Genzyme Corporation has acquired Verigen AG, a private company based in Germany with a proprietary cell therapy product for cartilage repair currently sold in Europe and Australia.

This product, Matrix-induced Autologous Chondrocyte Implantation (MACI), will both expand Genzyme's orthopaedic offerings in these markets, and provide a strong second generation product to develop for the United States market. Carticel (autologous cultured chondrocytes), Genzyme's first generation product, has been used in more than 10,000 patients since it was introduced in 1995, the company release says.

"This strategic acquisition will help advance our global orthopaedic franchise by providing a strong second generation cartilage repair product with a solid foundation in Europe and Australia," said Ann Merrifield, president of Genzyme Biosurgery. "We look forward to building on Verigen's established presence with orthopaedic surgeons in Europe and Australia - where we already market Synvisc for pain from osteoarthritis of the knee - and to launching US clinical trials for MACI by early 2006," Merrifield added.

The transaction will provide Genzyme with cell culture facilities in Europe and Australia to support sales in these territories. Genzyme has gained substantial expertise in the manufacture of cell therapy products through production of Carticel at its cell culture facility in Cambridge, Mass.

Genzyme has acquired Verigen for $10 million in initial payments, and potential additional payments of up to $40 million over the next six years based upon the achievement of development and commercial milestones. These include approval of a biologic license application in the US, marketing approval in the US, and royalties on sales. To date Genzyme has acquired approximately 96 per cent of Verigen's shares, and anticipates acquiring the remaining shares in the first half of the year.