The world is changing, so are we !

1. The world is changing, so are we !

2. Agenda • Overview: the Bio-Pharma industry • Major challenges for developers • Genzyme: Innovations for unmet medical needs

3. Overview: the Bio-Pharma industry

4. TOP 10 TRENDS ON THE PHARMA INDUSTRY HORIZON 1 6 • Industry consolidation will accelerate • Shift to more serious tone in DTC advertising 2 7 • Increased risk-sharing across development projects • Increasing risk-sharing to the consumer 3 8 • Increased Rx interest in Gx (generics) and other LCM(Low cost medications) • Continued separation of PC and specialty companies 4 9 • Increased pricing and regulatory pressures in Europe • Continued productivity and cost transformation 5 10 • Slow, steady experimental re-engineering of commercial model • Drug safety and healthcare compliance ???

6. New Drug Approvals Are Not Keeping Pace with Rising R&D Spending R&D Expenditures NCE Approvals R&D expenditures are adjusted for inflation Source: Tufts CSDD Approved NCE Database, PhRMA, 2005

7. Pharma Industry Sales are Generally Keeping Pace with R&D Spending R&D Expenditures Pharma Sales Source: PhRMA, Tufts CSDD Analysis, 2005

9. NME Approvals are Declining –Biologics are Filling the Void Source: FDA

10. Growing Percentage of NME Approvals are from Small/Mid-Tier Pharma Firms 31 24 21 17 Source: Ventiv Health, 2005

11. Major challenges for developers

12. Post-MarketingSurveillance Drug Discovery Preclinical Clinical Trials FDA Review Scale-Up to Mfg. ~ 5,000 – 10,000 250 5 COMPOUNDS ONE FDA-APPROVED DRUG PRE-DISCOVERY PHASE 3 PHASE 1 PHASE 2 NDA SUBMITTED IND SUBMITTED NUMBER OF VOLUNTEERS 20–100 100–500 1,000–5,000 0.5 – 2 YEARS INDEFINITE 3 – 6 YEARS 6 – 7 YEARS Innovation Challenge: Drug Discovery is a Long, Rigorous Process

13. Innovation at Risk Today: US Biopharma Business Model Becoming Unstable • Investment companies reported that through Sept 2008, biotech financing fell to $8.2 billion, 54% lower than the $17.9 billion raised in 2007. • In late 2008, Jefferies & Co. reported that “87% of biotech companies still remain unprofitable.” • In 2008, Pfizer pulled out of cardiovascular and other disease areas in order to stay profitable.

14. Innovation at Risk Today: Access to New Innovation Highly Uncertain Formularies List of covered drugs Tiered Copays Higher cost to patients for brands than for generics and preferred brands Financial Incentives Payments to physicians and/or pharmacies for high generic prescribing rate or switching patients to preferred drugs Step Therapy Patients must try and fail on alternatives before certain medicines are covered Prior Authorization Physicians required to justify medicine’s use before it’s covered, diminishing prescribing of such drugs Private insurers and government drive nearly all use of medicines to generics and “preferred” brands, making it harder for new medicines to reach patients and succeed in the marketplace

15. Government Policy Challenges Objective Subjective Drug Safety Comparative Effectiveness Cost Effectiveness Efficacy 1938 1962 2009

16. Legal Political Scientific Economic Regulatory Governmental Doctors/Patients Drugs Challenges:

17. Can value judgments be made by third parties? “Value, like beauty, is in the eye of the beholder.” - Twila Brase

18. Major Threats to Pharmaceutical Innovation • Industry productivity and output • Rapidly rising R&D costs • Increasing size of clinical trials • Increasing regulatory pressure • Political threat of price controls in US • Rising global healthcare costs • Global price disparities • Public discontent • Safety of prescription drugs • Regulatory agency accountability • Industry Rx marketing practices

19. Genzyme Innovations for unmet medical needs

20. Genzyme Strategic Principles for External New Product Opportunities • Unmet medical needs • Novel/innovative products • Well defined patient and physician populations • Complex regulatory & reimbursement strategies not • an obstacle • Definable pathway to commercialization • Sustainable shareholder value

21. What are We Looking For? • Commercial Stage Product Opportunity • Clinical Stage Product Opportunity • Preclinical Stage Product Opportunity • Preclinical Stage Research Opportunity • Diagnostic Test Opportunity

22. Commercial Stage Product Opportunity • New product within pre-existing Genzyme markets • Additional product for existing call-point • Expand geographic coverage • Expand indications • Improve product penetration • White space expansion • First entry into new commercial space • Backfill pipeline

23. Preclinical Stage Research Opportunity • Area(s) of common scientific interest • Complementary skills, reagents or experience • Often identified by Science staff

24. Genzyme External Opportunity Evaluation: FAQ • What kind of deals does Genzyme do? • Broad spectrum of deals : • Acquisition • Joint Ventures • Product/Opportunity in-license • Sponsored Research Agreements • Joint Research Programs Product Focused

25. The search process is not bound by : $ , country , partners Company A Competitors : Partners :

26. Every General Manager act as : AMBASSADOR SCOUTER lock keeper

27. Genzyme Focus Areas • Established focus areas (products/services) • Lysosomal Storage Diseases / Genetic Diseases • Renal • Transplantation • Endocrinology • Oncology • Orthopaedics • Diagnostics • Emerging focus areas • Cardiovascular disease • Autoimmune diseases • Neurological diseases • White space opportunities

28. All is Clear ? Any Questions?