Genzyme Molecular Oncology Reports Second Quarter 2001 Results.

Clinical Trials Expected to Expand in Second Half of Year

FRAMINGHAM, Mass., July 19 /PRNewswire/ --

Genzyme Corp. reported today that total revenues for Genzyme Molecular Oncology (Nasdaq: GZMO) for the second quarter of 2001 were $1.3 million, up from $1.0 million in the second quarter of 2000. Revenues for the second quarter of 2001 came primarily from the antigen discovery collaboration launched late last year with Purdue Pharma LP.

Expenditures for research and development in the second quarter of 2001 were $7.6 million, up from $4.6 million in the second quarter of 2000, an increase driven by growth in the number of cancer vaccine clinical trials from two to five, additional investment in the dendritic-tumor cell fusion program, and an expansion of antigen discovery activities.

Net loss for the second quarter of 2001 was $8.3 million, or $0.52 per share. Approximately 16.7 million shares of Genzyme Molecular Oncology Division common stock are outstanding, including 700,000 new shares that were issued in June as part of the redemption of Genzyme Corporation's convertible subordinated notes. In the second quarter of 2000, the net loss was $7.4 million, or $0.54 per share, based on 13.6 million shares outstanding.

"We have made good progress this quarter in moving our five clinical trials forward, and in laying the groundwork to initiate several others," said Gail Maderis, president, Genzyme Molecular Oncology. "At the same time, interest remains high in our discovery capabilities and we continue in active discussions with multiple parties around both immunotherapy and tumor endothelial marker partnerships."

Genzyme Molecular Oncology ended the quarter with $16.2 million in cash and marketable securities. It also has access to $15 million under a financing arrangement with Genzyme General as well as additional credit through Genzyme Corporation's revolving credit facility. Genzyme Molecular Oncology expects that cash on hand, along with committed partnering income, will fund existing operations through the remainder of 2001, with credit sufficient to fund anticipated operations through the third quarter of 2002.

Clinical Trial Progress

Genzyme Molecular Oncology continued to advance five ongoing phase 1-2 cancer vaccine trials, which include three in melanoma, one in breast cancer, and one in kidney cancer. In the second quarter it completed enrollment of its ex vivo antigen-specific melanoma vaccine trial. At the same time, progress continues on an in vivo trial for an antigen-specific melanoma vaccine.

Genzyme Molecular Oncology also plans to file an IND for a new melanoma cancer vaccine trial by the end of 2001 that would be the first involving a proprietary SPHERE(TM) peptide from its antigen discovery program. Genzyme Molecular Oncology selected melanoma as the first indication in which to test these novel SPHERE peptides in order to take advantage of prior clinical experience in that disease. Beyond melanoma, the goal is to use the antigen discovery platform to develop antigen-specific vaccines that address ovarian, lung, colon, breast, and prostate cancer.

Enrollment continues for three other phase 1-2 cancer vaccine trials -- one…