter of this year. So, great quarter and we look forward to reporting more as we move forward into these launches. Thank you.

[Joe Labaki], the gentleman runs the transplantation business.

Thank you, Henri. As Henri mentioned, the transplant business continues to grow very nicely globally with our main product Thymoglobulin being the driver. Thymo continues to grow not only in its current market in solid transplant, but in the markets of bone marrow transplant and treatment of hematology. So, we've also seen growth internationally in new markets as we leveraged the existing structure of Genzyme to Thymoglobulin to other parts of the world. In the clinical market, we continue to grow Thymo into new areas. Our Trim study looking at the solid organ transplant for minimization of steroids will be submitted to the American Journal of Transplantation. So, we would look to get some good data out of that as well as looking at a three-year follow around those patients. Our [CURTAIL] study, there was a pilot study looking at use of Thymoglobulin in induction for liver transplant, will be submitted to the American Transplant Congress in May of next year. So, again, that's another area we will expand Thymo use, and exciting areas for Thymo and condition of bone marrow transplant, treatment of hematologic malignancies and autoimmune disease. I am pleased to say that the ITM, immune tolerance that we are studying in Type I diabetes opened in October with it's first patient looking to enroll 66 patients, again, that's use of Thymo for treating that Type I diabetics. We also are looking on a study in MDS Myelodysplastic syndrome. An investigator study is open and running in the US with 11 patients with initial results very promising. And then we plan in opening a Genzyme sponsored Myelodysplastic syndrome study in Europe and the US in the coming months. For Thymo, at the upcoming American Society of Hematology Meeting we have four abstract that will be submitted in a good presence at that meeting around Thymo for hematology. Turning to Mozobil, as Henri mentioned, we are planning on the filing for Mozobil in mid-2008. We are working very hard on that right now. As you all know, we had great results, very robust results in our Phase III studies in multiple myeloma and non-Hodgkins lymphoma beating our endpoints of 20% difference very handily and with a 40% difference in both of those studies. So, we are again working on the NDA to get that filed and continue to expand the use of most Mozobil. We started chemosensitization studies in AML, this is an ongoing study currently in the U.S. and other studies planned to start-up in the coming months. We are also looking to start a European base study of G-CSF and Mozobil starting up in Q2 of next year, as well as another study within the U.S. to expand the access of Mozobil to patients.

Thank you, Joe. David Meeker, President of the Rare Disease Area.

Thank you, Henri. As both Henri and Mike indicated, we had a very solid quarter across the LSD business unit. Besides seasonal softness in the Fabry world does not reflect any change in that business. We just had our annual roundtable meeting in Europe with 320 physicians attending and increasingly I think the data and the physicians are coming to understand the devastating nature of this disease, importance of treating early and increasingly I think we will see younger and younger patients placed on therapy. We have now announced the availability of a field study which will be a study looking at using a lower dose of Fabrazyme in the younger pediatric population. Myozyme continued to have a very strong growth again as highlighted. We will file at the end of this quarter for 2008 approval in the U.S. with that approval expected to come in the first quarter of next year. The MTAP program as Mike highlighted is going well, with 29 patients on it been in the quarter and 45 patients on as of today. The last study has last patient is out. We expect results from that study in the first half of next year. Two post-presentations that are currently being presented at the ASIC meeting in San Diego highlight the long-term follow-up of patients in our severe 1702 study which were the patients between six and three years of age, again confirming a significant reduction in the risk of both mortality and progression to invasive ventilation in that population and long-term follow-up. And there is also posters showing long-term follow-up of 18 adult patients who were severe as defined by the need for ventilatory support and wheelchair support, with a significant percentage of those group showing both motor improvement in 13 out of 18 and respiratory…

Thank you, David. Mara Aspinall, President of the Genetics Diagnostics Division.

Thank you. As you heard, we had another strong and solid quarter with growth in both our physician testing and our clinical trial testing area, growth of about 19% from last year. Our growth comes from both increased market share as well as market growth from physicians who are increasingly using diagnostics to not only diagnose, but also to monitor patients and to choose their therapies.

Thank you, Mara. And lastly Duke Collier in the absence of Mark Enyedy who is not present today will make some comments on the oncology area.

Just a couple of points on oncology. As Henri mentioned, we are very happy finally to have closed the transaction with Bioenvision and to be able to move our development of and commercial efforts of clofarabine into global arena. This though is one very quick impact considerably accelerated our development process in adult AML. Two points I think I'd make about Clolar. First, we are very gratified to see what benefits it's bringing to the labeled indications -- the patient with the labeled indications who are very sick, third-line refractory relapsed pediatric AML patients. It's certainly the standard of care for those patients now and I think it's very satisfying to have brought some benefit to that group. It is increasingly through development programs plus approval programs that we are sponsoring that the Children's Oncology Group is sponsoring and various investigators are sponsoring, moving up line in pediatric AML, finding its way into management second line. And I think in increasingly some conversation about high risk first-line patients, although the care there has been quite strong for those patients for many years. With respect to adult indications, we are well along in our own sponsor trials in the U.S., two of them, one in Phase II in adults with AML and one on more pivotal Phase III and this case in refractory patients. We expect to have enrollment in our Phase II completed this year. We will be showing response rates, but in addition we are going to want to see the durability of effect and we expect the FDA will be of course quite focused on the durability of effects. So our current thought process is that we will be back to the FDA with the data late in the year perhaps '08 and '09 to some extent. The…

Thank you very much, Duke. Operator, at this time, let's move to Q&A.

Thank you. At this time, we will now begin the question-and-answer session. (Operator Instructions). Our first question comes from [Geoffrey Porges] with Bernstein. Your line is open.

Thanks very much for taking the question. Questions related to your long-term guidance, Henri particularly the 400 million from Mozobil. Could you just give us a little bit more brief comment, because I think your number suggests that there is around 50,000 to 55,000 transplant candidates in that 400 million number. And so that presumes so close to 10,000 per patient pricing and I was just wondering how you could -- if you can give us a little bit of a sense of how you are thinking about that to get to that number because its only seems bigger than we'd expected?

Yes. Let me ask Joe Labaki to make the comments on that. Joe.

Sir, you are correct. There are approximately 55,000 BMT patients around the world. There are probably actually more than, that we are under counting because of the registry data outside of the U.S. and Europe. Also one of the things that we are looking at with Mozobil is that, as you look at it about 20% patients will fail, those patients never get counted in that 55,000 number, because if you don't go to a transplant you should not get counted in the number. So I think there is the opportunity to expand that population as well. So, as we look at it and growing to that number, I feel very confident about that number and that's again, the number of patients I can benefit from Mozobil that's something we can reach.

And brief comment on the Pharmacoeconomics?

The Pharmacoeconomics, as we look at in and a lot of data will be presented at the upcoming ASH meeting there. We have two oral presentations. So you'll learn more about the data in depth. But we are looking at a lot. The biggest piece to look at that we announced in our data is, if you took a 100 bone marrow transplant patients in the NHL study, 90 of those patients would have mobilized and gone on to a transplant. Only about 50 or little less than 50 of those patients could have mobilized with G-CSF to go on to a transplant. And there are two things that happen there. So one, there are 40 patients that we need to be remobilized so they go back through the whole process again, and that's a cost for the system. And the other piece is that, there is a lost opportunity there for patients and the institutions for patients not going through transplantation.

Alright thanks, that's very helpful.

Next question?

Thank you. Our next question comes from Ian Somaiya with Thomas Weisel Partners.

Sure, just a question on your longer term guidance. As you provide greater visibility on the 2010, 2011 outlook – clearly there is heightened speculation on sort of the driving motivation behind that. And Henri, I would just love to get your comments on that, and just maybe to add to it. What gives you the foresight to be able to provide 2011 guidance and 2008 guidance ahead of your typical January schedule?

Yeah, since the second quarter we’ve become pretty direct about what our expectations are, and that indeed, is different from the way that we use to do this in the past. And the confidence really is based on looking very, very carefully indeed at each of the businesses. We have of course tremendous experience now in each of these businesses. And the other thing that we were starting to see about a year ago is the tremendous leverage that occurs by expanding these businesses' present and existing infrastructure. And that allowed us to really make projections forward within what we understand to be the markets, and we have been in thee markets for quite a while. What we understand to be the impact of the new products that we mentioned like Renvela, like Mozobil, like Synvisc-One, and others, and to become pretty focal and pretty direct in terms of how we are running this business, and what we are expecting from this business in terms of financial performance. We also look very carefully at our ability to continue to invest in R&D, because we are reading 2011 as our [main point]. So we are keeping R&D pretty much at the same percentage of sales throughout his period, growing it very nicely each year, and allowing us to make the kinds of investments required to bring things like Campath MS to a point where it becomes real product. And that's the actual excitement. We're not only seeing this kind of compound average growth rate from an earnings point of view through 2011, but we are also seeing very exciting programs indeed, that will become commercializable by on 2011 and Campath MS is may be the most direct example of that. We expect the MS market at that time to be about $8 billion to $9 billion, that's generally what I hear analyst talk about, and we will have what we think an extremely strong product in that space, and that will, as a single example continue to allow us to grow beyond the period that w spoke about. So it’s a careful analysis. It is different from the way we did it in the past, but it is the judgment we made because of the experience that we now have with many of these programs in the market.

All right. Thank you, Henri

Our next question comes from Jim Birchenough with Lehman Brothers

Hi, guys, and congratulation on the quarter. Just want to better understand the upside opportunity for Myozyme going forward, and the down side risk around the [added] onset data. So if you could just describe the build that you expect to continue outside of the U.S., what countries are in right now, and if there's some incremental new ads we’ll see in the fourth quarter going into’08? And then just trying to understand what the impact could be of the adult onset data both in a positive and negative scenario, particularly interested what the downside risk is if that trial doesn’t work your existing business?

David, you want makes some comments?

Sure. I guess the general response is that the overall opportunity for Myozyme and Pompe disease is large, and we are very early on in this overall process in terms of launches. Henri said, we've had a very successful launch, but we remained very early on in the process. The growth that we would expect to continue, we would expect strong growth to continue in Europe, again, very large market, very well organized, so relatively early on in that process. Japan, again we expect a continued growth in Japan. And efforts which won’t necessarily be large in 2008 in terms of numbers, but increasingly over a time it will make a large difference are, newborn screening efforts and Taiwan is one example where we've initiated newborn screening in Taiwan. The numbers that they screen are approximately 130,000 infants, four infants were identified in that population and that matches what is felt to be the incidence for Pompe disease. All four of those infants started treatment within one month or very shortly after birth, so the outcomes are likely to be better. So the bottom line is that things like newborn screening will continue to support this growth. The impact of a large study, again we remain very optimistic that the large study is going be positive like any trial again till we see the data we don’t know. What will drive growth in the adult world goes well beyond the large study. However, and increasingly as well over 50% of the patients now on treatment who are in the adult category if you will and as I highlighted in my introductory remarks, the anecdotal experience in that population is growing and confidence of physicians that the drug works in that population is growing. So we are not strictly dependent on a large study but we are looking forward to that study being positive.

And just so I could follow up. I guess I am trying to understand if there is anecdotal experience supporting the benefit of the drug. What's the worst case scenario? I am trying to understand the shades of grey with the data where you might not meet the regulatory requirements but there may be some secondary end points that meet. Just trying to understand that?

Yeah, exactly. The P value again is just a P value so, at worse I guess it could trend but it would be hard to imagine that there will be no evidence of efficacy so all of that would be supportive and there are secondary end points including quality of life and respiratory end points that will be part of that. And finally, as you think about the modeling that will drive next year is, once we do get approval for the 2000 leader, as Henri said, there will be a step function as those patients who are on the MTAP program as well as the last patients coming off and going on to a commercial drug.

Thank you.

Our next question comes from Yaron Werber with Citi.

Yeah. Hi, good morning and congrats on the good quarter. I just had a quick question Henri could you share with us in your 2011 guidance, what are you projecting in terms of competition for Cerezyme and maybe some of the other enzyme replacement products?

For Cerezyme we would expect that for that time there is some additional peering in terms of enzyme replacement therapy. We would suspect that, that competition will primarily manifest itself around new patients, because we don't expect to be given the very long-term, extremely solid experience that we have around Cerezyme to be any particular reasonable patients to shift or to change. So that is what we put in our mind that at that time there will be some competition. It's possible that it there would be somewhat delayed but that's in our projections. In terms of the Chaperone Technology, it's still very, very early days. In the best of cases, we don't expect that to manifests itself for the next five to six years. So that goes beyond this period of time, but it's very early days. This program still has to go through very rigorous clinical development, and those just take sometime. We experienced that ourselves too, we have our own Phase II program that David mentioned, showing very good results in terms of efficacy. Of course, the criteria here, is that we have and say [effication] -- a product that's comparable with the standard of care, no patient don't want to go backwards. But even being in an advanced stage of Phase II clinical testing in this patient population, we still expect it to take about three, maybe four years for us to reach the marketplace with this program. So that’s what’s in our assumption Yaron.

Can I just follow up Henri, and within your guidance are you considering taking any pricing action, potential price increases on the enzyme replacement products? I know you’ve never done that before?

Yeah, it’s very difficult to make suggestions or to talk about things that we haven’t decided on. So I don’t necessarily want to make any comments in that regard. Currently, our products actually are kind of inexpensive in this very ultra rare space, so we have not done it before as you commented, so we would do anything. We want to make sure that we do the right thing – that, I want to make absolutely sure that we maintain an approach that allows the broadest based access to product regardless of the economics of pricing or reimbursement. That has been our approach for many years since 1990 that has been appreciated by the community and by the reimbursement agencies around the world, and we will stay very [pure] against that kind of an approach.

Great, thank you.

Your next question is from Geoff Meachum with J.P. Morgan

Hi, guys quick question for you on the Thymoglobulin. Can you go in a little bit more detail as to what manufacturing issue was, and what’s been put in place so that this doesn’t recur? And then the second part of that is, what inventory do you have thus far on hand to meet demand?

Yeah, it’s a good question. I was just there last week and the manufacturing. The two issues, one is the issue related to where the FDA letter that we received recently, and that obviously is something that we take very serious. That's not impacting necessarily current supply, but we take that very serious and we will do that what is required to make sure that, A, that never recourse again, and that we reassure FDA and as well the regulatory agencies that we are fully compliant was any kind of regulations in terms of manufacturing this product. The write-offs of these two lots that David mentioned, I also mentioned, indeed also Michael mentioned that's also part of the press release. They don't have to do with [less], but they have to do with the quality of the product that did not meet the specs and we wrote those lots off. We are working very, very had to get our arms around that, because that does impact inventory that's available. So we are very, very tight in terms of inventory in this space, and we are working very, very hard indeed to get beyond to this point, but it will take some time for us to build the kind of inventory that will put us in a safer position. We are putting the best resources we have on this challenge, and we've done a number of things among others. We changed the place where we do [full] finish from an outside party to inside, and I am confident, I have tremendous confidence in the track record of our manufacturing experts, process experts to get beyond this point. So, we would expect -- that's why I mentioned this both as a current challenge, but as a future opportunity. I would expect us to get beyond this point shortly into the first half next year. This is costing us money right now, it's costing us margin and when we get beyond it, it will actually give us an opportunity expand the margin on the program, which has such a rich future ahead of it. Longer-term, we have decided to build a new plant that is up to the late standards in terms of manufacturing and that I think will secure this program not only in the medium-term, but in the longer-term. We expect this product to have a very long-term future ahead of it. We're still starting new clinical trials for new indications and that's why we are investing in it significantly not just to resolve current problems, but to be able to produce larger quantities in the future.

Just a follow-up on that Henri, real quick, and thanks for the color. So, is it fair to say that you have enough material on hand to meet demand until the first half of '08, but then second half of next year is when you may start running into supply constraints?

No, we are tight. We will be tight through the first half of next year. And at the current demand, at the current production level, at the current lots that are available, we are squeezing through this period. But, I am not comfortable with it and we have to get to a better inventory position. In terms of the forecast that Joe talked about and the current level demand that is expressed in the results of third quarter, yes indeed, we will be able to keep ahead of the quarter, but there is not much room for error and we are making all the investment necessary to make sure that we get beyond this point.

Thank you.

Our next question comes from Mark Schoenebaum, with Bear Stearns.

Hey, thanks. Thanks a lot for taking my question, I appreciate it. Henri, can you comment to us that the $4, 2008 EPS target includes any non-GAAP dilution that you might experienced from potential acquisitions. And also the 20% EPS non-GAAP CAGR from '06 to '11, can you confirm that that also includes any such dilution? Thanks.

No, as I said before, these projections do not include any hypothetical transactions, it's impossible to do that. And in this world, transactions still occur also for Genzyme and I don't think any shareholder would like us to be limited to the extent of that we can't make transactions, transactions will occur. And we just finished one this week with Bioenvision. We will have them in the future as well. So, what these numbers, non-GAAP numbers include are the non-GAAP business that we reported on the third quarter. The businesses that we are in currently and the new products that you are familiar with and they don't include any hypothetical transactions.

If you could, just a follow-up, when we as observers of Genzyme think about the tolerable level of dilution from those targets, can you at least frame it for us or give us some guidance on that?

No. In the past we have done transactions, so we've generally earned our way through the dilutive impact. That was the case with Bone Care and that was the case for Anamet. That was indication of Bioenvision we were just reporting one quarter, this current quarter, we'll have a very small diluted impact of a three or four pennies. But, we are also saying that for next year we will prioritize at the cost of the programs associated with Bioenvision in a way that it does not dilute overall earnings. The same happens around ILEX, the same happens around most of transactions that you are familiar with, that we've done over the last five years. So, transforming transactions that I'm not seeing at the moment may have a very different picture. And, but I can assure you that we have nothing currently contemplated in that regard. But, you never know, and but if such a situation were to occur in the case of GelTex that was a transforming transaction. That was dilutive for one or two years. Of course, it was extremely explainable to all of you that this was the good thing to have done, because it expanded significantly both the diversification and the top-line for the corporation in the long run. So we are very, very careful. We are very conservative indeed in this kind of transactions we do, the size of those transactions and I would expect very marginal, very short-term dilutive impact for the most part absorbable of those within the current P&L.

That was great. Thank you very much. I appreciate it.

Our next question comes from Phil Nadeau with Cowen & Company.

Good morning. Thanks for taking my questions. First is a follow-up to Yaron's question. Price RX is actually reporting that the prices of Cerezyme, Fabrazyme and Aldurazyme, I believe will be increased as of November 1st. Can you confirm if that is in fact going to happen? And then second on Renvela in CKB, you noted that the vote at the recent panel was for expanding the labels, but the discussion following the vote the suggested that maybe half the people who voted for label expansion and certainly the FDA representatives want to see more studies before the label is expanded. So, have you had conversations with the FDA that give you confidence post that meeting that the study that you've completed will support the filing next year?

Yeah, let me just comment on the price increase. There is a very small. I think 3% price adjustments around all LSD products that you're probably referring to. Does that answer you question?

Yeah, it does. Have you taken such a, almost cost loading type increase to these products in the past or is this the first event of cost loading type increase?

So, may be I'll just comment on that briefly. So, we have taken an adjustment which took early on both with Aldurazyme and Fabrazyme. There are two things here - one is, over time being able to make that cost loading adjustment as a reasonable and necessary thing to do. And as Henri said, we did it across all three products. And the other thing is that we work hard to maintain a global pricing band to make sure that prices don't get out of equilibrium across the world and that's also allows us to manage that more easily, so that's it.

John, can you comment on the advisory committee and the CKD question?

Certainly, Henri, it certainly was a complicated conversation particularly after the vote came. A couple of things I think got important. Throughout our conversations with the FDA about this, they have been clear that they want to see clinical outcomes data and that drove the advisory committee meeting. We have demonstrated in the past we discussed that that meeting that in dialysis patients, we've continued to show clinical outcomes data. We are very committed to the outcomes data and we will continue to do that. Part of the question is, are those outcomes data generated in a pre-approval or post-approval environment? I think the committee was very clear that patients with elevated phosphorus levels need to be treated. Although it's not a validated circuit, these patients need to be treated. We will be presenting our CKD data at the ASN meeting next week in San Francisco and we've shown top line data from that and we did treat a patient population, who had elevated phosphorus. As such, we do still have confidence and we still plan to move forward with our filing in CKD and we will continue our discussions with the FDA around what other data needs to be generated and we have always been committed to doing that and we will continue to so. We certainly have a desire to do that. As we talked about at the meeting, the patient population that has an elevated phosphorus level, marked type of phosphotemia is not the four million patients that are seen in the U.S. by nephrologist, but that's certainly the first target for these approvals. We want to continue to generate clinical data to show the benefits of using sevelamer in patients who don't have that marked and elevated phosphorus level because of the phosphate binding benefits of Renagel but also of sevelamer, but also the pleiotropic effects, the LDL lowering, the CRP lowering, the increasing [infectant], the binding of uremic toxins. We think all of these clinical benefits will help in earlier stage population. So the first approval that we're looking for will be in these patients with an elevated phosphorous level, but we will continue to generate clinical data to show benefits in the other patient populations allowing us to expand it that larger, million plus patient population.

So do you have data in pre-dialysis patients with elevated phosphate levels that you could include in your filing, whether it's from a perspectively defined trial or from [Décor] or from any other source or the main data in the CKD filing from the 49-patient study that you've completed?

That's right. That is the patient population that had phosphorous levels elevated above 5.5 milligrams per deciliter, and that's the patient population that was -- what was clear I think from the advisors, certainly the ones who voted to expand the labels, that was what they were considering where patients with significantly increased phosphorous levels and we think we updated to support that filing. And again, we'll talk with the FDA about subsequent studies that need to be done.

And you chose a 5.5 at the advice of the FDA at the time?

That's correct. I mean that was in the consultation with the FDA.

Great. Thanks for taking my question.

Next question?

Thank you. Our next question comes from Chris Raymond with Robert W. Baird.

Thanks for taking the question, maybe another guidance question if you don't mind. Just this quarter was a pretty sizeable deed compared to what people were expecting, but just kind of doing the math through the remainder of the year, if we were to just come in at the top end of your '07 guidance, that would infer a pretty sizeable step down for Q4. Can you maybe comment, is that really what you intend for folks to model, or is there a chance that there could be some upside to that range? Thanks.

Yeah, we have not focused on once again trying to give you guidance just for this quarter. I think you are quite right. We are tracking extremely well against the current guidance and we really moving on to the next year and that's why we mentioned to '08. So, we have the activities going on that we spoke about. We have the Bioenvision impact in this quarter that I spoke about. But there is no doubt that the outstanding times we can feel quite comfortable about in terms of our ability to get there.

Thank you.

Our next question comes from Meg Malloy with Goldman Sachs.

Great, thanks very much. Question again on next year's guidance, that is, are you still contemplating gross margins in 77%, 78% range as we had seen. I know this quarter we had a little bit of a downtick on that and there are a couple of moving parts. So, I guess the question one is, are gross margins the same next year and what could be the biggest swing factors, for example, when Myozyme manufacturing comes in and the rate of Renvela transition. Maybe if you could just walk us through your thinking there?

Yeah, Meg, that's many questions. The guidance call -- the formal guidance call will take place as usual in the early part of next year and we then goes through all the details. We have not done the complete budgeting of the corporation at this time. What we haven given you is what we are working towards and what we feel is a reasonable way to think about for all of you, the times where we will be at next year. All the details and the ins and outs we will discuss on a much more specific and granule basis when we get [dessert] during the guidance call in the early part of next year. Mike, do you want to make any other comment?

Yeah. That's fair enough. I think the only thing to keep in mind as far as trends Meg, is we were fairy heavily impacted by the by FX rate this quarter in two separate areas, one is on the inventory side as well as the cost of production. Again, you cannot point on whether that occur again next year on a go-forward basis. The second thing is as you bring on a new facilities such as we did in [San Francisco] and Waterford, most of the expense of cost of the first unit is true which in this case was Cerezyme. And in the case of Cerezyme, you are utilizing or you are dragging around all that excess capacity as you gear up with the increase capacity as well. As the volume increases, you will have a more matching of the capacity utilization. So those are two facts got to keep in mind, but I think Henri will get a right answer. We are not going to give further guidance on the detail until February [to revise it on].

Okay. Thanks a lot.

Our next question comes from Matt Duffy with BDR Research.

Hi, thanks for taking my question and good quarter. I wondered if you could just lay out for us little more specifically as we approach the Renvela launch, the related benefits of Renvela versus Renagel to both patients and the Genzyme?

John.

Sure thanks.

Thanks Henri.

So again, Renvela in the dialysis population is a buffered form of Renagel. It does keep bicarbonate levels higher, which is a benefit for patients on dialysis as well as giving us access to that CKD population. So, there are clearly benefits to Renvela. But, the way we look at this launch in the US and before we have the CKD not on dialysis indication, we are really looking at growing the brand of sevelamer, that's the way to measure. We are not measuring on a conversion rate here. If patients are well managed on Renagel, physicians want to keep those keep patients on Renagel, we are very comfortable with that. We are looking to see new patients towards Renvela and we want to see the overall brand grow and the overall market grow as it has when other products have been launched into the marketplace. So, that's the continued focus. We will be on the clinical benefits, what we've seen in RIND outcomes in D-COR etcetera, and then continuing to expand the product globally as well.

Okay. Very good. Thanks.

Our next question comes from Geraldine O'Keeffe with Fortis Bank.

Hi. Good morning. Thanks for taking my question. Cholestagel, you are targeting on the FH market. I am just wondering, does there have orphan drug status, and if you can comment on the pricing? And if you can remind us, has product already been launched in the US?

Jim, can you handle those questions?

Yeah. Let me start with them, maybe backwards. In the U.S. the product has been launched for a several year prior to Genzyme's acquisition of GelTex the product has been licensed to company which is now Daiichi Sankyo and they have been marketing that product successfully in the US for the last four to five years. The indication of this product is actually primary hypercholesterolemia. So, we have not applied for or received the orphan designation. The incidence of familial hypercholesterolemia is probably slightly above that would qualify for orphan designation and invest. And what was your third question, I missed there?

The pricing.

The pricing, the pricing I would say is, we've done a lot of work giving a pharmacoeconomic value to the product given the incidence of heart attacks and other cardiovascular events in this population. And we are confident those pharmacoeconomic benefit support a price which is comparable to that which the product is sold in the US, which is in the range of about $2,000 per patients per year.

And if you could just follow-up another question on the Renal panel, which we've already discussed a little bit. But I am just wondering on the other side, based on the outcome of the discussions as you think you might expect some off label use in the pre-dialysis market.

Go ahead John.

Sure. Yeah, well actually when we have off level use of Renagel today in patients with CKD not on dialysis is real hard to measure exactly what that is mixing the scripts. But, we do market research of physicians if they believe the Renagel story they are using in CKD. I think there is certainly a possibility that off label use can increase with Renvela available. But, again, its always best is when you can promote in the market and really talk to physicians about the benefits of the product, so I think that it will be limited.

But, as the fact say, John, if in CKD patients not on dialysis do have a high phosphate level that the standard of care is to manage the phosphate level.

The standard of care to mange the phosphate in the standard of care right now is generally to use calcium. The vast majority of those patients are on calcium today. Often calcium carbonate, not PhosLo, but PhosLo as well. So, there is a significant market opportunity there.

Okay. Thank you very much.

Our next question comes from Aaron Reames with Wachovia.

Thanks for taking my question and congratulations on the quarter. I just had a follow-up question on WelChol and I was wondering if you could confirm whether Daiichi Sankyo has a filing in front of the agency for the treatment of diabetes? And if that is approved, does that going to be an indication that you will pursue with Cholestagel?

Jim.

It is correct that Daiichi Sankyo does have a filing for Type 2 diabetes indication for the FDA, which I believe they -- and that just expect it probably soon. They have published several studies on the HbA1c lowering effect of colesevelam, let's say, the active agent. And I would say, we are also exploring the potential efficacy of the product in a diabetic population. Again, in the Genzyme, like we are approaching this. We are looking particularly at a more severe population, perhaps for example, the comorbid diabetic and hypercholesterolemic population.

Okay. And then, on another topic, can you provide us any update on the European filing of clofarabine and when we might expect to see a label expansion in Europe?

Yeah, Duke. Bioenvision had been given permission to supplement its current filing up until the middle of next month. We, of course now take that over and we'll see if any additional data can be filed next month. And then, our understanding or expectation is that we would hear from the authorities early in the year, probably, in January, February. Our current expectation is that they will not approve Clolar at that time based upon the package that they will have in front of them. So, that said, we are now having pulled everything together with the acquisition. We now expect that the material data to put the entire package together will probably come more or at least as much from our Phase II study that I mentioned earlier. And so, our expectation would be a European approval is probably cracking along in the same timing that I mentioned with respect to the US approval.

Can you remind us, is that Phase II that you have randomized or is that open label as well?

It is open label.

But do you think that will be sufficient though to answer all the questions that are outstanding?

It will be sufficient if the response rate and the durability of the responses is in process as we expect and as it had been seen in some of the earlier work.

Okay, thank you.

And operator, we will do three more questions.

Thank you. Our next question comes from Bill Tanner with Leerink Swann.

Thanks, maybe a couple of questions. First of all Henri on the motivation, on the $7, do - I mean, there is nothing magical there you're essentially just doing the math I guess that you provided back in July as a long-term EPS growth rate?

The motivation is obvious to give you a sense for what we expect and how we see these businesses.

No, right, we are understanding that -- but you previously said 20% EPS growth, that was just basically which should we calculate?

You can calculate it on the basis of 2006.

Right, usually the math works. So, then the question I guess is, as you look going forward kind of coming out of the other side of 2011, it seems like obviously your Campath MS is not in that guidance, the 2011. You might have greater visibility on Mozobil and other opportunities. It seems like wherein balance CKD could continue to do well. So, what is that due at least thinking about those things carrying you on, on the other side as to [blooding] an appetite sort of acquisition over the near and or medium term because it seems like people are going to stock. I guess there is some concern that company which I think you said that's part of the plan is to make acquisitions, but at least something we should be think about things over the near to intermediate term being smaller more strategic, not much in a way of dilution and is the way that the table is set through 2011 and then perhaps on the other side really suggest that nothing that's big and transformational and highly dilutive would likely to happen?

As I said earlier, there is nothing on the table in terms of the transformational transaction. Its also completely unpredictable over such a long period of time that nothing could go on the table, but we've not done those things in the last 25 years. And the largest transaction we did about some [gel packs], which was at that time transformational. But obviously it was a very explainable transaction, it is a very identifiable set of criteria and we were as a quick, it became an accretive transaction within two years. There is nothing like that that's currently being contemplated by the company, but I can't obviously exclude things, I don’t about yet. But what is very reasonable to assure is that we do the kinds of things that we have been doing all along in the past. And as I mentioned earlier, generally these are the kinds of things that are – that may like by on vision one quarter to be dilutive by few pennies and then we went all the way through that pretty quickly or we reprioritized overall problems of the company. So we can afford it without creating longer term dilution.

Okay, great, thanks.

Our next question comes from the Geoffrey Porges with Bernstein. Geoffrey Porges – Bernstein: Well, thanks a lot for the follow up question. I just have long-term question about Campath, given its importance for the portfolio, I am wondering if you could give us a sense of how decisions will be made about things like promoting the product, pricing the product, positioning it against the other MS treatment. How will things exactly work between Genzyme and Bayer given the investment you're making in this? Thanks.

Yeah, that's a great question. And we have of course, an ongoing relationship with Bayer that's in the oncology field, whereby Genzyme gets two sets of deconomics and Bayer gets one set of deconomics, they do the marketing and we do the development including the clinical development that we spoke about into Phase III. We will be working very closely together quite obviously; including how the pricing will go at that time. And those are well organized mechanism between the two companies to work on these kinds of decisions including any kind of decision with regards to development or regulatory actions and so on. The -- from a pricing point of view, as Genzyme has done, as many companies now do, we look very carefully at the value that we create and that the cost will be shown in the Phase III clinical trials that now are ongoing. An example of the value creates can maybe looked at the Phase III clinical, the Phase II clinical trials and the result, three-year results, we create tremendous value in this regard. And we feel very confident that we'll be able to create a valuable proposition to everybody in this field, globally, that is, is very attractive indeed and obviously, for patients the clinical outcome will be a very, very big driver indeed and the convenience of treatments only once a year, of course this regular follow-ups from our risk management point of view. So the process is well established between the two companies how we work together. Geoffrey Porges – Bernstein: Thanks very much for taking the follow up.

Our final question comes from Yaron Werber with Citi

Yeah, hi, thanks for taking the follow up. I just had a question. Can you quantify for us by any chance given the manufacturing constraints in the U.S. what’s the sort of the backlog right now? How many patients are waiting to get the products once you leave your manufacturing issues?

I would think at that time if you include the patients that are in the [LOPS] trial which will obviously start to compare it over mostly this, U.S. patients and the patients that will be in this supportive mode and patients that may wait during this period of time core products become available. You talk about a few hundreds patients, David lots of it 100 to 200

Yeah. (inaudible) so there is the remaining less patients, 50 of those are in the U.S. and as I indicated we currently have about 45 patients in the MTAB program that will continue to grow. So, I would say between those two efforts we will get between a 100 to 150 patients. And then there is the untapped potential in new patients who are our there inline. And one of the efforts which I didn’t mention earlier that we will continue to drive that piece of screening of this one brittle Muscular Dystrophy population, so with patients who have muscle weakness, but have not been given a specific diagnosis and I think things like (inaudible) this will make it easy to or easier to screen that population and we’ll get a significant yield there. So, between a 150 to 200 patients I would say is a reasonable expectation for what might be the demand out that.

And how many patients do you have totaled in the LOPS study, is it 50 in the U.S. and

90 patients or so, 90.

Thank you.

And that was the third question. Operator, then, I think we will close over this time. Anybody that was still in the queue to ask you question, please contact with us as Sally Curley or Mike Wyzga or whomever you want to direct a question to. We will absolutely try to respond to any outstanding questions, that you may have. Again, thank you all very, very much for participating today. It obviously is a very rich moment for the corporation. It’s very, very interesting way, and the way this we can project forward on this robust solid base on the new things that an opportunity we can create, new opportunities around, over this timeframe. Thanks all very much for being here. We look forward to seeing you and talk to you very soon.

Thank you for joining today's conference. That does conclude the conference call at this time. You may disconnect.

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