By Matthew Willett

Genzyme Corp. said after the market¿s close Wednesday it will sell $500 million worth of convertible subordinated notes to institutional investors, and at the same time announced the call of its outstanding 5.25 percent convertible subordinated notes.

The notes to be sold, not yet registered with the Securities and Exchange Commission, will be convertible into Genzyme General common stock. The other notes are scheduled for redemption on June 15, 2001, at a price equal to 102.63 percent of the principal amount plus accrued interest up to the date of redemption, payable in cash.

Holders of the called notes may elect at any time before June 14 to convert each $1,000 of principal into 25.25 shares of Genzyme General common stock, 2.73 shares of Genzyme Molecular Oncology common stock and 2.74 shares of Genzyme Biosurgery common stock.

Bo Piela, manager of media relations for Genzyme, said the company would not comment on the nature of the offering, beyond stating the funds are intended for general corporate purposes and as working capital.

If all holders of the called notes elect to convert their notes into shares, Genzyme would issue about 6.3 million shares of Genzyme General stock, about 681,000 shares of Genzyme Molecular Oncology stock and about 684,000 shares of Genzyme Biosurgery stock.

The called notes were issued in May 1998, in a private placement that raised about $250 million. Genzyme said at the time that it would use the funding to boost its drug development pipeline. (See BioWorld Today, May 21, 1998.)

Genzyme claimed $575 million in cash and cash equivalents at the end of the first quarter. It had 94.8 million shares outstanding at the end of the first quarter, and claimed total revenues of $222.7 million.

Piela said the broad Genzyme pipeline is led by Fabrazyme, its enzyme replacement therapy for Fabry disease.

¿We¿re expecting to receive marketing approval to market Fabrazyme in Europe within the next two to three months,¿ Piela told BioWorld Today. ¿We also expect to receive U.S. approval sometime later this year. We also recently began a major Phase IV study designed to evaluate RenaGel¿s impact on morbidity and mortality in dialysis patients.¿

RenaGel, approved for the treatment of hyperphosphatemia in end-stage renal disease patients on hemodialysis, is designed to control elevated phosphorous levels by binding to dietary phosphate in the intestine, preventing phosphates from reaching the bloodstream.

¿We also have another important study under way with RenaGel called the Treat to Goal Study that¿s designed to evaluate RenaGel¿s ability to lower phosphorous levels into the normal range and slow cardiac calcification in dialysis patients,¿ he said.

¿We also are completing enrollment in a confirmatory Phase III clinical trial of Aldurazyme, an enzyme replacement therapy under development with BioMarin Pharmaceutical [Inc., of Novato, Calif.], for patients with MPS-1,¿ Piela said. ¿We have pilot Phase II studies going on now of a toxin binder for C. difficile colitis, an infection that affects hospital and nursing home-based patients. That¿s a product that comes from the GelTex pipeline, an exciting product and a large market opportunity for us.¿

Genzyme bought GelTex Pharmaceuticals Inc., of Waltham, Mass., in a $1 billion deal in September. (See BioWorld Today, Sept. 12, 2000.)

Genzyme General¿s shares (NASDAQ:GENZ) closed down $2.87 at $108.16.

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