It's not everyday that a leading biotechnology company is created out of the blue, but that's exactly what multi-division biotech company Genzyme Corp. did this morning. In a three-pronged transaction, separately traded Genzyme tracking stocks Genzyme Tissue Repair (Nasdaq: GZTR) and Genzyme Surgical Products (Nasdaq: GZSP) will combine their operations with formerly independent bio-orthepedics products developer Biomatrix (NYSE: BXM) to form an all-new Genzyme division to be called Genzyme Biosurgery. The new Biosurgery division will be charged with carrying the Genzyme standard in the emerging field of using biomaterials and biothertherapeutic products in surgical and medical procedures.

The creation of Genzyme Biosurgery boosted the share prices of all three companies involved today. No doubt, a large portion of the rise can be explained by the general enthusiasm of the market these days over anything having to do with a merger. However, it's not too far-fetched of a notion to suggest that the inclusion of the word "Biosurgery" in the new corporate name may be the I.D. badge all three companies needed to get on the radar screen of investors in today's wild and woolly biotechnology market.

Based on its existing products and developmental pipeline, the newly created Genzyme Biosurgery is a biotechnology company in every sense of the word. However, the word "biotech" in today's sound-bite driven parlance is typically reserved by the mainstream media to describe only certain types of business creatures. In a way, this resembles how the term "value investor" has been bastardized and is today often wrongly used as a catch-all to categorize those who are in reality "last puff" investors and only buy steel companies at half book value or something.

Biotech companies are not always single product drug firms -- the stereotype usually affixed to tracking stock Genzyme General (Nasdaq: GENZ), whose major product is its cash cow Cerezyme enzyme-replacement treatment for the debilitating genetic problem known as Gaucher's disease. Nor do they have to be developers of monoclonal antibodies, which is what Genzyme General's Genzyme Transgenics (Nasdaq: GZTC) affiliate does. Nor are they just firms that are trying to find ways to combat a currently incurable condition such as cancer, which is what the third Genzyme tracking stock, Genzyme Molecular Oncology (Nasdaq: GZMO), is trying to do.

The new Biosurgey unit will primarily concentrate its efforts on developing biosurgical products for the orthopedics and cardiothoracic markets. Biomatrix is already a leader in the bio-engineered orthropedics area thanks to its Synvisc product, which can be loosely thought of as an injectible type of WD-40 for osteoarthritic knees. Synvisc will nicely supplement Genzyme Tissue Repair's existing Carticel product for repairing knee cartilage. Also in the Biomatrix pipeline are a number of anti-adhesion products that will support Genzyme Surgical Products' Seprafilm product, which is the only biomaterial currently approved for reducing adhesions following pelvic and abdominal surgeries.

Under the deal, Biomatrix' shareholders will get to exchange each of their shares for either $37 per share in cash or one new share of the new Genzyme Biosurgery. If all of the shareholders opted for the cash, Genzyme would be picking up Biomatrix for about $900 million, or approximately 48 times trailing earnings. However, don't expect many of Biomatrix's shareholders to go the cash route. Undoubtedly, the firm's shareholders realized long ago that they were investing in a company on the cutting edge of biotechnology, even though it may not have fit today's typical notion of what a biotech company should be.

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