If one word could be used to describe 2006 for the large-cap pharmas and biopharmas, it would be "acquisitive." In the past three months alone, there have been at least six billion-dollar acquisitions as the industry giants try to fill in bare pipelines and make up for oncoming generic or other branded drug competition. Biopharmaceutical firm Genzyme (NASDAQ:GENZ) isn't in quite the same sticky situation as some of its larger peers, but its biggest announcement from a relatively quiet 2006 was its more than $500 million acquisition of drug developer AnorMED.

Genzyme started the first quarter of 2006 off on a bad foot with the discontinuation of a phase 2 trial for one of its heart therapies. Even worse news came when it was announced that the FDA was extending its review of Myozyme, Genzyme's treatment for a rare enzyme deficiency disorder which was supposed to be one of its sales-growth drivers for the year.

On the financial side of things, Genzyme registered first-quarter revenue and earnings per share growth of 16%, excluding the effect of stock options on earnings. Sales were solid for all of its major products except Cerezyme (by far its biggest product, accounting for a third of sales). Cerezyme experienced markedly slower sales, only growing 6% year over year.

Things turned around in the second quarter, though. Myozyme was approved for marketing in the U.S. and E.U., and interim results of a confirmatory trial showed that the leukemia drug Campath may have increased efficacy over another leukemia drug, although higher adverse events associated with Campath tempered these results. Another good quarter of earnings and revenue growth occurred due to rising sales of some of Genzyme's newer drugs.

In the third quarter, with more than $1.7 billion on its balance sheet, Genzyme made an offer to acquire stem-cell drug developer AnorMED for $380 million. A bidding war with Millennium Pharmaceuticals (NASDAQ:MLNM) ensued, but Genzyme won the bidding contest and closed the deal with AnorMED for $580 million in the fourth quarter. Impressively, Myozyme sales ramped up to $20 million after being on the market for less than two quarters and should continue to grow at a rapid rate in the quarters to come.

Aside from the closing of the AnorMED deal, the fourth quarter has been slow for Genzyme. The only notable news was that its joint-pain treatment Synvisc received a label expansion in Europe, which should help fend off some of its declining sales.

Hitting its guidance for revenues in the range of $3.1 billion to $3.3 billion and $2.65-$2.75 per diluted share of earnings (not including options) for the year would represent revenue and EPS growth of at least 15% and 16% respectively over 2005. So overall, 2006 can be considered a good, but not great, year for Genzyme.

Here's how our Motley Fool CAPS community rates Genzyme's future prospects in 2007 and beyond:


CAPS Rating **** (out of five stars)

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Data current as of Dec. 21, 2006.

Genzyme has an impressive four-star rating, with the bulls outweighing the bears by a large margin. Incidentally, our CAPS tracking of all the major Wall Street analysts shows that Jim Cramer was positive on Genzyme's future for his Mad Money television show, but some CAPS players like bioman100 are wary of shares of Genzyme due to its "orphan drugs losing steam" and other potential hiccups with the company.

Genzyme isn't a formal pick for any of our Fool newsletters, but its technology and scientific research is right up our Rule Breakers newsletter analysts' alley. Why not take a free trial subscription to Rule Breakers and see what great biotechs they've unearthed? Rule Breakers picks -- of which Millennium Pharmaceuticals is one -- are outperforming the S&P 500 by more than 9%.

Check out the other companies featured in "The Motley Fool's 2006 in Review and 2007 Preview" special.

Fool contributor Brian Lawler cannot wait for his family's annual white elephant gift exchange and does not own shares of any company mentioned in this article. The Fool has a disclosure policy.